China’s Criminal Legislation on Embezzlement and Bribery (Research Series on the Chinese Dream and China’s Development Path) 981329311X, 9789813293113

Table of contents :
Series Preface
Preface
Contents
1 China’s Criminal Legislation on Embezzlement and Bribery: A Historical Overview
1.1 Early Development After 1949
1.1.1 Regulations of the People’s Republic of China on Punishments for Embezzlement and Its Background
1.1.2 Legal Provisions
1.1.2.1 Classification of Crimes
1.1.2.2 Legal Punishments for Embezzlement and Bribery
1.1.3 Conclusions
1.2 The Penal Code as a Tool for Fighting Embezzlement and Bribery
1.2.1 Background to the 1979 Criminal Law and Other Criminal Statutes
1.2.2 Provisions on Embezzlement and Bribery
1.2.2.1 The Penal Code of 1979
1.2.2.2 Criminal Statutes Amending the Penal Code of 1979
1.2.3 Conclusions
1.2.3.1 More Types of Conduct Criminalized as a Response to Social Transformation
1.2.3.2 Heavier Punishment for Embezzlement as a Continuation of Tradition
1.2.3.3 Improved Classification of Crimes to Combat Embezzlement and Bribery More Effectively
1.2.3.4 Intended Effect Hardly Achieved by Revising Legal Criteria for What Constitutes the Crimes
1.3 Amendments and Revisions to the Penal Code
1.3.1 Background to the Criminal Law of 1997 and Its Amendments
1.3.2 Legislative Amendments
1.3.2.1 Provisions in the Criminal Law of 1997
1.3.2.2 Revisions to the Penal Code of 1997
1.3.3 Conclusions
1.3.3.1 Embezzlement and Bribery Legislation Put in Place
1.3.3.2 Design of Legislation Model and Elements of Crime Increasingly at Odds with the Purpose of Criminal Sanction
1.3.3.3 Identity-Centered Punishment Model Provoking Mixed Comments and Failing to Ensure Equal Protection Under the Criminal Law
References
2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery Legislation
2.1 Gauging Historical Trends in the Incidence of Embezzlement and Bribery: A Methodological Analysis
2.1.1 Gauging Historical Trends in the Incidence of Embezzlement and Bribery Since the Beginning of Reform and Opening Up
2.1.1.1 Ways of Measuring Corruption
2.1.1.2 Choosing the Right Method
2.2 Historical Trends for Embezzlement and Bribery Cases
2.3 Basic Conclusions
2.3.1 Statutes Help Curb Embezzlement and Bribery
2.3.1.1 Slowdown in the Growth of Crimes
2.3.1.2 Varying Trends in Crimes
2.3.2 Expanding the Scope of Who Can Be Criminally Charged with Embezzlement and Bribery
2.3.2.1 Increasing the Types of Natural-Persons Eligible for Such Charges
2.3.2.2 Including Organizations as a New Type of Offenders
2.3.3 Effectiveness Problems of Legislation
2.3.3.1 Greater Harm of Embezzlement and Bribery
2.3.3.2 Multi-layered Legislative System Fails to Achieve Expected Results
References
3 Establishing and Improving Criminal Legislation on Embezzlement and Accepting Bribes
3.1 Eligibility Requirements for Being Criminally Charged with Embezzlement or Accepting Bribes
3.1.1 Embezzlement and Accepting Bribes by Natural Persons
3.1.1.1 Embezzlement and Accepting Bribes by Public-Sector Workers
3.1.1.2 Embezzlement and Accepting Bribes by Non-public-Sector Workers
3.1.2 Embezzlement and Accepting Bribes by Organizations
3.1.2.1 Interpretation of Provisions
3.1.2.2 Legislative Evaluation
3.1.2.3 Direction of Legislative Reform
3.2 Substantive Legal Definitions of Embezzlement and Accepting Bribes
3.2.1 “Taking Advantage of Position” in the Definition of Both Crimes
3.2.1.1 Interpretation of Provisions
3.2.1.2 Legislative Evaluation
3.2.1.3 Direction of Legislative Reform
3.2.2 Elements Specific to the Crime of Embezzlement
3.2.2.1 Types of Act that Constitutes Embezzlement
3.2.2.2 Statutory Scope of What May Be Embezzled
3.2.3 Elements Specific to the Crime of Accepting Bribes
3.2.3.1 Types of Act that Constitutes Accepting Bribes
3.2.3.2 Content and Scope of Bribes
References
4 Establishing and Improving Criminal Legislation on Giving Bribes
4.1 Legislative Activities and Judicial Practices: Past and Present
4.1.1 A History of Legislation on Giving Bribes
4.1.2 Stop Giving More Attention to Accepting Bribes Than Giving Bribes
4.2 Legal Criteria for Defining Giving Bribes as a Criminal Act
4.2.1 Replace “Property” with “Undue Advantage”
4.2.2 Replace “Giving” with “Promising, Offering or Giving”
4.3 Legal Punishment for the Crime of Giving Bribes
4.3.1 Across-the-Board Application of Financial Penalty
4.3.2 Disqualification as a Criminal Sanction
4.3.3 Equal Punishment for Giving Bribes and Accepting Bribes
4.4 Classification of Crimes Involving Giving Bribes
References
5 Legal Proceeding for Embezzlement and Bribery Cases
5.1 Legal Proceeding for Embezzlement and Bribery Cases
5.1.1 Case Filing
5.1.1.1 Accepting a Case
5.1.1.2 Document Review and Handling
5.1.1.3 Supervision Over Decisions of not Filing a Case
5.1.2 Investigation Procedure
5.1.2.1 Jurisdiction for Investigation
5.1.2.2 Conclusion of Investigation
5.1.3 Prosecution
5.1.3.1 Pre-prosecution Review
5.1.3.2 Public Prosecution
5.1.3.3 Non-prosecution
5.1.4 Court Proceedings
5.1.4.1 Proceedings at the First Instance
5.1.4.2 Proceedings at Second Instance
5.1.4.3 Prohibition of Reformation in Peius
5.1.5 Enforcement
5.1.5.1 Who Enforces the Verdict and on What Grounds
5.1.5.2 Enforcement in Cases of Embezzlement and Bribery
5.1.5.3 Changes of Enforcement
5.2 Problems and Possible Solutions
5.2.1 Burden of Proof for Prosecution and Improvement in Presumption Rules
5.2.2 Lack of Incentives for Suspect Testimony and Establishment of the Witness Immunity System
5.2.3 Difficulty in Convicting the Fugitives and the Establishment of Trial by Default System
5.2.4 Judicial Credibility Concerns and the Establishment and Improvement of the Off-Site Trial System
References
6 International Cooperation in Tracking Down and Capturing Fugitive Officials
6.1 Background
6.2 Four Different Approaches: Strengths and Weaknesses
6.2.1 Bilateral Extradition and Legal Assistance Treaties: Cooperation Platforms to Be Improved
6.2.2 Red Notice: Useful, Up to a Point
6.2.3 China-US Cooperation: A Case Study
6.2.4 UNCAC
6.3 Outlook and Recommendations
References
References
Books, In Chinese
Journals, In Chinese
Newspapers, In Chinese
Contributions, In Chinese
Theses and Dissertations, In Chinese
Websites, In Chinese
English
Index

Citation preview

Research Series on the Chinese Dream and China’s Development Path

Renwen Liu Editor

China’s Criminal Legislation on Embezzlement and Bribery

Research Series on the Chinese Dream and China’s Development Path Project Director Xie Shouguang, President, Social Sciences Academic Press Series Editors Li Yang, Chinese Academy of Social Sciences, Beijing, China Li Peilin, Chinese Academy of Social Sciences, Beijing, China Academic Advisors Cai Fang, Gao Peiyong, Li Lin, Li Qiang, Ma Huaide, Pan Jiahua, Pei Changhong, Qi Ye, Wang Lei, Wang Ming, Zhang Yuyan, Zheng Yongnian, Zhou Hong

Drawing on a large body of empirical studies done over the last two decades, this Series provides its readers with in-depth analyses of the past and present and forecasts for the future course of China’s development. It contains the latest research results made by members of the Chinese Academy of Social Sciences. This series is an invaluable companion to every researcher who is trying to gain a deeper understanding of the development model, path and experience unique to China. Thanks to the adoption of Socialism with Chinese characteristics, and the implementation of comprehensive reform and opening-up, China has made tremendous achievements in areas such as political reform, economic development, and social construction, and is making great strides towards the realization of the Chinese dream of national rejuvenation. In addition to presenting a detailed account of many of these achievements, the authors also discuss what lessons other countries can learn from China’s experience.

More information about this series at http://www.springer.com/series/13571

Renwen Liu Editor

China’s Criminal Legislation on Embezzlement and Bribery

123

Editor Renwen Liu Department of Criminal Law Institute of Law, Chinese Academy of Social Sciences Beijing, China Translated by Mr. Fulai Tian and Ms. Ling Yue Revised by Ms. Hongyan Luo

ISSN 2363-6866 ISSN 2363-6874 (electronic) Research Series on the Chinese Dream and China’s Development Path ISBN 978-981-32-9311-3 ISBN 978-981-32-9313-7 (eBook) https://doi.org/10.1007/978-981-32-9313-7 Jointly published with Social Sciences Academic Press The print edition is not for sale in China. Customers from China please order the print book from: Social Sciences Academic Press. © Social Sciences Academic Press 2019 This work is subject to copyright. All rights are reserved by the Publishers, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Series Preface

Since China’s reform and opening began in 1978, the country has come a long way on the path of Socialism with Chinese Characteristics, under the leadership of the Communist Party of China. Over 30 years of reform, efforts and sustained spectacular economic growth have turned China into the world’s second largest economy and wrought many profound changes in the Chinese society. These historically significant developments have been garnering increasing attention from scholars, governments, and the general public alike around the world since the 1990s, when the newest wave of China studies began to gather steam. Some of the hottest topics have included the so-called “China miracle,” “Chinese phenomenon,” “Chinese experience,” “Chinese path,” and the “Chinese model.” Homegrown researchers have soon followed suit. Already hugely productive, this vibrant field is putting out a large number of books each year, with Social Sciences Academic Press alone having published hundreds of titles on a wide range of subjects. Because most of these books have been written and published in Chinese, however, readership has been limited outside China—even among many who study China—for whom English is still the lingua franca. This language barrier has been an impediment to efforts by academia, business communities, and policy-makers in other countries to form a thorough understanding of contemporary China, of what is distinct about China’s past and present may mean not only for her future but also for the future of the world. The need to remove such an impediment is both real and urgent, and the Research Series on the Chinese Dream and China’s Development Path is my answer to the call. This series features some of the most notable achievements from the last 20 years by scholars in China in a variety of research topics related to reform and opening. They include both theoretical explorations and empirical studies, and cover economy, society, politics, law, culture, and ecology, the six areas in which reform and opening policies have had the deepest impact and farthest-reaching consequences for the country. Authors for the series have also tried to articulate their visions of the “Chinese Dream” and how the country can realize it in these fields and beyond.

v

vi

Series Preface

All of the editors and authors for the Research Series on the Chinese Dream and China’s Development Path are both longtime students of reform and opening and recognized authorities in their respective academic fields. Their credentials and expertise lend credibility to these books, each of which having been subject to a rigorous peer review process for inclusion in the series. As part of the Reform and Development Program under the State Administration of Press, Publication, Radio, Film and Television of the People’s Republic of China, the series is published by Springer, a Germany-based academic publisher of international repute, and distributed overseas. I am confident that it will help fill a lacuna in studies of China in the era of reform and opening. Xie Shouguang

Preface

China’s Criminal Legislation on Embezzlement and Bribery is a book in the “Research Series on the Chinese Dream and China’s Development Path”—a collaborative publishing project between Social Sciences Academic Press (SSAP) and Springer Nature. Fighting corruption and promoting clean government are integral parts of the endeavor to fulfill the Chinese Dream as well as a major task China has to tackle on the path of development. Criminal law plays a unique role in punishing those who have committed embezzlement and bribery. In the context of China’s increasing interactions with the rest of the world, the growing number of people wanted for such crimes fleeing China to take refuge outside the country has become a real problem. In response, international cooperation in criminal investigation in these cases and complications arising from differences in legislative approaches adopted by concerned countries have attracted more and more attention from around the world. There is no better time to write a book about China’s criminal legislation on embezzlement and bribery and scholarly debates on related issues. This book is divided into six chapters. Chapter 1 “China’s Criminal Legislation on Embezzlement and Bribery: A Historical Overview” examines the legislative efforts since the People’s Republic of China was founded, with a focus on the Regulations of the People’s Republic of China on Punishments for Embezzlement adopted in 1952, the penal code of 1979 (the PRC’s first-ever criminal code), criminal statutes that amended it, the penal code of 1997 and its amendments. Chapter 2, “Effectiveness Assessment of Anti-embezzlement and Anti-bribery Legislation,” concludes that while these laws had made a positive difference, the two types of offences, bribery in particular, continue to be widespread, which can in part be explained by the fact that the country is undergoing drastic transformation and leaves much room for legislative improvements. Chapters 3 and 4, “Establishing and Improving Criminal Legislation on Embezzlement and Accepting Bribes” and “Establishing and Improving Criminal Legislation on Giving Bribes,” look at the conviction and sentencing provisions on embezzlement and bribery in the current Criminal Law and the judicial interpretations made by the Supreme People’s Court and relevant bodies on the one hand and, on the other, offer suggestions on how to improve the provisions. Our proposals include expanding the vii

viii

Preface

scope of bribes from “property” to “undue advantage,” according to the United Nations Convention against Corruption (UNCAC); adapting the sentencing guidelines based on the quantity of illegal proceeds to the economic and social changes; and taking stricter punitive action against giving bribes. Chapter 5 is titled “Legal Proceeding for Embezzlement and Bribery Cases.” As Criminal Law includes both substantive law and procedural law, we have dedicated a whole chapter to the criminal proceedings, exploring challenging issues such as whether the institutional arrangement for the People’s Procuratorate to be responsible for both investigating into the crimes and initiating the criminal proceedings is reasonable, how to improve the provisions and procedures for the trial of a case at a non-local court, and how to safeguard the accused’s rights in the case of default judgment. Chapter 6, “International Cooperation in Tracking Down and Capturing Fugitive Officials,” focuses on four ways of getting the fugitives back to China, i.e., extradition or mutual legal assistance (MLA), arrest by Interpol, case-specific cooperation through diplomatic channels, and cooperation mechanisms under UNCAC. This chapter also addresses some knotty problems China has encountered in recent years. For example, given that the principle of non-extradition applies in cases involving the prospect of the death penalty, is it still appropriate to keep embezzlement and bribery offenders eligible for the death penalty? For English-speaking readers whom this book is intended for, there are two things deserving particular attention. First, according to China’s Criminal Law, public-sector workers and non-publicsector workers who have committed similar offences nonetheless face different charges. Here are some examples. Enterprise employees who abused their jobs and took possession of the employer’s property will be charged with “employee embezzlement” if the enterprise is not state-owned, but with “embezzlement” if the employer is a state-owned enterprise or if the employee has been dispatched by a state-owned enterprise to work at a non-state-owned enterprise. The former charge carries a maximum sentence of fifteen years, while the latter is eligible for death penalty in the gravest circumstances. One who takes a bribe will be charged with “accepting bribes by a non-public-sector worker,” which carries a maximum sentence of fifteen years, if he/she works in a non-state-owned enterprise, but with “accepting bribes,” facing the possibility of death, if the enterprise is state-owned, even if the bribee has been dispatched to work in a non-state-owned enterprise. Similarly, people who bribe employees of non-state-owned enterprises will be charged with “giving bribes to a non-public-sector worker,” which carries a maximum sentence of ten years, but with “giving bribes (to a public-sector worker),” punishable by life imprisonment in most serious cases, if they have targeted employees of state-owned enterprises. And in the case of using corporate funds to personal gain, the charge will be “misappropriation of funds,” which carries a maximum sentence of ten years if the corporation is not state-owned, but with “misappropriation of public funds,” which carries a maximum sentence of life imprisonment if the corporation is state-owned. We believe that such a legislative framework is faulty and has yet to be improved. In the long run, the country stands to gain from stripping state-owned enterprises of the administrative powers they

Preface

ix

currently enjoy and ending the privileges for which their employees, who are now but should no longer be treated as public-sector workers, are currently eligible. These measures are not only instrumental for establishing China’s status as a bona fide market economy according to WTO rules but also consistent with the need to help state-owned enterprises “adapt to the evolving marked and international conditions” such as articulated in the “CPC Central Committee Decision on Major Issues Concerning Comprehensive Deepening of Reform.” Second, the punishments for embezzlement and bribery offences in the Chinese mainland are on the whole heavier than those in Western countries and even in Taiwan, Hong Kong, and Macao regions of China. In particular, the provision in China’s Criminal Law which allows a maximum sentence of death for embezzlement and bribery offenders has not only often spelled trouble for international criminal justice cooperation, but also caused considerable scholarly debate within the country. The punishments for criminal offences are harsher in China for two reasons. One is that when we criminalize a certain act, we need to consider both what crime it constitutes and the amount of the damage or illegal proceeds. For example, if the amount of illegal gain in a case of bribery or embezzlement is small, the act would not be criminalized. That means the Criminal Law only deals with grave crimes, which would be roughly equivalent to what are known as felonies in other countries. Whether this legislative model is defensible on theoretical grounds is open to debate. In fact, the practice of criminalizing an act based on both qualitative and quantitative criteria has changed as shown, for example, in the recent revisions to the provisions about theft (which make burglary and pickpocketing legally punishable regardless of the amount of money involved), the criminalization of reckless driving, and abolition of the re-education-through-labor system. As far as embezzlement and bribery are concerned, however, the practice will not change in the short term and even higher amounts of illegal gains will be required for an act to be criminalized as embezzlement or bribery. The other reason behind the harsh punishments for crimes is a growing surge in the number of crimes including economic crimes and corruption against the backdrop of rapid social transformation since the beginning of reform and opening up in China. For example, while the 1979 penal code imposed a maximum sentence of fifteen years’ imprisonment on accepting bribes, the 1982 amendment introduced death penalty for the gravest cases in light of the growth in the crime. It should be noted that China has made a major step forward in reducing the use of the death penalty. Provisions about the maximum sentence of death for thirteen nonviolent crimes were removed for the first time in the Eighth Amendment to the Criminal Law adopted in 2011, and fewer crimes will carry the death penalty in the proposed Ninth Amendment. Given the public anger toward embezzlement, the Communist Party of China (CPC) considers the fight against corruption a significant move to win public support and build a solid foundation for ruling. Death as the maximum penalty for embezzlement and bribery is unlikely to be removed in the short run. An undeniable fact is, however, the number of embezzlement and bribery cases for which death penalty was imposed (except for those with a reprieve) has been on the decline. The introduction of effective anti-corruption measures is expected to curb

x

Preface

the crimes and help decrease public resistance to the removal of death penalty for embezzlement and bribery. Communication between different legal systems and cultures is indeed enlightening and beneficial for everyone involved. In writing this book, we have become keenly aware that the Criminal Law theories indeed transcend national boundaries. All countries need to follow the basic legal doctrines developed over the centuries, such as common purpose, inchoate offence, and basis of criminal liability. China’s Criminal Law system also has its unique features, particularly in such provisions as those for a briber’s voluntary surrender before prosecution, which may mitigate or exempt the briber from the punishment, or for the meritorious service performed by a criminal. It is never our intention to overemphasize what makes China’s legal system distinct. On the contrary, we argue for learning from good international practices in an effort to promote the rule of law. In the final analysis, law is not solely grounded in reasoning, but deeply rooted in a country’s traditions, culture, and local knowledge. Understanding this would help make reading the book easy and enjoyable. This book is the result of collaboration between different authors. Liu Renwen has written the Preface; Wei Changdong, the first two chapters; Sun Guoxiang and Qian Xiaoping, Chapter 3; Liu Renwen and Huang Yunbo, Chapter 4; Peng Xinlin and Ma Ke, Chapter 5; and Liu Renwen and Liu Jun, Chapter 6. Liu Renwen is also responsible for putting together the entire manuscript and preparing it for final submission. Renwen Liu Institute of Law, Chinese Academy of Social Sciences Beijing, China

Contents

1 China’s Criminal Legislation on Embezzlement and Bribery: A Historical Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changdong Wei

1

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changdong Wei

31

3 Establishing and Improving Criminal Legislation on Embezzlement and Accepting Bribes . . . . . . . . . . . . . . . . . . . . . . Guoxiang Sun and Xiaoping Qian

53

4 Establishing and Improving Criminal Legislation on Giving Bribes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Renwen Liu and Yunbo Huang 5 Legal Proceeding for Embezzlement and Bribery Cases . . . . . . . . . . 149 Xinlin Peng and Ke Ma 6 International Cooperation in Tracking Down and Capturing Fugitive Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 Renwen Liu and Jun Liu References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213

xi

Chapter 1

China’s Criminal Legislation on Embezzlement and Bribery: A Historical Overview Changdong Wei

China has one of the world’s oldest legal systems which was highly sophisticated in very ancient times. During almost each of its imperial dynasties, imposing severe punishment on embezzlement and bribery remained a basic principle in the governance of the country. Since the People’s Republic of China was founded in 1949, the government has made fighting embezzlement and bribery a consistent priority.

