The Amendment consists solely of one additional sub-article to the PRC Criminal Law which reads as follows:
“whoever provides property to a foreign official or an official of an international public organisation for the purpose of seeking an improper commercial benefit, will be punished [in accordance with the provisions applicable to commercial bribery].”
An initial observation which can be made is that the Amendment has not been inserted into the “Graft and Bribery” chapter of the PRC Criminal Law which deals with corruption of public officials (where one may ordinarily expect it to be placed) but in the “Crimes against the Order of Socialist Market Economy” chapter, which deals with “commercial bribery”, i.e. the offence of actively bribing non-public officials.
While at first glance the placing of the Amendment in the PRC Criminal Law may appear surprising, it is consistent with China’s obligations under the United Nations Convention against Corruption to prosecute the bribery of foreign officials where the purpose of the bribe is to obtain an advantage in the conduct of international business (see footnote below). Moreover, by stating that the purpose of the bribe should be the receipt of “an improper commercial benefit”, the Amendment itself suggests that an offence will only be committed when the purpose of the bribe is of a commercial nature.
Both companies and individuals can be punished under the Amendment. In accordance with Articles 6 and 7 of the PRC Criminal Law, the Amendment will be applicable to PRC nationals both in the PRC and outside the PRC, and all PRC companies (and their managers) who carry business overseas (including Sino-foreign joint ventures, and wholly foreign-owned enterprises). If the offence is serious, individuals may face criminal detention of between three to ten years, while companies may receive fines, and managers directly responsible for an offence may also face criminal detention of up to ten years.
Unfortunately the Amendment provides little detail on the behaviour that will actually be prosecuted by PRC authorities, or the prosecution thresholds, potential affirmative defences and potential exemptions. In this regard, the one-sentence addition to the PRC Criminal Code compares rather unfavourably to the FCPA’s sixteen page counterpart or the UK Bribery Act. Implementing regulations may soon be passed which should provide guidance and greater legal certainty regarding the operation of the Amendment.