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china matters

China Matters: Doing Business in the PRC Identifying Corruption- Related Risks and Performing Necessary Due Diligence

August 03, 2010

By Laura Flippin, Lesli Ligorner & Barbara Tsai

One of the most significant steps prior to making any new investment in the Peoples Republic of China (the PRC) is to perform proper due diligence. The PRC presents unique challenges for foreign investors and businesses covered by the U.S. Foreign Corrupt Practices Act (the FCPA) which make performing thorough due diligence critical: the prevalence of corruption and customer kickbacks in the PRC, the strong expectation of business courtesies and gratuities in Chinese culture, and heavy reliance on third party intermediaries to conduct all aspects of business.