1.1 1.1.1

Early Development After 1949 Regulations of the People’s Republic of China on Punishments for Embezzlement and Its Background

Though the Communist Party of China (CPC) stayed alert for the problems that might arise within the Party after it came into power,1 corruption, which had run rifle during the Kuomintang era, continued to exist due to the influence of the semi-colonial and semi-feudal legacy and a pernicious feudal culture. In addition, to restore and develop the economy, the CPC adopted the economic policy of “utilizing and restricting”

1

At the Second Plenary Session of the 7th CPC Central Committee, Chairman Mao Zedong said, “Because of the victory, some of us in the Party may become proud, give themselves the airs of heroes, stop making progress, seek a life of pleasure and comfort and hate to live a hard one… Perhaps some communists have never surrendered to the enemies and for that they deserve to be called heroes. However, they may be defeated by the enemies’ sugar-coated bullets. We must prevent that from happening.” Mao (1991).

C. Wei (&) Institute of Law, Shanghai Academy of Social Sciences, Shanghai, China e-mail: [email protected] © Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7_1

1

2

C. Wei

capitalist industry and commerce to best mobilize the private business community, which also provided soil for corruption.2 In response to the serious challenges, the CPC and the people’s government it led immediately launched two campaigns against the major threats to the new regime’s security and stability. Combating embezzlement and bribery was an important part of such efforts. The first campaign was carried out within the Party. On December 1, 1951, the CPC Central Committee issued the “Decision on Streamlining Administration, Increasing Production, Practicing Economy, and Opposing Embezzlement, Waste and Bureaucracy,” marking the beginning of the campaign against “three evils.”3 In the meantime, the CPC Central Committee found that embezzlement within the Party was often closely connected with capitalists’ illegal activities such as bribery, tax evasion, theft of state property, cheating on government contracts and stealing of economic information (“five evils”) in order to make exorbitant profits. To stem embezzlement, Mao Zedong proposed a new campaign in addition to the one against “three evils” in the “Instructions on Running a Campaign against the ‘Five Evils’ in Cities” which was drafted on January 26, 1952. With the struggle against the lawless bourgeois mounted in big and mid-sized cities across the country to support the campaign against “three evils” within the Party, the second battlefront emerged in the fight against the “five evils.” The Six Codes adopted by the Kuomintang government was completely repudiated in the early years of the People’s Republic of China, considering the country’s choice of development path and development status. In face of the challenges posed by embezzlement and bribery to the new regime and in the absence of a sound criminal code, the Central People’s Government Council

2

Peng Zhen, then Vice Chairman of the Political and Legal Affairs Committee of the Government Administration Council of the Central People’s Government, delivered a report titled “Explanatory Notes on the Draft Regulations of the People’s Republic of China on Punishments for Embezzlement ” at the 14th meeting of the Central People’s Government Council on April 18, 1952. As he said in the report, “People call embezzlement, waste and bureaucracy the ‘three evils’ and bribery, tax evasion, theft of state property, cheating on government contracts and stealing of economic information the ‘five evils’. The ‘five evils’ are the main forms of attack the lawless bourgeois are now carrying out against the nation and the people while the ‘three evils’ are mainly the results of such attacks. The latter also have their roots in the exploiters and reactionary rulers of the old society and the lawless bourgeois are the social class that has inherited and supports such roots.” Peng Zhen. Explanatory Notes on the Draft Regulations of the People’s Republic of China on Punishments for Embezzlement. Gao and Zhao (2007a). 3 The campaign against the “three evils” was started because of a report submitted by the Northeast Bureau to the CPC Central Committee. In October 1951, the CPC Central Committee launched a nationwide campaign of increasing production and practicing economy to support the War to Resist U.S. Aggression and Aid Korea and to break the government’s financial bottlenecks. On November 1, 1951, the Northeast Bureau of the CPC Central Committee delivered a report to the central authorities about running the campaign of increasing production and practicing economy to further the fight against embezzlement, waste and bureaucracy, in which some officials’ serious acts of embezzlement and wastefulness were disclosed. After that, the Beijing Bureau, Shanghai Bureau, and North China Bureau successively reported about corruption within the Party, which caught full attention of the central authorities.

1 China’s Criminal Legislation on Embezzlement and Bribery …

3

approved the adoption of the Regulations of the People’s Republic of China on Punishments for Embezzlement (hereinafter referred to as “the Regulations”) at its 14th meeting held on April 21, 1952. This piece of legislation on embezzlement and bribery provided the legal basis for the campaigns against the “three evils” and the “five evils.” As the PRC’s third statute that relates to crime,4 the Regulations made it clear that the penalty for embezzlement and bribery was imposed to ensure the stability of the regime and the economy.

1.1.2

Legal Provisions

As the first-ever piece of legislation on embezzlement and bribery in the history of the People’s Republic of China, the Regulations had eighteen articles and addressed mainly four issues, i.e., classification of crimes, elements that constitute a crime, legal punishments, and how they are applied. It not only offered the basic legal principles concerning embezzlement and bribery, but also established a quite effective crime and punishment system.

1.1.2.1

Classification of Crimes

Four types of crimes are defined in the Regulations. First, embezzlement. According to Article 2 of the Regulations, “In the case that anyone who works in a government agency, state-owned enterprise, public school or government-affiliated organization embezzles, steals, swindles or gets through illegal means government property, obtains others’ property by extortion, takes a bribe, or seeks personal gains under the guise of delivering public service, it constitutes an embezzlement offence.” Apparently, “embezzlement” is defined as any breach of duty for undue benefits by a public employee. The following criteria were required to be met for the conviction of the crime. First, the offender must be a public employee, including those working in a government agency, state-owned enterprise, public school or government-affiliated organization (Article 2), or social organization (Article 15). Second, the acts of embezzlement include (1) embezzlement of government property; (2) accepting bribes or extortion; (3) other illegal acts committed 4

In accordance with the Common Program of the Chinese People’s Political Consultative Conference, the Central People’s Government exercised the legislative power for a period after the founding of the People’s Republic of China, during which three sets of Regulations were introduced as separately implemented Criminal Laws Separately implemented Criminal Law. The two adopted before the Regulations on Punishments for Embezzlement were the Regulations of the People’s Republic of China on the Punishment of Counterrevolutionaries (approved at the 11th meeting of the Central People’s Government Council on February 20, 1951, and promulgated by the Central People’s Government on February 21, 1951) and the Provisional Regulations on the Punishment of Currency Offences (promulgated by the Government Administration Council of the Central People’s Government on April 19, 1951).

4

C. Wei

for private gain by a public-sector worker in the pursuit of public business. Article 12 also provided that “any non-public-sector worker who colludes with a public-sector worker in an act of embezzlement shall be punished according to Articles 3, 4, 5, 10 and 11,” making clear under what condition shall a non-public-sector worker be convicted of complicity in embezzlement and bribery. Second, giving bribes or introducing the opportunity of receiving bribes. According to Article 6 of the Regulations, “Anyone who gives a bribe or introduces the opportunity of receiving bribes to a public-sector worker shall be punished in light of the seriousness of the case and according to Article 3. In the case that the offence is very serious, the offender’s property shall be partially or completely confiscated. The offender who confesses everything and informs on the bribee shall be fined and exempted from criminal sanction.” It thus subjected bribers to strict criminal penalty. Third, embezzlement by a non-public-sector worker. According to Article 8 of the Regulations, “In the case that any non-public-sector worker embezzles, steals, swindles or gets through illegal means government property, the property illegally obtained shall be recovered, the seriousness of the offence shall be measured based on the amount of illegal gains and according to Articles 4 and 5, and the offender shall be fined or required to compensate for other losses incurred on the government. In the case that the offence is very serious, the offender shall be punished according to Article 3 or his or her property shall be partially or completely confiscated. In the case of a minor offence, the offender who confesses everything shall be exempted from criminal sanction.” As the Regulations was intended to protect government property, the charge was brought against non-public-sector workers who had illegally taken possession of government property. The Regulations did not address the situation that a non-public-sector worker accepted a bribe. It introduced the “dualism of identity” that would later appear in the Criminal Law of the People’s Republic of China, an arrangement that would subject offenders of embezzlement and bribery to different charges depending on whether they are public-sector workers or not. Fourth, embezzlement and bribery-related offence. The Regulations also criminalized the act of helping cover up acts of embezzlement or failure to inform on the offender. According to Article 13, “In the case that the leader of a government agency, state-owned enterprise, public school or government-affiliated organization who finds an employee has committed embezzlement but helps to cover it up or fails to inform on the offender, criminal or disciplinary sanction shall be imposed against the leader according the seriousness of the case.” This provision made the penal system more effective in preventing embezzlement and bribery.

1.1.2.2

Legal Punishments for Embezzlement and Bribery

For the first time in the history of the People’s Republic of China, the Regulations established the general rules governing how punishments should be imposed for embezzlement and bribery, and introduced diverse types of sanction for the crimes.

1 China’s Criminal Legislation on Embezzlement and Bribery …

5

First, sentencing according to the amount of proceeds of crime. The Regulations stated that a sentence decision was primarily based on the proceeds of crime, with due consideration given to the circumstances of the crime.5 Moreover, since embezzlement was broadly defined to include accepting bribes and other acts of making illicit gains, the Regulations virtually laid down the principle that the same punishment would be meted out for embezzlement and accepting bribes. Second, diverse types of sanction. Apart from criminal penalties, including both principal and accessory penalty, the Regulations also stressed the role of administrative and financial sanctions in effectively punishing crimes. The criminal penalty was mainly imprisonment or a maximum of death when circumstances were particularly grave. Some serious cases might also carry the additional penalty of property confiscation. The conditions under which the death penalty may apply were laid down clearly. Administrative sanctions include disciplinary measures such as dismissal from an organization, removal from office, demotion, ranking reduction, having “disciplinary infraction” added to one’s personnel file, and receiving warning, and together with criminal and financial sanctions, they formed a relatively sound system of punishments for embezzlement and bribery. Third, case-by-case approach to sentencing. There was no penal code in China when the Regulations was released. Therefore, Articles 4 and 5 listed the punishments in six categories (aggravated punishment, heavier punishment, lesser punishment, mitigated punishment, probation, and disciplinary sanction) for embezzlement and bribery under fifteen specific circumstances.

1.1.3

Conclusions

The first few years after the founding of the People’s Republic of China marked the formative period of the country’s anti-embezzlement and bribery law. The Regulations set down the general rules for how the crimes of embezzlement and

According to Article 3 of the Regulations, “An embezzlement offender shall be punished considering the seriousness of the offence and according to the following rules. First, in the case that the amount of money involved exceeds one hundred million yuan, the offender shall be sentenced to more than ten years in prison or life imprisonment; in the case that the offence is very serious, the offender shall be sentenced to death. Second, in the case that the amount of money involved stands between fifty million yuan and one hundred million yuan, the offender shall be sentenced to five to ten years in prison. Third, in the case that the amount of money involved stands between ten million yuan and fifty million yuan, the offender shall be sentenced to one to less than five years in prison, or one to four years of penal servitude, or one to two years of being put under surveillance. Fourth, in the case that the amount of money involved is less than ten million yuan, the offender shall be sentenced to imprisonment, penal servitude or being put under surveillance for less than one year, or be subject to disciplinary sanctions such as dismissal from office, removal from office, demotion, downgrading, demerit recording or warning. The property obtained by the offender shall be recovered; in the case of a very serious offence, the offender’s property shall be partially or completely confiscated.”

5

6

C. Wei

bribery should be punished, and more importantly, it provided a basic legal framework that would have a profound impact on future legislative developments in this area. Although the framework was rather general and the scope of application was broadly defined, the Regulations targeted the main forms of embezzlement and bribery at that time and the crime and punishment system it established laid the foundation for future endeavors to improve policy and legislation on this subject. First, the Regulations provided the legal basis for punishing embezzlement and bribery in the early years of the People’s Republic of China. As the first set of legal rules on punishing embezzlement and bribery, the Regulations reflected the clear attitude of the CPC-led new regime toward corruption, epitomized the Chinese tradition of strictly disciplining officials, and embodied the basic idea of punishing the crimes according to the law. The Regulations listed the mitigating and aggravating factors when considering a sentence, providing for “leniency for past offences, severity for new ones; leniency toward the many and severity toward the few; leniency toward those owning up to their crimes and severity toward those refusing to do so; and leniency toward non-public-sector workers (except those who committed grave crimes), and severity toward public-sector workers.” These provisions served to split the offenders, overcome resistance, and combat the crimes more effectively. The definitions of the relevant crimes provided the legal basis for sentencing. Second, an integrated approach helped combat corruption more effectively. The Regulations offered an integrated approach in order to punish the illegal acts, eradicate the source of crime, and remove factors that were conducive to crime. While the Regulations dealt primarily with embezzlement (including accepting bribes), it also listed giving bribes, introducing bribes, helping cover up embezzlement and bribery, and colluding with offenders as punishable offences. By defining the different types of offence, it provided an integrated approach in order to better prevent and fight the crimes. Third, the practice of treating embezzlement and accepting bribes as the same crime and passing sentences based on both the proceeds and circumstances of crime goes with the principle that punishment should be proportionate to the gravity of offence. The harm embezzlement and bribery cause to society lies not only in the amount of illegal gains public employees traded power for or the influence or favor non-public-sector employees bribed public employees for, but more importantly, in the serious violation of the rule that public power is not to be traded. Criteria must be established to ensure the punishment is proportionate to the gravity of offence. Given the purpose of embezzlement and bribery, which is to seek undue benefits, it is befitting to have the amount of illegal proceeds as a key consideration for sentencing. This not only follows the penal tradition in China, but also points directly to the harm the crime has caused. The specific circumstances of crime are also considered in this process to ensure proper punishment. It should be noted that the Regulations, as the first-ever piece of legislation on embezzlement and bribery, did have its deficiencies. For example, embezzlement and accepting bribes were treated in the same way despite the differences in what constituents each of them; the constituent elements and circumstances of crimes were defined not very accurately. Despite that, the Regulations, as a tentative set of

1 China’s Criminal Legislation on Embezzlement and Bribery …

7

rules, produced positive results. Statistics show that 3.83 million people in Party organizations and government agencies above county level participated in the campaign against “three evils.” More than 100,000 people committed embezzlement in which more than ten million yuan was involved, bringing the total proceeds of crime to six trillion yuan. Among those who committed very serious offences, 9,942 were sentenced to fixed-term imprisonment, sixty-seven to life imprisonment, and forty-two to death, and nine were granted a reprieve.6

1.2 1.2.1

The Penal Code as a Tool for Fighting Embezzlement and Bribery Background to the 1979 Criminal Law and Other Criminal Statutes

The decade-long political turmoil in China came to the end in October 1976, presenting new opportunities for building a socialist country based on the rule of law. In December 1978, the Third Plenary Session of the 11th CPC Central Committee decided that China should adopt the policy of reform and opening up and develop a stronger socialist system of laws. As it was noted at the session, “To support people’s democracy, China needs to develop a stronger system of laws and organizations of democracy, ensure the stability, consistency and full authority of the laws and institutions, and make sure that there are laws to abide by, enacted laws are strictly observed and enforced, and law-breakers are brought to justice.”7 Since then, China has gathered speed in developing the legal system. The first-ever penal code since 1949 was approved unanimously at the Second Session of the fifth National People’s Congress held on July 1, 1979, and entered into force on January 1, 1980. The enactment of the penal code of 1979 marked the beginning of the codification of the Criminal Laws as well as a major milestone for building the legal system in the People’s Republic of China. Given the reality and the need to punish crimes, the penal code, built on the principles defined in the Regulations of the People’s Republic of China on Punishments for embezzlement, established an improved system of offences and punishments. The offences related to embezzlement and bribery included embezzlement in “Chapter 5 Crimes against Property,” taking or giving bribes and introducing the opportunity of receiving bribes in “Chapter 8 Crime of Misconduct in Office,” as well as relevant offences in “Chapter 6 Crimes of Social Administration.” Given the social context at the time, the penal code made no substantial improvements over the Regulations except for adjustments to what constitutes the crimes and how punishments should be met out. With the decade-long political turmoil having just ended, embezzlement and bribery were not yet acute problems then because of the 6

Compilation Committee on the History of the CPC (2003). Communique of the Third Plenary Session of the 11th CPC Central Committee (1978).

7

8

C. Wei

planned economy the country had long pursued, the government’s close control over the political, social, and civic spheres of life, the way in which power, predominantly political power, was exercised, and the way of economic operation, wealth possession, and distribution on the basis of the planned economy. The relatively simple provisions on crimes of embezzlement and bribery in the Criminal Law basically fit in with the conditions at the time. After the penal code of 1979 was enacted, China entered a new era of reform and opening up. At the core of the economic reform was the need to change the growth model. The establishment of a socialist market economy and the profound changes in the economic structure expedited transformation of society. During this process, the diversification of stakeholders in economic interests and distribution brought by a changed growth model fueled the pursuit of profit and to some extent, weakened the government control over embezzlement and bribery. As a result, crimes of embezzlement and bribery grew and spread rapidly. The total number of offences increased significantly, so did the number of grave cases. Due to its inherent limitations, the penal code failed to effectively fight against embezzlement and bribery. To eliminate their negative impact on the economic reform and effectively control economic crimes such as bribe-soliciting and accepting bribes, the NPC Standing Committee adopted the Decision on Severely Punishing Crimes Harming the Economy (hereinafter referred to as “the Decision”) on March 8, 1982. Article 2 of the Decision revised provisions on accepting bribes, defining more types of criminal acts, simplifying constituent elements of the crime, introducing harsher punishment for accepting bribes and follow-up acts. That made the Criminal Law more effective in tackling bribery. In light of the increase in cases of embezzlement and bribery and many problems in judicial practice, the Supreme People’s Court and the Supreme People’s Procuratorate jointly released the Answers to Questions Concerning Law Application in Handling Cases of Economic Crimes (Trial) on July 18, 1985. The document stipulated in greater details how the judicial authority should apply legal provisions concerning embezzlement, taking or giving bribes, and introducing the opportunity of receiving bribes, and added that “refusing to return misappropriated public funds” can be punished as an embezzlement offence. On January 21, 1988, the NPC Standing Committee fully revised the provisions on embezzlement and bribery in the penal code, after carefully considering judicial interpretations made by the Supreme People’s Court and the Supreme People’s Procuratorate, and adopted the Supplementary Provisions on the Punishment of Crimes of Embezzlement and Bribery (hereinafter referred to as “the Supplementary Provisions”). As the most complete set of criminal rules for dealing with embezzlement and bribery since 1949, the Supplementary Provisions showed considerable improvements in such aspects as the classification of crimes, the formulation of constituent elements of a crime, and principles of legal punishments, compared with the 1979 penal code. It marks the creation of embezzlement and bribery legislation in China. Moreover, the document defined, for the first time, giving bribes and accepting bribes as punishable offences, laying the foundation for the establishment of organizational offences in the new Criminal Law.

1 China’s Criminal Legislation on Embezzlement and Bribery …

9

The establishment of the socialist market economy system not only brought about a flourishing economy but also expedited the diversification of participants in the market economy. The non-public sector grew rapidly as an important part of the economy. Bribery and embezzlement committed by non-public organizations hampered the development of market economy and the promotion of integrity in the Chinese society. To ensure the healthy development of market economy, legislation was urgently warranted to fight corruption in the non-public sector. The NPC Standing Committee thus adopted the Decision on Punishing Crimes Violating the Company Law on February 28, 1995, which defined embezzlement and bribery in the non-public sector as distinct offences and imposed punishment accordingly. Since the Decision on Punishing Crimes Violating the Company Law distinguished between the identities of offenders, it allowed China’s embezzlement and bribery legislation to expand from the fields of public power to the non-public sector and marked the beginning of an identity-centered punishment system for corruption.

