February 3, 2015
Auditing to Discover Acts of Commercial Bribery Early in China
Presented by
Representative Attorney Kenji Kuroda
Hosted by
the Business Research Institute
Seminar room, Business Research Institute (Kōjimachi)

Seminar outline

When doing business in China, some Japanese businesspeople turn a blind eye to commercial bribes offered by Chinese senior management and others to expand the business, thinking that they should “do as the Romans do”.
However, unlike in Japan, commercial bribery between companies is punishable as a crime under the Criminal Law in China, and depending on the circumstances, Japanese employees may be held liable or imprisoned. Further, in recent years, the Chinese government has taken a clear stance of cracking down on commercial bribery with harsher penalties.
Given this situation, founding partner Kenji Kuroda will explain in detail the risks that commercial bribery involves and countermeasures that can be taken against it, which is knowledge that every Japanese businessperson working in China should have. We hope that it will serve as a useful guideline in your business activities in China.

I. Risks and recent trends regarding commercial bribery in China
(1) Risks in commercial bribery and the difficulty in preventing them
(2) The trend of crackdowns and increased penalties by the authorities
(3) Recent examples of exposures

II. Legal restrictions on commercial bribery in China
(1) Overview of restrictions under the Anti-Unfair Competition Law and the Criminal Law (actus reus and punishment)
(2) Differences between commercial bribery and non-commercial bribery
(3) Exceptions to commercial bribery
(4) Distinctions between government employees, for whom heavier punishments are imposed, and others

III. Audits for discovering acts of commercial bribery
(1) The importance of audits as a countermeasure against commercial bribery
(2) A detailed description of audits and how to implement them
(3) The necessary documents to investigate for an effective audit
(4) Examples of compliance violations uncovered by audits
(5) How to make effective use of the audit results

IV. Establishing a compliance regime as a countermeasure against commercial bribery
(1) Setting up compliance departments in Chinese local subsidiaries
(2) Clearly defining standards by instituting a compliance manual (code of conduct)
(3) Bookkeeping as a preventative measure
(4) Establishing and making good use of internal reporting systems for early detection
(5) Ongoing employee training

V. How to respond when under on-site investigation by authorities on suspicion of commercial bribery (emergency responses)
(1) How to conduct internal and external investigations in order to quickly grasp the situation
(2) Examples where the company’s interests are at odds with employees’ interests
(3) Issues when disputing using appeals, etc.