CHINA Law and Practice Contributed by: Alan Zhou, Jacky Li, Weiwei Gu, Steven Zhu and Jenny Chen, Global Law Office
foreign national commits a crime against China or a Chinese citizen. Article 10 of the Criminal Law stipulates the principle of Passive Recognition of Foreign Criminal Judgments, stating that any Chinese citizen who commits a crime outside the territory of China may still be investigated for his or her criminal liabilities under Chinese laws, even if he or she has already been tried in a foreign country. However, if he or she has already received criminal punishment in the foreign country, he or she may be exempted from punishment or given a miti - gated punishment. Article 8 further specifies the principle of Protective Jurisdiction, indicating that the Criminal Law may be applicable to any foreigner who commits a crime out - side the territory and territorial waters and space of China against China or against any Chinese citizens if, for that crime, this Law prescribes a minimum punish - ment of fixed-term imprisonment of not less than three years. However, this does not apply to a crime that is not punishable according to the laws of the place where it was committed. There is generally no extraterritorial application from an administrative law perspective. 3.3 Corporate Liability On a criminal level, bribery committed by an employee of a company could be deemed as either an individual crime or a unit crime, depending on various factors, including whether the company is engaged in the brib - ery (specifically, whether it is the company’s decision to conduct the bribery), the possession of illegal gains, and whether the bribes are offered in the name of the company or the individual employee. If the charge is raised against the individual employee, the company would not bear legal liabilities. However, if the charge is against the company as a unit crime, the so-called “dual punishment system” would apply – ie, not only would a monetary penalty be imposed on the com - pany, but the main persons responsible (ie, the legal representative and other persons in charge) could also be subject to criminal detention or imprisonment. The administrative enforcement differs, as there is a default mechanism in place: the acts of bribery com -
mitted by a company’s employees shall be deemed as the acts of the company, unless the company has evidence to prove that such acts of its employees were not made in search of transaction opportunities or competitive advantages for the company. Further - more, under Article 33 of the Administrative Penalty Law, where the company concerned has sufficient evi - dence to prove that it has committed no subjective fault, no administrative penalty shall be imposed on the company. The company would only have admin - istrative liabilities imposed on it, including a fine rang - ing from CNY100,000 to CNY5 million, confiscation of illegal gains, and revocation of its business licence where circumstances are severe. With respect to whether the corporate’s legal liabili - ties will be pursued when it is merged or divided after committing an offence, on the criminal level, as long as an entity that assumes the rights and obligations of that predecessor entity exists, the criminal liability of the predecessor entity and the relevant responsible persons shall still be pursued. The predecessor entity shall still be listed as the defendant, and the legal representative or the person chiefly in charge of the new entity that succeeds the rights and obligations of the predecessor entity shall be the litigation repre - sentative. The successor entity shall bear the criminal liability of the predecessor entity to the extent of the property it inherited. In terms of administrative liability, the general princi - ple may be found in the Implementation Regulations of the Customs of the People’s Republic of China on Administrative Penalties, which specify that the prede - cessor entity shall be the liable subject, and the suc - cessor entity that assumes the rights and obligations shall be the person subject to the property penalty. Based on law enforcement practice, this principle may also be applicable in other areas.
4. Defences and Exceptions 4.1 Defences
For the criminal offence of bribery, the Criminal Law explicitly stipulates that any person who provides ben - efits to a state functionary as a result of extortion by the state functionary, and does not obtain an undue
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