1.2.2

Provisions on Embezzlement and Bribery

1.2.2.1

The Penal Code of 1979

i: Classification of Crimes The penal code improved on the definitions of various types of embezzlement and bribery offences contained in the Regulations. First, embezzlement. Since the penal code made accepting bribes a separate offence, the description of what constitutes embezzlement was simplified. According to Article 155 of the penal code, “Any public-sector worker who embezzles public property taking advantage of his or her position shall be sentenced to less than five years in prison or detention. In the case that the amount of money involved is huge and the offence is serious, the offender shall be sentenced to more than five years in prison. In the case that the offence is very serious, the offender shall be sentenced to life imprisonment or death. In the case of the offence mentioned in the preceding paragraph, the offender’s property shall be confiscated or the offender shall pay compensation. Anyone who performs public service entrusted by a government agency, state-owned enterprise, public institution, or people’s organization and commits the offence mentioned in the Paragraph 1 shall be punished according to the provisions in the first two paragraphs.” Two legal criteria must be met for the conviction of the crime. One is that the offender must be a public-sector worker or a person entrusted by a government-affiliated organization to perform public service. Article 83 defines public-sector workers as those who work in government agencies, state-owned enterprises and public institutions as well as those performing public service according to the law. Compared with the Regulations, the penal code extends the scope of embezzlement offenders. The other element of the crime is the act of taking advantage of position to embezzle public property. The penal code made several

10

C. Wei

revisions to the Regulations. First, “taking advantage of position” was introduced as a constituent element, so the crime of embezzlement (including accepting bribes) was defined in a stricter sense. This is a change of remarkable significance for future legislation in this area. Second, the criminal acts were described in general terms, allowing the statute to cover more activities. Second, accepting bribes. The penal code, for the first time, established accepting bribes as a separate crime. According to the Paragraph 1 of Article 185, “Any public-sector worker who, taking advantage of his or her position, accepts a bribe shall be sentenced to less than five years in prison or detention. The money and property offered as a bribe shall be confiscated and the public funds and property involved shall be recovered.” This points to two legal criteria for one to be convicted of the crime. One is that he or she must be a public-sector worker. “Those who are entrusted to perform public service” might be liable for the offence of embezzlement, but not for accepting bribes. The reason for the different scopes of offenders in these two cases is that the public power involved is of different nature. Although “those who are entrusted to perform public service” are not public-sector workers, they have the right to directly manage public property, and thus, embezzlement may occur. Bribees, however, must have been invested with particular public power to make it possible for them to accept bribes in their official capacity. The other requirement is about the criminal act; that is, the offender must have taken advantage of his or her position to get a bribe. In this respect, the penal code included the following changes to the Regulations: “taking advantage of position,” already a legal criterion for an act to constitute embezzlement, was for the first time made an element of the criminal act of accepting bribes; and “obtaining others’ property by extortion and accepting bribes” described in the Regulations was simplified as “accepts a bribe.” Third, giving bribes or introducing the opportunity of receiving bribes. The provisions on giving bribes or introducing the opportunity of receiving bribes in the Regulations were retained in the penal code. According to the Paragraph 3 of Article 185, “Anyone who gives or introduces a bribe to a public-sector worker shall be sentenced to less than three years in prison or detention.” As for the legal criteria for what constitutes giving bribes, the penal code defined the bribees, but stated nothing about the purpose of the offence. Fourth, misappropriation of earmarked funds and materials. According to Article 126 of the penal code, “Anyone who is directly responsible for misappropriating the government’s funds or supplies for disaster relief, emergency relief, flood control and entitled groups and thus seriously jeopardizing the interests of the country and the people shall be sentenced to less than three years in prison or detention. In the case of a very serious offence, the offender shall be sentenced to more than three years and less than seven years in prison.” It was the first time that misappropriation taking advantage of one’s position was defined in China’s Criminal Law, and the legislative system regarding abuse of power, which was extended to cover acts of embezzlement, bribery, and misappropriation, has since been established.

1 China’s Criminal Legislation on Embezzlement and Bribery …

11

ii. Legal Punishments for Embezzlement and Bribery First, embezzlement and bribery were made separate crimes and punishments became less harsh on the whole. In the penal code of 1979, embezzlement and accepting bribes carried different penalties. For the crime of embezzlement, there were punishments on three levels, i.e., less than five years in prison, more than five years in prison, as well as life imprisonment and death penalty (for very serious offences). For the crime of accepting bribes, there were only two levels, namely less than five years in prison and more than five years in prison (in the cases where national and people’s interests are seriously jeopardized). Compared with the Regulations, the penalties prescribed in the penal code were on the whole lighter. Second, the practice of sentencing according to the amount of proceeds of crime was abolished. In the Regulations, the penalties for embezzlement were determined mainly according to the amount of money involved. In the penal code of 1979, however, the amount was no longer the only criterion of determining the penalty for embezzlement. Apart from the essential offence, both the amount of money involved and the circumstances of the crime shall be considered. For the offence of accepting bribes, the penal code did not state the correlation between the proceeds of crime and punishment. According to the Paragraph 2 of Article 185, if one is found guilty of accepting bribes, the only aggravating factor is the serious damage caused by the criminal act.

1.2.2.2

Criminal Statutes Amending the Penal Code of 1979

i: Decision on Severely Punishing Crimes Harming the Economy First, the provisions on accepting bribes were adjusted. The Paragraph 2 under Article 1 of the Decision was a complete departure from what was stated in the penal code of 1979. Firstly, “taking advantage of position” was no longer an essential element of the offence of accepting bribes. Secondly, soliciting bribes was included in the criminal category of accepting bribes. Thirdly, the scope of embezzlement and bribery offenders was clarified. The Paragraph 1 of Article 1 of the Decision extended the scope of “public-sector workers” defined in Article 83 of the penal code of 1979, stipulating that “public-sector workers referred to in the Decision include people working in administrative and judicial bodies at all levels, the military, state-owned enterprises and public institutions, as well as other persons who perform public service according to the law.” Fourthly, the provision on punishments for accepting bribes was revised. The offenders shall be punished in light of the provision on embezzlement in Article 155 of the Criminal Law and could be sentenced to life imprisonment or death in the gravest cases. With such a revision, the punishments for accepting bribes became much heavier and the practice of treating embezzlement and accepting bribes as identical crimes where the same punishments shall apply, adopted in the Regulations, was resumed.

12

C. Wei

Second, acts related to embezzlement and bribery were criminalized. The Paragraphs 3 and 4 under Article 1 of the Decision defined five types of criminal offences related to embezzlement and bribery: favoritism (a public-sector worker takes advantage of his or her position to conceal or harbor a bribee and help cover up the bribery), harboring criminals (a relative of a public-sector worker or a former public-sector worker commits the foregoing offence), falsifying evidence (one destroys evidence or fabricates false evidence for a bribee), disrupting order in social administration or retaliation (one obstructs, threatens, or retaliates any law enforcement officer, whistleblower, or witness), and offences where provisions regarding misconduct in office, malpractice, and deliberately letting go of a criminal in the Criminal Law would apply mutatis mutandis (a responsible public-sector worker fails to perform his or her statutory duty of investigation into a bribee due to interference or other reasons, the immediate supervisor of the offender who knows about the offence or the only public-sector worker with the knowledge of the incident fails to report it and testify according to the law). The provisions on offences related to embezzlement and bribery supplemented and expanded the scope of legislation in this area, and helped build China’s capacity to prevent and combat such crimes, thus marking a significant milestone in the legislation. Third, complicity in accepting bribes was defined. The Paragraph 3 under Article 1 of the Decision provided that anyone who had conspired with a bribee before committing the foregoing offences such as favoritism, harboring criminals, falsifying evidence, disrupting order in social administration, and retaliation shall be punished for complicity in the crime. ii: Supplementary Provisions on the Punishment of Crimes of Embezzlement and Bribery The Supplementary Provisions contained thirteen articles, which extensively revised the provisions regarding embezzlement, accepting bribes, and giving bribes in the Criminal Law to broaden and improve the legislation in this area. Moreover, in light of the realities, other acts that posed serious harm to society were also criminalized and five new types of offence were defined, an effort to extend the scope of punishable offences and to build a new legislative system on embezzlement and bribery. The improvements on the Criminal Law and the Decision included the following: First, law was extensively revised for criminalization purpose. a. Embezzlement. Firstly, the scope of offenders was widened from “public-sector workers” as defined in the penal code to “public-sector workers, staff members of collectively owned business entities or other persons who deal with or manage public property” to cover every aspect of public property management and to prevent the embezzlement of public property from growing rapidly. Secondly, the document clearly defined embezzlement as the act of taking public property for one’s own use through unlawful possession, theft, swindling, or other means, which increased the judicial applicability of the Criminal Law. Thirdly, a new type of offence was defined. For the first time, public-sector

1 China’s Criminal Legislation on Embezzlement and Bribery …

13

workers’ failure to perform their statutory duty to report and hand over to government authorities an expensive gift they have accepted in an international event was criminalized.8 Fourthly, sentencing according to the amount of proceeds of crime, a principle previously defined in the Regulations was again adopted. The amount of proceeds of crime was defined as the basis for legally prescribed or heavier punishment, with each level of penalty corresponding to a certain amount, and the circumstances of the crime were also stressed as an important consideration. Fifthly, embezzlement began to carry heavier penalties than before. Sixthly, if two or more people took part in a crime of embezzlement, the head of the gang or the principal offender would be punished according to the total amount of money involved in the offence. b. Accepting bribes. Firstly, people accusable of accepting bribes were more broadly defined. After the revision, the scope of the offenders of accepting bribes was the same as those of embezzlement. Secondly, the offence included two types of act, soliciting bribes or accepting bribes. Thirdly, “seeking benefits for others” was added as a constituent element of accepting bribes for the first time, though the document distinguished between soliciting and accepting bribes. It was made an essential element of accepting bribes, but not of soliciting bribes. Fourthly, commercial bribery was added into the category. The act of “accepting kickbacks or commissions in various forms in economic exchanges for personal gains” was categorized as accepting bribes for the first time. Fifthly, the principle of penalizing accepting bribes and embezzlement in the same way was established. The principle of sentencing according to the amount of proceeds of crime was adopted for punishing accepting bribes. Attention was also given to the special harm that accepting bribes and embezzlement inflicts on society. It was clearly stipulated whether an act of accepting bribes has “seriously jeopardized national or collective interests” was crucial for determining the punishment for the bribee.9 Given their varying impact on society, soliciting bribes were penalized more severely than accepting bribes. In the case that a bribee was also engaged in other illegal activities, all offences shall be punished. c. Giving bribes. Firstly, “seeking undue benefits” was included for the first time as a constituent element of giving bribes—an intent crime in the theory of According to Article 10 of the Supplementary Provisions, “Any public-sector worker who accepts, in an international exchange activity, an expensive present but fails to turn it over to the authorities according to related regulations shall be prosecuted for embezzlement.” This provision was included in Article 394 of the Criminal Law of 1997. 9 According to Article 5 of the Supplementary Provisions, “A bribee shall be punished according to the amount of proceeds and circumstances of crime as required in Article 2; in the case that the amount of money involved is less than RMB 10,000 and national or collective interests are seriously jeopardized, the offender shall be sentenced to more than ten years in prison; in the case that the amount of money involved exceeds RMB 10,000 and national or collective interests are seriously jeopardized, the offender shall be sentenced to life imprisonment or death and the offender’s property shall be confiscated.” Apparently, compared with the punitive measures for embezzlement described in Article 2, the circumstances of crime are more important to the selection of punishment for accepting bribes. 8

14

C. Wei

Criminal Law. Secondly, commercial bribery was introduced. Anyone who gives a public-sector worker, a staff member of a collectively owned economic organization or any other public officials money, gifts, kickbacks, or commissions in various forms in economic activities shall be punished for giving bribes. Thirdly, regarding punishment imposition, the criminal liability of bribers was increased considerably. In very serious cases, the offender shall be sentenced to life imprisonment and the offender’s property shall be confiscated. Fourthly, it was clearly stipulated that a briber who was also engaged in other illegal activities shall be punished for all offences. Second, criminalization of a growing number of types of conduct. a. Misappropriation of public funds was made a criminal offence.10 According to Article 3 of the Supplementary Provisions, “Any public-sector worker, staff member of a collectively owned economic organization or any other person who deals with or manages public property who, taking advantage of his or her position, misappropriates public funds to engage in illegal activities, or misappropriates a large amount of public funds and uses them in profit-making activities, or misappropriates a large amount of public funds and fails to return them after more than three months shall be convicted of misappropriation of public funds and sentenced to less than five years in prison or detention, or more than five years in prison in the case of serious offence. In the case that a very large amount of funds are embezzled and not returned, the offender shall be convicted of embezzlement. In the case that funds or supplies for disaster relief, emergency rescue, flood control, or entitled groups are embezzled, severe punishment shall be imposed on the offender. In the cases that misappropriated public funds are used in other activities that constitute different crimes, punishment shall be meted out for all the crimes.” The following criteria were required to be met for the conviction of the crime: The offender must be a public-sector worker, a staff member of a collectively owned economic organization, or any other person who deals with or manages public property; and the criminal act involves “taking advantage of position.” Three types of criminal act were clearly defined. b. Accepting bribes by an organization was made a criminal offence. According to Article 6 of the Supplementary Provisions, “In the case that any enterprise owned by the whole people, public institution, government body or group that solicits or accepts others’ property and seek benefits for them and the

10

In the Supplementary Provisions on the Punishment of Crimes of Embezzlement and Bribery (draft) adopted by the NPC Law Committee, misappropriation of public funds was only defined as a new type of embezzlement offence. In the deliberation of the draft, however, “some members of the NPC Law Committee, Supreme People’s Court and Supreme People’s Procuratorate as well as some local authorities put forward that misappropriation of public funds had a different nature from that of embezzlement and should be established as a separate crime and punished separately” so it was defined as a different crime when the draft was submitted to the NPC Standing Committee for review. Xiang (2007).

1 China’s Criminal Legislation on Embezzlement and Bribery …

15

circumstances are serious, the organization shall be fined and the person in charge of the organization and other persons responsible for the offence shall be sentenced to less than five years in prison or detention.” The following criteria were required to be met for the conviction of the crime: The offender must be an enterprise owned by the whole people, public institution, government body or group; and the criminal act involves soliciting or accepting money or gifts and helping bribers obtain benefits. In this way, the Supplementary Provisions made a distinction between the offence committed by an organization and by a natural person. c. Giving bribes by an organization was made a criminal offence. According to Article 9 of the Supplementary Provisions, “In the case that any business, public institution, government body or group gives a bribe for seeking undue benefits, or offers kickbacks or commissions to a public-sector worker, staff member of a collectively owned economic organization or any other public official and the circumstances are serious. In the case that proceeds of giving bribes are personal, the person involved shall be punished according to Article 8.” The following criteria were required to be met for the conviction of the crime: The offender must be a business, public institution, government body or group; the criminal act involves offering a bribe or giving kickbacks or commissions to a public-sector worker, staff member of a collectively owned economic organization or any other public official, and the circumstances are serious; and the purpose is “seeking undue benefits.” d. Possession of assets of massive value with unidentified sources was made a criminal offence. The Paragraph 1 under Article 11 of the Supplementary Provisions, “In the case that the property or expenditure of a public-sector worker is apparently beyond the scope of legitimate income and the difference is huge, the person shall be asked to explain the sources. In the case that the person fails to specify legitimate sources, the amount beyond the scope of legitimate income shall be deemed illicit and the offender shall be sentenced to less than five years in prison or detention and the extra amount shall be confiscated, or only the extra amount shall be confiscated in case of lesser offence.” The following criteria were required to be met for the conviction of the crime: the person charged with the crime must be a public-sector worker; and his or her property or expenditure is far greater than his or her legitimate income, and the person cannot specify the legitimate sources of the extra amount. e. Concealing bank deposits abroad was made a criminal offence. According to the Paragraph 2 under Article 11 of the Supplementary Provisions, “Public-sector workers shall declare their bank deposits abroad according to relevant regulations. In the case that a public-sector worker fails to declare his or her deposits abroad and the amount is large, the person shall be sentenced to less than two years in prison or detention; in case of minor offence, the organization where the person works or higher authorities shall impose disciplinary sanction on the offender.” The following criteria were required to be met for the conviction of the crime: The offender must be a public-sector worker, and the criminal act involves a failure to declare huge deposits abroad.

16

C. Wei

iii. Decision on Punishing Crimes Violating the Company Law There were fifteen articles in the Decision on Punishing Crimes Violating the Company Law. Eight types of criminal act in violation of company management rules were defined, and three new crimes were introduced, i.e., accepting bribes by a company employee, employee embezzlement, and misappropriation of funds. It was for the first time that embezzlement and bribery committed in non-public sectors and by non-public-sector workers were included in China’s Criminal Law, marking that the penal system for embezzlement and bribery was expanding to cover non-public sectors and their workforce. First, accepting bribes by a company employee. According to Article 9 of the Decision on Punishing Crimes Violating the Company Law, “In the case that a director, supervisor or staff member of a company, taking advantage of his or her position, solicits or accepts a bribe and the amount of money involved is large, the offender shall be sentenced to less than five years in prison or detention; in the case that the amount of money involved is huge, the offender shall be sentenced to more than five years in prison and his or her property shall be confiscated.” The following criteria were required to be met for the conviction of the crime: The offender is a director, supervisor, or staff member of a company, and the criminal act involves soliciting or accepting a huge amount of bribe, taking advantage of his or her position. Second, employee embezzlement. According to Article 10 of the Decision on Punishing Crimes Violating the Company Law, “In the case that a director, supervisor or staff member of a company, taking advantage of his or her position, embezzles company property and the amount of money involved is large, the offender shall be sentenced to less than five years in prison or detention; in the case that the amount of money involved is huge, the offender shall be sentenced to more than five years in prison and his or her property shall be confiscated.” The following criteria were required to be met for the conviction of the crime: The offender is a director, supervisor, or staff member of a company; and the criminal act involves embezzling a huge amount of company property, taking advantage of his or her position. The Decision provided the same level of penalties for embezzlement and accepting bribes by a company employee. Third, misappropriation of funds. According to Article 11 of the Decision on Punishing Crimes Violating the Company Law, “In the case that a director, supervisor or staff member of a company, taking advantage of his or her position, takes a large amount of company funds for personal use or lends them to others and fails to return them after more than three months, or uses them in profit-making or illegal activities although the money has been taken for no more than three months, the offender shall be sentenced to less than three years in prison or detention. In the case that the amount of misappropriated company funds is very large and the money is not returned, the offender shall be deemed having committed employee embezzlement under Article 10.” The following criteria were required to be met for the conviction of the crime: The offender is a director, supervisor, or staff member of a company; and the criminal act involves taking a large amount of company

1 China’s Criminal Legislation on Embezzlement and Bribery …

17

funds for personal use or lending them to others, taking advantage of his or her position, and failing to return them after more than three months, or using them in profit-making or illegal activities although the money has been taken for a period shorter than three months.

1.2.3

Conclusions

The enactment of the penal code of 1979 and the criminal statutes that amended it marked a crucial step China made toward building a socialist country based on the rule of law as well as a milestone in China’s legislative endeavors to fight against embezzlement and bribery. After the penal code was enforced, reform was pushed through and the market economy system was gradually established. One of the side effects of the change was, however, a profit-oriented mentality that had been suppressed under the planned economy system was on the rise and rampant embezzlement and bribery became a mounting concern for Chinese society. Given these problems and the need to facilitate the growth of the socialist market economy, improving the legislation on embezzlement and bribery was urgently warranted. Along with the rapid social transformation, China’s legislation on embezzlement and bribery also entered a period of adjustment and change. After a rethink of how to coordinate the expansion of the Criminal Law and effective social control, legislators deemed it important to criminalize more types of conduct, strengthen legislation adjustments, and build a more effective penal system. The progress in the legislation during this period played a crucial role in controlling the spread of corruption and ensuring the smooth transition of Chinese society.

1.2.3.1

More Types of Conduct Criminalized as a Response to Social Transformation

A trend for criminalization was typically observed in the Criminal Law of a transitional country. While the change of policies and the shift from the planned economy to the market economy helped ease or solve old social problems and advance social development, new problems cropped up, and the fast-growing crimes were one of them. The government needed to extend the scope of activities the Criminal Law regulates so as to tighten social control. This trend was particularly clear in the legislation on embezzlement and bribery, an area that had experienced little change in a long period from the Regulations of 1952 to the penal code of 1979 as the demand and pressure for criminalization had not been great under the old social mechanism and policies. However, the reform and opening-up policy that has been implemented since the end of 1978 brought a new economic model. A step-by-step approach to reform, which was adopted to ensure smooth transition, led to the conflicts between the old and new models. A profit-oriented mentality was awakened, and the control of embezzlement and bribery was at a time

18

C. Wei

ineffective. While old forms of embezzlement and bribery went rampant, new forms also emerged. The five offences defined in the penal code of 1979 were expanded to twelve, suggesting a growing need for the Criminal Law. Moreover, as reform and opening-up went further, Chinese society saw the formation of a new structure in which the government, the market, and the civil society have their due roles to play, leading to the growth of embezzlement as well as the spread of bribery from the public sector to the business and other non-public sectors. In particular, as market economy developed, commercial bribery caused by the competition between equal business entities became a widespread concern. In response to the change in the forms of bribery, the legislation was improved by defining bribery offences in both the public and business sectors. The legislation on embezzlement and bribery, which had focused on the public sector alone, began to expand to cover non-public sectors, which signaled the increasing trend of criminalization in the Criminal Law.

