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This is the first time: China has convicted two more people for bribing foreign public officials. This high-profile ruling sends a clear signal that the time has come to exercise extraterritorial jurisdiction.
In October 2023, China’s supreme court made public a lower court’s ruling that is of great significance: it is the first case of convictions under a 12-year-old law that incorporated the crime of bribery of foreign public officials into Chinese law. Criminal law. Beyond presaging a new era of criminal accountability for Chinese businessmen, those convictions also demonstrate Xi Jinping’s global ambition. This is a first step towards what he calls “the rule of law in foreign affairs. “
The ruling handed down through the Guangzhou Intermediate Court revealed that, from 2017 to 2019, two former senior executives of state-owned China Railway Tunnel Group Co. , Ltd. (CRTG), Xi Zhengbing and Zhou Zhonghe, sought illegitimate business. interest through the payment of bribes totalling S$220,000 (US$166,000) to Henry Foo Yung Thye, then deputy director of the Singapore Land Transport Authority group. Xi was also found guilty of receiving bribes worth 1. 92 million Chinese yuan ($270,000). The court sentenced Xi to five years in prison for paying and accepting bribes, and Zhou to two years in prison for paying bribes.
In 2021, Foo, the Singaporean official tasked with overseeing the structure of a major metro project, was sentenced to five and a half years in criminal terms by a Singapore court for accepting bribes totaling S$1. 24 million. These bribes came from contractors and subcontractors, adding that the CRTG. Foo has been described by Singaporean prosecutors as “the most significant case of corruption in the public sector” in recent times in a country that prides itself on the rectitude of its officials.
The Xi and Zhou case provides a glimpse into China’s application of extraterritorial jurisdiction in anti-corruption laws. In doing so under the larger backdrop of the so-called “Foreign Related Rule of Law,” it also sheds light on China’s ambition to take the driver’s seat in the international order.
China’s original anti-corruption law, enacted in 1979, contained no provisions regarding bribery of foreign public officials. In 2003, China signed the United Nations Convention against Corruption, which requires the State party to enact laws punishing bribery of foreign public officials (FPOs). ) and officials of foreign public organizations (OPOs). After ratifying the Convention, China added the crime of bribery of FPO and OPIO to its criminal law through the Eighth Amendment in 2011. This new provision, applicable to users (entities) of herbs and legal entities), has been added as the second paragraph in Article 164, which provides for bribery of private officials. It provides that “[any user who provides assets to an official of a foreign country or to an official of a foreign public organization for improper purposes of publicity merit shall be punished in accordance with the preceding paragraph [i. e. , bribery of private officials]. “
As for extraterritorial jurisdiction, when China’s Criminal Law was first revised in 1997, it provided Chinese courts with jurisdiction over crimes specified in international treaties or conventions where China is a party or a member. In this case, despite the fact that the crime was committed in Singapore and was a part of Foo’s larger bribery scheme, the Chinese court could assert its jurisdiction based on China’s obligations under the Convention. Additionally, Chinese courts’ jurisdiction could also stem from Xi and Zhou’s Chinese citizenship.
Given the many jurisdictional grounds, why have there been no cases of convictions in China as a result of FPO and OPIUM corruption?This is clearly due to the lack of suspects who can be prosecuted. In the last decade alone, more than 150 Chinese and U. S. corporations have been excluded from the World Bank, the Asian Development Bank and other multilateral progress banks for fraud and corruption. In other countries, high-profile cases involving Chinese or U. S. corporations bribing FPOs have been widely reported. These include unspecified Chinese state-owned corporations that allegedly bribed former Malaysian Prime Minister Najib Razak in exchange for rail and pipeline link projects that would provide corporations with “above-market profitability. “Several Chinese corporations have been investigated by local prosecutors for providing bribes in Latin American countries, including Bolivia, Ecuador and Venezuela.
I propose that the – if not unprecedented – conviction of Xi and Zhou can be attributed to two recent major developments in Chinese law, both locally and internationally.
Clarifying China’s law
At the national level, the judiciary and prosecutors are introducing enforceable measures to fight corruption abroad.
Until recently, Chinese law lacked clear guidance on even the threshold for indictment. At the time of the eighth amendment, bribery of non-public officials (NPOs) was prosecuted if a person paid bribes of over 10,000 yuan or if an entity paid bribes of over 20,000 yuan. According to Article 164 of the Criminal Law, bribery of FPOs and OPIOs should have the same threshold for indictment as that of NPOs.
