Chinese Commercial Bribery (AUCL)

Question 1

What is the primary statute governing civil commercial bribery in China?

Answer 1

Anti-unfair Competition Law of the People’s Republic of China 2017 (2017 AUCL). This punishes various acts of bribery undertaken by private parties for a business purpose.

Question 2

(T or F) Commercial bribery can only be subject to an administrative penalty under Chinese law

Answer 2

False. Commercial Bribery can be both a criminal offense (under Articles 163 and 164 of the Criminal Law) and an administrative offense (under the AUCL)

Question 3

(T or F) The revised AUCL only targets offerors of bribes for purposes of administrative penalties

Answer 3

False. AUCL is now limited to commercial bribe-takers.

Question 4

(True or False) Bribery of a public entity can trigger criminal liability under the Criminal law

Answer 4

True [Note: Only where the criminal charging threshold is met. This means an individual or an entity gives property to a public entity to seek improper benefits or gives kickbacks or commissions to a public entity in breach of relevant rules (Article 391)

Question 5

(True or False) Acceptance or extortion of a bribe by a public entity can trigger criminal liability under the Criminal law

Answer 5

True (where the criminal charging threshold is met). [Note: This means a public entity requests or accepts property from others in an illegal manner to seek benefits for the other person, or receives kickbacks or commissions and keeps them off the books (Article 387).]

Question 6

(True or False) There is a presumption of vicarious liability on the employer where the employee commits commercial bribery

Answer 6

True [Note: Vivarious liability has always been the regime under the 1996 Interim Provisions on Commercial Bribery. It is a defence for the employer to prove that the employee’s behaviour is irrelevant to seeking transaction opportunities or competitive advantages for the employer

Question 7

Who are the three main recipients of commercial bribery under the AUCL?

Answer 7

　1. any employee of the counterparty in a transaction;
2. any entity or individual entrusted by the counterparty in a transaction to handle relevant affairs; or
　　3. any other entity or individual that is to take advantage of powers or
influence to influence a transaction.

Question 8

(True or False) The third category of recipients (any other entity that takes advantage of its position to influence a transaction) includes SOEs.

Answer 8

True. [Note: SOEs were previously a separate category but the NPC determined that “entities” in the 4th category included SOEs.]

Question 9

(True or False) Transaction counterparties are excluded from the definition of “bribe recipients” under the AUCL.

Answer 9

True. [However, it is unclear whether this would exculpate transaction counterparties from off the book payments].

Question 10

True or false: Acceptance or extortion of a commercial bribe is liable to a fine under the AUCL.

Answer 10

False [Note the AUCL covers the giver of a commercial bribe, not the receiver. Acepting or giving a commercial bribe are offenses under Chinese Law (Article 163 and 164 of 1997 Criminal Law)

Question 11

What are the elements of commercial bribery giving rise to administrative liability?

Answer 11

The bribe is in the form of property or other means (财物或者其他手段).
• The bribe is for the purpose of seeking transaction opportunities or competitive advantages (以谋
取交易机会或者竞争优势).
• The recipient is one of the following:
• staff members of transaction counterparties;
• entities or individuals entrusted by transaction counterparties with the handling of relevant affairs; or
• any other entities or individuals who take advantage of their functional authority or influence to impact
transactions. [Note: Article 7 of AUCL]

Question 12

What are “property or other means” in determining administrative liability for commercial bribery?

Answer 12

• Property, including:
• cash;
• goods;
• fees, for example, for consultancy, promotion, publicity, research or labour;
• commissions; and
• reimbursement of expenses.
• Other means, including intangible or soft benefits, such as providing trips or visits.
• Rebates or discounts that are not expressly and truthfully recorded in the giver’s or the recipient’s accounts. ((Articles 2 and 5, 1996 Interim Provisions on Commercial Bribery.)

Question 13

What are the administrative penalties for civil commercial bribery?

Answer 13

Administrative liability for commercial bribery can lead to confiscation of illegal proceeds, fines of up to RMB3
million and, for corporate entities, the revocation of their business licence.