1.2.3.2

Heavier Punishment for Embezzlement as a Continuation of Tradition

Imposition of heavier punishments was another trend in the development of legislation on embezzlement and bribery during this period. China’s first Criminal Law was enacted twenty-nine years after the Regulations on Punishments for Embezzlement had been introduced. In the early years of the People’s Republic of China, the government gained strong capacity for social control and the total amount and incidence of crime stayed at low levels. Therefore, the punitive measures for embezzlement and bribery offences defined in the penal code of 1979 were much more lenient than those provided in the Regulations. However, the high incidence of embezzlement and bribery offences in the process of reform and opening up and the lack of effective means to control them made it necessary to restore the tradition of severe punishments. The adoption of the Decision on Severely Punishing Crimes Harming the Economy marked the end of lenient punishments. The development of legislation on embezzlement and bribery, from the penal code of 1979 to the Decision on Severely Punishing Crimes Harming the Economy, the Supplementary Provisions on the Punishment of Crimes of Bribery, and then the Decision on Punishing Crimes Violating the Company Law, showed a trend toward criminalization and toward heavier punishments. The latter should be understood from two perspectives. On the one hand, heavier punishments are intended to combat rampant crime and reduce its negative impacts on society so that the Criminal Law could play its due role in imposing social control. On the other, however, the negative impacts of heavy punishments are notable as well. Social transformation is a sweeping process that involves every aspect of society, one that calls for policy changes and needs to be guaranteed by the rule of law. Market economy and the rule of law are inherently connected, and promoting the rule of law is thus both important and necessary for developing market economy. The fact during this period is, however, the government provided very few (if any) necessary legal provisions on embezzlement and bribery apart from the Criminal Law and

1 China’s Criminal Legislation on Embezzlement and Bribery …

19

grossly overlooked the role of other laws in curbing embezzlement and bribery. Using the Criminal Law alone would not lead to the results the legislators expected. On the contrary, it might cause higher crime rates, higher criminalization rates, and heavier punishments. Moreover, imposition of heavier punishments indicates a tendency toward oversimplified governance which might push up the costs of governance and to some extent aggravate social problems.

1.2.3.3

Improved Classification of Crimes to Combat Embezzlement and Bribery More Effectively

The enactment of the penal code of 1979 and the three criminal statutes that amended it marked the start of a holistic approach to criminal sanctions against corruption. Due to the last resort principle, the adjustment of the Criminal Law in a modern country is usually passive. The Criminal Law is usually intended to punish acts that have been committed and posed significant harm to society, and the judicial verifiability of such acts is directly connected to the legislation on the crime. Passive adjustment, however, may lead to insufficient protection afforded by the Criminal Law. The holistic approach to controlling embezzlement and bribery requires some initiative of the legislators. On the one hand, the legislation on embezzlement and bribery should cover both natural persons and organizations as overlooking either of them may cause serious harm to society. The inclusion of organizational offenders is an important step toward fighting against embezzlement and bribery in a holistic manner. On the other hand, apart from defining the embezzlement and bribery offences, provisions should also be introduced to close any loopholes in the criminal investigation and prosecution to extend the areas that the Criminal Law regulates. The provisions on possession of assets of massive value with unidentified sources in the Supplementary Provisions embody the idea of a tiered penal system for embezzlement and bribery. Given the enormous change since the reform and opening-up policy was introduced, possessing a huge amount of asset with unidentified sources was a new offence created to fight against corruption. Despite the opposition and even criticism from Criminal Law scholars, the introduction of the offence marks a breakthrough and helps to broaden the scope of embezzlement and bribery offences addressed by the Criminal Law.

1.2.3.4

Intended Effect Hardly Achieved by Revising Legal Criteria for What Constitutes the Crimes

A high incidence of corruption was what drove the several rounds of legislative revisions after the adoption of the reform and opening-up policy, especially in the process of social transformation. Reviewing the development of the Criminal Law during this period, with a focus on the scope and intensity of the legislative changes, we would find that, despite the trend toward criminalization and heavier punishments, the criteria added to the legal definitions of what constitutes

20

C. Wei

embezzlement and bribery turned out to reduce the scope of the law’s application, thus affecting the effectiveness of the punitive measures. For example, “taking advantage of position” was added for the definitions of embezzlement and accepting bribes, “seeking benefits for others” added for accepting bribes, and “seeking undue benefits” added for giving bribes. Therefore, the revisions made to the penal code in the Decision and the Supplementary Provisions went against what the legislators had originally intended, and the added legal criteria for the crimes were a departure from the trend toward criminalization and heavier punishments. Criminalization and heavier punishments showed the legislators’ intention to regulate activities in a wider scope and with greater intensity in order for the Criminal Law system to better achieve the goal of effective social control and interventions. Criminalization was intended to make the net of justice more rigorous and the imposition of heavier punishments followed the same logic. Added criteria for what constitutes a crime, however, would narrow down the scope of application of a law. The legislators had to find middle ground as they wanted, on the one hand, to extend the scope of the law to give full play to its role in social control, and on the other, to impose some restrictions on its application and by adding a qualification to the definitions, make a strict distinction between what constitutes a crime and what does not, thus curbing the rapid expansion of the Criminal Law. Although the legislative choice made was justifiable given the needs during the period of social transformation, the revisions inhibited the effective application of the law and had adverse impacts on the control of embezzlement and bribery in the years that followed.

1.3 1.3.1

Amendments and Revisions to the Penal Code Background to the Criminal Law of 1997 and Its Amendments

Unlike the Regulations on Punishments for Embezzlement in which embezzlement and bribery offences were considered to be of the same nature, the penal code of 1979 defined them differently: Embezzlement was classified as a crime against property with a focus placed on the protection of public property, while bribery was classified as misconduct in office, with a focus on the integrity of public power. There was also a big difference in the penalty they carried (with a maximum sentence of death penalty for embezzlement and fifteen years in prison for accepting bribes). Later on as the penal code of 1979 could no longer adequately address the need to fight embezzlement and bribery, the Decision adopted in 1982 increased the maximum sentence for accepting bribes to death penalty. Considering that both embezzlement and accepting bribes involve taking advantage of position for undue benefits, the NPC Standing Committee dealt with them in the same document (i.e., the Supplementary Provisions it adopted in 1988) and specified heavy punishments for both crimes, in a way similar to the legislation model adopted in the

1 China’s Criminal Legislation on Embezzlement and Bribery …

21

Regulations. To further improve the legislation on embezzlement and bribery, the legislature once entrusted the Supreme People’s Procuratorate to draft the AntiEmbezzlement and Bribery Law. In 1997, the legislature combined the Supplementary Provisions on the Punishment of Crimes of Embezzlement and Bribery and the Anti-Embezzlement and Bribery Law into a chapter in the Criminal Law. Having embezzlement and bribery dealt with in a dedicated chapter highlights their nature as offences undermining the integrity of public office. This was appropriate given the classification requirements of the Criminal Law, the pressing need to fight the crimes in China and the priority countries have given to their punishment and prevention around the world.11 Article 185 of the Criminal Law was amended by the NPC Standing Committee on December 25, 1999, and then on June 29, 2006, the Sixth Amendment to Criminal Law was adopted, broadening the scope of non-public-sector workers as in the offences of “accepting bribes by a non-public-sector worker” and “giving bribes to a non-public-sector worker”. In the Seventh Amendment to Criminal Law adopted on February 28, 2009, a new type of crime, i.e., accepting bribes by person of influence,12 was defined in line with the United Nations Convention against Corruption (UNCAC). Accepting bribes by a close relative of or any other person closely connected to a present or former public-sector worker was included in the Criminal Law. Article 395, in particular, increased the penalty for possession of assets of massive value with unidentified sources. In addition, there were provisions about how to deal with acts following embezzlement and bribery (e.g., money laundry, the transfer, concealment, or disguise of the nature of the proceeds of crime). With all the revisions, China basically had a sound legal framework for punishing embezzlement and bribery.

1.3.2

Legislative Amendments

1.3.2.1

Provisions in the Criminal Law of 1997

i: Classification of Crimes The penal code of 1997 followed the identity-centered model used in the Supplementary Provisions and the Decision on Punishing Crimes Violating the Company Law, and defined two criminal categories of embezzlement and bribery committed by public-sector workers and by those who are not.

11

Gao and Zhao (2007b). Supplementary Provision on the Types of Offence Defined in the Criminal Law of the People’s Republic of China (IV) adopted at the 1474th meeting of the Judicial Committee of the Supreme People’s Court in September 23, 2009, and the 20th meeting of the Procuratorial Committee of the Supreme People’s Procuratorate on September 28, 2009.

12

22

C. Wei

First, embezzlement and bribery by public-sector workers. In the penal code of 1997, embezzlement and bribery (including offences committed by state-owned enterprises) were treated primarily in the fifteen articles of Chapter 8.13 Improvements were made mainly in the following aspects: a. The scope of natural persons that may be charged for embezzlement and bribery (or object of crime) narrowed down. A broader definition of offenders (or object of crime) in embezzlement, misappropriation of public funds, accepting bribes and giving bribes used to be a focus of the Supplementary Provisions. However, since the amended penal code adopted a legislation model that distinguishes between public-sector and non-public-sector workers, it became necessary to narrow down the scope of offenders (or object of crime). After the revision, the offenders (or object of crime) of the four crimes were limited to public-sector workers. The identity-centered legislation system for embezzlement and bribery was recognized in the penal code. b. A new form of criminal act recognized as “accepting bribes”. Apart from the basic forms of act that constitute the crime of accepting bribes defined in the Supplementary Provisions, the penal code of 1997 introduced acceptance of bribes by one who helps another seek undue benefits. According to Article 388 of the Criminal Law, “Any public-sector worker who takes advantage of his or her position or status, seeks undue benefits for a briber through the acts of other public-sector workers, and solicits and accepts property shall be deemed to have committed the crime of accepting bribes.” In this way, the scope of the crime is extended and indirect bribery is made a punishable act. c. Revisions concerning embezzlement and bribery committed by organizations. The penal code of 1997 made two changes to embezzlement and bribery committed by organizations, both of which have already been made a criminal offence in the Supplementary Provisions. The first change was about which types of entity may be indicted for accepting bribes, and the description was given in a way that better ensures consistency in the law. The second was revising the scope of the entities that may be charged for giving bribes and the scope of the object of crime (upon which the criminal act inflicts) so as to reflect the legislation model that distinguishes between public-sector and non-public-sector workers. After the changes, this category of criminal offences showed two features. One was that the scope of organizational offenders was restricted. Except for the offence of giving bribes to an organization where offenders included both natural persons and organizations and where the organizational offenders were defined specifically, the other four organizational offences all hinged upon special identities (typically government agencies, state-owned enterprises, public institutions, and people’s organizations, except

13

Legal provisions to which the types of offence defined in Chapter 8 were cited in Chapters 3 and 5 of Part Two of the penal code, but no new embezzlement and bribery offences were defined in the two chapters, so it should be deemed that embezzlement and bribery offences committed by public-sector workers were all defined in Chapter 8.

1 China’s Criminal Legislation on Embezzlement and Bribery …

23

for the offence of privately taking confiscated property) and were thus termed “identity-based offences.” The other feature was the diverse forms of criminal activity that constituted the offences. The same criminal activities were defined for both the bribery offences committed by organizations and those by natural persons to facilitate judicial confirmation. For example, while the Supplementary Provisions had defined accepting bribes by an organization simply as soliciting and accepting others’ property, the revised penal code stipulated that “any organization that secretly takes kickbacks and commissions in various forms shall be convicted of accepting bribes and punished according to the preceding paragraph,” thus expanding the scope of activity that constituted these organizational offences. d. New offences included in the criminal category of embezzlement and bribery by organizations. Based on new developments in the area, the penal code of 1997 created three new offences, i.e., giving bribes by an organization (Article 391), privately taking state-owned property (Paragraph 1, Article 386), and privately taking confiscated property (Paragraph 2, Article 396). These offences, together with accepting bribes by an organization and giving bribes by an organization defined in the Supplementary Provisions, constituted a sound system of embezzlement and bribery offences by organizations. Second, embezzlement and bribery committed by a company employee. The adoption of the Decision on Punishing Crimes Violating the Company Law on February 28, 1995, marked the beginning of the legislation model that distinguishes between public-sector and non-public-sector workers for the crimes of embezzlement and bribery. Based on the penal code of 1979 and other criminal statutes that amended it, the penal code of 1997 established the criminal category of employee embezzlement and bribery, which was dealt with in different chapters. Bribery by company employees was addressed in Section 3 (Crimes against Order in Company Management) of Chapter 3 (Crimes against Order in Socialist Market Economy) in the Special Provisions of the Criminal Law while embezzlement and misappropriation of funds by company employees were defined in Chapter 5 Crimes against Property. The penal code of 1997 improved on the Supplementary Provisions and the Decision on Punishing Crimes Violating the Company Law in the following ways: a. The provision on accepting bribes by a company employee was revised. Firstly, the scope of offenders was adjusted. The offence of accepting bribes by a company employee was defined for the first time in the Decision on Punishing Crimes Violating the Company Law, and the offenders were defined to be “directors, supervisors or staff members of a company,” which was changed to “company employees” in the amended penal code. Secondly, a new type of conduct was criminalized. The act of accepting kickbacks and commissions in various forms as personal gains was defined to be accepting bribes by a company employee.

24

C. Wei

b. The provision on employee embezzlement was revised. Employee embezzlement was a new type of offence first introduced in the Decision on Punishing Crimes Violating the Company Law to fill the gap in the penal code of 1979 and the Supplementary Provisions, following the implementation of the corporate system reform. It was defined to be the embezzlement of company property by a director, supervisor, or staff member of the company. Two revisions were made to the provisions on embezzlement in the amended penal code. One was the adjustment of the offenders’ scope. “Directors, supervisors, or staff members of companies” was changed to “employees of companies or other organizations,” which was more accurate and accorded with the provision on embezzlement. The other was the adjustment of constituent element. The element of “taking advantage of position or job” defined in the Decision on Punishing Crimes Violating the Company Law was revised to “taking advantage of position” for embezzlement. c. The provision on misappropriation of funds was revised. One revision made by the penal code of 1997 was to define people who can be charged with misappropriation in the same way as those charged with employee embezzlement, which marked an improvement over previous laws. The other revision was to remove the statement formerly contained in the Decision on Punishing Crimes Violating the Company Law—“anyone who misappropriates a large amount of company funds and fails to return them shall be convicted of embezzlement according to Article 10.” d. Giving bribes to a company employee was criminalized as a response to the new trend observed. This broadened the scope of application of the articles on embezzlement and bribery. ii: Legal Punishments for Embezzlement and Bribery Apart from specifying a full range of embezzlement and bribery offences, the penal code of 1997 also provided for a complete set of legal punishments for these crimes which showed three characteristics. First, the offender’s identity was a key factor in sentencing. The penal code adopted an identity-centered approach to defining the types of offence concerning embezzlement and bribery and provided different punishment and sentencing criteria for offenders who are public-sector workers and those who are not. On the whole, public-sector workers would be subject to heavier punishment for embezzlement and bribery than employees of companies and other organizations. Second, the amount of proceeds of crime continued to be a major consideration in sentencing decisions. In the identity-centered provisions on embezzlement and bribery in the penal code of 1997, the amount of illegal proceeds was used as a main measure of how much harm is done to society in most cases. Although for certain offences the circumstances of crime or both the amount of proceeds and circumstances were considered, the amount of proceeds remained a main factor considered in deciding sentencing. Third, the range of punishment stayed largely unchanged and statutory penalty became less severe in some cases. The penal code of 1997 imposed punishment for

1 China’s Criminal Legislation on Embezzlement and Bribery …

25

embezzlement and bribery in largely the same way as the Supplementary Provisions and other related criminal statutes. Firstly, the range of punishment was not increased and penalty for giving bribes and giving bribes to an organization was even lowered.14 Secondly, in the case of accepting bribes, the penal code of 1997 specified a higher amount of proceeds of crime that might subject one to the same punishment as previously stipulated, and besides, it did not adopt the punishment in serious circumstances stipulated in Article 5 of the Supplementary Provisions to moderately reduce the intensity of punishments for accepting bribes.15

1.3.2.2

Revisions to the Penal Code of 1997

i: Amendment to the Criminal Law There were nine articles in the Amendment to the Criminal Law. Except for Article 716 which contained revisions to Article 185 in the penal code of 1997 to clarify the

For example, according to Article 8 of the Supplementary Provisions, “Anyone who commits an offence of giving bribes shall be sentenced to less than five years in prison or detention. Anyone who gives a bribe to seek undue benefits and the circumstances are serious or national and collective interests are seriously jeopardized shall be sentenced to more than five years in prison. In the case that the circumstances are very serious, the offender shall be sentenced to life imprisonment and his/her property shall be confiscated.” Apparently, the punishment for a very serious case of giving bribes in the Supplementary Provisions was defined to be life imprisonment. According to Article 390 of the amended penal code, however, the punishment was defined to be “more than ten years in prison or life imprisonment.” Although the maximum sentences were the same, life imprisonment was a sure sentence in the former case while there was another option in the latter case so the punishment can be lighter. 15 According to Article 5 of the Supplementary Provisions, “A bribee shall be punished according to the amount of proceeds and circumstances of crime as required in Article 2; in the case that the amount of money involved is less than RMB 10,000 and national or collective interests are seriously jeopardized, the offender shall be sentenced to more than ten years in prison; in the case that the amount of money involved exceeds RMB 10,000 and national or collective interests are seriously jeopardized, the offender shall be sentenced to life imprisonment or death and the offender’s property shall be confiscated. Bribe-soliciting shall be punished severely.” Article 2 was the general provision on the punitive measures for embezzlement. Compared with Article 2, Article 5 was a special provision in that it increased the level of punitive measures for accepting bribes by introducing both the amount of proceeds of crime and the losses caused as a criterion for imposing punishment, but this provision was not adopted in the amended penal code. 16 According to Article 7 of the Amendment to the Criminal Law, “Article 185 of the Criminal Law is revised to: ‘Any employee of a commercial bank, stock exchange, futures exchange, securities company, futures brokerage company, insurance company or any other financial institutions who misappropriates the funds of his/her employer or its client, taking advantage of his/her position, shall be convicted and punished according to Article 272.’ ‘Any employee of a state-owned commercial bank, stock exchange, futures exchange, securities company, futures brokerage company, insurance company or any other state-owned financial institutions or such an employee who is appointed to perform public service in a non-state-owned institution mentioned in the preceding paragraph shall be convicted and punished according to Article 384.’” 14

26

C. Wei

scope of “other financial institutions,” no changes were made to the previous legal provisions on embezzlement and bribery. ii: Sixth Amendment to the Criminal Law There were twenty-one articles in the Sixth Amendment to the Criminal Law and three of them pertained to embezzlement and bribery. First, the scope of accepting bribes by a company employee and that of giving bribes to a company employee are broadened. Articles 7 and 8 of the Amendment extend the scope of the two offences to close the loopholes in the penal code. Specifically, the offenders are extended to cover “employees of other organizations” for the first offence and “employees of other organizations” for the second. The offences were renamed “accepting bribes by a non-public-sector worker” and “giving bribes to a non-public-sector worker” by the Supreme People’s Court and the Supreme People’s Procuratorate. Second, embezzlement and bribery were added as predicate offences for money laundering which were limited to drug-related offences, organized crimes and smuggling in the penal code of 1997. Following the Third Amendment to the Criminal Law which included terrorist activities in the predicate offences, the Sixth Amendment added embezzlement and bribery to the category, which also helped improve the legal stipulations regarding embezzlement and bribery offences. iii. Seventh Amendment to the Criminal Law There were fourteen articles in the Seventh Amendment to the Criminal Law, and two of them were about embezzlement and bribery. First, the new offence of using influence to take a bribe was introduced. Bribery offences committed by public-sector workers presented a new trend as China’s anti-corruption campaign moved forward. Direct bribery committed by public-sector workers was on the decline while disguised forms such as indirect transactions, promises, and transactions through an intermediary began to emerge. Furthermore, the increase in the bribery cases that involved the family of a public-sector worker was also worthy of attention. These grave new challenges, if left unaddressed, would seriously undermine the way bribery is criminalized and penalized. Criminalizing the abuse of influence has been prioritized by developed countries. Article 18 of the UNCAC defined “Trading in influence,” requiring each State Party to establish the abuse of influence that undermines the integrity of public service as criminal offence. Considering its own situation and the requirements of international conventions, China adopted the Seventh Amendment to the Criminal Law on February 28, 2009, in which using influence to take a bribe was added as a new offence. The following were included in the Criminal Law: “a close relative of or any other person closely related to a public-sector worker seeks undue benefits for a briber through the act of the public-sector worker or the acts of other public-sector workers taking advantage of the public-sector worker’s power or status, and solicits or accepts property from the briber” and “a former public-sector worker or his or her close relative or any other person closely related to him/her commits the aforementioned act taking advantage of the former public-sector

1 China’s Criminal Legislation on Embezzlement and Bribery …

27

worker’s power or status.” In this way, bribery committed by both public-sector and non-public-sector workers is punished by the Criminal Law. Second, possession of assets of massive value with unidentified sources is given harsher punishment. Within China’s penal system, this offence plays a unique role insofar as it is expected to function as a deterrence. However, it failed to meet this expectation because offenders were typically treated leniently and given light sentences. The Seventh Amendment to the Criminal Law tries to redress that by raising the maximum punishment for the offence to ten years in prison. iv. Eighth Amendment to the Criminal Law In accordance with the UNCAC, the Eighth Amendment to the Criminal Law adopted on February 25, 2011, made a revision to Article 164, adding bribing foreign public officials and officials of public international organizations to the category of “giving bribes to a non-public-sector worker” and defining it as an offence committed by an organization.

