China is considering new legislation aimed at strengthening its legal framework for combating cross-border corruption. As reported in an article recently published, the proposed measures could have significant implications for foreign companies operating in or maintaining business relationships with China, particularly regarding their exposure to anti-corruption enforcement and related compliance requirements.

The legislative initiative reflects China’s increasing attention to corruption involving international business activities. For multinational companies, the proposed framework raises questions concerning the territorial reach of Chinese anti-corruption legislation, the coordination of compliance programmes across jurisdictions and the potential interaction with existing anti-bribery regimes, including the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act.

Importantly, the legislation remains at the draft stage. Its eventual scope, implementation and practical consequences will depend on the final legislative text and subsequent enforcement practice. The proposed measures should therefore be distinguished from obligations already applicable under Chinese law.

The draft, comprising 47 articles across six chapters, would introduce specific compliance obligations for companies falling within its scope. These include requirements relating to anti-corruption policies, risk assessments, internal controls, reporting mechanisms and cooperation with competent authorities. Failure to establish adequate compliance arrangements could itself give rise to administrative consequences, independently of whether an underlying act of corruption has been established.

A particularly relevant aspect for multinational companies concerns cross-border investigations and the exchange of information with foreign authorities. The draft contains restrictions on certain foreign enforcement activities conducted within China and on the provision of evidence or assistance without the requisite Chinese authorisation. Such provisions could create additional legal complexities where companies are simultaneously subject to investigations or disclosure obligations in several jurisdictions.

The proposed legislation illustrates China’s efforts to develop a more comprehensive framework for addressing corruption with international dimensions. Its implications for foreign companies will depend on the final wording of the legislation, its jurisdictional scope and the way the relevant provisions are implemented and enforced.