China's top legislature passes law on cross-border corruption

Centre · 2China's top legislature passed the Anti-Cross-Border Corruption Law on Friday 6 November, according to the state news agency Xinhua. 1 2 Centre · 1It was approved at the close of the 25th session of the 14th National People's Congress Standing Committee and, per Xinhua as relayed by the South China Morning Post, took effect immediately. 2 Centre · 2Xinhua said the law aims to deepen international cooperation on the issue and safeguard China's sovereignty and security; the statute sets up formal mechanisms for handling cross-border cases, international cooperation and asset recovery. 1 2

Centre · 2A draft was first reviewed on 25 August and revised for a second deliberation earlier this month; the revisions broadened the scope, including a provision supporting a fairer global anti-corruption governance system, per Xinhua. 2 1 Centre · 2The revisions also tightened confidentiality rules, requiring investigators to protect state secrets, commercial secrets and personal data gathered in probes, and lawmakers refined provisions allowing enforcement bodies to use digital tools in cross-border investigations. 1 2 Centre · 1Chinese companies doing cross-border business must set up anti-corruption compliance functions proportionate to their size, activities and risk exposure, according to Xinhua. 1

Centre · 2The law follows a call from top anti-corruption official Li Xi, in a People's Daily article on Thursday, for legislation to track down fugitives, prevent flight and recover illicit assets; it has been in the legislative plan since 2023, and the Party's third plenum in July 2024 called for such a law. 1 2 Centre · 1The SCMP describes the law as a statutory backbone for campaigns such as Operation Fox Hunt and Operation Sky Net, which it says have been hampered by the lack of extradition treaties with key Western countries, and also as a defensive measure against perceived foreign legal overreach. 2 Centre · 1The SCMP reports that the law codifies measures to block unauthorised foreign investigations on Chinese soil and authorises retaliation against overseas enforcement actions deemed pretexts for suppressing Chinese interests, provisions it says have no direct US or UK equivalent. 2

Centre · 1Law firm DLA Piper, cited by the SCMP, said Article 26 bars companies from sharing evidence with foreign regulators such as the US Department of Justice or UK Serious Fraud Office without Beijing's approval, while Article 18 compels cooperation with Chinese investigators; it added that foreign executives in China may be barred from leaving once an investigation begins. 2 Centre · 1The SCMP says that, unlike under the US FCPA or UK Bribery Act, failing to establish a compliance framework would itself be a violation, and that the law applies to Chinese citizens and enterprises wherever the conduct occurs, including overseas subsidiaries; it expects tests in global financial hubs where firms face conflicting privacy and due-process rules. 2