China’s Draft Anti-Cross-Border Corruption Law – How Will It Affect Foreign Companies?

China has published a draft Anti-Cross-Border Corruption Law that would extend its anti-graft campaign to bribery that crosses borders. The National People’s Congress Standing Committee released the draft on 26 August 2026 for public comment until 26 September.

The draft reaches three groups: Chinese citizens and China-domiciled companies, including foreign-owned ones, that bribe foreign officials or officials of international institutions; foreign individuals and overseas companies that bribe such officials inside China; and foreign individuals and overseas companies that bribe Chinese public officials, state organs, state-owned enterprises or public institutions. It also covers embezzlement, abuse of power and similar misconduct committed abroad by Chinese citizens and companies, and suspects who flee overseas or move corrupt assets out of the country. Anyone may report cross-border corruption, with confidentiality, protection and possible rewards for whistleblowers.

For foreign businesses the practical burdens are significant. Companies must cooperate with Chinese investigations and supply materials on request, and in serious cases an overseas company can be required to cooperate directly. Foreign institutions would be barred from investigating corruption in China without Chinese consent, and people in China could not provide evidence or assistance without authorisation. The authors note that this could collide with foreign enforcement, for example a US Foreign Corrupt Practices Act inquiry into an overseas parent, and that it interacts with existing Chinese rules on data, state secrets and personal information.

The draft also proposes proportionate compliance obligations for China-based branches and subsidiaries of overseas companies and for Chinese companies operating abroad, scaled to size, scope and revenue. These cover a compliance management system, designated compliance officers, periodic risk assessments, confidential reporting channels, financial controls, risk-based oversight of third parties, integrity training and a duty to report suspected corruption. It further extends the Anti-Foreign Sanctions Law to cases where a foreign government sanctions a Chinese citizen or company on anti-corruption grounds.

The authors recommend that firms start proportionate readiness reviews now, including legal sign-off before interviews, forensic collection or transfers of China-sourced evidence.

Article Credit: https://www.china-briefing.com/news/chinas-anti-cross-border-corruption-law-draft/