China has long been regarded as a high-risk jurisdiction in terms of anti-bribery and compliance. A number of multinational corporations (MNCs) have been investigated by Chinese and foreign regulators in recent years, for issues ranging from bribing healthcare professionals to providing high-level job opportunities to relatives of PRC government officials. In fact, out of the U.S. Securities and Exchange Commission (SEC)'s 26 FCPA enforcement actions last year, 14 involved business operations of MNCs in China. A recent report by The Lawyer highlights that China was singled out by the first edition of the Risk Advisory Group's Corruption Challenges Index as the country businesses face the most severe corruption challenges in—outranking 180 other nations for first place.

China's anti-corruption crackdown

Most anti-corruption investigations into MNCs have historically been initiated by foreign regulators, mostly arising from concerns of Foreign Corrupt Practices Act (FCPA) violations. PRC regulators rarely got involved. But the intensified anti-corruption campaign under the new leadership has seen China launch numerous investigations in recent years, directly impacting the business operations of MNCs in China. Moreover, as these domestic regulatory probes draw the attention of global media and foreign regulators, they may well trigger investigations in other jurisdictions. With the ever-increasing emphasis on and capability in law enforcement in today's China, domestic and foreign authorities may even coordinate and simultaneously launch anti-corruption investigations into MNCs in future.

Cross-regulatory investigations

In addition to anti-corruption probes, various administrative authorities are empowered to conduct administrative investigations. The scope of these include, but are not limited to, the following: antitrust, environmental, and tax revenue inspections. One important factor to bear in mind is that for each specific type of administrative investigation, a company could be investigated by multiple regulatory authorities simultaneously.