Abstract
Since the enactment of the Anti-Unfair Competition Law in 1993, China’s economy has changed significantly. To better regulate the current market, a draft amendment to the AUCL was published on February 25, 2016. Specifically, Articles 7 and 20, the commercial anti-bribery provisions of the AUCL, reflect substantial changes to the current law. This paper will identify such proposed changes and analyze implications and potential issues of the elements of the commercial anti-bribery provisions, including burden of proof, vicarious liability of employers, bribery involving public service, books and records provision, extraterritorial jurisdiction, and penalties, etc. It will also look to the United States’ domestic commercial anti-bribery laws for comparisons. This paper hopes to shed light on potential improvements the draft amendment should consider to achieve its desired purposes of better curbing commercial bribery and regulating the current market.

I. Introduction

The Legislative Affairs Office of the State Council of China published for public comment a draft amendment to the Anti-Unfair Competition Law (the “AUCL”) on February 25, 2016 (the “Draft Amendment”). It was drafted by the State Administration of Industry and Commerce (“SAIC”, and “AICs” for its local counterparts), the government agency responsible for the enforcement of the AUCL over the past 23 years. The AUCL is the major administrative legislation regulating various forms of unfair competition practices in China, including commercial bribery, product counterfeiting, monopoly power abuse, misleading commercial advertising and commercial secrets violations, etc. The commercial bribery provisions have been substantially revised by Article 7 and Article 20 of the Draft Amendment.

The preamble of the Draft Amendment acknowledges that the market economy has undergone dramatic changes since the enactment of the AUCL in 1993. Presumably, one of the major purposes behind the Draft Amendment is to adapt the law to current market conditions and address new issues that have emerged in the past two decades. Another possible purpose is to clarify the current law and eliminate inconsistencies between the AUCL and other overlapping legislations, such as the Anti-Monopoly Law, the Trademark Law, and the Advertisement Law. The legislators also presumably intend to make the anti-bribery provisions consistent with the tightened anti-corruption provisions in the Criminal Law.

This paper will introduce the major amendments to the commercial bribery clauses, analyze the implications and potential issues, and propose resolutions based on the legislative and enforcement experience in the United States.