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Member Connections Seminar Report: Turbulence in the waters

BritCham / CBBC
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At our Member Connections seminar on 11 September, speakers Catherine Guo, Edward Huang and Tian Wenchang of King & Capital law firm gave a presentation on the subject of "Turbulence in the Waters: Risk control and prevention of litigation for multinationals in China".

Ms Guo and Mr Huang ran through various legal issues that may affect foreign multinationals here, including features of the Chinese legal system; how to determine a crime; bribery; unit crimes, joint crimes and individual crimes; positional embezzlement; tax evasion; and other business-related crimes such as fraud, trademark infringements and insider dealing. These were highlighted with case studies. Bribery was of special interest to many attendees, and the speakers clarified many of the different classifications of bribery, as detailed below.

Finally a presentation was given by Tian Wenchang, founder of King & Capital and chairman of the All China Lawyers Association. He said that the Chinese market is somewhat chaotic, and that it is important for foreign companies to adapt to the Chinese way as a means of self-protection and risk prevention.

Key points

  • Bribery has various categories, including: accepting bribes; offering bribes; acceptance of commercial bribes by a non-national official; offering commercial bribes to a non-national official; units accepting bribes; units offering bribes; and introducing bribes.
  • Crimes are classified according to the perpetrator: unit crimes are those committed by any company, enterprise, institution, state organ, or organisation; joint crimes are those committed by two or more people jointly; and individual crimes are those committed by one person (over the age of 16).
  • Tax evasion: any taxpayer who files false returns or who does not file returns by means of deception or concealment in order to evade taxes is liable to criminal detention and a concurrent fine, or up to three years' imprisonment (if 10-30% of payable tax is evaded); or between three and seven years' imprisonment (if over 30% is evaded).
  • Analysis of the cause of crimes committed by foreign executives: these may include unfamiliarity with, or disregard of, Chinese law; attempting to profit via loopholes or grey spots (e.g. via guanxi, or personal connections); or coercion from corporate partners to violate the law.
  • How to avert the risk of crime: this can include improving the corporate governance structure; enhancing management awareness; making the company legal structure a formality; daily compliance; placing full trust in legal advisors; and ensuring that operators are able to implement advice.
  • Companies facing criminal investigation or litigation are advised to seek help from the Embassy and find a suitable defence lawyer.
  • It is recommended that companies strengthen the links between their legal department and external lawyers.

Thank you to King & Capital for their sponsorship of this event. If you are interested in finding out more about this topic, please contact them. If you would like to sponsor an event yourself, please send an email to hayley.thomas@britishchamber.cn detailing the topic that you would like to cover in your presentation and your requirements for the event.

Member Connections
Member Connections is an event platform provided by BritCham and CBBC in which we give our members the opportunity to present information about their products, services, technologies and expertise to interested colleagues in the British business community.
Companies are offered the chance to sponsor an event, at which they are then allocated a prime speaking slot to promote themselves and their operations to the audience. Member Connections events are free for all BritCham and CBBC members to attend. They cover a variety of topics so that all attendees receive an inclusive and comprehensive overview of business developments that may affect them.


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