1.3.3

Conclusions

1.3.3.1

Embezzlement and Bribery Legislation Put in Place

The penal code of 1997 reflected revisions to the embezzlement and bribery provisions in the penal code of 1979 and other criminal statutes. The general principles for the changes were fully defining the different types of offences, evaluating the Criminal Law consistently and ensuring a broad scope of control. The 1997 edition brought together what had been contained in the separate criminal statutes, and maintained, modified or amended earlier provisions. An identity-centered penal system for embezzlement and bribery was established and improved. First, maintaining earlier provisions. It continued with the identity-centered legislation model by defining similar criminal acts differently depending on the capacity of offenders as public-sector or non-public-sector workers and placing crimes in separate chapters depending on the jeopardized legal interests. The provisions on specific types of offence and corresponding punishments were confirmed. The legal criteria for what constitutes the crimes stayed mostly unchanged, which was particularly true for the offences committed by natural persons. Second, modifying earlier provisions. To enhance the understanding of the common nature of legal interests jeopardized by embezzlement and bribery offences committed by public-sector workers, a separate chapter was devoted to such crimes. Apart from this, there were also minor adjustments to punishments and constituent elements of the crimes, mainly with regard to differentiating offenders who were public-sector workers and those who were not, and very little change was made in defining the criminal acts. Third, amending earlier provisions. With new criminal offences introduced, new types of criminal act defined offence, and criminal offences created to close

28

C. Wei

loopholes in prosecution, the penal system for embezzlement and bribery was improved. To look at the penal code of 1997 critically, although the revised law incorporated previous achievements and helped improve the embezzlement and bribery offences and the punitive measures, most provisions still stayed unchanged and the inherent defects in the design of constituent elements were thus not repaired.

1.3.3.2

Design of Legislation Model and Elements of Crime Increasingly at Odds with the Purpose of Criminal Sanction

The choice of legislation model and establishment of legal criteria for what constitutes a crime decide how effective the Criminal Law is in punishing crime. That means both the legislative model and constituent elements need to be developed in a way that is conducive to the fight against crime. First, depending on legislators’ focus of attention when they try to describe criminal offences, there are three different models for the Criminal Law, i.e., qualitative model, quantitative model, and the combination of both. Beginning from the Supplementary Provisions adopted in 1988, the Criminal Law adopted a qualitative model in defining embezzlement and bribery offences while quantitative criteria were also frequently used to clearly provide for the situations where the law may apply. While such a model helped to avoid arbitrary sentencing, it excessively emphasized the legal principle of “nullum crimen sine lege” (no crime without law), leading to many problems in the judicial application of the law. Such a legislation model was continued in the penal code of 1997, which affected the effectiveness of the Criminal Law in controlling embezzlement and bribery. As the number of constituent elements determines the scope of control, an increase in the constituent elements suggests a narrow scope of control, which makes active control unlikely. While an increasing trend toward criminalization since 1988 has defined more acts as illegal, the continued growth in constituent elements of embezzlement and accepting bribes—two basic embezzlement and bribery offences, caused difficulty in convicting and imposing penalty on an offender.

1.3.3.3

Identity-Centered Punishment Model Provoking Mixed Comments and Failing to Ensure Equal Protection Under the Criminal Law

The punishment model in the criminal categories of embezzlement and bribery distinguishes between public-sector and non-public-sector workers, assessing the harm of a criminal act based on who has committed the crime. The model was established in the Decision on Punishing Crimes Violating the Company Law

1 China’s Criminal Legislation on Embezzlement and Bribery …

29

adopted by the NPC Standing Committee.17 While it rightly pointed to the fact that persons who, in their different capacity, could have access to different resources and thus may cause different harm to society, the flaws of the model were also noticeable. First, it provided an incomplete picture of the basic nature of the harm embezzlement and bribery would cause to society. Regardless of the identity of the offender, both embezzlement and bribery would seriously jeopardize social justice and values. Second, it overlooked the connection between offenders with different identities. Judicial practice shows there is often a causal relationship between the embezzlement and bribery offences committed by public-sector and private-sector workers. The identity-centered legislation is not conducive to the fight against corruption. 17 The Decision on Punishing Crimes Violating the Company Law added three offences, i.e., accepting bribes by a company employee, employee embezzlement, and misappropriation of funds, extended the scope of embezzlement and bribery offences, and established an identity-centered punishment model for embezzlement and bribery that distinguishes between public-sector and non-public-sector workers. To be specific, the same or similar acts committed by persons with different identities were evaluated differently in the Criminal Law. Since different punitive measures and criteria were designed for embezzlement and bribery offences committed by persons with different identities, the offenders’ criminal liability also differed widely according to the identity. Take the embezzlement offence defined in Article 10 of the Decision as an example. Two levels of punitive measures were provided for the offence: less than five years in prison or detention in the case that the amount is large, and more than five years in prison and property confiscation in the case that the amount is huge. In the Supplementary Provisions, however, much heavier punishments were designed for embezzlement than those for embezzlement. According to Article 2 of the Supplementary Provisions, “Embezzlement offenders shall be punished according to the severity of circumstances in line with the following provisions: (1) In the case that the amount of money involved exceeds RMB 50,000, the offender shall be sentenced to more than ten years in prison or life imprisonment and his/her property shall be confiscated; in the case of very serious circumstances, the offender shall be sentenced to death and his/her property shall be confiscated. (2) In the case that the amount of money involved is more than RMB 10,000 and less than RMB 50,000, the offender shall be sentenced to more than five years in prison and his/her property shall be confiscated; in the case of very serious circumstances, the offender shall be sentenced to life imprisonment and his/her property shall be confiscated. (3) In the case that the amount of money involved is more than RMB 2,000 and less than RMB 10,000, the offender shall be sentenced to more than one year but less than seven years in prison; in the case of very serious circumstances, the offender shall be sentenced to more than seven years but less than ten years in prison. In the case the amount is more than RMB 2,000 and less than RMB 5,000 and the offender surrenders himself/herself, performs meritorious service or shows regret and returns the money, lesser punishment may be imposed or the offender can be exempted from criminal sanction but should be imposed disciplinary sanction by his/her organization or higher authority. (4) In the case that the amount of money is less than RMB 2,000 and the circumstances are serious, the offender shall be sentenced to less than two years in prison or detention; in the case of lighter circumstances, the offender shall be imposed disciplinary sanction by his/her organization or higher authority. In the case that two persons collude in the embezzlement offence, they shall be punished separately according to the amount of proceeds and role in the offence. The primary offender of a group involved in an embezzlement offence shall be punished according to the total amount of money involved; other persons involved shall be punished according to the total amount of money involved in the case of serious circumstances.”

30

C. Wei

Third, it would have an adverse effect on the incorporation of the idea of equal protection into the Criminal Law. With regard to prosecution and sentencing, the identity-centered model overstressed the importance of the nature of the organization the offender worked for (i.e., public owned or private owned) and the power he or she was invested with. This may result in the differentiated protection of public and non-public property, which is a departure from the idea of equal protection in modern Criminal Laws.

References Communique of the Third Plenary Session of the 11th CPC Central Committee (1978) People’s Daily Press, Beijing, p 12 Compilation Committee on the History of the CPC (2003) History of the CPC, vol VI. People’s Publishing House, Beijing Gao M, Zhao B (2007a) Selected documents on China’s criminal legislation. Law Press China, Beijing, p 189 Gao M, Zhao B (2007b) Evolution of China’s criminal law. Law Press China, Beijing, pp 91–92 Mao Z (1991) Report to the second plenary session of the 7th CPC central committee. In: Selected works of Mao Zedong, vol IV. People’s Publishing House, Beijing, p 1438 Xiang C (2007) Report on the results of the NPC law committee’s deliberation of the draft supplementary provisions on the punishment of embezzlement and bribery and smuggling. In: Gao M, Zhao B (eds) Selected documents on China’s criminal legislation. Law Press China, Beijing, p 398

Chapter 2

Effectiveness Assessment of Anti-embezzlement and Anti-bribery Legislation Changdong Wei

Over the past 60 years since the first legislative effort was made toward fighting against embezzlement and bribery, particularly after the release of the first Criminal Code in 1979, China has continuously improved its criminal legislation on embezzlement and bribery by introducing new offences, consolidating and amending existing ones and adjusting the scope of acts that constitute the criminal offences. Nevertheless, a sound legislative system is not necessarily commensurate with its impact on preventing and curbing crime. Rather, how well a legislative system can curb the offences is a fundamental measure of the effectiveness of the Criminal Law. Just as British scholar Roger Cotterrell says, whether or not a law can effectively influence the behavior of individuals is considered an important measure to evaluate the making of the law.1 In other words, an important criterion for assessing the legislative quality is whether the legislators keep a close eye on the developments concerning the activities or behaviors a piece of legislation tries to regulate, the legal norms are aligned with such developments in the best possible manner and that the process of law making satisfies to the greatest possible extent the intrinsic and extrinsic conditions on which the law relies.2 Such an assessment is based on a careful review of past legislation. Only a comprehensive assessment of effectiveness of China’s current legislation on embezzlement and bribery can help us understand its merits and demerits and better inform future legislative endeavors in this field.

1

Cotterrell (1989). Guan (2007).

2

C. Wei (&) Institute of Law, Shanghai Academy of Social Sciences, Shanghai, China e-mail: [email protected] © Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7_2

31

32

2.1

C. Wei

Gauging Historical Trends in the Incidence of Embezzlement and Bribery: A Methodological Analysis

In order to assess the effectiveness of legislation on embezzlement and bribery, it is necessary to ascertain what such statutes can do in efforts to curb the overall incidence of embezzlement and bribery. For the purpose of this research, we would focus on the overall impact of legislation since the beginning of reform and opening up.

2.1.1

Gauging Historical Trends in the Incidence of Embezzlement and Bribery Since the Beginning of Reform and Opening Up

An overall examination of trends in embezzlement and bribery in China must take into consideration crime statistics during this period to arrive at the right conclusion. Criminologists would tell us, however, that the existence of the dark figure of crime3 casts doubt on such data and hence directly influences the assessment of the capability and effectiveness of a particular piece of legislation in combating crime. So far as embezzlement and bribery are concerned, the dark figure of crime is more obvious. On the one hand, embezzlement and bribery belong in criminal theory to the category of status offences, with most of the offenders being public-sector workers who, as members of social elites, possess plentiful social resources, and are often well-educated and more adept at keeping their crimes from public view. It would take a long time for such crime to be uncovered and reported. On the other hand, embezzlement and bribery violate largely the legal interests of the general public who are less wary of the danger than in those cases involving specific victims. Moreover, the absence of social control mechanisms—where ongoing improvements were needed after China entered into a period of transition in the early 1980s—in certain areas adversely affected timely investigation and prosecution of embezzlement and bribery in time, leading to a sizable gap between reported crimes and actual occurrences. Some studies conservatively estimate the “dark figure of corruption” in China stands at least at 80%, and the probability of corrupt public servants being discovered is approximately between 10 and 20%.4Therefore, reported crimes of embezzlement In criminological theory, a “dark figure of crime” refers to the number of crimes which for various reasons are not included in criminal statistics. Officially reported and recorded crimes are only a portion of actual occurrence; there are still a considerable number of crimes that remain hidden as a “dark figure of crime” because they were not discovered, or though discovered by police, were not solved or prosecuted. When using crime numbers and crime rates, therefore, consideration should also be given to the presence of a “dark figure of crime” and the extent to which it exists, so as to accurately estimate actual crime situations of a region in a certain period. See: Zhang (2003). 4 Hu and Guo (2002). 3

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

33

and bribery are but the tip of the iceberg with a significant number of offences undiscovered. The “dark figure of corruption” makes it difficult to assess accurately the effect of criminal legislation. It is thus necessary to first establish criteria for evaluating changes and developments in the offences of embezzlement and bribery before we proceed to a study of the relationship between China’s anti-embezzlement and anti-bribery law and the general trends in the crimes. Criminological studies of embezzlement and bribery in China, which tend to focus on such aspects as basic types of crime, constitutive requirements, and correlation between crime and punishment, have not yet yielded significant findings of the above-mentioned assessment methods and criteria. With embezzlement and bribery becoming prevalent and inflicting greater harm to social ethics and progress, the issue has drawn widespread attention from political scientists and sociologists, and accurate estimation of embezzlement and bribery and their consequences has become an area of great interest to researchers. Positive research findings have been made, which may assist further research into the evolution and current status of China’s anti-embezzlement and anti-bribery legislation.

2.1.1.1

Ways of Measuring Corruption

In their studies of corruption, political scientists and sociologists have come up with the following two basic methods to measure corruption. i. Subjective Measurement Subjective measurement employs a variety of tools, e.g., questionnaires, field interviews, online surveys, telephone surveys, to elicit comments from different social groups on political corruption, and on this basis, creates an indicator system by which to assess corruption.5 Based on how particular respondents perceive corruption, this method does not require them to have an intimate knowledge of specific occurrences of offences, but nevertheless, the well-developed indicator system can help researchers arrive at reliable conclusions. The subjective method of corruption measurement is widely acknowledged and highly thought of in the world. As is noted by scholars, “Sometimes subjective perception may be more important than what the real situation is. For instance, the stronger perception people have of corruption in a country, the less likely foreign investors are to invest in this country, and the greater anti-corruption pressure the public impose on the government. Perception of corruption, therefore, may be seen as an important basis on which corruption are measured.”6 Some international organizations publish on a regular basis their assessments of corruption in countries or regions with a view to

5

He (2002, p. 46). Ni and Wang (2004).

6

34

C. Wei

attracting public attention and urging governments to stay alert to low corruption rankings and take steps to combat corruption. Some prestigious international organizations in the global anti-corruption field, e.g., Transparency International (TI), the World Bank, the United Nations Development Programme (UNDP), and Business International, have established their famous corruption assessment systems. Particularly influential among them is Transparency International’s corruption assessment system which comprises the corruption Perceptions Index (CPI) and the Bribe Payers Index (BPI). The CPI reflects observations and perceptions of corruption in countries worldwide from global business people, scholars, and risk analysts, and is based on corruption perception and assessment data extracted from well-known international surveys (e.g., those by Gallup, Political and Economic Risk Consultancy, and the World Economic Forum). The BPI is, to a certain extent, a supplement to the CPI. The table below shows Transparency International’s annual assessments of corruption in China based on its years-long observation. As is shown in Table 2.1 and Fig. 2.1, the level of corruption in China was low and then surged before stabilizing. The first five years of the 1980s saw a low level of corruption in China. In the decade that followed, with China’s social transformation gaining in pace, the incidence of corruption rose year by year until it peaked in 1995. Thereafter, as China’s social systems improved and especially the country’s anti-corruption drive gained in strength, corruption tended to slow down. It is shown from Table 2.2 and Fig. 2.2 that bribery in China kept rising fast, and more than that China had been one of the lowest-ranked countries, suggesting that Table 2.1 CPI scores and ranks of China, transparency international

Year

Score

Rank

Number of countries

1980–1985 5.13 N/A N/A 1988–1992 4.73 N/A N/A 1995 2.16 40 41 1996 2.43 50 54 1997 2.88 41 52 1998 3.5 52 85 1999 3.4 58 99 2000 3.1 63 90 2001 3.5 57 91 2002 3.5 59 102 2003 3.4 66 133 2004 3.4 71 146 2005 3.2 78 159 2006 3.3 70 163 2007 3.5 72 180 2008 3.6 72 180 2009 3.6 79 180 2010 3.5 78 178 Source Website of Transparency International (http://www. transparency.org/news_room/latest_news/press_releases)

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

35

Fig. 2.1 Trend in CPI scores of China, transparency international

Table 2.2 BPI scores and ranks of China, transparency international Year

Score

Rank

Number of countries

1999 3.1 19 19 2002 3.5 20 21 2006 4.94 29 30 2008 6.5 21 22 Source Website of Transparency International (http://www.transparency.org/news_room/latest_ news/press_releases)

Fig. 2.2 Trend in BPI scores of China, transparency international

corruption in China still tends to spread and the task of fighting corruption is still formidable. ii. Objective Measurement Objective measurements gauge political corruption through a statistical analysis of cases anti-corruption enforcement agencies solved over the years.7 Some scholars use the term “frequency of corruption” for this method which measures corruption in a certain social echelon within a specified period of time and which encompasses at least two types of attributes: one is the quantitative properties of corruption such as its scale and extent and the absolute and relative numbers of corrupt people, and the other is qualitative properties of corruption such as its intensity and nature.8 The objective measurement method is based on reported cases of corruption and is

7

He (2002, p. 47). Wang (2001).

8

36

C. Wei

accurate in its estimate of the extent and scale of corruption. By examining the relation between anti-corruption results and occurrences of corruption, it unveils how corruption is presently like and what implications it has. This method nonetheless has its limitations, because the statistics available for analysis can only roughly reflect how frequently corruption occurred. “Corruption cases actually reported and prosecuted are only the tip of the iceberg, accounting for only a portion of actual occurrences, and can only reflect the social endeavors against corruption, rather than precisely illustrating the actual extent of corruption.”9 Therefore, people can only make a rough estimate of the rate of corruption cases prosecuted and the dark figure of corruption. Though not perfect, the objective measurement method plays an irreplaceable role in measuring the extent of and change in political corruption. By statistically analyzing corruption cases prosecuted by anti-corruption agencies, we can discover how corrupt people are distributed hierarchically and numerically, identify fields where corruption occurs frequently, and find out to what extent different forms of corruption are harmful; all these are important signs of the extent of political corruption.10 The objective method, therefore, remains major approach Chinese scholars employ for empirical research on corruption in China, though the scope of measurement may differ for different anti-corruption or enforcement agencies.11 The above two methods have their respective merits. The subjective measurement examines the general corruption tendencies within society and provides a broad picture rather than specifics as it is not necessarily based on precise crime data. The objective measurement, on the other hand, examines the endeavors of anti-corruption or enforcement agencies to combat corruption. Though providing a precise measure of corruption cases dealt with, it cannot incorporate the dark figure of corruption, which compromises its accuracy. In reality, the two approaches are usually combined to arrive at more reliable conclusions.

2.1.1.2

Choosing the Right Method

Having studied the features, merits and demerits of the two methods, we decide to use the objective measurement as a major approach to the trends in the incidence of embezzlement and bribery since the beginning of reform and opening up, for reasons shown below.

