Managing a Company’s Legal Risks Related to Corruption in International Business

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The commonalities and differences of the anti-corruption laws in the U.S. and China

Comparing the anti-corruption laws between America and China, I find some commonalities and differences of the relevant laws in these two countries. First of all, the penalty of avoiding anti-corruption laws in both countries includes anti-corruption fines and fixed-term imprisonment. However, the penalties for violating anticorruption laws in America are primarily financial and the fines are relatively higher than the anti-corruption fine in China. For example, the fine for avoiding the FCPA for a company can be up to $25 million and the fine for an individual avoiding the antitrust law can be up to $1 million (Loughman & Sibery, 2012). The penalties in China are always fixed-term imprisonment and the anticorruption fines are much lower. A manager will be fined less than 200000RMB if he/she did bribery. And for the person who accepts bribery will be punished up to more than 10 years of fixed-term imprisonment or life imprisonment if he/she accepts more than 100,000 Yuan (People's Republic of China Supreme People's Court, 2003). Both America and China have several laws that can be used to prohibit the business corruption. But, the anticorruption laws in the U.S. are more centralized than the relevant laws in China. America has single federal laws to prohibit business corruption, like the FCPA. However, China does not have a single law to deal with business corruption, the anticorruption rules are always covered by other laws or regulations, like the Criminal law of the PRC and the Anti-Unfair Competition Law of the PRC. And these laws always only cover one aspect of the corruption. I think China really needs to set up a specific single law to cover all aspects of the corruption. Moreover, I think the relevant laws in both countries have clear definition of the actions that are prohibited. For example, in the FCPA, the bribery is prohibited, and it defines the action as providing government officials with valuable gifts or a large amount of money. In Chinese laws, the bribery also has clear definition. The action of bribing others though gifts, money and other means is not allowed.

Conclusion

The corrupt business practice has many negative impacts on the company. It is not allowed in the U.S. and China. Both countries have set up relevant anti-corruption laws to prohibit business corruption. And there are many commonalities and differences of the relevant laws in these two countries. In my mind, the anti-corruptions law is a useful method to avoid corruption, but the company also needs to do something to help to prohibit those illegal actions. For example, the company can strengthen its management and use some cameras to supervise employees’ performance. Also the company can optimize its selection system to hire more qualified employees with high legal compliance. Both the company and the government have the responsibility to prohibit the corruption.

Bibliography

Chua, Y., & Wong, G. (2007). New judicial interpretation of PRC Anti-Unfair Competition Law issued. Journal of Intellectual Property Law & Practice, 443- 444.

Criminal Law of the People's Republic of China. (1997, March 14). Retrieved November 5, 2015.

http://www.fmprc.gov.cn/ce/cgvienna/eng/dbtyw/jdwt/crimelaw/t209043.htm

Hylton, K. (2003). Antitrust law economic theory and common law evolution. Cambridge, UK: Cambridge University Press.

Loughman, B., & Sibery, R. (2012). Bribery and corruption navigating the global risks. Hoboken, N.J.: Wiley.

National Association of Attorneys General. (2013, January 29). Retrieved November 4, 2015.

http://www.naag.org/publications/naagazette/volume-7-number-1/corporate- corruption.php

People's Republic of China Supreme People's Court. (2003, September 22). Retrieved November 5, 2015.

http://en.chinacourt.org/public/detail.php?id=3306

2010 year-end FCPA update | Lexology. (2011, January 3). Retrieved November 4, 2015.

http://www.lexology.com/library/detail.aspx?g=e986c4ef-2882-4560-

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