The Proposed Amendments to China's AUCL Commercial Bribery Provisions: Comments and Suggestions

• Author: William Rosoff and Jiang Jingli
• Pages: 192-211

192 TSINGHUA CHINA LAW REVIEW [Vol. 8:191

THE PROPOSED AMENDMENTS TO CHINA’S AUCL

COMMERCIAL BRIBERY PROVISIONS: COMMENTS AND

SUGGESTIONS

William Rosoff

JIANG Jingli

Abstract

Since the enactment of the Anti-Unfair Competition Law in 1993,

China’s economy has changed significantly. To better regulate the

current market, a draft amendment to the AUCL was published on

February 25, 2016. Specifically, Articles 7 and 20, the commercial

anti-bribery provisions of the AU CL, reflect substantial chang es to

the current law . This paper will identify such proposed changes and

analyze implications and potential issues of the elements of the

commercial anti-bribery provisions, including burden of proof,

vicarious liability of employers, bribery involving public service,

books and records provision, extraterritorial jurisdiction, and

penalties, etc. It will also look to the United States’ domestic

commercial anti-bribery laws for comparisons. This paper hopes to

shed light on potential improvements the draft amendm ent should

consider to achieve its desired purposes of better curbing

commercial bribery and regulating the current market.

I. INTRODUCTION

The Legislative Affairs Office of the State Council of China

published for public comment a draft amendment to the Anti-Unfair

Competition Law (the “AUCL”) on February 25, 2016 (the “Draft

Amendment”). It was drafted by the State Administration of Industry

and Commerce (“SAIC”, and “AICs” for its local counterparts), the

government agency responsible for the enforcement of the AUCL

over the past 23 years. The AUCL is the major administrative

legislation regulating various forms of unfair competition practices in

China, including commercial bribery, product counterfeiting,

monopoly power abuse, misleading commercial advertising and

commercial secrets violations, etc. The commercial bribery

provisions have been substantially revised by Article 7 and Article

20 of the Draft Amendment.

The preamble of the Draft Amendment acknowledges that the

market economy has undergone dramatic changes since the

enactment of the AUCL in 1993. Presumably, one of the major

purposes behind the Draft Amendment is to adapt the law to current

market conditions and address new issues that have emerged in the

past two decades. Another possible purpose is to clarify the current

law and eliminate inconsistencies between the AUCL and other

2016] PROPOSED AMENDMENTS TO CHINA’S AUCL 193

overlapping legislations, such as the Anti-Monopoly Law, the

Trademark Law, and the Advertisement Law. The legislators also

presumably intend to make the anti-bribery provisions consistent

with the tightened anti-corruption provisions in the Criminal Law.1

This paper will introduce the major amendments to the

commercial bribery clauses, analyze the implications and potential

issues, and propose resolutions based on the legislative and

enforcement experience in the United States.

II. PROPOSED AMENDMENTS TO THE COMMERCIAL ANTI-BRIBERY

PROVISIONS

A. Business Operators and Commercial Bribery

Article 2 of the Draft Amendment updates the definition of

“business operators,”2 who are the only targets of the “commercial

bribery” regulation set forth in Article 7 and administrative penalties

under Article 20 for any violations.3

Under the current AUCL, the term “business operators” is defined

as “legal persons, other economic organizations and individuals

engaged in the trade of goods or profit-making services.”4 This

definition has been debated extensively by commentators, many of

whom have argued that such definition is too narrow.5 In the Draft

1 See Xing Fa () [Criminal Law] (promulgated by the Standing Comm., Nat’l People’s Cong.,

Aug. 29, 2015, effective Aug. 29, 2015) art. 390 (Lexis China Online) (specifically, more discretion is

given to the prosecutor because the new art. 382 replaces the value intervals in the old art. 382 with less

quantitatively defined adjectives).

2 Guowuyuan Fazhi Bangongshi Guanyu Fabu Zhonghua Renmin Gongheguo Fan Buzhengdang

Jingzheng Fa Xiuding Caoan Songshengao Gongkai Zhengqiu Yijian de Tongzhi (0

) [Circular

of the Legislative Affairs Office of the State Council on Promulgating the Anti-Unfair Competition Law

of the People’s Republic of China (Revised Draft for Review) for Public Opinions] (promulgated by

Legislative Affairs Office of the State Council Feb. 25, 2016) [hereinafter Draft Amendment] art. 2

(Lexis China Online).

3 Id.

4 Fan Buzhengdang Jingzheng Fa () [Anti-Unfair Competition Law] (promulgated

by the Standing Comm. Nat’l People’s Cong., Sept. 2, 1993, effective Dec. 1, 1993) [hereinafter 1993

Anti-Unfair Competition Law] art. 2 (Lexis China Online).

5 Zheng Youde () & Wu Chunyan (), Woguo Fan Buzhengdang Jingzheng Fa

Xiuding Shiwen ( ) [Ten Questions about China’s Amendment to

Anti-Unfair Competition Law], 1 FAXUE () [LAW SCIENCE] 57 (2009); Meng Yanbei (1),

Lun Woguo Fan Buzhengdang Jingzheng Fa zhi Xiuding: Baorong,Zengjian yu Xihua (

) [A Study on China's Anti-Unfair Competition Law's

Amendment: Pluralism, What to Add and Delete, and Explanations], 2 ZHONGGUO GONGSHANG

GUANLI YANJIU () [STUDY ON CHINA ADMINISTRATION FOR INDUSTRY &

COMMERCE] 62 (2015); Li Yougen (), Lun Jingji Fa Shiye zhong de Jingyingzhe (

) [A Study on the Business Operator In Terms of Economic Law], 3 NANJING DAXUE

XUEBAO () [JOURNAL OF NANJING UNIVERSITY] 55 (2007); Li Shengli (), Lun

Fan Buzhengdang Jingzheng Fa zhong de Jingzheng Guanxi he Jingyingzhe (

) [A Study on Anti-Unfair Competition Law's Competitive Status and the Business

Operator] 8 FAZHI YANJIU() [RESEARCH ON RULE OF LAW] 49 (2013).