On 25 August, the draft Law of the People’s Republic of China on Combating Cross-Border Corruption was submitted for its first review by the Standing Committee of the National People’s Congress. The draft consists of six chapters and 47 articles and covers the prevention and investigation of cross-border corruption, international cooperation, corporate anti-corruption compliance, and liability for violations. On 28 August, the draft law was published for public consultation, which will remain open until 26 September 2026.
Cross-Border Corruption
Under the draft, cross-border corruption would include, in particular:
- bribery of foreign public officials and officials of public international organizations by Chinese citizens and organizations, as well as by foreign individuals and organizations where such conduct takes place in China;
- bribery by foreign individuals and organizations of Chinese public officials and persons closely associated with them, as well as state bodies and organizations, together with related acts of accepting bribes;
- other corruption-related violations and offences committed abroad by Chinese citizens and organizations;
- other corrupt conduct involving a cross-border element where the consequences occur wholly or partly in China;
- flight abroad by persons suspected of corruption and cross-border transfers of corruption-related assets.
The draft provides for different types of liability for cross-border corrupt conduct. Where the conduct constitutes a criminal offence under the Criminal Law of the PRC, criminal liability would apply; violations of the administrative order may result in administrative penalties. Disciplinary measures are envisaged for public officials, while civil liability would arise where property or other damage is caused. Illegally obtained proceeds and any gains derived from them would be subject to confiscation, recovery or restitution.
Anti-Corruption Compliance
A separate chapter of the draft law is devoted to anti-corruption compliance. The relevant requirements are proposed to apply to:
- Chinese companies that have branches or subsidiaries abroad or carry out investment activities overseas;
- branches and subsidiaries established in China by foreign companies.
For such companies, the draft provides for a number of mandatory elements of anti-corruption compliance, including:
- Anti-corruption compliance system – companies would be required to develop internal rules and procedures taking into account their size, scope of business and operating revenue, ensure their implementation, promptly investigate and address identified violations, and integrate compliance into the entire process of decision-making, implementation and supervision;
- Designation of responsible units or personnel – Chinese companies engaged in cross-border business activities would be required to establish appropriate compliance units or designate personnel responsible for anti-corruption compliance. Separate compliance rules may be adopted for units engaged in cross-border activities and for overseas branches and subsidiaries; depending on the circumstances, compliance officers may also be assigned to overseas entities, with specific guidelines and lists of responsibilities established for them;
- Corruption risk assessment – companies would be required to identify and assess integrity risks arising from cross-border business activities, issue timely warnings concerning identified risks and take appropriate response measures, as well as monitor such risks and improve the measures applied;
- Internal reporting mechanisms – companies would be required to establish and improve internal reporting channels. Where suspected cross-border corruption is identified, the relevant information would have to be reported to supervisory or public security authorities;
- Financial controls and internal audit – companies would be required to ensure that accounting documents and financial reports are truthful and complete and to prevent financial and accounting mechanisms from being used to commit, conceal or disguise cross-border corruption. Chinese companies would also be required to strengthen financial management, accounting and internal audit in units engaged in cross-border activities and in their overseas entities;
- Due diligence and oversight of third parties – companies would be required to conduct due diligence on engaged organizations and individuals, supervise their activities and establish mechanisms to prevent related integrity risks. Third parties representing a company would be required to comply with its anti-corruption rules, while the use of third parties to commit cross-border corruption would be expressly prohibited. Chinese companies would also have to ensure that their overseas branches and subsidiaries apply the company’s third-party oversight mechanisms;
- Anti-corruption training and awareness-raising – companies would be required to provide integrity education to employees and strengthen their awareness of ethical business conduct. Chinese companies would also be expected to promote a corporate culture of integrity and provide compliance training to employees of units engaged in cross-border business activities, as well as overseas branches and subsidiaries, so that they understand and comply with corporate compliance requirements and risk prevention measures.
Additional requirements are envisaged for state-owned enterprises, including enhanced controls over key overseas positions, major funds and significant projects. Such measures may include directly appointing financial officers to overseas entities, rotating personnel posted abroad and preventing conflicts of interest.
Where a company fails to comply with the statutory anti-corruption compliance obligations, the competent authority may order it to rectify the violation within a specified period. If the company refuses to do so, the draft allows for the suspension of specific business operations, suspension of operations for rectification, or revocation of the relevant business licence.
State Oversight
The draft law provides for the establishment of a national mechanism for combating cross-border corruption, to be led by the State Commission of Supervision. The mechanism would also involve the public security authorities and government bodies responsible for, among other areas, foreign affairs, justice, finance, commerce, anti-money laundering, auditing, state-owned asset supervision and administration, financial and securities regulation, and cyberspace administration.
Its functions would include assessing the overall situation concerning cross-border corruption, developing relevant policies and specific guidelines, coordinating law enforcement and judicial activities, and promoting anti-corruption compliance systems and mechanisms for identifying, assessing and preventing corruption risks.
Competent government authorities would also be required to monitor and analyse cross-border corruption risks in individual sectors and strengthen supervision in areas particularly vulnerable to such risks. Industry associations and chambers of commerce would be expected to assist their members in strengthening anti-corruption compliance.
The draft also provides for enhanced monitoring of cross-border financial flows. Authorities and institutions responsible for anti-money laundering, auditing, taxation and financial supervision would be required to refer information to supervisory or public security authorities where financial transactions or asset transfers indicate possible cross-border corruption.
Organizations and individuals would have the right to report cross-border corruption. Competent authorities would be required to keep such reports confidential, while persons providing useful information could receive protection and rewards in accordance with applicable rules. At the same time, organizations and individuals would be required to cooperate with investigations into cross-border corruption and provide truthful evidence. In major cases, Chinese authorities could also, on the basis of reciprocity, require cooperation from foreign companies and other organizations.
International Cooperation
The draft provides for cooperation between Chinese authorities and foreign authorities and organizations in tracing suspects and corruption-related assets, conducting joint investigations, collecting evidence and exchanging information.
Within the framework of international law enforcement cooperation and mutual legal assistance, Chinese authorities could request, among other things, information on individuals, assets and financial accounts; witness testimony; documents and electronic data; searches and other investigative measures; freezing of assets; and confiscation and return of illegally obtained property. Extradition, transfer of sentenced persons, repatriation and other mechanisms could be used to return suspects located abroad.
At the same time, foreign authorities, organizations and individuals would not be permitted, without the consent of the competent Chinese authorities, to independently conduct investigations into cross-border corruption within the territory of the PRC. Organizations and individuals in China would likewise be prohibited, without the required authorization, from providing evidence or other assistance to foreign authorities in such investigations.
Where a foreign state, in violation of international law and the basic norms governing international relations, uses anti-corruption measures or the improper extraterritorial application of its domestic laws to impose discriminatory restrictions on Chinese citizens or organizations, China would be able to adopt countermeasures, blocking measures and other responses provided for under its national legislation.