9

See Footnote 8. He (2002, p. 48). 11 In China, corruption control includes disciplinary control and judicial control; the former is performed by the government’s administrative supervision agencies and the CPC’s discipline inspection agencies, and the latter is performed by procuratorial agencies, public security agencies (charged with cracking down on corruption crimes committed by non-state functionaries), and judicial agencies. 10

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

37

i. The Objective Measurement Fits the Research Purpose An assessment of the trends in the incidence of embezzlement and bribery since the beginning of reform and opening up underpins the judgment on the soundness and extent of China’s anti-embezzlement and anti-bribery legislation, as well as the capability and effectiveness of the law in combating crimes. Only by getting an accurate picture of the trends and how they are related to legislative readjustment and improvement, can we possibly form a right judgment about the legislation and its impact on combating embezzlement and bribery, and on this basis, improve China’s criminal legislation system in the light of the United Nations Convention against Corruption. Given the research purpose, a focus should be placed on a quantitative approach. A subjective measurement of embezzlement, though also involving the use of data, cannot fully meet the requirement of research accuracy as it is not a quantitative analysis of crimes already committed. By comparison, an objective measurement, which is based on occurrences of crime, is typically quantitative in essence and can better demonstrate how effectively legislation can and has combated crimes. ii. An Objective Assessment of the Frequency of Campaigns Against Embezzlement and Bribery Reveals Crime Trends Some scholars have suggested that the magnitude of embezzlement and bribery could be ascertained indirectly, i.e., through extrapolation from pertinent statistics on crackdowns on embezzlement and bribery, including data on the scale, scope, and intensity of these campaigns, which are readily available.12 Proportionate penalties on crimes that caused a certain degree of damage are a necessary and active response of human society to crimes. Since the emergence of states, criminal sanctions have been one of their fundamental duties. The existence of crime leads to states’ activities against it, and the intrinsic causal relationship between the two proves that an assessment of the frequency of fighting against crime nationwide will help reveal the frequency of crime. Likewise, a study of the judicial efforts against embezzlement and bribery will assist in the study of the trends in the crimes. Though the presence of a dark figure of crime gives rise to the gap between occurrences of embezzlement and bribery and prosecuted cases (as expressed in the formula: Amount of embezzlement and bribery = Amount of uncovered crime of embezzlement and bribery + Dark figure of crime), it is completely possible to understand the trends in embezzlement and bribery within a certain period so long as this dark figure is scientifically measured. Since the dark figure of crime is important for the objective measurement of crime trends, it is therefore necessary to distinguish the frequency of crime from that of crime prosecuted, understand their connection, and proceed to unveil the trends in embezzlement and bribery by measuring the frequency of crime prosecuted.

12

See Footnote 8.

38

2.2

C. Wei

Historical Trends for Embezzlement and Bribery Cases

To understand the trends in embezzlement and bribery in China since the beginning of reform and opening up, we need to: (i) examine, on the basis of the yearly total number of cases of embezzlement and bribery received by prosecutorates and those actually prosecuted, the underlying trends in these crimes and their broader correlation with adjustments to criminal legislation; (ii) examine yearly changes in the annual total of cases received and prosecuted, link these changes with the legislative adjustments in respect of constituent elements of and punishment for particular crime, and then evaluate how such adjustments affect the combat against the crime; and (iii) give due consideration to how and to what extent the dark figure of crime affects the assessment of the trends in embezzlement and bribery, and take heed of its effects and roles in evaluating the broad operation of criminal legislation on embezzlement and bribery.13

2.3 2.3.1

Basic Conclusions Statutes Help Curb Embezzlement and Bribery

Though not all occurrences of embezzlement and bribery are reported and prosecuted, it cannot be denied that there is a certain intrinsic relationship between actual occurrences of crime and the country’s actions against crime. The relationship is exhibited in how corruption leads to control over corruption and how corruption control reflects the effectiveness of criminal legislation. Thus, an evaluation of corruption control would shed light on the situation of corruption, as well as on how effective criminal legislation can be in combating corruption. When consideration is given to the time lag between the country’s anti-crime efforts and the dark figure of crime and the occurrences of crime, it is completely possible to figure out the basic situation of embezzlement and bribery in this period based on punishment meted out, and by establishing a relationship between occurrences of crime and the

13

It must be noted that the high incidence of crimes of embezzlement and bribery following China’s beginning of reform and opening up was taken seriously by the legislative and judicial agencies of the state. However, the data provided by procuratorial organs, which are charged mainly with investigating crimes of embezzlement and bribery, cannot fully reflect specific situations concerning crimes of embezzlement and bribery because differences exist in understanding of harm these crimes have done to the society in different historical periods since the beginning of reform opening up. The period mainly spans from 1979 when the Criminal Law was promulgated to 1987, during which procuratorial organs nationwide did not tabulate separately the specific number of embezzlement and bribery cases they handled, so that analysis could only be conducted based on the annual total number and situations of, and trends in economic crimes committed then.

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery … Table 2.3 Number of cases of economic crimes received and prosecuted by nationwide procuratorial organs in 1980– 1987

Year

Cases received

39 Cases prosecuted

1980 4,000 N/A 1981 35,100 N/A 1982 N/A 33,000 1983 N/A N/A 1984 43,000 22,000 1985 N/A 28,000 1986 81,591 49,557 1987 N/A N/A 1983–1987 N/A 155,000 Source 1980–1988 work reports of the Supreme People’s Procuratorate. See the website of the Supreme People’s Procuratorate at: http://www.spp.gov.cn/site2006/

improvement and readjustment to criminal legislation, to evaluate the impact of criminal legislation on the fight against particular crimes.

2.3.1.1

Slowdown in the Growth of Crimes

As is shown in the foregoing Tables (2.3, 2.4, and 2.5) and Figs. (2.3 and 2.4), cases of embezzlement and bribery in China were on the whole in decline, and the changes in cases received and in those prosecuted were roughly in sync before they moved in a different direction later on. Both indicators surged drastically following the release of the Criminal Code in 1979, with increases consistently observed in 1980–1990 and in 1992–1997—though the growth slowed down in the second period. From 1990 to 1993, the embezzlement and bribery cases received and prosecuted tended to drop, reaching their lowest levels in 1992 and 1993, respectively. After the revised Criminal Code was released in 1997, both cases received and prosecuted were in decline, but at a slightly different pace—while the decline in cases received accelerated from 2000 onwards, cases prosecuted dropped slowly since 1998.14

2.3.1.2

Varying Trends in Crimes

Trends in different offences of embezzlement and bribery vary. As is shown in Fig. 2.5, while the embezzlement and bribery cases accepted by the nationwide procuratorial organs had been on the decline, a trend that picked up the pace from

14

Admittedly, these conclusions did not consider the fact that monetary thresholds for prosecution have been raised across the country. If factual changes in that regard are taken into account, the downward trend in cases of embezzlement and bribery which should have been placed on file would be questionable, and the number would have stabilized at some level for a period at most.

Cases received

Embezzlement

Bribery

Embezzlement

Unlawful distribution of state-owned assets between an organization’s members

Possession of assets of massive value with unidentified sources

Other

1988 45,700 36,554 9,234 1989 116,763 N/A N/A 1990 110,226 59,012 35,674 15,540 1991 96,872 53,835 27,275 15,762 1992 82,403 46,826 19,651 15,926 1993 92,136 49,294 20,475 22,367 1994 102,112 51,923 27,696 22,493 1995 102,038 51,340 30,080 20,618 1996 100,383 50,306 31,623 18,454 1997 93,050 47,797 27,152 18,101 1998 89,544 46,219 23,046 14,977 476 262 4,564 1999 83,555 44,383 20,299 15,895 747 294 1,937 2000 83,461 44,874 20,771 14,958 901 281 1,676 2001 76,530 41,511 19,688 12,562 962 251 1,556 2002 67,935 36,821 18,698 10,028 988 214 1,186 2003 55,333 29,276 16,476 8,272 1,023 193 93 2004 53,418 27,795 16,637 7,691 1,013 227 55 2005 48,722 24,382 16,224 7,013 847 212 44 2006 45,057 20,477 17,889 5,793 687 188 23 2007 41,175 18,164 17,264 5,037 529 164 17 2008 39,077 17,102 16,840 4,539 421 151 24 2009 39,279 17,019 17,794 3,910 375 157 24 Source 1989 work reports of the Supreme People’s Procuratorate. See the website of the Supreme People’s Procuratorate at: http://www.spp.gov.cn/site2006/. Procuratorial Yearbook of China 1990–2009, China Fangzheng Press, 1990–2009

Year

Table 2.4 Embezzlement and bribery cases accepted by nationwide procuratorial organs in 1988–2009

40 C. Wei

Cases prosecuted

Embezzlement

Bribery

Embezzlement

Unlawful distribution of state-owned assets between an organization’s members

Possession of assets of massive value with unidentified sources

Other

1988 21,100 16,200 4,800 1989 58,926 33,681 25,245 1990 61,929 29,188 22,185 10,556 1991 57,260 28,551 17,668 11,041 1992 47,451 24,569 11,964 10,918 1993 44,540 20,858 10,019 13,663 1994 50,074 21,674 14,797 13,603 1995 51,089 21,642 16,831 12,616 1996 46,314 19,520 15,945 10,849 1997 42,762 18,782 12,916 11,064 1998 30,670 12,909 8,759 8,283 91 20 608 1999 32,911 14,372 8,192 10,056 198 28 65 2000 37,183 16,765 9,872 101,702 277 30 69 2001 36,447 16,362 10,347 9,283 341 25 89 2002 34,716 15,785 10,725 7,740 369 33 64 2003 31,953 14,161 10,553 6,754 419 32 34 2004 30,548 13,308 10,572 6,162 448 38 20 2005 28,322 11,792 10,446 5,636 406 24 18 2006 27,119 10,337 11,702 4,708 323 39 15 2007 26,780 9,956 12,226 4,285 283 19 11 2008 26,306 9,605 12,471 3,958 242 23 7 2009 25,408 8,865 12,897 3,412 212 21 1 Source 1989 work reports of the Supreme People’s Procuratorate. See the website of the Supreme People’s Procuratorate at: http://www.spp.gov.cn/site2006/. Procuratorial Yearbook of China 1990–2009, China Fangzheng Press, 1990–2009

Year

Table 2.5 Embezzlement and bribery cases prosecuted by nationwide procuratorial organs in 1988–2009

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery … 41

42

C. Wei

Fig. 2.3 Trends in cases of economic crimes received and prosecuted by nationwide procuratorial organs handled in 1980–1987

Fig. 2.4 Trends in embezzlement and bribery cases received and prosecuted by nationwide procuratorial organs in 1988–2009

Fig. 2.5 Trends in embezzlement cases received and prosecuted by nationwide procuratorial organs handled in 1988–2009

2000 onwards, the cases prosecuted had been in decline since 1989 until after 1998 when there was a small rise, yet before 2002, it resumed the general downward trend.15 Figure 2.6 shows four major turning points in the trends in bribery cases received and prosecuted by nationwide procuratorial organs: 1989 and 1995 as the turning points for the downward trends, 1993 and 1999 as the turning points for the upward trends; after 2011, cases of bribery edged up steadily. In Fig. 2.7, which displays cases of embezzlement received and prosecuted by nationwide procuratorial organs, the annual number of cases received made a downward turn in 1994 and the fall accelerated afterward; the annual number of cases prosecuted changed mildly in the period 1990–1997, and beginning in 2001, the downward trended

15

The downward trend in crimes of embezzlement was related directly to the widespread restructuring of enterprises in recent years. The range of control over crimes of embezzlement shrank in effect following the restructuring of former state-owned and collectively owned enterprises.

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

43

Fig. 2.6 Trends in bribery cases received and prosecuted by nationwide procuratorial organs in 1988–2009

Fig. 2.7 Trends in cases of misappropriation of public funds received and prosecuted by nationwide procuratorial organs in 1988–2009

accelerated. Other types of crimes of embezzlement and bribery were relatively small in number and tended to decline on the whole. The above-mentioned data suggests that growth in crimes of embezzlement and bribery on the whole in China had been curbed to a certain degree. China’s criminal legislation on embezzlement and bribery has on the whole agreed with the general trends in this regard. Based on the penal code of 1979, China’s criminal legislation on embezzlement and bribery underwent three revisions—in 1982, 1988, and 1995, respectively—after the beginning of reform and opening up. The release of the penal code of 1997 marked the establishment of a relatively sound legislative system. Afterward, legislative adjustments were made in respect of offenders of particular crimes based on social and economic situations. Though the anti-bribery and anti-embezzlement legislative system which the penal code of 1979 established had fewer offences and a limited scope of application, it allowed for more flexibility in application because the Criminal Code requires fewer elements for a specific crime. Such a legislative model played a constructive and crucial role in curbing the surge in crimes of embezzlement and bribery in the early 1980s. With social transformation continued, the greedy desires for wealth led to embezzlement and inflicted increasing damage upon the public sector of the economy. The flaw in the penal code of 1979 concerning the narrowly defined scope of offenders began manifesting itself, and to address the problem, the Supplementary Regulations was issued in 1988. Given the growing tendency in embezzlement and bribery in the transitional period, the Supplementary Regulations marked a timely legislative improvement; it expanded the scope of offenders and increased the types of criminal behaviors dealt with, resulting directly in a surge in 1989 in the number of embezzlement and bribery cases received and

44

C. Wei

prosecuted in China. Afterward, the scope of offenders was limited to “public-sector workers,” and the influence that the scope of offenders had on the capacity of combating against embezzlement and bribery basically stabilized too. The implementation of the Supplementary Regulations coupled with active collaboration among judicial agencies,16 paved the way for curbing the upward trend in crimes of embezzlement and bribery in the years that ensued. In addition to increased types of criminal behaviors, the Supplementary Regulations also added constituent elements of crime, leading to a shrunk scope of crimes of embezzlement and bribery and a drop in the annual number of cases in the years following the release of the Supplementary Regulations. The 1997 revision to the Criminal Law in respect of embezzlement and bribery essentially confirmed previous legislation. Thereafter, the changes in the incidence of embezzlement and bribery tended to be mild, and the establishment of a corruption prevention system at the time reinforced the downward trends in crimes of embezzlement and bribery.

2.3.2

Expanding the Scope of Who Can Be Criminally Charged with Embezzlement and Bribery

Under the penal code of 1979, those criminally liable for bribery were limited to natural persons, or more specifically, public-sector workers. As the planned economy was replaced by the market economy, types of stakeholders tended to diversify, and legislation was adapted and readjusted accordingly, making it necessary to expand the scope of those who may be criminally responsible and subject to prosecution for the crime. This was manifested as follows.

16

This mainly refers to the Announcement that Criminals of Embezzlement, Bribery, Speculation, Profiteering, and so on Must Surrender Themselves within the Time Limit which the Supreme People’s Court and the Supreme People’s Procuratorate issued jointly on August 15, 1989. Within the two and a half months specified by the Announcement, procuratorial organs nationwide received from the masses 133,765 clues of economic crimes including embezzlement and bribery, and more than 36,000 criminals surrendered themselves to procuratorial organs. (See the Work Report of the Supreme People’s Procuratorate at the First Session of the Eighth National People’s Congress on March 22, 1993, delivered by Liu Fuzhi.) From August 15 to October 15, People’s Courts across the country received from procuratorial agencies 6,755 cases of crime including embezzlement, bribery, speculation, and profiteering. And 5,167 cases of economic crime were prosecuted in accordance with the Announcement, including 1,831 embezzlement cases, 830 bribery cases, and 181 cases of speculation and profiteering (See the Work Report of the Supreme People’s Procuratorate at the Tenth Session of the Eighth National People’s Congress Standing Committee on October 25, 1989, delivered by Ren Jianxin).

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

2.3.2.1

45

Increasing the Types of Natural-Persons Eligible for Such Charges

The scope of natural persons who may be subject to prosecution for embezzlement and bribery was expanded. While those held liable for embezzlement and bribery under the penal code of 1979 were limited to public-sector workers, the Supplementary Regulations included workers of collective business entities, as well as other persons engaged in public affairs. The Decision of 1995, for the first time, sub-divided the crimes of embezzlement and bribery into two categories, depending on whether the offender is a public-sector worker or a company employee. While the Criminal Law of 1997 dealt with embezzlement in a comprehensive manner, it failed to address bribery of non-public-sector workers at organizations other than companies and enterprises, making it impossible for judicial personnel to deal with such behaviors as doctors taking advantage of their rights to prescription to take kickbacks and referees blowing the whistle unfairly. To address this problem, the Sixth Amendment to the Criminal Law made improvements by extending bribees to include employees of companies, enterprises, and other organizations, hence subjecting all types of offenders to the law.

2.3.2.2

Including Organizations as a New Type of Offenders

Offenders in cases of embezzlement and bribery were expanded from natural persons to organizations. At the time the penal code of 1979 was released, organizations had no independent economic interests due to the planned economy, nor did the Criminal Law cover crimes committed by organizations in their modern sense. From the mid-1980s onwards, as more and more organizations contended for economic interests, bribery cases involving organizations or juristic persons rose, bringing about the complex situations where natural persons and organizations committed crimes independently or jointly. In response to the change, the Supplementary Regulations introduced the offences of giving and accepting bribes by an organization, with a view to satisfying the pressing practical needs. Later in 1997, the Criminal Law began to include a complete set of rules dealing with crimes of embezzlement and bribery involving organizations. The legislative amendment to the scope of offenders of embezzlement and bribery was indicated in the changing numbers of cases received and prosecuted. Following the release of the Supplementary Regulations, there was a drastic surge in crimes of embezzlement and bribery. The number of embezzlement and bribery cases received and prosecuted by nationwide procuratorial organs spiked in 1989 and afterward showed a clear tendency of steady decline. This suggests a positive correlation between the adjustment in criminal legislation and general crime trends.

46

C. Wei

2.3.3

Effectiveness Problems of Legislation

2.3.3.1

Greater Harm of Embezzlement and Bribery

In our opinion, assessing trends in embezzlement and bribery needs not only to examine the frequency of crime that is reflected by cases received and prosecuted by procuratorial organs, but to employ indicators of the intensity of crime to analyze in greater detail the degree of harm that crimes of embezzlement and bribery did and then evaluate the role of the legislative system in combating embezzlement and bribery. The frequency of crimes of embezzlement and bribery is mainly measured by such indicators as the number of cases received and prosecuted, and the rate of cases prosecuted, while the intensity of crime refers to an indicator system that reflects the degree of harm that crime of embezzlement and bribery did within a certain period. To assess the intensity of crime, we may examine the changes in the numbers and rates of major and serious cases. Table 2.6 shows major and serious cases of embezzlement and bribery that nationwide procuratorial organs handled in 1990–2008, with its data based on the Procuratorial Yearbooks. The trends in major cases (Fig. 2.8) and those in serious cases (Fig. 2.9) indicate the intensity of crime. As is shown in Fig. 2.8, the number of major cases of embezzlement and bribery that nationwide procuratorial organs investigated since 1990 kept rocking up, and it was not until the revised Criminal Code was released in 1997 that a downward turn emerged. But beginning in 1998, major cases rose again before stabilizing at roughly a level seen in the early 1990s. Figure 2.9 shows the trends in major cases of embezzlement and bribery, where, despite a brief drop in 1992 and in 1997, the serious cases since 1990 were on the increase and remained at quite high a level. From Figs. 2.10, 2.12, and 2.14 about the trends in major cases of embezzlement, embezzlement, and bribery and Figs. 2.11, 2.13, and 2.15 about serious cases of these crimes, it is obvious to see that except the trends in serious cases of embezzlement, all other crimes took on a similar pattern of movement in respect of the intensity of crime, a tendency which —coupled with the trends shown in Fig. 2.4 in the embezzlement and bribery cases received and prosecuted by nationwide procuratorial organs—indicates that despite a steady decline in embezzlement and bribery cases received and prosecuted, their damage to society on the whole had not been eased up. This suggests that the intensity of crimes of embezzlement and bribery was still on the increase (Tables 2.7, 2.8, and 2.9). When examining China’s legislative system on embezzlement and bribery, we may observe serious capacity and effectiveness problems. Specifically, though the present legislative system stresses severe punishment on crimes of embezzlement and bribery, it is unable to effectively curb the intensity of the crimes and tighten the net of justice against these crimes. The rising trends in major and serious cases of embezzlement and bribery suggest that there still remain serious flaws in legislation which adversely affect its capacity of fighting against crime.

