China

Reviewed April 2015
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PUBLIC OFFICIALS
    What is the relevant test for each offence?
    • Under Articles 164, 385, 387, 389, 391 and 393 of the PRC Criminal Law, the offences of bribing another person or taking bribes are linked to the provision of “improper benefits”.

      A person will be guilty of an offence if he gives payment in the form of tangible or intangible property with monetary value to “state personnel” for the purposes of receiving an “improper benefit” (Articles 389-391, PRC Criminal Law) (see below for definitions).

      A person will be guilty of an offence if he is state personnel taking advantage of his position to solicit or accept a payment unlawfully in the form of “property” or an “unlawful kickback or processing fee” where the payment was given in exchange for an “improper benefit” (Article 385, PRC Criminal Law).

      Property and improper benefits are not expressly defined.  In the context of commercial bribery, property can be tangible or intangible property with monetary value, such as membership cards and pre-paid gift cards or coupons, entertainment and travel1. Improper benefits include any benefit not lawfully available or arranging for assistance, support or an advantage that is not consistent with applicable laws, regulations or industry standards. With respect to tendering and bidding, government procurement or other commercial activities, any bribe given that violates the principle of fairness and impartiality in order to seek a competitive advantage shall also be deemed an attempt to secure improper benefits2. State personnel refers to all personnel of state organs, including:

      personnel engaged in public administration in state organs, such as government officials or the officials of the Chinese Communist Party (CCP)
      personnel engaged in public service in state owned enterprises (SOEs), institutions and social organisations
      personnel assigned by the government, SOEs or government-sponsored institutions to engage in public service in non-state owned corporations, enterprises, institutions and social organisations, and
      other personnel engaged in public service according to the law (Article 93, PRC Criminal Law). 

      Under Article 164 of the PRC Criminal Law, there is also a separate offence of bribing a foreign public official. It is an offence for any person to give “property” to a “foreign public official” or an “official of an international public organisation” for the purpose of seeking an “improper commercial benefit”. Notably, differing from domestic bribery, the offence of bribing a foreign public official must involve a commercial benefit. 


      1. Opinions Regarding Issues Concerning the Application of Law in the Handling of Criminal Commercial Bribery Cases issued by the Supreme People’s Court and the Supreme People’s Procuratorate (“Opinions regarding Criminal Commercial Bribery Cases”) (effective 20 November 2008), Article 7.

      2. Id, Article 9.

    Can corporates and individuals commit the offence?
    • Individuals and companies (Article 30, PRC Criminal Law), as well as management in charge of supervising the corporate acts in question (Article 31, PRC Criminal Law), can be liable for the offence of bribing domestic and foreign officials (Article 164).  In “serious circumstances” intermediaries may also be liable (Article 392, PRC Criminal Law).  Although certain offences under the PRC Criminal Law can only be committed by “entities”, the Supreme Court of the PRC has clarified that any crime committed by officers, employees or agents of an entity can be treated as crimes committed by the entity itself, if: (i) the crime is committed on behalf of or for the benefit of the entity; or (ii) there is a gain of illegal income by the entity.

    Does the offence have extra-territorial effect?
    • The principal offences under Articles 164, 385, 387, 389, 391 and 393 of the PRC Criminal Law, apply to acts of bribery committed in the PRC, irrespective of whether the “improper benefit” occurs in the PRC or overseas. 

      The PRC Criminal Law also extends to acts of bribery occurring overseas if it is committed by a PRC citizen (limited to offences with a fixed term of punishment of greater than three years), PRC state personnel and military personnel (Article, 7, PRC Criminal Law).

      Under Article 164 PRC Criminal Law, any bribery of foreign public officials or the official of an international public organisation is an offence when committed by a PRC citizen, a PRC established entity or an employee of a PRC company. Article 164 is sufficiently broad as to apply to any such act carried out anywhere in the world.

    Are there any exceptions or defences?
    • It is not an offence under Article 389 of the PRC Criminal Law if a person offers money or property to state personnel through extortion but receives no illegitimate gain.

      Under Article 390 of the PRC Criminal Law if there is a voluntary confession before prosecution there is the possibility of mitigation or exemption from punishment. This also applies to intermediaries caught under Article 392.

    What are the penalties?
    • A public official who accepts a bribe is subject to different penalties, including discipline imposed by the Communist Party such as fines and imprisonment, however it is dependent on the amount involved. The penalties include administrative sanctions, confiscation of the property comprising the bribe, life imprisonment and the most serious sanction: a death sentence. 

      Any individual or entity that bribes a public official may be fined. Under Article 390 of the PRC Criminal Law, individuals may be imprisoned for various lengths depending on the amount involved and the seriousness of circumstances, such as the following:

      whoever commits the crime of offering bribes shall be sentenced to fixed term imprisonment of not more than five years or criminal detention
      whoever offers bribes to seek illegitimate gain, if the circumstances are serious or if great damage is caused to the interests of the State, shall be sentenced to fixed-term imprisonment of not less than five years, but not more than 10 years, and
       if the circumstances are particularly serious, he or she shall be sentenced to fixed term imprisonment of not less than ten years or life imprisonment and may also be sentenced to confiscation of property. Voluntary disclosure to authorities is a mitigating factor.

