Why Compliance with the U.S. Foreign Corrupt Practices Act Matters in China

Abstract

How is it that U.S. law can apply to certain Chinese companies and the conduct of Chinese business executives‘ The answer is the Foreign Corrupt Practices Act ("FCPA"), a broad-reaching U.S. law enacted to prohibit bribery as a means of obtaining and retaining business. A common misperception is the business community is that the FCPA applies only to U.S. companies and US citizens. However, under certain circumstances, the FCPA can also apply to the conduct of Chinese companies and Chinese business executives, making FCPA compliance in China crucial.

This article does not aim to show how the actions of Chinese nationals employed by U.S. companies in China can expose their U.S. employer to FCPA liability - even though there have been several examples in recent years of this occuring. Rather, this article discusses how Chinese companies and Chinese business executives can directly be subject to U.S. prosecution for violating the FCPA.

Keywords: Foreign Corrupt Practices Act, China