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Extraterritorial Effect of the Anti-Corruption Law of the Peoples Republic of China

April 27, 2011

The Global Compliance and Disputes Practice

On February 25, 2011, the PRC legislature passed 49 amendments to the Criminal Law of the Peoples Republic of China (Criminal Law). One such amendment Amendment No. 8 of the Criminal Law criminalizes the payment of bribes to non-PRC government officials and to international public organizations (the Amendment). Section XXIX of the Amendment, Revising Article 164 of the Criminal Law, states that:

If an individual gives something of great value to an employee of a company, enterprise or other entity for improper gains and interests, such person shall be sentenced to a fixed-term imprisonment of no more than three years of criminal detention; if the amount of value involved is especially huge, the offender shall be sentenced to a fixed-term imprisonment of not less than three years but not more than ten years, and be concurrently subject to a fine.

An individual who gives something of value to a foreign public official or official of an international public organization in pursuit of improper commercial interests shall be punished in accordance with the preceding paragraph of this Article. (Emphasis added.)

If an entity commits crimes which fall into the preceding two paragraphs of this Article, the entity shall be subject to a fine and the chief person in charge who is directly liable for such offense as well as the other persons who are directly involved in the offense shall be punished according to the first paragraph of this Article.

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