1. New laws or regulations
(1) On August 29, 2015, the Ninth Amendment to PRC Criminal Law (the “Ninth Amendment”) was officially promulgated by National People’s Congress Standing Committee. The changes will become effective as of November 1, 2015. The Ninth Amendment proposes several updates, revisions, and addition to the current PRC Criminal Law, including to the sanctions concerning bribery and corruption crimes. The following are particularly worthy of note in this regard:
(i) The threshold at which bribes may trigger sanction has been deleted.
Under the current PRC Criminal Law, a person committing the crime of receiving bribery will be punished depending on the amount of bribes s/he has taken, i.e., if below RMB 5,000 (USD 786), s/he may be sentenced to up to 2 years’ imprisonment; if between RMB 5,000 (USD 786) and RMB 50,000 (USD 7,866), s/he may be sentenced to up to 10 years’ imprisonment; if between RMB 50,000 (USD 7,866) and RMB 100,000 (USD 15,732), s/he may be sentenced to life imprisonment; and if over RMB 100,000 (USD 15,732), s/he may receive the death penalty.
According to the Ninth Amendment, the foregoing thresholds have been removed and replaced by more general parameters, i.e., (a) relatively high (s/he may be sentenced to up to 3 years’ imprisonment), (b) very high (s/he may be sentenced to up to 10 years’ imprisonment) or (c) extremely high (s/he may receive the death penalty). This Ninth Amendment, however, does not specify the amount of bribes that will be regarded as “relatively high”, “very high”, or “extremely high”, giving the authorities discretion in making such determinations.
(ii) New provision penalizing those bribing any close relative of a current or retired State Functionary.
The current PRC Criminal Law does not stipulate whether or how a person or entity who offers a bribe to a close relative of a state functionary should be sanctioned. The Ninth Amendment addresses this situation by specifying that a person/entity will be deemed to have committed the crime of offering bribery if s/he/it has bribed any close relative or any other person who has a close relation with a state functionary for the purpose of seeking an improper benefit.
(iii) Fines will be imposed upon the person/entity involved in any bribery or corruption crime.
Under the current PRC Criminal Law, not every kind of bribery or corruption crime will include monetary punishment. The Ninth Amendment corrects this by establishing the fine as a general punishment for any person/entity who commits a bribery or corruption crime.
Local level (Beijing & Shanghai): No developments.
Communist Party Rules: No developments.
2. Upcoming laws or regulations
3. Government Action
(1) It was reported on August 4, 2015 that Shen Peiping (“Shen”), the former Deputy Governor of Yunnan Province, was being prosecuted by No.1 People’s Procuratorate of Beijing Municipality for taking bribes. According to the prosecution, during the period from 2000 to 2012, Shen took advantage of his positions as the Party Secretary of Tengchong County and the mayor of Simao City, Yunnan Province to provide illegal and improper assistance to many entities in connection with the sale of iron ore, the governance of overload transport, the exploration of copper projects, and the settling of mass disturbances in mining areas. In return, Shen is alleged to have received benefits from bribe-givers valued at RMB 16.15 million (USD 2.54 million) in total. The No.1 Intermediate People’s Court of Beijing will issue a verdict in the future.
(2) On August 11, 2015, Wang Zongnan (“Wang”), the former General Manager of Shanghai Friendship Group Co., Ltd. (“Friendship Group”) and former Chairman of Shanghai Lianhua Supermarket Co., Ltd. (“Lianhua Supermarket”), was sentenced to 18 years in prison plus confiscation of personal property totaling RMB 1 million (USD 157,334) by No.2 Intermediate People’s Court of Shanghai for embezzlement and bribery-taking. Wang was also deprived of political rights for 5 years.
The court found that between 2001 and 2006, Wang conspired with his colleagues in Lianhua Supermarket, including the former general manager, director, financial officer, and HR manager of Lianhua Supermarket, to take advantage of their positions to embezzle the public funds of Lianhua Supermarket and its subsidiaries/branches amounting to RMB 195 million (USD 30.68 million) over a total of more than 10 occasions, using such funds to register two companies in Shanghai to engage in businesses of company registration services, capital verification services, and real estate investment. Reportedly, Wang has enjoyed illegal gains exceeding RMB 1.2 million (USD 188,800).
(3) On August 14, 2015, Guan Shouzhong (“Guan”), the former Deputy General Manager of Anhui Electric Power Company was sentenced to 12 years’ imprisonment for taking bribes by the Intermediate People’s Court of Lu’an City, Anhui Province with personal properties worth RMB 400,000 (USD 62,933) confiscated.
It was determined that during his term of office from 2000 to 2013, Guan abused his position by seeking illegal benefits from project bidding and contracts in relation to the power communication backbone network, the renovation of transformer substations, and the buildout of control building for bribe-givers and accepting RMB 4.54 million (USD 714,296), USD 40,000, EUR 10,000 (USD 11,245) and shopping cards valued at RMB 50,000 (USD 7866) in exchange.
(4) It was reported on August 19, 2015 that Liu Ya (“Liu”), the former Deputy Mayor of Bengbu City, Anhui Province had been sentenced by the Intermediate People’s Court of Lu’an City, Anhui Province to 20 years in prison plus confiscation of personal property amounting to RMB 700,000 (USD 110,133) for bribery-taking, mediate bribery, and owning large amounts of unidentified property.
Reportedly, during the period from 1993 to 2013, Liu took advantage of his position to seek illegal benefits for others, and solicited and accepted bribes including RMB 7.33 million (USD 1.15 million), HKD 100,000 (USD 12,903), USD 10,000, EUR 10,000 (USD 11,245) in cash, shopping cards valued at RMB 50,000 (USD 7,866), and 500 grams of gold. Liu also was found to have illegally accepted properties valued at up to RMB 4.5 million (USD 708,003) from bribe-givers who sought improper benefits through the misuse of official positions by state functionaries with whom Liu had close relation. Apart from bribery-taking and mediate bribery, Liu’s household property and expenditure was found to exceed his legal income, and part of his properties valued at more than RMB 3.78 million (USD 594,723) have no legitimate origin.
(5) On August 31, 2015, Chen Mingxian (“Chen”), the former Party Secretary and Deputy Director of the Department of Transportation of Hunan Province was sentenced by the Intermediate People’s Court of Zhuzhou City, Hunan Province to death with a 2-year’s reprieve for accepting bribes and holding large amounts of unidentified property.
Chen was accused of abusing position functions, soliciting and accepting bribes individually and together with his wife and other individuals in amounts up to RMB 49.41 million (USD 7.77 million), USD 10,000, and HKD 40,000 (USD 5,161). In return, Chen was found to have sought illegal benefits in project bidding, the supply of materials, and the insurance business with regard to civil works, greening, power distribution, and the design of highways in Hunan Province. Chen also failed to explain the source of certain large properties that he owned. These were valued at RMB 12.81 million (USD 2.01 million), USD 150,000, HKD 570,000 (USD 73,548), GBP 10,000 (USD 15,308), ERU 10,000 (USD 11,245) and JPY 5,000 (USD 41).
5. China-related FCPA Action