First Reading of China’s Anti-Cross-Border Corruption Law: What Companies with Global Operations Need to Know

On August 25, 2026, China took a significant step toward combating cross-border corruption by submitting the draft Anti-Cross-Border Corruption Law for its first reading before the Standing Committee of the 14th National People’s Congress. This marks China’s first legislation dedicated specifically to anti-corruption in the cross-border context. The draft was released for public comment on August 26, with a submission deadline of September 26. 

The draft law (the Draft) seeks to clarify the principles and mechanisms for investigating cross-border corruption and pursuing the associated legal liabilities, countermeasures against unjustified extraterritorial application of foreign countries’ laws, corporate anti-corruption compliance obligations, among other things—with broad implications for companies operating internationally.

Both businesses based in China and those based abroad with operations in or with China should closely monitor this evolving legal landscape and prepare for heightened compliance requirements under China’s developing regime for countering cross-border corruption.

LEGISLATIVE BACKGROUND AND POLICY RATIONALE

The Anti-Cross-Border Corruption Law draft reflects China’s commitment to strengthening its anti-corruption framework in response to increasing cross-border business activities and international cooperation requirements.

This draft legislation builds on years of development. In February 2011, the eighth amendment to the PRC Criminal Law added a provision that prohibits giving money or property to a foreign public official or an official of an international public organization for the purpose of obtaining improper commercial benefits.

In June 2014, the Central Anti-Corruption Coordination Group established the International Fugitive Recovery and Asset Recovery Office comprising multiple government and judicial agencies, later renamed in March 2022 to reflect a broader mandate that includes cross-border corruption governance.

Subsequent arrangements accelerated formal legislative deliberation. Published in September 2023, the legislative plan for the Standing Committee of the 14th Session of the National People’s Congress listed the Anti-Cross-Border Corruption Law as a first-class project, indicating that it was ready for substantive review. 

High-level policy direction was provided at the Third Plenary Session of the 20th Central Committee in July 2024, where the need for comprehensive legislation to address cross-border corruption was formally endorsed, laying a solid foundation for the current draft review.

PRIMARY OBJECTIVES

The Draft is composed of six chapters and 47 articles, covering general principles, enforcement mechanisms and responsibilities, case handling and international cooperation, enterprise compliance and integrity requirements, and legal liability and penalties.

According to the explanatory statement on the Draft released by the National Supervisory Commission, the Draft’s primary objectives include:

• Clarifying the principles, scope, and policy positions for China’s cross-border anti-corruption efforts, including China’s opposition to the abuse of anti-corruption “long-arm jurisdiction” by foreign states;
• Establishing mechanisms and responsibilities for cross-border anti-corruption work;
• Strengthening case handling and international cooperation, including mechanisms for fugitive and asset recovery and establishing corresponding institutional arrangements for countermeasures and blocking measures in the anti-corruption field;
• Explicitly delineating corporate integrity and compliance obligations; and
• Explicitly delineating legal liabilities for cross-border corruption.

SCOPE OF CROSS-BORDER CORRUPTION

While China’s existing anti-corruption measures largely focus on domestic issues, the draft law extends coverage to include acts committed abroad by Chinese nationals, enterprises and organizations based in China, and individuals, enterprises, and organizations based outside of China that have dealings with Chinese government officials, Chinese government agencies, state-owned enterprises, institutions, and people’s organizations. 

Under Article 3 of the Draft, cross-border corruption encompasses the following types of conduct:

• Bribery by individuals and entities based inside China or bribery acts committed inside China: Acts of bribery committed by Chinese citizens, domestic enterprises, other organizations, and their branches and subsidiaries based in China toward foreign public officials or officials of international public organizations, or acts of bribery toward foreign public officials or officials of international public organizations committed inside of China by individuals, enterprises, other organizations, and their branches based outside of China.
• Acts of bribery toward public officials in China and persons with specific relationships to public officials in China or government agencies, state-owned enterprises, institutions, and people’s organizations based inside China: Acts of bribery committed by individuals, enterprises, other organizations, and their branches based outside of China toward public officials and persons with specific relationships to public officials, or government agencies, state-owned enterprises, institutions, and people’s organizations based inside China, as well as related acts of accepting bribes.
• Duty-related misconduct or crimes other than those specified in the above-mentioned two provisions committed outside of China by individuals and entities based inside China: Acts of duty-related misconduct or crimes committed abroad by Chinese citizens, domestic enterprises, other organizations, and their branches and subsidiaries based in China other than those specified in the preceding two provisions, including graft, bribery, abuse of power, dereliction of duty, rent-seeking, transfer of benefits, favoritism and malpractice, and waste of state assets.
• Other acts of corruption of a similar nature: Other acts of corruption of a nature similar to those specified in the preceding three provisions, where all or part of the acts are committed abroad and all or part of the consequences occur domestically inside China.
• Escape of suspects and cross-border transfer of corrupt assets: Acts by persons suspected of corruption who have fled abroad or transferred corrupt assets across borders.

