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According to the White Paper, recent efforts to deal with cases of commercial bribery have been focused in six major areas, namely engineering construction, the grant of land use rights, mineral resources exploration and mining rights, trade of property rights, the sourcing and marketing of pharmaceuticals, government procurement and the development of and trade in resources. There has been a broader focus in other areas including bank lending, securities and futures trading, commercial insurance, publishing and distribution, sports, telecommunications, electric power, quality control and environmental protection. The White Paper also refers to the launch of the crackdown on cross-border commercial bribery in which trans-national businesses operating in China were targeted.³

The White Paper notes that the investigation of cases involving corruption has been prioritized in response to the different characteristics of corruption at different stages of China's development. In that respect it notes that in the 1990s efforts were strengthened to investigate and deal with cases of corruption in the fields of finance, real estate and engineering construction while in the 21st century the focus has shifted to investigating and dealing with cases in which senior public officials have taken advantage of their control over personnel, judicial powers and rights of administrative examination and approval or administrative encforcement in collusion with lawbreaking businessmen, or have traded power for money or solicited and taken bribes and cases of corruption that cause mass disturbances and major accidents due to negligence.

The solution to corruption in these priority areas has been identified in the White Paper as involving the implementation of a strengthened system of administrative accountability, power restraint, supervision and transparency. The discipline inspection bodies of the CPC, committees of the National People's Congresses and People's Political Consultative Conferences acting independently but in coordination with the People's Courts and People's Procuratorates under the leadership of the National Bureau of Corruption Prevention of China, and the public via whistle-blowing hotlines and websites as well as via the expression of public opinion in the news media and on the internet have all been idetified as having important roles to play in this solution.⁴

The government acknowledges that the fight to combat corruption and build a clean government in China is still a difficult one and one which requires the active involvement of the public at large as well as the long-term education of the public and government officials to instill principles of integrity that are regarded internationally as essential to combatting corruption at its roots.⁵

Comments

Businesses operating in China should note that efforts to fight corruption are being strengthened in response to China's actual situation, especially in certain key industries and in relation to key post-holders. Where businesses are unlucky enough to fall victim to corruption in China, the White Paper makes clear that they have an 'unimpeded right' to complain and to take action through various channels including by filing a lawsuit. ⁶The White Paper also makes clear that in its efforts to combat corruption, the government will adhere to a constitutional and legal framework which protects the legitimate rights of those being investigated and prosecuted on suspicion of their involvement in corrupt acts.

¹  <http://english.gov.cn/official/2010-12/29/content_1775353.htm>

² <http://english.gov.cn/2011-01/10/content_1781680.htm>

³  White Paper, Chapter VI.

⁴  White Paper, Chapter IV.

⁵  <http://english.gov.cn/2011-01/10/content_1781680.htm>; White Paper Chapter VII

⁶  White Paper, Chapter IV

根据白皮书，近年来，重点查处的商业贿赂行为主要集中在六大领域，即工程建设、土地使用权和探矿采矿权出让、产权交易、医药购销、政府采购以及资源开发和经销。查处和打击范围还涉及其他领域，包括银行信贷、证券期货、商业保险、出版发行、体育、电信、电力、质检和环保等。白皮书还提及对跨国（境）商业交易中商业贿赂行为的打击。³

白皮书表示，中国政府针对腐败行为在中国发展不同阶段的不同特点确定查办案件的重点。在20世纪90年代，中国加大对金融、房地产、工程建设等领域案件的查处力度；进入21世纪，着重查处领导干部利用人事权、司法权、行政审批权、行政执法权等进行官商勾结、权钱交易、索贿受贿的案件以及导致群体性事件和重大责任事故的腐败案件。

白皮书中确定的对重点领域中腐败行为的治理方案包括加强行政审计、权力制约和监督以及提高公开透明度。在处理腐败现象中，中国共产党内部监督机构、人民代表大会相关委员会和中国人民政治协商会议相互独立，并在国家预防腐败局的统筹下与人民法院、人民检察院密切合作；而且，通过举报热线、举报网站的检举以及通过新闻媒体和网站发表公开意见的公众监督发挥了重要作用。⁴