However, a 2016 court interpretation confuses the issues by raising the threshold for non-profit bribery to 60,000 yuan, but does not specify whether this also applies to FPO and OPIUM bribery. This omission has led to confusion on the basic question of the amount above which corruption becomes corruption. a criminal offense. The confusion was not resolved until May 2022, when the financial threshold was set at 30,000 yuan for any of the crimes.
Despite this vital clarification, prosecutors still needed more guidance before they could implement this provision. For example, what is the scope of PAHO and CIPOs, and what deserves to be considered an “inappropriate business advantage”?Although the Convention has provided definitions for PAHO and OPIO, it is not directly applicable to China’s internal affairs without being incorporated into Chinese law. According to the usual understanding of Chinese law against criminals, officials hired through foreign governments are certainly a type of FPO. But it is not transparent whether, for example, heads of nonprofits funded through a foreign government or nominal representatives of foreign organizations have OPS or OPI status.
Moreover, unlike maximum bribery offenses in China, which require the detail of an “undue advantage,” FPO and OPIO bribery requires an “unfair advertising advantage. “There are several judicial interpretations and departmental rules that spell out the definition of “undue advantage. “, but none of them face an “undue advertising advantage. “
Not surprisingly, then, when being interviewed by a leading national legal newspaper, several judges and prosecutors expressed concern that this new provision is not really operational, and that its symbolic meaning probably exceeds its judicial effect.
Nevertheless, the court did hand down the convictions of Xi and Zhou. It is not clear what exact improper commercial benefit the CRTG had sought, except that Foo reportedly shared confidential information relating to the project and promised to support the bribers in their bid. At least there is little doubt that Foo, as director of Singapore’s Land Transport Authority, was an FPO.
The judgment was announced with fanfare, in the presence of local legislators. It was immediately published by the top court’s website, as well as People’s Daily, the Chinese Communist Party’s mouthpiece. The decision has likely become final since no appeal has been reported.
By promoting the Guangzhou court’s decision, the Supreme Court is encouraging courts across the country to refer to it while adjudicating similar cases. Although the judiciary and the procuracy are likely to release more detailed guidance related to foreign corruption in the near future, the campaign of Foreign Related Rule of Law (FRROL) is marching on and cannot wait. For now, courts have to take a pragmatic approach called “crossing the river by feeling the stones.”
Chinese law goes international
China’s hard-hitting FRROL crusade is the other recent development in Chinese law that helped the Guangzhou court succeed in its convictions in this case. As China becomes assertive on a global scale, expanding its Belt and Road Initiative (BRI) to 154 countries and 32 foreign organizations, Chinese leaders are emphasizing the importance of being able to apply their own regulations to foreign-related issues.
The term FRROL was coined by Xi Jinping in 2020. There is still no consensus among scholars and practitioners as to its specific application in the legal field. One of the most prominent authorities on this subject within China is Huang Huikang, a law professor and a former diplomat, who gave a talk on this topic in November to the Politburo, the highest political body of the Chinese Communist Party. According to Huang, one of the most important aspects of FRROL is to apply jurisdiction of domestic laws to legal matters with foreign elements, which is to be done by improving both legislation and law enforcement.
Huang underlined that FRROL is different from long-arm jurisdiction in the United States The latter allows a U.S. court to exercise jurisdiction over foreign persons or entities having minimum contacts with the United States. For example, it allows the prosecution of individuals operating websites in foreign countries whose only contact with the U.S. is the use of their websites by U.S. citizens. The Chinese government portrays U.S. long-arm jurisdiction as unilateralism and bullying. Its own FRROL, on the other hand, it portrays as a concrete embodiment of widely recognized legal principles for extraterritorial jurisdictions.
In theory, Huang’s distinction between FRROL and far-reaching jurisdiction is legally subtle. In practice, given China’s global ambition, FRROL will likely be a Chinese euphemism for a policy that is necessarily akin to the far-reaching jurisdiction it criticizes.
China has long been accused of intentionally neglecting its foreign anti-corruption laws. When it competes with democracies where bribery of foreign public officials is vigorously prosecuted, it reaps the benefits of this negligence, particularly in some BIS countries where corruption is widespread. Is China curtailing its unethical but lucrative practices?It has two main incentives, one reactive and one proactive.
In response, China touts the merits of FRROL to thwart foreign interference and sanctions, and to block U. S. jurisdiction with a long arm. have deteriorated over the past 8 years. Geopolitical tensions are emerging over many issues, including Taiwan’s prestige and accusations of Chinese espionage. Beijing feels isolated and victimized by Western countries led by the United States. FRROL will serve as a platform from which to unleash lawful counterattacks.
