CHINA Law and Practice Contributed by: Alan Zhou, Jacky Li, Weiwei Gu, Steven Zhu and Jenny Chen, Global Law Office
tages or other interests could potentially be deemed as bribery. 2.2 Influence-Peddling From a criminal law perspective, the Criminal Law stipulates several crimes with respect to influence- peddling practices. Conviction for such crimes needs to take various considerations into account, such as whether the person conducting the influence-peddling is a state or non-state functionary or any person who has a close relationship with the state functionary, and the specific manifestations of the influence on decision-making. For example, any close relative of the state functionary, or any other person closely related to that state functionary, who secures illegiti - mate benefits for an entrusting person through that state functionary’s performance of his or her duties or through another state functionary’s performance of his or her duties by taking advantage of that state functionary’s functions, powers or position, and who extorts from or accepts the entrusting person’s money or property, shall be convicted of the crime of accept - ing bribes via influence. Anyone who, for the purpose of securing illegitimate benefits, offers bribes to any of the close relatives of the state functionary or other persons closely related to that state functionary, or any state functionaries who have been removed from their positions, their close relatives or other persons closely related to them, shall be convicted of the crime of offering bribes to persons with influence. From the administrative law perspective, influence- peddling is prohibited because it is categorised as a form of commercial bribery in violation of the fair competition principle. A business operator bribing organisations or individuals who take advantage of their functional authority or influence to impact a transaction may face a fine of up to CNY5 million, confiscation of illegal gains, and revocation of its busi - ness licence where circumstances are severe. 2.3 Financial Record-Keeping Inaccurate Corporate Books and Records With respect to inaccurate corporate records, the Criminal Law stipulates multiple different crimes. For example, anyone who conceals or intentionally destroys account books or financial reports that are required to be kept in accordance with the law, if the
circumstances are severe (eg, more than CNY500,000 is involved), shall be sentenced to a fixed-term impris - onment of up to five years and/or a fine of up to CNY200,000. Entities committing such crime shall also be fined, with the directly accountable persons being punished. Moreover, an enterprise that records false information in its balance sheet or inventory of assets during the process of its liquidation, causing serious harm to the interest of the creditors (eg, causing economic losses of more than CNY500,000), shall be convicted of the crime of impairing liquidation and shall incur a fine of up to CNY200,000, with its directly accountable per - sons to be sentenced to a fixed-term imprisonment of up to five years. It should be noted that the afore - mentioned crimes do not necessarily relate to corrup - tion, and are stipulated separately and independently under the Criminal Law. From the perspective of administrative law, compa - nies forging or tampering with accounting documents, account books and other accounting materials, or providing false financial accounting reports, shall be criticised by a notice and may incur a fine of up to ten times the amount of the illegal gains if such gains are equal to or exceed CNY200,000; where the illegal gains are less than CNY200,000 or there are no illegal gains, a fine of up to CNY2 million may be imposed. The directly accountable persons may also be subject to a fine of up to CNY2 million. Likewise, the foregoing legal liabilities exist independently and are not neces - sarily involved with acts of corruption. In addition, in accordance with the AUCL, where a business operator gives a discount to its transaction counterparty or pays a commission to an intermediary, it shall truthfully record that discount and commis - sion in its account books. The same requirements also apply to the counterparty or intermediary receiving the discount or commission. Disseminating False Information From the criminal law perspective, whoever fabri - cates and spreads false information that adversely affects securities or futures trading, thus disrupting the securities or futures trading market, if the conse - quences are severe (eg, direct monetary losses for
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