中国政府承认中国反腐败行动和廉政建设仍然任务繁重，并需要公众的积极参与以及对公共和政府工作人员长期开展廉政教育，国际上普遍认为这是反腐败的根本。⁵

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在中国经营的公司应该注意，针对中国现状，尤其是针对一些关键领域以及掌握重要职权的官员的反腐败力度正在加强。在中国，如果某公司不幸成为腐败行为的受害者，白皮书对此明确表示，公众有权利举报或者通过包括起诉在内的各种渠道采取行动。⁶ 白皮书还表明，在致力于反腐败的同时，政府将根据宪法及法律制度保护被调查或者被举报涉嫌参与腐败行为的嫌疑人的合法权利。

¹ <http://www.gov.cn/zwgk/2010-12/29/content_1775173.htm>

²<http://www.gov.cn/ldhd/2011-01/10/content_1781174.htm>

³ 白皮书第六节。

⁴ 白皮书第四节。

⁵ http://www.gov.cn/ldhd/2011-01/10/content_1781174.htm>；白皮书第七节。

⁶ 白皮书第四节。

The Policy Environment

In the last decade, the percentage of corruption cases which Chinese authorities have investigated and which arise from international trade or involve foreign business entities is surprisingly high, accounting for almost two thirds of investigations that have resulted in a penalty. On June 22, 2008, the CPC Central Committee promulgated its 2008-2012 Work Plans for Establishing and Improving the System of Corruption Punishment and Prevention, which focus on the investigation and punishment of commercial bribery committed by foreign business entities operating in the PRC.

The Legal Framework

For many business operators, their counterparts in China may include "state functionaries". Article 93 of the PRC Criminal Law, amended on March 14, 1997, defines this concept broadly. It includes persons who hold office in state organs, employees of state-owned companies and others who perform official duties according to the law. Foreign companies supplying infrastructure, teaching materials and hospital equipment in the Chinese market are examples of，those which deal with state functionaries on a regular basis.

With this concept in mind, Article 389 of the PRC Criminal Law makes it a crime for an individual or unit to give "money or property" to a state functionary for the purpose of obtaining an undue advantage.

On November 20, 2008, the Supreme People's Court and the Supreme People's Procuratorate jointly issued their Opinion on Some Issues Concerning the Application of the Law in Criminal Commercial Bribery Cases ("Opinion"). In the Opinion, the concept of "property" in the crime of bribery under the PRC Criminal Law was clarified to include any "property interest" that can be quantified with a monetary value.

Payment or reimbursement of travelling expenses is certainly caught by the broader concept of "property interest" and so is the provision of meals. Strictly speaking, the provision of such benefits, even of a low value, could attract criminal liability, as long as the provider had the requisite intent to obtain an undue advantage.

In reality, there is a monetary threshold for criminal prosecution. According to the Threshold for Criminal Prosecution in Bribery Cases issued by the Supreme People's Procuratorate, the "property" offered as a bribe must be at least RMB10,000 for an individual or RMB200,000 for a unit, to justify criminal prosecution. However, these amounts may be taken cumulatively so that if meals or entertainment of a low value are provided on a regular basis (and for the purpose of obtaining an undue advantage), it will progressively attract criminal liability to the provider and eventually justify criminal prosecution.

However, according to Article 10 of the 2008 Opinion, prosecutors and judges must comprehensively analyze relevant information in addition to the value and purpose of giving a "property interest". The factors which they must consider include the past contacts between the provider and the recipient, whether provider and recipient are relatives or friends, the reason for and the occasion on which the "property interest" was given, whether the provider made any request in connection with the recipient's post, and whether the recipient actually rewarded the provider by using his or her post in a corrupt way. The purpose of this analysis is to differentiate, on the basis of the facts of the case, between legitimate gifts and bribes, both to state functionaries and otherwise.

Business operators in China are also prohibited from engaging in "commercial bribery" by giving money or property to another business unit or individual, or by any "other means", for the purpose of selling or purchasing goods. Business operators may be levied with an administrative penalty of between RMB10,000 and RMB200,000, if found to have engaged in commercial bribery.