China proactively prides itself on a “rules-based” business environment to attract and regulate foreign investment, provide legal protection to the BIS, and increase its influence over foreign rulemaking. To recover from the economic effect of three years of COVID-19 lockdowns, China eliminated visa requirements for 11 countries in Asia and the EU. It has also increased foreign flights to attract foreign companies. It needs to reassure foreign investors, who need predictable results.
At the same time, China has the world’s largest creditor. Over the past three years, $78. 5 billion of debt from China’s $1 trillion BIS infrastructure finance program has defaulted, and China spent $240 billion on the bailout budget between 2008 and 2021. China is interested in identifying a legal framework for dispute resolution.
As the world’s second largest economy, China is no longer shy in showing its ambition to reshape the global order. The Supreme Court’s publicization of the Xi and Zhou case sends a clear signal to the country’s 409 intermediate courts: the time has come to exercise extraterritorial jurisdiction. The Xi and Zhou case will be the first of many prosecutions involving FPOs and OPIOs. People and businesses who used to think they would have little contact with China’s judicial system will feel the impact of China’s anti-corruption laws and policies.
It is one thing to expand a country’s jurisdiction over foreign-related disputes. It is quite another to instill confidence in the credibility of a country’s judicial formula and acceptance of its decisions. Beijing has long been criticized for employing its domestic anti-corruption campaigns. as a weapon to get rid of unwanted political rivals. Will foreign anti-corruption legislation and FRROL stick to the same pattern?Will they become tools for China to manipulate the global order?Or, in a more positive scenario, will they become tools for China to manipulate the global order?Could they even, through a cycle of virtuous commentary, improve China’s rule of law?We’ll be watching to see.
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In October 2023, China’s supreme court made public the ruling of a major lower court: it is the first case of convictions under a 12-year-old law that incorporated the crime of bribery of foreign public officials into China’s anti-criminal law. . . . Beyond presaging a new era of criminal accountability for Chinese businessmen, those convictions also demonstrate Xi Jinping’s global ambition. This is a first step towards what he calls “the rule of law in foreign affairs. “
The ruling handed down through the Guangzhou Intermediate Court revealed that, from 2017 to 2019, two former senior executives of state-owned China Railway Tunnel Group Co. , Ltd. (CRTG), Xi Zhengbing and Zhou Zhonghe, sought illegitimate business. interest through the payment of bribes totalling S$220,000 (US$166,000) to Henry Foo Yung Thye, then deputy director of the Singapore Land Transport Authority group. Xi was also found guilty of receiving bribes worth 1. 92 million Chinese yuan ($270,000). The court sentenced Xi to five years in prison for paying and accepting bribes, and Zhou to two years in prison for paying bribes.
In 2021, Foo, the Singaporean official tasked with overseeing the structure of a major metro project, was sentenced to five and a half years in criminal terms by a Singapore court for accepting bribes totaling S$1. 24 million. These bribes came from contractors and subcontractors, adding that the CRTG. Foo has been described by Singaporean prosecutors as “the most significant case of corruption in the public sector” in recent times in a country that prides itself on the rectitude of its officials.
The Xi and Zhou case provides insight into China’s application of extraterritorial jurisdiction in anti-corruption laws. In doing so, in the broader context of the so-called “rule of law in foreign affairs,” it also highlights China’s ambition to take the lead. in the external order.
China’s original anti-corruption law, enacted in 1979, contained no provisions related to bribery of foreign public officials. In 2003, China signed the United Nations Convention against Corruption, which requires the State party to enact laws punishing bribery of foreign public officials (FPOs). ) and officials of foreign public organizations (OPOs). After ratifying the Convention, China added the crime of bribery of FPO and OPIO to its criminal law through the Eighth Amendment in 2011. This new provision, applicable to users (entities) of herbs and legal entities), has been added as the second paragraph in Article 164, which provides for bribery of private officials. It provides that “[any user who provides assets to an official of a foreign country or to an official of a foreign public organization for improper purposes of publicity merit shall be punished in accordance with the preceding paragraph [i. e. , bribery of private officials]. “
With regard to extraterritorial jurisdiction, when China’s criminal offences law was first revised in 1997, it conferred jurisdiction on Chinese courts over offences specified in foreign treaties or conventions to which China is a party or member. As part of a larger Foo corruption scheme, the Chinese court can simply assert its jurisdiction on the basis of China’s obligations under the Convention. In addition, the jurisdiction of Chinese courts may also derive from Xi and Zhou’s Chinese citizenship.
