China moves to extend anti-corruption reach across borders

China, in the midst of a sweeping anti-corruption campaign, has moved to enact a dedicated law targeting cross-border corruption — including fugitives who have fled abroad and illicit assets hidden overseas.

According to Xinhua and China News Service, a draft "cross-border anti-corruption law" was submitted for its first reading at a standing committee session of the National People's Congress on Tuesday (local time).

The draft sets out the principles, scope and enforcement mechanisms governing China's cross-border anti-corruption work, and strengthens case-handling procedures and international cooperation. It also codifies corporate obligations to maintain clean business practices and the legal liability that follows.

Xinhua said the legislation aims to establish an institutional framework to protect China's sovereignty, security and development interests.

The agency said the law would provide the legal tools needed to pursue corruption suspects who have fled overseas, recover illicit assets held abroad and handle corruption cases with foreign links.

China News Service said overseas assets held by Chinese companies have grown rapidly as more firms expand internationally, and called for the creation of a clean business environment.

Huo Zhengxin, a professor at China University of Political Science and Law who participated in drafting the bill, told the Global Times the legislation represents a significant step forward in bringing rule-of-law principles to bear on foreign-related affairs.

Existing anti-corruption laws have made it difficult to gather overseas evidence, track down fugitives and recover illicit assets in cross-border cases. Huo said the new bill also includes provisions related to extradition.

Huo added that because the bill enshrines corporate integrity obligations, it will become harder for company insiders to conceal corruption through overseas projects. He also said the bill is expected to clarify the extraterritorial reach of China's anti-corruption laws.

He said the bill further contains provisions to counter attempts by other countries to exercise expanded jurisdiction over Chinese companies using their own anti-corruption laws.

The Global Times added that a case involving a former senior executive at state-owned China National Offshore Oil Corp. (CNOOC) — who accepted large bribes and hid the proceeds overseas before being caught — was reported in January.