Law of 29 December 2023 “On Amendments to the Criminal Code of the People’s Republic of China” (中华人民共和国刑法修正案) entering into force on 1 March 2024 provides, in particular, for the following changes:
1. Liability of officials of organisations
One of the key reforms is the extension of articles 165 (abuse of functions) and 166 of the Criminal Code (nepotism, i.e. handing over a profit-making business to relatives and/or friends, purchasing or selling of goods, works and services at above or below market prices, respectively, or purchasing and accepting substandard goods, works and services in the interest of relatives and/or friends) to cover officials of private sector enterprises. From now on, like public officials, they can be held liable in the following manner:
- In serious circumstances - imprisonment or criminal detention of up to three years and/or a fine; and
- In particularly serious circumstances - imprisonment between three and seven years and a fine.
The officials of private sector enterprises are also prohibited from transforming corporate assets into shares (other forms of equity participation) and/or sell them at a lower price. The commission of these crimes is punishable by:
- Imprisonment or criminal detention of up to three years in serious circumstances; and
- Imprisonment between three and seven years in particularly serious circumstances.
2. Sanctions
The Law also changes the sanctions for corruption crimes.
For instance, the minimum term of imprisonment for active bribery has been reduced from five to three years with the possibility to also impose fines.
Additionally, the possibility to impose fines is established with regard to the persons guilty of transferring money or other property to public bodies, public corporations, enterprises, entities or public non-state organisations with the aim to have an undue advantage, as well as guilty of violating the law by providing “kick-backs” or other rewards in their economic activities; in serious circumstances, these crimes are punishable by imprisonment for a period between three and seven years and a fine.
Extortion and/or misappropriation of other peoples’ property is now subject to a varying degrees of punishment: imprisonment or criminal detention of up to three years in serious circumstances, and imprisonment for a period between three and ten years in particularly serious circumstances (the previous version of the Law imposed the maximum imprisonment of three years).
The Law has also revisited the sanctions for the organisations that pay bribes or provide public officials with “kick-backs” and/or other rewards to gain undue advantages: they can be fined in serious circumstances. The natural persons who bear direct responsibility for the respective crime can be sentences to imprisonment of criminal detention for up to three years and a fine in serious circumstances and to imprisonment for a period between three and ten years and a fine in particularly serious circumstances.
3. Aggravating/mitigating circumstances
A number of changes concern the procedure for determining the punishment for active bribery.
More severe liability measures (for example, the maximum imprisonment provided for a specific article of the Criminal Code) can be imposed in the case of:
- Active bribery that has taken place repeatedly and/or involved the bribery of more than one official;
- Active bribery in the implementation of key national or major projects;
- Active bribery with a view to getting the appointment to a certain position, promotion or transfer;
- Active bribery of employees of oversight, law enforcement and judicial bodies;
- Passive bribery of public officials;
- Active and passive bribery and other illegal activities in certain areas, including ecology and the environment, finance, production safety, food and medicine, prevention and mitigation of natural disasters, social welfare, education, health care etc.;
- Use of illicit gains for active bribery.
The Law also establishes the circumstances mitigating the liability for active bribery such as:
- Notification of the competent authorities of the crime before person is held liable;
- Insignificance of the crime;
- Key role in the advancement of the investigation or solving a major crime;
- [Other] significant merits.
