Tackling foreign bribery

Soon after President Obama worked with his Chinese counterpart in late January and early February of this year to re-set relations between the two superpowers, China moved swiftly ahead with a significant new anti-corruption measure – an effort to punish bribery of government officials outside China when committed by Chinese citizens or entities. The new law, effective May 1 2011, is a noticeable step forward for China's efforts to align its legal regime with international standards, and poses yet another round of challenges for companies doing business in the People's Republic of China (PRC) and around the world.

The new provision, hailed by some as “China's FCPA [Foreign Corrupt Practices Act],” is a one-sentence supplement to Article 164 of the PRC Criminal Law (中华人民共和国刑法), which previously addressed only commercial domestic bribery. The bribery of public officials within China is dealt with elsewhere in the PRC Criminal Law. The new measure, which takes effect on May 1 of this year, criminalises the giving of money or property to a foreign (for example, non-Chinese) public official or an official of an international public organisation for the purpose of seeking illegitimate commercial benefit. (The full text of Article 164, as amended, appears in both English and Chinese in the box to the right).