Given the many jurisdictional grounds, why have there been no cases of conviction in China as a result of FPO and OPIO corruption?Of course, this is due to the lack of suspects who can be prosecuted. In the last decade alone, more than 150 Chinese and U. S. corporations have been expelled from the World Bank, the Asian Development Bank and other multilateral progress banks for fraud and corruption. High-profile cases involving Chinese or U. S. corporations bribing FPOs have been widely reported in other countries. companies that allegedly bribed former Malaysian Prime Minister Najib Razak in exchange for rail and pipeline link projects that would provide corporations with “above-market profitability. “Several Chinese corporations have been investigated through local prosecutors for providing bribes in Latin American countries, adding that Bolivia, Ecuador and Venezuela.
I propose that the – if not unprecedented – conviction of Xi and Zhou can be attributed to two recent major developments in Chinese law, both locally and internationally.
Clarifying China’s Law
At the national level, the judiciary and prosecutors are introducing enforceable measures to fight corruption abroad.
Until recently, Chinese law lacked transparent guidance, even at the threshold of indictment. At the time of the Eighth Amendment, bribery of private officials (NPO) was prosecuted if a user paid bribes of more than 10,000 yuan or if an entity paid bribes of more than 10,000 yuan. more than 20,000 yuan. According to Article 164 of the Penal Code, the corruption of FPO and OPIO has the same threshold of indictment as that of NPOs.
However, a 2016 court interpretation confuses the issues by raising the threshold for non-profit bribery to 60,000 yuan, but does not specify whether this also applies to FPO and OPIUM bribery. This omission has led to confusion on the basic question of the amount above which corruption becomes corruption. a criminal offense. The confusion was not resolved until May 2022, when the financial threshold was set at 30,000 yuan for any of the crimes.
Despite this vital clarification, prosecutors still needed more guidance before they could implement this provision. For example, what is the scope of PAHO and CIPOs, and what deserves to be considered an “inappropriate business advantage”?provided definitions for PAHO and OPI, it is not directly applicable to China’s internal affairs without being incorporated into Chinese law. According to the common understanding of Chinese law against criminals, officials hired through foreign governments are certainly a type of FPO. But it is not transparent whether, for example, heads of nonprofits funded through a foreign government or nominal representatives of foreign organizations have OPS or OPI status.
Moreover, unlike maximum bribery offenses in China, which require the detail of an “undue advantage,” FPO and OPIO bribery requires an “unfair advertising advantage. “There are several judicial interpretations and departmental rules that spell out the definition of “undue advantage. “, but none of them face an “undue advertising advantage. “
It is not surprising, therefore, that a number of judges and prosecutors, interviewed through a leading national legal journal, expressed fears that this new provision is not operative and that its symbolic importance is likely to go beyond its judicial effect.
However, the court handed down the convictions of Xi and Zhou. It’s unclear exactly what abusive publicity merit the CRTG was seeking, unless Foo allegedly shared sensitive data related to the task and promised bribes in his bid. At least there is no doubt that Foo, as director of the Land Transport Authority of Singapore, was an FPO.
The verdict was announced with great fanfare, in the presence of local legislators. It was published without delay on the supreme court’s online page, as well as through the People’s Daily, mouthpiece of the Chinese Communist Party. definitive since no appeals have been reported.
By promoting the Guangzhou court’s decision, the Supreme Court is encouraging courts across the country to refer to it while adjudicating similar cases. Although the judiciary and the procuracy are likely to release more detailed guidance related to foreign corruption in the near future, the campaign of Foreign Related Rule of Law (FRROL) is marching on and cannot wait. For now, courts have to take a pragmatic approach called “crossing the river by feeling the stones.”
Chinese law goes international
China’s hard-hitting FRROL crusade is the other recent development in Chinese law that helped the Guangzhou court succeed in its convictions in this case. As China becomes assertive on a global scale, expanding its Belt and Road Initiative (BRI) to 154 countries and 32 foreign organizations, Chinese leaders are emphasizing the importance of being able to apply their own regulations to foreign-related issues.
The term FRROL was coined through Xi Jinping in 2020. There is still no consensus among academics and practitioners regarding its express application in the legal field. One of the most prominent governments on the issue in China is Huang Huikang, a law professor and former diplomat, who gave a lecture on the issue in November before the Politburo, the Chinese Communist Party’s top political body. According to Huang, one of the most important aspects of FRROL is to apply the jurisdiction of domestic law to legal issues with foreign elements, which will need to be done by improving the law and law enforcement.
