On July 25, 2023, the Draft Amendment (XII) to the PRC Criminal Law (the “Draft Amendment XII”) was submitted to the Fourth Session of the Standing Committee of the 14th National People’s Congress for deliberation. The Draft Amendment XII enhances the fight against crimes relating to bribery and adds provisions to combat corruption by internal staff members of private enterprises. Below we share our insights regarding the main content of the Draft Amendment XII, which we hope work as a catalyst and reference for further discussion.
I. Strengthening penalties on crimes related to offering bribes
In recent years, Chinese judicial organs have acted to punish the offering and accepting of bribes to fight corruption. The Draft Amendment XII strengthens the penalties on crimes relating to offering bribes from three aspects and strives to govern corruption issues. The specific proposed amendments include:
1. Adding six circumstances with heavier penalties on the offering of bribes. The current PRC Criminal Law (the “Current Criminal Law”) does not stipulate aggravating circumstances for crimes related to offering bribes, and only stipulates special circumstances, including “offering bribes to more than three people”, where the criminal threshold is RMB 10,000 (under normal circumstances, the criminal threshold is RMB 30,000). The Draft Amendment XII proposes to add six circumstances, including but not limited to offering bribes multiple times, offering bribes to several people and offering bribes to state functionary bodies, where heavier penalties will be imposed.
2. Adjusting the criminal threshold and penalties for offering bribes to match that of accepting bribes. The Current Criminal Law and relevant judicial interpretations adopt the same modes on the criminal threshold of offering bribes and the crime of accepting bribes, i.e., RMB 30,000 under normal circumstances and RMB 10,000 under special circumstances, but such special circumstances for the two crimes would be different. For example, the special circumstances for the crime of accepting bribes includes “soliciting bribes multiple times”, while the special circumstances for the crime of offering bribes includes “offering bribes to more than three people”. The Draft Amendment XII further adjusts the relevant provisions on the crime of offering bribes, in connection with the relevant provision on the crime of accepting bribes.
3. Adjusting the penalties for offering bribes by an entity. The Current Criminal Law only has one-layer for the crime of offering bribes by an entity which is five-year imprisonment. The Draft Amendment XII proposes to adjust the penalties for offering bribes by an entity to two layers, and the maximum penalty could be 10-year imprisonment.
II. Adding relevant provisions to combat corruption committed by the internal staff of private enterprises
On July 14, 2023, the Central Committee of the Communist Party of China and the State Council issued the Opinions on Promoting the Development and Enlargement of the Private Economy, which put forward new opinions on the development of the private economy. The Draft Amendment XII adds new provisions for corruption by internal staff members, especially senior and other key personnel, of private enterprises. These involve the crime of illegally engaging in similar businesses under Article 165, the crime of illegally seeking profits for relatives and friends under Article 166, and the crime of practicing favoritism by converting shares at low prices or selling state-owned assets under Article 169. Under the Current Criminal Law, these three crimes combat company personnel operating similar businesses on their own or through their relatives or friends, or selling state-owned assets, which may harm a company’s interests, but they are all limited to state-owned companies and enterprises. The Draft Amendment XII proposes to extend the scope of application of such crimes by the staff of private enterprises, which, if implemented, will provide a powerful weapon for private enterprises to prevent conflicts of interest and combat staff taking advantage of positions for private benefit. This will be an important step in combating corruption and protecting the private economy.
According to the legislative work plan previously released by the Standing Committee of the National People’s Congress, Amendment XII to the Criminal Law is to be reviewed and adopted this year, and we will continue to follow up on its progress.