Companies in China: Internal Corruption and Bribery Treatment
It is important for those who have businesses in China to understand that corporates in China can be held liable for the actions of their employees, directors, and officers under criminal, administrative, and civil laws.
The enforcement of anti-bribery and anti-corruption legislation in China has become increasingly vigorous in recent years. It involves the?PRC Criminal Law and the?PRC Anti-unfair Competition Law?(“AUCL”), along with various government departments’ administrative rules and implementations.
The?PRC Criminal Law?applies to:
- “official bribery”, involving government officials and state functionaries
- “commercial bribery”, involving private enterprises and/or their employees).
AUCL prohibits “commercial bribery”.
Keeping an eye on business contexts, instances where corrupt behavior is likely to be faced by organizations include, for example
-?????losing bidder hired by winning bidder
-?????continual acceptance of high-price/low quality goods
-?????use of unneeded middlemen in the transaction
-?????routine entertainment/gifts for ‘guanxi’.
Senior management may occasionally benefit in ways that are advantageous to the business as a whole. Bribery of customers or channel partners may be involved in exchange for goods or services, including concrete and abstract benefits like the assurance of additional orders, improved advertising, etc.
There may also occur the case of company’s affiliates – such as agents/dealers/distributors - engaged in bribery.
领英推荐
Commercial corruption can have serious repercussions for a company's reputation as well as heavy fines for the company and imprisonment for the individuals involved.
Because of this, it's crucial for Chinese businesses to grasp the behaviors that constitute commercial corruption.
Each company shall have policies and procedures in place to handle any eventualities and take adequate measures in response, including draft of:
- codes of conduct for suppliers, clients, affiliates
- employee policies
- seals management procedure
- diversified payment approval procedures etc.
The related trainings and evidence of the attendance and acknowledge by the employees is essential for company’s filing.
You can't afford to wait, if your company in China has not already taken measures internally.
Have a thought. And let's talk.