Huang noted that FRROL is another far-reaching jurisdiction in the United States. The latter allows a U. S. court to exercise jurisdiction over foreign persons or entities with minimal contact with the United States. For example, it allows for the processing of Americans operating in foreign countries whose only contact with the United States is through the use of their U. S. citizens. The Chinese government describes the long-range jurisdiction of the United States as unilateralism and intimidation. Its own FRROL, on the other hand, presents itself as a concrete embodiment of widely identified legal principles for offshore jurisdictions.
In theory, Huang’s distinction between FRROL and far-reaching jurisdiction is legally subtle. In practice, given China’s global ambition, FRROL will likely be a Chinese euphemism for a policy that is necessarily akin to the far-reaching jurisdiction it criticizes.
China has long been accused of intentionally neglecting its foreign anti-corruption laws. When it competes with democracies where bribery of foreign public officials is vigorously prosecuted, it reaps the benefits of this negligence, particularly in some BIS countries where corruption is widespread. Is China curtailing its unethical but lucrative practices?It has two main incentives, one reactive and one proactive.
Reactively, China is touting FRROL to counteract foreign interference and foreign sanctions, and to block U.S. long-arm jurisdiction. China-U.S. relations have soured over the past eight years. Geopolitical tensions are mounting over numerous matters, including Taiwan’s status and accusations of Chinese espionage. Beijing feels isolated and victimized by U.S.-led Western countries. FRROL will serve as a platform from which to mount legal counterattacks.
China proactively prides itself on a “rules-based” business environment to attract and regulate foreign investment, provide legal protection to the BIS, and increase its influence over foreign rulemaking. To recover from the economic effect of three years of COVID-19 lockdowns, China eliminated visa requirements for 11 countries in Asia and the EU. It has also increased foreign flights to attract foreign companies. It needs to reassure foreign investors, who need predictable results.
At the same time, China has the world’s largest creditor. Over the past three years, $78. 5 billion of debt from China’s $1 trillion BIS infrastructure finance program has defaulted, and China spent $240 billion on the bailout budget between 2008 and 2021. China is interested in identifying a legal framework for dispute resolution.
As the world’s second largest economy, China no longer hesitates to flaunt its ambition to reshape the global order. The Supreme Court’s publication of the Xi and Zhou case sends a transparent signal to the country’s 409 intermediate courts that the time has come to negotiate extraterritorially. jurisdiction. The Xi and Zhou case will be the first in a long series of legislative lawsuits involving FPO and OPIO. People and corporations who thought they had little contact with China’s judicial system will feel the impact of China’s anti-corruption legislation and policies. .
It is one thing to expand a country’s jurisdiction over foreign-related disputes. It is quite another to instill confidence in the credibility of a country’s judicial formula and acceptance of its decisions. Beijing has long been criticized for employing its domestic anti-corruption campaigns. as a weapon to get rid of unwanted political rivals. Will foreign anti-corruption legislation and FRROL stick to the same pattern?Will they become tools for China to manipulate the global order?Or, in a more positive scenario, will they become tools for China to manipulate the global order?Could they even, through a cycle of virtuous commentary, improve China’s rule of law?We’ll be watching to see.
In October 2023, China’s supreme court made public a lower court’s ruling that is of great significance: it is the first case of convictions under a 12-year-old law that incorporated the crime of bribery of foreign public officials into Chinese law. Criminal law. Beyond presaging a new era of criminal accountability for Chinese businessmen, those convictions also demonstrate Xi Jinping’s global ambition. This is a first step towards what he calls “the rule of law in foreign affairs. “
The sentence was issued through the Guangzhou Intermediate Court. It revealed that from 2017 to 2019, two former senior executives of state-owned China Railway Tunnel Group Co. , Ltd. (CRTG), Xi Zhengbing and Zhou Zhonghe, pursued illegitimate business interests by paying bribes totalling S$220,000. $166,000) to Henry Foo Yung Thye, then deputy director of organization at the Land Transport Authority of Singapore. Xi was also found guilty of receiving bribes worth 1. 92 million Chinese yuan ($270,000). The court sentenced Xi to five years in prison for paying and accepting bribes, and Zhou to two years in prison for paying bribes.
Chi Yin is Chief Operating Officer and Research Fellow at the U. S. and Asia Law Institute at New York University School of Law, and worked as an intermediate court to deliver judgments in China for six years.