      Under Article 392 of the PRC Criminal Law, the criminal penalty may be up to three years’ imprisonment for intermediaries who facilitate bribery.

      Under that same article, an entity that gives bribes may be subject to fines and the management directly in charge, and persons directly responsible for the unlawful corporate acts, may be imprisoned for up to five years. 

      In addition, a corporate entity convicted of bribery of public officials will be barred from participating in public tenders.

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    PRIVATE SECTOR
      Is there an offence for bribery within the private sector?
      • Under the Anti-Unfair Competition Law of the PRC (the PRC Anti-Unfair Competition Law) and the PRC Criminal Law, bribery in the private sector is an offence. The former prescribes the civil liability for the act of bribery while the latter provides for criminal liability. Private commercial bribery offences are therefore both a criminal and civil violation under PRC Law.

      What is the relevant test?
      • Under Articles 163 and 164 of the PRC Criminal Law, it is an offence to provide any individual with, or for an individual to receive, money or property of “relatively high value” to induce that individual to take advantage of his or her position. The threshold for what is considered “relatively high value” is RMB5,000 (approximately £500) for a non-public official receiving payment, RMB10,000 (approximately £1000) for a payment by an individual and RMB200,000 (approximately £20,300) for a payment by an entity. 

        Under Article 8 of the PRC Anti-Unfair Competition Law, a business operator (or manager) is guilty of offering a bribe if the manager gives secret commissions to another organisation or individual without the normal accounting records; or if the organisation or individual accepts illegal kickbacks without normal accounting records, he/she or it will be liable for accepting a bribe. A business operator may be liable for commercial bribery conducted by its staff for the purpose of selling or purchasing commodities for the business operator1.

        It is also a civil offence for a business operator to provide cash or “gifts in-kind” or to use “any other means” in order to sell or purchase commercial goods or services. The prohibition of commercial bribery by “any other means” includes a prohibition on the provision of paid travel and vacation expenses both within and outside of the PRC2.

        “Property” used in the commercial bribery context is defined as, “either money or physical objects and includes property-like benefits that can be calculated in monetary value, such as the provision of housing renovations, membership cards and gift cards (coupons) carrying monetary value, travel expenses etc”.


        1. Article 3 of the Provisional Regulations of the State Administration for Industry and Commerce on Prohibition of Commercial Bribery.

        2. Id. Article 2.

      Can corporates and individuals commit the offence?
      • Both corporates and individuals can be liable for the offence of commercial bribery1.

        Under Article 164 of the PRC Criminal Law, a unit (eg a company, enterprise, institution, state organ or organisation) commits an offence by giving money or property to any employee of a company or enterprise for the purpose of seeking improper benefits, if the amount involved is relatively large. The persons who are directly in charge and the other persons who are directly responsible for the crime shall also be guilty of an offence.


        1. Id. Article 3.
      Does the offence have extra territorial effect?
      • The principal offences under Articles 163 and 164 of the PRC Criminal Law apply to acts of bribery committed in the PRC, regardless of whether the “improper benefit” is in the PRC or elsewhere.

        The PRC Criminal Law also extends to an act of bribery occurring overseas if it is committed by a PRC citizen (only for offences with a fixed-term punishment of greater than three years), PRC state personnel or military personnel (Article 7, PRC Criminal Law).

        Under Article 164 of the PRC Criminal Law, bribery of foreign public officials or an official of an international public organisation constitutes an offence when committed by a PRC citizen, a PRC entity or an employee of a PRC company. Article 164 is broad and applies to any such act carried out anywhere in the world.

      Are there any exceptions or defences?
      • Under Article 8 of the PRC Anti-Unfair Competition Law, a business operator may, in the course of selling or buying goods, offer a discount to others or may pay commission to a middle man.  These actions however must be strictly recorded in the accounts. There is no civil defence.

        Under the PRC Criminal Law, there is no exception or defence to the criminal offence. Article 164 of the PRC Criminal Law provides that an individual who confesses prior to prosecution may receive mitigation or be exempt from punishment.

      What are the penalties?
      • Civil liability

        Under Article 22 of the PRC Anti-Unfair Competition Law, fines of between RMB10,000 to RMB200,00 can be imposed, along with the confiscation of illegal income.

        Criminal liability

        Under Article 163 of the PRC Criminal Law, the solicitation or acceptance of a bribe of “relatively high value” may result in imprisonment of up to five years, along with the possibility of forfeiture of property.

        Under Article 164 of the PRC Criminal Law, the penalty for offering a bribe of a “relatively large” amount may result in fixed-term imprisonment or criminal detention of less than three years.  If the amount involved is “large”, fines and a three to 10 year prison term may be imposed.  If a corporate entity commits the crime, fines may be imposed and the persons who are directly responsible for the crime (either by participating or by failing in a duty to prevent or stop the act) may also be punished.  

        In addition, a corporate entity convicted of commercial bribery will be barred from participating in public tenders.

      This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document. Simmons & Simmons is registered in China as a foreign law firm. We are permitted by Chinese regulations to provide information on the impact of the Chinese legal environment and also to provide a range of other services. We are not admitted to practise in China and cannot, and do not purport to, provide Chinese legal services. We are, however, able to co-ordinate with local counsel to issue a formal legal opinion should this be required.