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Author, James Swenson, Managing Director, Ethixbase360
On August 28, 2026, the Standing Committee of China’s National People’s Congress (NPCSC), the country’s top legislature, released for public comment a new draft Anti-Cross-Border Corruption Law (the “ACBC Law”; unofficial translation here). Comments closed in late September, and observers expect the law to pass after two to three readings.
Expanding on over a decade of efforts to build out the country’s anti-corruption framework, the draft ACBC Law is China’s first standalone statute on transnational corruption.
Who Is Impacted and What Conduct Is Covered?
As various legal observers have pointed out, the draft ACBC Law has a wide reach, covering:
- Chinese citizens and companies, including, potentially, their overseas branches and subsidiaries, wherever the conduct occurs;
- Foreign companies’ branches and subsidiaries in China, as well as foreign individuals and companies operating there; and
- Any foreign persons and entities whose misconduct has a nexus to China, even if they have no entities or personnel in the country.
The draft covers five broad types of conduct:
- Outbound bribery: Chinese entities or citizens bribing foreign officials anywhere, or non-Chinese entities or citizens bribing foreign officials on Chinese soil;
- Inbound bribery: foreign entities or citizens bribing Chinese officials, their relatives or state-owned enterprises (SOEs), as well as the officials who accept the bribes;
- Misconduct by Chinese officials and SOE personnel abroad: embezzlement, abuse of power and similar misconduct overseas;
- Misconduct with effects in China: comparable corruption committed abroad whose results are felt in China, the so-called “catch-all effects test”; and
- Cross-border flight: suspects fleeing abroad, or corrupt assets moved across borders.
What Is Required of Companies?
If enacted as drafted, the law would require Chinese companies with overseas operations and China-based branches and subsidiaries of foreign companies to maintain, among other things:
- A compliance management system, with designated compliance staff and, where relevant, compliance officers deployed to overseas entities;
- Ongoing risk monitoring, internal audit and internal reporting mechanisms;
- Financial and accounting controls;
- Third-party due diligence and management; and
- Employee integrity training.
Other elements stand out. Failure to establish the required compliance infrastructure would itself be sanctionable, even if no bribe was paid. Companies may be required to report suspected cross-border corruption, and would be obliged, unlike under the US Foreign Corrupt Practices Act (FCPA), to cooperate with investigations and provide evidence. In serious cases, that obligation may extend to a foreign company’s overseas headquarters. Obstructing an investigation would carry its own liability. Finally, individuals suspected of involvement, including foreign executives, could be barred from leaving China.
In sum, companies with China operations should prepare to adapt their compliance programs, ensuring those programs are demonstrably local, not simply a translated global policy.
Other Considerations
Observers have long noted that elements of China’s anti-corruption campaign have served a domestic political agenda. Meanwhile, the draft creates no new crimes: China already criminalizes bribery of its officials under the Criminal Law, and it criminalized foreign bribery in 2011.
The draft can also be read through a geopolitical lens: it arrives as the US has narrowed its enforcement of the FCPA. Its text calls for the UN Convention against Corruption to serve as the main channel for international anti-corruption cooperation. As the US is perceived to be stepping back, is China asserting that it will set the rules moving forward?
Another key concern is the potential for collision with the FCPA or UK Bribery Act. The draft ACBC Law bars foreign authorities from conducting anti-corruption investigations in China without consent, and prohibits anyone in China from providing them evidence without approval. A company under parallel scrutiny by the US Department of Justice or UK Serious Fraud Office, with relevant staff and records in China, could face a foreign expectation to cooperate and a Chinese prohibition on doing so. To be fair, these approval requirements largely restate existing Chinese law. What is new is that the draft authorizes countermeasures against foreign anti-corruption action China deems improper, by reference to the 2021 Anti-Foreign Sanctions Law, which allows visa bans, asset freezes and transaction bans against those involved.
Conclusion
The draft ACBC Law is likely to pass largely intact, and companies should prepare for its requirements now. Whether it becomes a genuine anti-corruption tool or a geopolitical one will depend on how, and against whom, it is enforced.