The scope of cross-border corruption defined under the Draft reflects the exercise of both personal and territorial jurisdiction over cross-border corrupt acts. The Draft is broader in scope than the United States’ Foreign Corrupt Practices Act in that it also covers the acceptance of bribes by public officials in China, persons who have a specific relationship with such officials, and government agencies, state-owned enterprises, public institutions, and people’s organizations in China.

Article 3(3) of the Draft also appears to broaden the reach of corruption offenses to cover duty-related misconduct and crimes in the private sector, such as within privately owned businesses.

ENFORCEMENT MECHANISMS

A national anti-cross-border corruption mechanism will be led by the National Supervisory Commission in coordination with multiple government agencies, including those dedicated to public security, judiciary, finance, commerce, anti-money laundering, auditing, state-owned assets supervision, financial supervision, securities supervision, and cyberspace administration.

Local supervisory commissions may establish regional mechanisms as needed. Industry regulators and associations are tasked with risk monitoring, compliance promotion, and sectoral warnings. In particular, anti-money laundering authorities must monitor cross-border fund flows and report suspicious activity, consistent with the international practice of maintaining close coordination between anti-corruption and anti-money laundering efforts.

The Draft encourages the use of big data and AI for risk identification and mandates public education and talent development in anti-corruption.

INTERNATIONAL COOPERATION AND COUNTERMEASURES

The Draft advocates for international anti-corruption cooperation, with the United Nations Convention against Corruption as the main channel. Chinese authorities may request evidence and cooperation from foreign entities on the basis of reciprocity, and measures to prevent escape abroad include restricting exit.

According to the Draft, the relevant Chinese authorities shall handle requests for cross-border cooperation in law enforcement and judicial matters related to corruption, as well as requests for mutual legal assistance, submitted by relevant overseas agencies in accordance with Chinese laws, international treaties and agreements to which China is a party, or in accordance with the principles of equality, reciprocity, and consensus. 

Article 26 of the Draft provides that, without the consent of the relevant Chinese authorities, foreign entities, organizations, and individuals shall not, either on their own or through others, conduct law enforcement activities—such as investigations into cross-border corruption—within the territory of China, nor shall entities, organizations, and individuals within the territory of China provide evidence or furnish other relevant assistance to entities, organizations, and individuals outside of China. 

This provision seems to refer only to law enforcement activities. In theory, therefore, an internal investigation conducted by a foreign multinational’s headquarters into the China operations of its Chinese subsidiaries or branches should not fall within the scope of law enforcement activities. However, the implementation of this Draft law bears watching, particularly as to how this provision will be interpreted.

Article 6 of the Draft provides the basis for invoking China’s Anti-Foreign Sanctions Law and relevant blocking statutes to counter the unjustified extraterritorial application of foreign laws under the pretext of anti-corruption. Where a foreign state uses anti-corruption as a pretext, or improperly applies its laws extraterritorially, to target China or impose discriminatory measures on Chinese citizens or entities, China reserves the right to take appropriate measures, such as countermeasures and blocking, in accordance with the PRC Anti-Foreign Sanctions Law and other relevant laws and regulations.

CORPORATE COMPLIANCE OBLIGATIONS

The Draft requires companies engaging in cross-border business to establish integrity and compliance management systems, conduct risk assessments, maintain internal reporting mechanisms, and implement targeted monitoring and remediation. State-owned enterprises must strengthen risk controls over key overseas positions, funds, and projects, including direct assignment of financial managers, rotation of overseas staff, and conflict-of-interest avoidance.

Companies must maintain truthful and complete financial and accounting records and are prohibited from using financial methods to conceal corruption. Due diligence and supervision of third-party agencies or individuals are required to prevent third-party corruption. Further, integrity education and compliance training for overseas staff are mandated.

It is also notable that the Draft provides that companies engaging in cross-border business shall report suspected cases of cross-border corruption to relevant authorities, such as supervisory agencies and public security organs, if such cases are discovered. This draft provision appears to impose a mandatory self-reporting obligation for suspected cross-border corruption cases.

IMPLICATIONS

The introduction of the draft Anti-Cross-Border Corruption Law signals a new era of regulatory scrutiny and compliance expectations for companies engaged in international operations. 

Businesses based in China and those based abroad with operations in or with China should be aware that, once enacted, the law will:

• Increase Compliance Requirements: Companies will have to review and potentially enhance their compliance programs to meet the heightened standards for integrity and anti-corruption controls.
• Broaden Legal Exposure: The law’s explicit stipulation of legal liabilities for cross-border corruption means that companies and individuals may face more severe sanctions for violations both in China and abroad.
• Promote International Best Practices: By aligning domestic compliance obligations with international norms and fostering cooperation with foreign authorities, the law will encourage companies to adopt globally recognized anti-corruption frameworks.
• Support Market Access and Reputation: Enterprises that proactively strengthen compliance may benefit from improved access to international markets and enhanced reputation among global partners.