The concept of "property" in Article 8 of the PRC Anti-Unfair Competition Law ("Anti-Unfair Competition Law"), which became effective as of December 1, 1993, is construed narrowly by the State Administration for Industry and Commerce ("SAIC"), the authority responsible for supervising the conduct of business operators in China. According to Article 2 of the Interim Rules for Prohibiting Commercial Bribery, issued by the SAIC on November 15, 1996 ("SAIC Interim Rules"), "property" under Article 8 of the Anti-Unfair Competition Law means cash and material objects. It does not include meals.

According to Article 2 of the SAIC Interim Rules, offering domestic or international tours (for the purpose of selling or purchasing goods) is an example of commercial bribery using "means other than paying in property". The term "other means" has an inclusive definition but in practice has not been interpreted by AICs to include meals.

There is an exception under the SAIC Interim Rules to the prohibition against business operators giving gifts of property to other business units or individuals as part of their trading activities – advertising gifts of a small value can be given, based on common commercial practice. In the spirit of this exception, the provision of low-cost meal treats and related hospitality is unlikely to trigger an investigation by the AIC if it is part of normal commercial practice. However, the provision of conspicuous or unusually expensive entertainment, such as a golf trip or a sightseeing tour, might attract attention.

AICs at or above county level have jurisdiction to supervise and examine cases of commercial bribery. If the activity constitutes a crime, they are required to transfer the case to judicial organs for further investigation and prosecution.

It is also important to note that disciplinary rules apply to state functionaries and other official personnel. The leaders of state-owned enterprises are prohibited in general from using their positions for personal gain and to the detriment of the enterprise which they serve. In particular, they must not accept personal gifts or any other items of value that ought rightfully to be awarded to the enterprise.

In addition, business counterparts who are members of the China Communist Party must abide by internal rules which prohibit them from accepting gifts or banqueting that might influence the impartial execution of their official duties. Those who accept invitations to meals which might unduly influence their official conduct are liable to punishment (such as a warning in serious cases or a more severe punishment in very serious cases) under Article 80 of the Communist Party Disciplinary Punishment Rules promulgated by the Central Anti-Commercial Bribery Taskforce under the Central Commission of Discipline Inspection of the China Communist Party on February 28,2004.

Likewise, persons who are civil servants are prohibited from using their post to seek personal gains for themselves or for others or for engaging in any activities for profit. They may be punished (including by warning, demerit, demotion or dismissal) and their eligibility for any wage rise, promotion or any other reward for good conduct as a civil servant will be suspended for the duration of the punishment.

Although the Communist Party Disciplinary Punishment Rules and the PRC Civil Servants Law will not apply to the provider of hospitality if the provider itself is not a party member or civil servant, providing paid hospitality or paying for the travel expenses of a person who is a party member or civil servant may be considered a type of "unfair competition activity" under the Central Leadership Group of the Anti-Commercial Bribery Administration's Opinion on Accurately Mastering the Policy in dealing with Commercial Bribery on May 28,2007("2007 Opinion").

In the 2007 Opinion, a distinction was made between "criminal commercial bribery activities", "unlawful activities attracting administrative penalties" and "unfair competition activities – those activities involving low amounts which are against business ethics or market rules". While "unfair competition activities" under the 2007 Opinion will not attract criminal or administrative liability, another business operator who is harmed by such activities may recover damages and its own costs of investigating the activity by bringing a lawsuit in the PRC People's Court under Article 20 of the Anti-Unfair Competition Law. Such public action could in turn result in an administrative investigation.

Conclusion

The purposes of China's laws against bribery are to prevent corruption and to safeguard fair competition. While the current policy is focused on the investigation and punishment of commercial bribery committed by foreign business entities operating in the PRC, it is clear that prosecutors and judges will attempt to differentiate between genuine gifts, reasonable commercial activity and actual bribes. Because the threshold for criminal prosecution is cumulative, compliance-oriented business operators will take a cautious approach to the provision of paid entertainment and travel opportunities to their business counterparts in China, even if each occasion is of a small value, and will audit their operations to eliminate the risk of forming corrupt intent. This might mean not extending invitations on some occasions or to some persons, even when local custom seems to condone it. Where legal compliance is part of the business operator's bottom line this decision will come naturally. Seeking specific legal advice in case of doubt is strongly encouraged.