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

47

Table 2.6 Major and serious cases of embezzlement and bribery that nationwide procuratorial organs handled in 1990–2009 (Statistical data contained in this table is derived from Procuratorial Yearbook of China 1990–2008, China Fangzheng Press, 1990–2008. For statistical reasons, these yearbooks contained no data on major and serious cases that occurred in 1988 and 1989. Out of consideration for validity of empirical analysis, therefore, the major and serious cases of embezzlement and bribery that nationwide procuratorial agencies handled in 1990–2007 were analyzed, as in statistical analysis and trend figures below concerning crimes of embezzlement and bribery. In addition, the Procuratorial Yearbook of China 1999 defined a major case of embezzlement and bribery as the one involving graft or bribes exceeding RMB 50,000, embezzlement exceeding RMB 100,000, or of other nature exceeding RMB 500,000; and defined a serious case as the one involving a government official at county level or above.) Year

Cases prosecuted

Major cases

Persons involved in serious cases

1990 61,929 13,259 1,344 1991 57,260 13,415 1,004 1992 47,451 18,429 634 1993 44,540 18,191 990 1994 50,074 23,977 1,713 1995 51,089 29,420 2,193 1996 46,314 31,053 2,361 1997 42,762 33,283 2,156 1998 30,670 9,715 1,674 1999 32,911 13,059 2,200 2000 37,183 16,121 2,556 2001 36,447 16,637 2,670 2002 34,716 16,582 2,546 2003 31,953 16,805 2,389 2004 30,548 16,485 2,626 2005 28,322 16,000 2,503 2006 27,119 15,681 2,435 2007 26,780 16,819 2,380 2008 25,306 17,594 2,380 2009 25,408 18,191 2,364 Source Website of the Supreme People’s Procuratorate at: http://www.spp.gov.cn/site2007/. Procuratorial Yearbook of China 1990–2010, China Fangzheng Press, 1990–2010. For statistical reasons, the table doesn’t contain the number of major and serious cases that occurred in 1988– 1989

Fig. 2.8 Trends in major cases of embezzlement and bribery that nationwide procuratorial organs investigated in 1990–2009

48 Fig. 2.9 Trends in serious cases of embezzlement and bribery that nationwide procuratorial organs investigated in 1990–2009

Fig. 2.10 Trends in the rate of major embezzlement cases that nationwide procuratorial organs investigated in 1990– 2009

Fig. 2.11 Trends in serious cases of embezzlement that nationwide procuratorial organs investigated in 1990– 2009

Fig. 2.12 Trends in the rates of major bribery cases that nationwide procuratorial organs investigated in 1990– 2009

Fig. 2.13 Trends in serious cases of bribery that nationwide procuratorial organs investigated in 1990– 2009

C. Wei

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

49

Fig. 2.14 Trends in the rates of major cases of misappropriation of public funds that nationwide procuratorial organs investigated in 1990–2009

Fig. 2.15 Trends in serious cases of misappropriation of public funds that nationwide procuratorial organs investigated in 1990–2009

2.3.3.2

Multi-layered Legislative System Fails to Achieve Expected Results

China’s legislative revisions concerning embezzlement and bribery focus on the introduction of new offences and the continued improvement on constituent elements of crime, and a multi-layered legislative regulation system has formed. Apart from a dualistic system covering both natural-person offenders and organizational offenders, the Criminal Law also distinguishes natural persons based on whether or not they have “public-sector” statuses. It not only specifies the main types of crime of embezzlement, embezzlement and bribery, but also provides for the crime of possession of assets of massive value with unidentified sources in order to curb embezzlement and bribery at the source. In practice, however, the multi-layered Criminal Law system did not work as effectively as expected. It is shown in Tables 2.4 and 2.5 that the annual number of cases of possession of assets of massive value with unidentified sources received and prosecuted by prosecutorates since 1998 stood largely at 200 on average and the average annual number of cases prosecuted was only about 25, in a stark contrast to the annual number of embezzlement and bribery cases accepted, those prosecuted, and the rate of cases prosecuted. This suggests that the actual application of the legislation on crime of possession of assets of massive value with unidentified sources was far less effective than originally intended. While the legislative purpose of introducing the

50

C. Wei

Table 2.7 Cases of embezzlement that nationwide procuratorial organs investigated in 1990– 2009 Year

Cases prosecuted

Major cases

Major case rate

Persons involved in serious cases

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

29,188 28,551 24,569 20,858 21,674 21,642 19,520 18,782 12,909 14,372 16,765 16,362 15,785 14,161 13,308 11,792 10,337 9,956 9,605 8,865

7,435 8,050 7,898 9,881 11,430 13,330 13,619 15,490 3657 5,173 6,736 6,932 7,199 7,191 6,810 6,133 5,592 5,866 5,913 5,730

25.5% 28.2% 32.1% 47.4% 52.7% 61.6% 69.8% 82.5% 28.3% 36.0% 40.2% 42.3% 45.6% 50.1% 51.2% 52.0% 54.1% 58.90% 61.56%

321 261 176 238 363 486 575 547 456 570 683 696 732 632 691 591 529 462 465 397

offence is to curb embezzlement at the source, this intention was called into question by scholars from the very beginning. The greatest controversy lies in the statutory punishment as many experts hold that the maximal five-year prison term is too lenient to bring corrupt officials to justice.17 17

In 2001, Xiao Zuoxin, former mayor of Fuyang, Anhui, and his wife Zhou Jimei, were prosecuted for taking more than RMB 1.2 million in bribes, in addition to which more than RMB 12 million was decided to be of unknown reason, nearly 10 times the verified amount the couple took in bribes. From the perspective of judicial practice, the punishment for crime of huge property of unknown origin was largely imposed in combination with other crimes and rarely separately applied. Because in China, the term for concurrent punishment in the case of fixed-term imprisonment for several crimes before 2011 was 20 years at maximum, the crime of huge property of unknown origin was often “absorbed” in the process of sentencing. It should be noted that according to the Seventh Amendment to the Criminal Law which the NPC Standing Committee adopted in 2009, the longest prison term for the crime of huge property of unknown origin was increased from 5 to 10 years. In addition, the Eighth Amendment to the Criminal Law which the NPC Standing Committee adopted in 2011 revised provisions regarding concurrent punishment for several crimes: where the total term for fixed-term imprisonment is below 35 years, the maximum prison term may not exceed 20 years; where the total term is over 35 years, the maximum prison term may not exceed 25 years.

2 Effectiveness Assessment of Anti-embezzlement and Anti-bribery …

51

Table 2.8 Cases of bribery that nationwide procuratorial organs investigated in 1990–2009 Year

Cases prosecuted

Major cases

Major case rate

Persons involved in serious cases

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

22,185 17,668 11,964 10,019 14,797 16,831 15,945 12,916 8,759 8,192 9,872 10,347 10,725 10,553 10,572 10,446 11,702 12,226 12,471 12,897

3,860 3,266 2,613 4,356 7,625 10,331 11,497 10,667 1,847 2,552 3,658 4,248 4,871 5,424 5,690 6,042 7,088 8,045 8,805 9,875

17.4% 18.5% 21.8% 43.5% 51.5% 61.4% 72.1% 82.6% 21.1% 31.2% 37.1% 41.1% 45.4% 51.4% 53.8% 57.8% 60.6% 65.8% 70.6%

929 662 411 641 1,173 1,489 1,564 1,291 909 983 1,279 1,378 1,391 1,378 1,545 1,527 1,598 1,650 1,684 1,755

Table 2.9 Cases of misappropriation of public funds that nationwide procuratorial organs investigated in 1988–2009 Year

Cases prosecuted

Major cases

Major case rate

Persons involved in gross cases

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

10,556 11,041 10,918 13,663 13,603 12,616 10,849 11,064 8,283 10,056 10,170 9,283 7,740 6,754 6,162 5,636 4,703 4,285 3,958 3,412

1,964 2,009 7,918 3,954 4,922 5,759 5,937 7,126 3,885 5,244 5,623 5,082 4,348 4,010 3,756 3,610 3,056 2,908 2,876 2,586

18.6% 18.2% 72.5% 28.9% 36.2% 45.6% 54.7% 64.4% 46.9% 52.1% 55.3% 54.7% 56.2% 59.4% 61.0% 64.1% 65.0% 67.9% 72.7%

94 81 47 111 177 218 222 318 289 432 540 504 359 289 277 289 218 196 158 136

52

C. Wei

References Cotterrell R (1989) The sociology of law: an introduction (trans: Pan Dasong). Huaxia Publishing House, p 67 Guan B (2007) An interpretation of scientific legislation. J Soc Sci (3) He Z (2002) A study of corruption during China’s transformation. Central Compilation & Translation Press, Beijing, p 46 Hu A, Guo Y (2002) The economics of corruption among civil servants: a cost-benefit analysis. Comp Econ Soc Syst (4) Ni X, Wang L (2004) An assessment of embezzlement in China and an estimation of embezzlement consequences. Xinhua Digest (3) Wang C (2001) A frequency of corruption analysis of the Chinese society in 1990–1999. CASS J Polit Sci (1) Zhang X (2003) Essentials of criminology. Law Press China, pp 103–104

Chapter 3

Establishing and Improving Criminal Legislation on Embezzlement and Accepting Bribes Guoxiang Sun and Xiaoping Qian

Regulations on embezzlement and bribery, one of the earliest milestones in the development of the criminal legislation of the People’s Republic of China,1 have played a vital role in the country’s history of Criminal Law. Since the release of its first penal code in 1979, China has kept improving its legislation on embezzlement and bribery in order to fight against the crimes more effectively and adjust the legislative system to the changing needs of society. The earliest provisions on embezzlement and bribery cover only public officials (in the traditional and broad senses of the term). Later legislative development was mainly driven by the country’s economic and social development, in particular the economic reform which began in the 1980s. Two historic breakthroughs are especially noteworthy. The first took place when the law began to include organizations as possible offenders. In the mid-1980s,

1

In the early years after the founding of the People’s Republic of China, when there were no conditions for promulgating a unified criminal code, the Central People’s Government of the People’s Republic of China, out of the need for punishing serious crimes, promulgated a series of three Regulations in the nature of a separately implemented Criminal Law, viz. the Counterrevolution Punishment Regulation of the People’s Republic of China (approved at the 11th meeting of the Committee of the Central People’s Government on February 20, 1951, and announced by the Central People’s Government on February 21, 1951), the Provisional Regulation on Disturbing the State’s Currency Control (promulgated by the Government Administration Council of the Central People’s Government on April 19, 1951), and the Embezzlement Punishment Regulation of the People’s Republic of China (approved at the 14th meeting of the Central People’s Government on April 21, 1952). These three Regulations were in force until the promulgation of the Criminal Code of 1979 and, therefore, in a certain sense, paved the way for the Criminal Law of new China.

G. Sun (&) Law School, Nanjing University, Nanjing, China e-mail: [email protected] X. Qian School of Law, Southeast University, Nanjing, China e-mail: [email protected] © Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7_3

53

54

G. Sun and X. Qian

the market-oriented economic reform accelerated the diversification of economic entities’ interests, and organizations that acquired juristic personality during the reform might be financially motivated to commit embezzlement and bribery. The fast-growing number of such cases drew the attention of the legislature. In 1988, the NPC Standing Committee adopted the Supplementary Regulations on Punishment for Crimes of Embezzlement and Bribery, introducing for the first time the offences of accepting and giving bribes by organizations. Afterward, acts of embezzlement or misappropriations by organizations were also criminalized and thus a crime classification system that included embezzlement and bribery by natural persons and organizations was fully created. The second breakthrough occurred in the mid-1990s, when the country’s economic reforms were accelerated. With corporate reforms being advanced, enterprises in diverse forms of ownership developed rapidly, and embezzlement and bribery in these organizations became a vacuum in legislation. Given the particular ways power was abused in these newly emerging cases, China established the identity-centered model that distinguished embezzlement and bribery by public-sector workers and non-public-sector workers. A legislative system concerning embezzlement and bribery which is of Chinese characteristic thus began to take shape. Following its accession to the United Nations Convention against Corruption in the early twenty-first century, China stepped up efforts to align its legislation with international anti-corruption legislation, which improved the legislative system and helped curb crimes more effectively. Embezzlement and accepting bribes have long been a focus of China’s criminal legislation, and the provisions on the two typical job-related crimes have distinctive Chinese characteristics. Moreover, China’s criminal legislation urgently needs improvement so as to increase the country’s capacity of fighting corruption and to better align efforts in this area to international standards.

3.1

Eligibility Requirements for Being Criminally Charged with Embezzlement or Accepting Bribes

3.1.1

Embezzlement and Accepting Bribes by Natural Persons

3.1.1.1

Embezzlement and Accepting Bribes by Public-Sector Workers

i. Interpretation of Provisions In criminal legislation worldwide, offenders of embezzlement and bribery—both job-related crimes—by definition have a special status. This special status, a constituent element for crimes of embezzlement and bribery, means the natural-person offenders must be “public-sector workers” according to Chapter 8 of the Criminal Law. In particular, the provisions on the scope of embezzlement offenders are part of

3 Establishing and Improving Criminal …

55

what marks the characteristics of China’s Criminal Law. Compared with accepting bribes provided for in Article 385 of the Criminal Law as well as other bribery and misappropriation offences, the offenders of embezzlement are far broader in scope. Except for embezzlement, all those who may be charged with crimes under Chapter 8 of the Specific Provisions of the Criminal Law are public-sector workers. Article 382 of the Criminal Law prescribes two types of offenders: public-sector workers described in the first paragraph and “people trusted to manage and operate state-owned assets by state agencies, state-owned enterprises and companies, institutions, and mass organizations” as specified in the next paragraph. The establishment of the scope of offenders of embezzlement and bribery is a long process which reflects not only the significance and value of legislative decision-making but the requirements on building a clean governance system to cater to the needs of social development in certain stages. Society is based not on law, Marx says, that is a fantasy of jurists, and, conversely, law ought to be based on society and it is an expression of interests and needs which society shares and which a certain way of material life produces, rather than willfulness of single individuals.2 Law is a product of history and reflects special needs of particular social and historical development. Since in the early years of its founding new China released the Regulations on punishment for embezzlement in the form of separate criminal statute, the scope of offenders of embezzlement and bribery was legislatively altered many times.3 In the first penal code of 1979, the offenders of embezzlement and bribery were for the first time explicitly defined as “public-sector workers,” and Article 83 hereof stated that “Public-sector workers mentioned in this law refer to all people engaged in public service according to the law who work for state organs, enterprises, institutions or otherwise.” This provision largely remained despite minor changes later to adapt to the needs of reform and social development. The term “public-sector worker” is explicitly defined in Article 93 of the current Criminal Law of China (the revised penal code of 1997) as including: (i) persons engaged in public service who work for state agencies (ii) persons; engaged in public service who work for state-owned companies, enterprises, institutions, and mass organizations; (iii) persons assigned by state agencies, state-owned

2

Collected Works of Marx and Engels (1961). According to Articles 2, 15, and 16 of the Embezzlement Punishment Regulations of the People’s Republic of China, workers of all state agencies, enterprises, schools and their affiliates, workers of social organizations, and revolutionary servicemen, may all constitute offenders of crime with respect to Embezzlement. On August 21, 1957, the Supreme People’s Court issued the Reply on How to Apply Law to Job-related Acts of Seeking Gain Illegally by Members of the Private Party to a Public–Private Partnership Enterprise, stating that “A job-related act of seeking gain illegally by a member of the private party to a public–private partnership enterprise, when it occurs after the enterprise’s assets have been checked and personnel arranged, shall be seen as a crime of embezzlement as is committed by a public-sector worker, in accordance with Article 2 of the Embezzlement Punishment Regulations.” Thus, job-related acts of corruption by private parties to public–private partnership enterprises were also included in the scope of punishment for embezzlement and bribery, marking an expanded scope of offenders of crime with respect to embezzlement and bribery.

3

56

G. Sun and X. Qian

companies, enterprises and institutions to engage in public service at non-state companies, enterprises, institutions and mass organizations; and (iv) other persons engaged in public service according to the law. The statutory definition of offenders of embezzlement and bribery had drawn the attention of the Chinese criminological community before the release of the revised Criminal Code. The supreme judicial agency had given definite opinions, in its judicial interpretations and other similar legal documents, of how should the judiciary determine the scope of “public-sector workers” in cases of embezzlement and bribery. Given the importance of the term in job-related crime research and in the application of law, it is necessary to examine the issue in light of the law as it is and as it ought to be, with a view to correctly understanding the legislation and making improvements upon it. To conduct an as-it-is analysis of the scope of embezzlement and bribery offenders, we need to use the widely accepted literal rule for interpreting Criminal Laws. According to Article 93 of the Criminal Law, public-sector workers have two basic features. One is the formal feature. As stated in Paragraph 1 of this article, public-sector workers are those engaged in public service at state agencies, i.e., state functionaries. Paragraph 2 adds that persons engaged in public service at state-owned organizations and mass organizations, persons assigned by state-owned organizations to engage in public service at non-state organizations, and persons engaged in public service according to the law are treated as public-sector workers as well, i.e., “quasi-public-sector workers.” Obviously, both public-sector workers and quasi-public-sector workers must have engaged in public service at particular agencies, either on assignment or by law. In other words, people would not be deemed public-sector workers unless they possess this formal feature. Those who perform a public service are administratively affiliated to state agencies, state-owned companies, enterprises, institutions, or mass organizations and have acquired their official position by election, appointment, engagement, assignment, or other necessary means according to the law. The other is the essential feature which distinguishes public-sector workers from others. Article 93 of the Criminal Law makes “engaging in public service” a defining feature shared by all public-sector workers, despite their diverse backgrounds or differences in other ways. Typically, Chinese Criminal Law scholars explain “engaging in public service” in the following ways. Some view it as “behavior of fulfilling duty and of dealing with other state affairs according to the law.”4 Others argue that it means “carrying out functional activities of administering state, social or collective affairs according to the law.”5 Still others believe it means “performing organizational, lead, supervisory, managerial, or similar roles at state agencies, state-owned companies, enterprises, institutions, mass organizations, etc.”6 Some scholars are of the opinion that the defining feature of “public service activities” is administration.

4

Zhang (1997). Liu (1997). 6 Zhao (1997a). 5

3 Establishing and Improving Criminal …

57

Administrative activities in connection with state affairs, e.g., organization, supervision and management, are defined as public service activities rather than labor service. Conversely, a non-administrative activity, even if falling within the category of state affairs, does not belong to public service, but labor service. For instance, freight escorts, storemen, cashiers, and accountants working for a state-owned organization have goods and cash in their custody; they are engaged in administrative activities which are thus classified as public service activities. University and high school teachers, researchers, and engineers who are on the government payroll and categorized as “state cadres” are engaged in professional rather than administrative activities, and what they do is thus labor service.7 Correctly understanding “public service” is thus crucial for judging whether one is a “public-sector worker” as defined under Article 93 of the Criminal Law and for the application of criminal sanction against embezzlement and bribery. The Minutes of the National Workshop on Economic Crime Trials by Courts (“the Minutes” below) released in November 2003 by Supreme People’s Court explained based on criminal studies and judicial applications, that “engaging in public service means fulfilling such duties as organizing, leading, supervising, and managing on behalf of state agencies, state-owned companies, enterprises, institutions, mass organizations, etc. Public service is mainly manifested by public affairs associated with duty and by activities of supervision and management concerning state-owned assets; for instance, when works at state agencies perform their duties, or when state-owned companies’ directors, managers, supervisors, accountants, and cashiers carry out such activities as managing or overseeing state-owned assets, they engage in public service.” To correctly define public service, we should pay particular attention to the following three aspects8: First, “public service” is a broad term that encompasses a wide range of activities. Activities of public service are intended for the state and society and fulfill state and public interests; they show how the state administers public affairs and provide public service, and so they do not include collective affairs management.9 Activities of public service include managing people, things, and affairs. The scope of public service varies from country to country because of differences in social, historical, economic, and cultural settings. While some countries limit public service to governance of a country, most countries would also use the term to refer to the management of public utilities and state-owned enterprises (state-owned enterprises and companies) and the delivery of public service. In Japan, for instance, a special law extends the scope of bribery offenders, stating “officials of public institutions are regarded as staff members in public service, i.e., civil 7

Zhao et al. (2007). Sun (1998). 9 According to the “NPC’s Explanation on Paragraph 2 of Article 93 of the Criminal Law of the People’s Republic of China,” for instance, people of grassroots organizations like villagers’ committees as seen as “other persons engaged in public service according to law” as referred to in paragraph 2 of the Article 93 of the Criminal Law only when they assist People’s Governments in administration. Pure collective affairs of villagers’ committee are not of public service. 8

58

G. Sun and X. Qian

servants.”10 In China, SOE executives’ management of state assets also falls into the category of the state’s public affairs management. People’s groups or mass organizations like the Communist Youth League, trade unions, and women’s associations are in fact tasked with managing state and social affairs in some senses. Activities of public service in China, therefore, take place not only in state agencies but in public entities such as state-owned enterprises and companies, public institutions, and people’s groups. Accordingly, “people who are entrusted with managing state-owned assets by state agencies, state-owned companies, enterprises, institutions, and mass organizations” under Article 382 of the Criminal Law are also deemed public-sector workers, as they are engaged in state-owned assets management, a typical form of “activities of public service.” As such they might be charged with not only embezzlement, but also crimes such as embezzlement and accepting bribes. Similarly, bid evaluation by duly formed committees or government procurement activities conducted by competitive negotiation and request for quotation (RFQ) panels should be seen as activities of public service, and if members of such committees or panels, in performing their duties, have asked for or illegally accepted property from others, and in exchange granted others undue benefit, they should be treated as having committed embezzlement as public-sector workers. Second, public service directly serves state and public interests. Public service pertains to state and social administration and directly represents the interests of the state and society. An activity which does not fall under “public affairs” of the state and society is not an “activity of public service.” Some argue that lawyers who act as an agent for and in the interest of a state-owned entity also perform “activities of public service.”11 Such a view is debatable. According to the Lawyers’ Law, a lawyer is “a practitioner who offers legal services to his or her clients.” Lawyers use their professional expertise to provide their clients—whether they are state-owned enterprises and companies or not—with legal services and act as an agent to protect their clients’ interests. Lawyers perform their work to a certain extent independently from the will of their clients, and their activities do not belong to the category of state and social administration. Therefore, a lawyer provides service, but not “public service.” Third, coverage of “public service” and “labor service” needs to be clarified. If we, according to the meeting Minutes of the Supreme People’s Court, narrowly understand “public service” as public affairs associated with such activities as supervising and managing state-owned property, then “public service” and “labor service” are two different terms. If public service is broadly defined as public affairs, however, the two are not mutually exclusive; rather, “public service” includes “labor service.” The UNCAC stresses that offenders of embezzlement, i.e., “public officials”, are persons who “perform public functions or provide public services,” obviously in the broad sense of the term “public service.” The Penal 10

Oya (2008). Liao (2007a).

