2026.09.15 ZHENG Yu、LI, Yongze
On 28 August 2026, the Anti-Cross‑Border Corruption Law of the People’s Republic of China (Draft) (the “Draft”) was released for public comment. The Draft consists of six chapters and 47 articles and covers the principles, scope of application, working procedures, case handling, international regulatory cooperation, corporate integrity, compliance obligations and legal liabilities for cross‑border anti-corruption.
The release of the Draft signals a new era of integration for China’s cross‑border anti‑corruption legal framework. While pursuing commercial opportunities, cross-border operating enterprises are required to establish integrity and compliance systems as required by Chinese laws and regulations.
I. Integrity and Compliance Obligations Further Clarified
The Draft sets out the integrity and compliance obligations for cross‑border operating enterprises. They are required to comply with Chinese laws, regulations, regulatory provisions, international treaties as well as observe commercial ethics and industry standards. It requires them to establish integrity and compliance management policies, strengthen risk prevention and control and enhance third-party management. Moving forward, regulators will not focus solely on whether enterprises have engaged in unlawful conduct but will also assess whether reasonable and effective risk prevention systems have been put in place.
For companies listed overseas or with plans to do so, close attention should be paid to the compliance risks arising from offshore structures, affiliated-party transactions, M&As and financing arrangements. Although overseas structures, multi-layer SPVs and related-party transactions are not illegal per se, legal risks may be triggered if they lack commercial substance and serve as vehicles for improper benefit transfers, asset diversion or regulatory circumvention.
II. Third‑Party Cooperation Is a Primary Focus of Cross‑Border Corruption Investigations
Agents, intermediaries, consultants and other third parties are frequently engaged in cross-border business operations. Yet from an international anti-corruption enforcement perspective, third‑party arrangements may, in certain contexts, trigger scrutiny regarding improper benefit transfers, and it is not a valid defense for an enterprise to argue that it bears no liability because the misconduct was carried out by a third party. Regulators will examine whether the enterprise has reasonably fulfilled its due diligence and management responsibilities including undertaking background checks, service scope reviews, fee reasonableness assessments, payment verification and record retention when engaging a third party.
For overseas investments, engineering projects, public-sector project cooperations and resource development in particular, expenditures such as agency, consultancy and project coordination fees should be rigorously scrutinized. It is essential to ensure that third-party services have a genuine commercial purpose and that the authenticity of transactions can be supported by materials such as contracts, payment records and work deliverables.
III. Further Refine Cross-Border Investigations and International Regulatory Cooperation
The Draft further refines the working mechanisms for handling cross-border corruption cases and international regulatory cooperation. This includes rules concerning the protections and rewards for whistleblowers, fugitive repatriation, asset recovery, law enforcement, judicial cooperation and evidentiary reviews. The Draft also specifies that, without the consent of the competent Chinese authorities, no foreign institution, organization or individual may conduct, whether by itself or through others, anti-cross-border corruption investigations within the territory of China, nor may any domestic institution, organization or individual provide evidence or assistance to foreign entities in violation of the regulations.
This provision reflects the importance that China attaches to sovereign principles in the governance of cross-border corruption, with relevant procedural requirements formulated accordingly. Given the different regulatory requirements across multiple jurisdictions, conflicts of law may arise in cross‑border investigations, particularly with respect to the authority to conduct investigations, the provision of evidence, cross‑border data transfers, trade secrets and personal information protection. Therefore, enterprises that are navigating both the Chinese regulatory requirements and overseas anti‑corruption investigations should not only follow the rules of a particular jurisdiction but also take into account the legal requirements from the different jurisdictions. Accordingly, this calls for an internal emergency dealing mechanism for enterprises that brings together internal legal, compliance and audit teams, as well as external legal counsels.
IV. Further Tighten the Recovery of Overseas Assets and Cross‑Border Fund Monitoring
Article 25 of the Draft provides that assets derived from cross‑border corruption may be recovered through law enforcement and judicial cooperation by way of confiscation of the illegal gains, court‑ordered restitution or voluntary surrender. Such arrangements indicate that in the future, asset recovery may be prioritized in cross-border anti-corruption governance. This may help resolve the longstanding problem where overseas fugitives and assets are difficult to recover and may provide robust system support for the recovery of illicit overseas assets.
Overseas real estate, financial assets, trust arrangements and complex equity structures that are associated with corruption risks may face stricter scrutiny. When designing overseas asset allocations and cross‑border investment arrangements, relevant parties should pay close attention to the legality of the sources of funds, the authenticity of the transaction background and the reasonableness of the business arrangements. It is our understanding that in the future, domestic regulators will be more likely to apply the principle of substance‑over‑form in conducting look‑through reviews of such complex structures in cross‑border corruption investigations.
With respect to cross‑border fund monitoring, Article 13 of the Draft requires anti‑money laundering authorities and other relevant departments or organizations to guide financial institutions and designated non‑financial institutions in strengthening cross‑border fund monitoring in accordance with the law. This means that for these entities, their responsibilities for identifying, monitoring and reporting in respect of unusual cross‑border fund flows will be further reinforced. When conducting overseas investments, fund transfers, related-party transactions and service fee payments, it is essential to ensure that the transactions have genuine commercial purposes and retain complete supporting documentation.
V. Enterprises Are Advised to Strengthen Internal Policies for Cross‑Border Integrity and Compliance
Although the Anti‑Cross‑Border Corruption Law is still at the draft stage, the regulatory rationale behind it is fairly clear: for enterprises engaging in cross‑border operations, compliance reviews and internal governance improvement should be conducted in advance and close attention should be paid to the following:
Anti‑bribery and integrity compliance policies should be established, and risk assessment, internal policies and procedures, training and education, supervision and inspection and non‑compliance dealing should be incorporated into day‑to‑day operations.
Third‑party cooperation management should be strengthened, with necessary background checks and risk assessments conducted on agents, consultants, intermediaries and partners, focusing on the authenticity of services, the reasonableness of fees and the flow of funds.
Financial policies and contract management policies should be improved. Contracts, approval documents, payment records and performance evidence should be retained for key expense items such as consultancy fees, service charges and commissions, to ensure that transactions can be proved to have a genuine commercial basis.
Compliance training for directors, senior executives and persons in charge of overseas business should be strengthened to raise awareness of cross‑border operational risks. For potential cross‑border investigations, mechanisms in respect of evidence preservation, internal investigations, legal counsel engagement and regulatory communication should be established in advance.
The Draft is not simply designed to penalize misconduct, it is an important legislative development that represents a major step for China toward a more regulated cross‑border business environment, sets out clear legal grounds for domestic regulators to investigate cross‑border corruption cases and helps facilitate international regulatory cooperation. Overseas enterprises that want to do business in China will need to take anti-corruption compliance requirements under Chinese law seriously, while Chinese enterprises will need to keep up with tighter cross-border compliance standards when investing, operating or pursuing business opportunities overseas and should incorporate anti-corruption, anti-bribery and third-party risk management into their global operations.
Against a backdrop of ever‑deepening global business connections, cross-border operations are no longer just a strategy for market expansion, they would also put an enterprise’s governance and risk management to the test. To get ahead of China’s evolving anti‑corruption regime and to build transparent, sound and sustainable compliance systems will help enterprises reduce their legal risks, strengthen their competitiveness and achieve growth in the long term.
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