11

3 Establishing and Improving Criminal …

59

Code of Portugal states in Article 386 that the managers, supervisors, and employees working at publicly owned or financed companies, companies mainly funded by public capital, and public utility franchisees, are seen as civil servants.12 The Penal Code of Italy prescribes in Article 317 that any civil servant or any person engaged to provide a service, who, by abusing his or her power or authority, has forced or tempted other persons to give, or promise to give, himself/herself or a third person a sum of money or other benefit, shall be sentenced to 4–12 years in prison. It is perfectly viable for China’s legislation to blur the distinction between “public service” and “labor service” and define public service broadly as work of management and service performed by virtue of public power and for public interest, and as a result, encompass all activities associated with public functions and public services in the category of public service. For instance, work of shop assistants or bus conductors at state-owned enterprises and companies, doctors at public hospitals, and public school teachers may all be considered public service. Another example is journalists whose job is to collect information, write and present news stories for newspapers or TV and radio programmes. Some argue that journalists’ intellectual labor is not public service, but their labor service, whether they work for a state-owned organization or not.13 This view is questionable. In China, news organizations, mostly state-owned, are granted by the state the right of supervision within a certain extent by creating and shaping public opinion. This, as an important part of public oversight, also belongs to public power. When journalists perform their duty of supervision on behalf of their employer, a public institution, their work falls under “public service,” and if they accepted so-called “hush money” or “money for paid news,” they should be seen as having committed the offence of accepting bribes. ii: Legislative Evaluation A careful study of how China’s Criminal Law provides for the offenders of embezzlement and bribery shows that the substantial criterion it uses to judge whether one is a “public-sector worker,” i.e., “engaging in public service,” is not strictly followed.14 In judicial practice, much disagreement exists over the defining feature of “public-sector workers,” often causing confusions and misjudgments. The central issue, which had existed before the release of the revised Criminal Code, is the dispute over “official status” and “public service.” Some argued that crime by public-sector workers is job-related, and the offender must have a public-sector worker status. Others held that whether one was engaged in public service, rather than whether one was truly a state functionary, decided whether he or she should be deemed a public-sector worker under the Criminal Law. It thus followed that those who have a public-sector worker status are not deemed as such

12

Criminal Code of Portugal (2010). Zhao (2009). 14 Sun and Wei (2011). 13

60

G. Sun and X. Qian

if they are virtually not engaged in public service. Apart from these two views, a “mixed view” argues that to be deemed a public-sector worker under the Criminal Law; one must have such status and at the same time be truly engaged in public service according to the law.15 Below, we would elaborate on this issue. (1) Public-sector workers need to be defined more precisely When the current Criminal Law defines a public-sector worker, it introduces several conditions that need to be met in order for one to fit the definition. Whereas legal terms need to be accurate, such everyday phrases as “state-owned company or enterprise“ and “appoint or assign,” when used in defining “public-sector worker,” may lead to ambiguity and confusion in judicial settings. Firstly, opinions divide over what is an SOE. The present Criminal Law defines public-sector workers as persons engaged in public service at state-owned organizations. It is necessary, therefore, to decide whether an organization is state-owned in the first place. This used to be easy in the planned economy age, but has become difficult today as a modern enterprise system was introduced, and most state-owned enterprises and companies were restructured. Scholars are particularly divided over the nature of enterprises in which the state has a controlling or non-controlling stake. While some argue that state-owned enterprises and companies should be limited to those completely owned by the state,16 others contend that the scope should be expanded to include companies and enterprises in which the state has controlling interests.17 Such control may be either absolute or relative. That means joint-stock or limited liability companies in which the state has a controlling stake—be it greater than 50% of the ownership interests (absolute control) or lower than that (relative control)—are deemed state-owned enterprises and companies as well, since the state-owned assets and interests exceed non-state-owned types.18 In order to solve disagreement, the Supreme People’s Court pointed out in its May 26, 2001, report on determining what charge to be filed against managers at joint-stock companies in which the state has a controlling or non-controlling interest who used their influence to illegally possess corporate property, that these managerial employees, except those assigned to engage in public service by state agencies, state-owned companies, enterprises, or institution, are not public workers. The document suggested that state-owned enterprises and companies are enterprises in which the state has a 100% stake, which seems to be in conflict with existing laws and Regulations. The Audit Law, for instance, states in Article 22 that “audit supervision over enterprises in which state assets have a controlling or dominating position is put under the same audit supervision management as other state-owned enterprises and companies.” Obviously, state-owned

15

Zhou (2005) Yang (2002a) 17 Lv (2007a). 18 Sun (1998). 16

3 Establishing and Improving Criminal …

61

enterprises and companies under this and other laws do not refer exclusively to companies and enterprises wholly owned by the state. Scholars doubt whether the uniform definition given by the Supreme People’s Court out of practical considerations is indeed well-founded, arguing that in these joint-stock companies, some or most of the employees being public-sector workers who perform public service as part or all of their duties.19 “Given the nature of the jobs, financial status and social responsibility of state-controlled joint-stock banks, and according to the principles of objectivity of law, equity of criminal justice and punishment being proportionate to crime, workers at these banks who are tasked with public asset management and engaged in public service according to the law ought to be redefined as public-sector workers.”20 Some lawmakers also questioned the definition, calling “The Supreme People’s Court’s inclination to term only those wholly state-owned enterprises state-owned enterprises and companies is evidently unjustifiable, as it concerns a crucial economic system and policy issue.”21 In March 2003, NPC delegates presented to the congress a “proposal on enhancing Criminal Law protection of state-owned assets,” calling on the NPC to make clear or revise the definition of “state-owned enterprises and companies” mentioned in Articles 165 through 169 of the Criminal Law of 1997.22 In judicial practice, the Supreme People’s Court’s definition did not apply in all cases, with workers of the same ranks at organizations of an identical nature were treated as public-sector workers sometimes, but differently at other times.23 According to the UNCAC, any person who performs a public function, including for a public enterprise, or provides a public service, is also a “public official.” While the UNCAC did not define what a “public enterprise” is, some international organizations generally regard it as state-owned companies in which the state holds a controlling interest. According to the European Communities’ Transparency Directive issued on June 25, 1980, for instance, a state-owned enterprise means an enterprise over which a country exerts a dominating influence directly or indirectly by means of its ownership, financial participation, articles of incorporation, or other rules governing the activity of the enterprise.24 The Organisation for Economic Co-operation and Development (OECD) made it clear in its notes to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, that a state-owned enterprise means over which a government may exercise dominance directly or indirectly, regardless of

19

Tang (2007, p. 77). Wu (2009a). 21 Lang (2003). 22 Huang (2003). 23 Reportedly in practice, as to heads of branches of state-owned commercial banks in particular, decisions by judicial agencies on whether or not they should be seen as public-sector workers vary so widely as to not know what course to follow. See Yang (2009). 24 Wang (1999). 20

62

G. Sun and X. Qian

whatever legal form the enterprise exists in, and if, it should be particularly noted, a government owns more than half the paid-up capital of an enterprise (i.e., the government has a controlling position in the enterprise), or control a majority of voting shares in the enterprise, or is able to appoint more than half the members of the enterprise’s executive body or supervisory board, this enterprise is a state-owned enterprise discussed here.25 Therefore, China’s judicial interpretation of state-owned enterprises and companies has a narrow scope as it construes a state-owned company or enterprise as one that has all its assets being state-owned, which neither accords with actual situations in the country nor complies with related international conventions. Secondly, “assign” remains a vague term. Article 93 of the Criminal Law recognizes as public-sector workers the persons who are assigned to perform public service by state agencies, state-owned companies, enterprises, or institutions. The term “assign” here means “appoint and dispatch,” and the relation between the organization and the person it sent to perform special duties is the same as between a superior and a subordinate in an administrative reporting chain. To correctly understand “assign” under the Criminal Law, we need to make clear under what conditions assignment takes place, forms of assignment, and the status of the assigned person. In view of the varied backgrounds of public-sector workers and complexity of their possible status changes, the foregoing Minutes pointed out that assignment might take diverse forms such as appointment, designation, nomination, and approval. Regardless of their status, those assigned by a state agency or a state-owned company, enterprise, or institution to perform organizational, supervisory, managerial, or other duties at a non-state-owned company, enterprise, institution, or mass organization on the former’s behalf, may be recognized as a person engaged in public service. In this way, a person assigned to perform such duties at, for example, a joint-stock company in which the state holds a controlling or non-controlling stake, ought to be treated as a public-sector worker. Some scholars thus pointed out that “the term ‘assignment’ should be understood from two aspects. One is the formal aspect, i.e., assignment may vary in form, such as appointment, designation, nomination, recommendation, agreement, endorsement, approval. The other is the substantial aspect, i.e., persons assigned to perform organizational, supervisory, managerial, and other public service activities at non-state-owned companies, enterprises, institutions, or mass organizations, directly representing state agencies or state-owned companies, enterprises, or institutions.”26 This seemingly justified explanation is in fact questionable.27 People 25

See the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and Related Documents, at http://www.oecd.org/dataoecd/17/26/1837141.pdf. 26 Xiong and Ren (2007a). 27 As of the end of 2009, among the 22 cases which Reference to Criminal Trial covered involving the identification of public-sector workers, six involved the need to tell if the person in question was assigned. See Reference to Criminal Trial No. 110: Wang Haifeng convicted of taking bribes and fabricating evidence; No. 275: Hu Qineng convicted of embezzlement; No. 311: Jiang

3 Establishing and Improving Criminal …

63

may ask, for example, how can we determine the status of former public-sector workers in state-owned enterprises and companies following the restructuring of the organizations?28 Can managers of non-state-owned companies or enterprises, who were lawfully elected by members of such organizations and whose appointment has been approved as per required procedures by state-owned organizations, be seen as “assigned” public-sector workers? Can people who were nominated by SOE heads and appointed as executives by non-state-owned companies be treated as public-sector workers? Scholars also question the definition in the Minute. Some believe “approval” should not be deemed a form of “assignment,” arguing “approval” is procedurally significant, but is essentially different from “assignment” and those approved to perform the duties as prescribed in the Minute should not be seen as public-sector workers.29 Moreover, “at the time state-owned enterprises and companies were restructured, it was made clear that their workers were deemed as

Zhongsheng and others convicted of embezzlement; No. 335: Cao Jun convicted of taking bribes; No. 446: Gu Rongzhong convicted of misappropriation of public funds and embezzlement; and No. 510: Ma Pinghua convicted of misappropriation of public funds. 28 The Supreme People’s Court’s Minutes stated that “Workers of a former state-owned company or enterprise which has been transformed into a joint-stock company, and workers appointed by the formed joint-stock company, except for persons who perform supervision and management duties on behalf the state-owned investor, are not recognized as public-sector workers.” But often controversial was the question exactly what “persons who perform supervision and management duties on behalf the state-owned investor” means. In January 2009, for example, the People’s Procuratorate of Chongchuan District, Nantong, Jiangsu, charged Yuan Huiqing with taking advantage of his positions as deputy director and vice president at the business unit of the Industry and Commercial Bank of China (ICBC) Nantong Branch from 2005 to 2007 to seek profit for others and with illegally taking RMB 188,000 in bribes. The People’s Court of Chongchuang District opined after a hearing that Yuan’s illegal acts, which occurred before and after Industrial and Commercial Bank of China Limited was incorporated, constituted the Offence of Accepting Bribes and the Offence of Accepting Bribes as a non-public-sector worker, and subsequently decided to impose on him concurrent punishment for the two crimes, sentence him to four years and three months in prison, and confiscate RMB 100,000 in property of his. On September 26, 2006, the People’s Procuratorate of Chongchuan District lodged a protest against the sentence, contending that the court determined, without factual and legal grounds, defendant Yuan’s status as a non-public-sector worker after the founding on October 28, 2005, of Industrial and Commercial Bank of China Limited. After its hearing, the Intermediate People’s Court of Nantong was of the opinion that Yuan, as deputy director at the business unit of the Nantong branch before the bank’s restructuring, was a worker who was engaged in jobs of organizing, leading and managing at a state-owned enterprise, with duties in the nature of public service; and that following the bank’s restructuring, Yuan continued to serve as deputy director of the said business unit, and, though he was reappointed vice president as a result of internal structural readjustment, his duties remained substantially unchanged and were in the nature of public service. This court then concluded that Yuan had a public-sector worker status both before and after the bank’s restructuring and his act of taking RMB 188,000 in bribes constituted an Offence of Accepting Bribes according to law. And accordingly, Yuan was convicted of bribery and sentenced to five years and six months in prison, in addition to confiscation of RMB 100,000 of his. Xu and Ma (2010). Will the Nature of Duty Change with Restructuring of a Company? Procuratorate Daily, January 2. 29 Zhang (2007a).

64

G. Sun and X. Qian

being assigned to work at enterprises of mixed ownership. While it was no problem in the beginning, by and by it would cause confusion as it became hard to draw a line between persons assigned by former state-owned enterprises and companies and those who were newly assigned. This made it difficult to tell who should be seen as public-sector workers.”30 Thirdly, it is not adequately justifiable to describe as “public service” official duties performed by persons assigned by state-owned organizations to work at non-state-owned organizations. In order for an assigned person to be considered “public-sector worker,” he or she must engage in public service. The Minutes says that “Any person, regardless of his or her status, so long as he/she was assigned by a state agency or a state-owned company, enterprise or institution to perform organizational, supervisory, managerial, or other duties at a non-state-owned company, enterprise, institution, or mass organization on the former’s behalf, may be recognized as a person engaged in public service.” But still, this explanation is not convincing. Suppose A (assigned by an SOE) and B (not thus assigned) hold the same position (say, vice president) and perform the same duties (organizational, supervisory, managerial, etc.) in a non-state-owned company and both have been entrusted to do so in the same way (elected or appointed by the company’s board of directors). Then why is it that what A does is called public service but what B does is not? In other words, “management personnel at a company or enterprise, though naturally deemed members of the same team with shared interests, are artificially split into two groups, one representing state ownership and interests and the other representing non-public ownership and interests. Team members with shared interests thus become representatives of divided interests.”31 This is unthinkable, whether in jurisprudence or logically. (2) “Public service” in the broad sense is a key to correctly defining who may be criminally charged with bribery To determine the scope of public-sector workers, the key is how we understand public service. While we believe public service is still the defining feature of public-sector workers, we should cease construing it in its narrow sense, so as to weaken distinctions between public service and labor service and accentuate the boundary between public service and private service. Firstly, the definition of public-sector workers needs to be consistent, emphasizing both one’s official status as such and duties connected with it. People habitually judge whether one is a public-sector worker on the basis of one’s official status as such. This easy criterion is still in use today. The definition in Article 93 of the Criminal Law includes descriptions about one’s official capacity. For instance, “workers of state agencies,” “workers of state-owned companies, 30

Zhang et al. (2008). Zhang (2007, p. 134).

31

3 Establishing and Improving Criminal …

65

enterprises, institutions, or mass organizations,” persons “assigned by state agencies or state-owned companies, enterprises, or institutions” to engage in public service at non-state-owned organizations, and “persons engaged in public service according to the law” need to meet certain eligibility requirements in order to be recognized as public-sector workers. However, one’s status as a public-sector worker alone does no suffice; it is but a title if not coupled with one’s official duties and obligations. Given the trends in studies of embezzlement and bribery, duties can better manifest the legal interests a crime jeopardizes. German penal code breaks away with the traditional definition of civil servants and makes it clear that civil servants are what they are because of the duties they perform.32 In Finland, it is explicitly stated by law that civil servants include not only workers at municipal authorities, state churches, and other public agencies, but (i) members of city councils and other public representatives (not including the members of parliament), (ii) any persons who exercise public powers based on law (there are some exceptions, though), and (iii) other persons who exercise public powers based on law other than company employees.33 In the USA, while the Federal Corrupt Practices Act broadly defines who may be charged with bribery, federal courts still need to exercise discretion on a case-by-case basis. The courts may make judgments on the basis of: (i) the nature of one’s position (stances), placing the focus on public assignment, duties and responsibility arising from such position, or (ii) one’s status, emphasizing formal legal relations between individuals and the government. Moreover, legal precedents establish that whether one is a public servant depends on whether one has the official position (stance) as such and the public assignment that would confer upon him or her the responsibilities associated with the official position.34 Since using “official status” as the sole criterion is both theoretically and legislatively questionable, the judiciary should cease oscillating between the “official status” and “public service” criterion. Though not an easy term to precisely define, “public service” best captures the basic feature of public-sector workers compared with other possible criteria and thus shall be used to tell public-sector workers apart from others for judiciary purposes. Accordingly, people engaged in public service should be treated as public-sector workers under the Criminal Law, whether they have the official status of “state cadres” in the traditional sense, whether they work permanently or temporarily for a state-owned organization, or whether they are employed by a state-owned or non-state-owned organization.35 Secondly, a person assigned by a state-owned organization to work at a non-state-owned one should not be recognized as “engaged in public service.”

32

Hans-Heinrich (2002). Yu (2005). 34 Wang (2002). 35 Public service is not limited to state-owned organizations, which is similarly provided for abroad also. In German Criminal Law, for example, activities of public service were previously limited to statutory forms of organization, but Germany’s Anti-Corruption Act of 1997 expanded the scope to include other forms of organization. Hans-Heinrich (2004, p. 27). 33

66

G. Sun and X. Qian

The Criminal Law classifies those assigned by a state-owned organization to work at a non-state-owned entity as public-sector workers and their job-related activities as public service. This, however, has raised much doubt. Some scholars argue against this classification, saying these assignees are not engaged in public service because their activities “with respect to supervising, managing or operating assets of non-state-owned enterprises are carried out to increase or preserve the value of such assets, thus falling outside the scope of public affairs; nor do they exercise public powers.”36 In our view, what the Criminal Law says about “assignment” is characteristic of the era of the planned economy and has come into conflict with the Company Law. According to the Company Law, except for solely state-funded companies to which the state may assign management staff, all other joint-stock companies and limited liability companies decide whom to hire as management staff at their own discretion.37 “After a company’s shareholders meeting or board meeting approved the appointment proposed by an SOE that holds interests in the company, the status of the persons appointed to the company would change as their newly acquired duties and authority would come no longer from the SOE that nominated them. Since the appointments reflect the collective will of the company’s decision-makers and investors, they shall represent not solely the interest of a single shareholder (the SOE), but the collective interest of the company. In addition, Article 93 goes against the fairness principle of the Criminal Law. While a worker assigned to a non-state-owned organization by a state-owned organization may face 10 or more years in prison or even death for embezzling RMB 100,000, another worker of the non-state-owned organization may be given a 5 years or longer sentence for the same criminal activity. Since in both cases no public property is involved and the loss incurred to the organization is the same, the widely different penalties go against the principle of the same punishment for the same crime under the Criminal Law. Therefore, these workers cannot be seen as public-sector workers, but only as employees of the company they work for.” 38For this reason, assigned workers ought not to be charged with embezzlement, misappropriation and bribery by public-sector workers. Nevertheless, when people act on behalf of a state-owned organization to exercise the shareholder’s rights at a non-state-owned company, what they do would fall within the category of “public service,” and they should be seen as a public-sector worker rather than the assignees discussed above. iii. Direction of Legislative Reform Having the scope of “public service” defined, we may proceed to discuss who may be classified as public-sector workers in embezzlement and bribery cases. 36

Zhang et al. (2008, p. 331). See: “Application of Law in Cases of Economic Crime: A Summary of Discussions at National Workshop on Economic Crime Trials by Courts,” Reference to Criminal Trial (Issue 41). Law Press China (2005, p. 154). 38 See: “Application of Law in Cases of Economic Crime: A Summary of Discussions at National Workshop on Economic Crime Trials by Courts,” Reference to Criminal Trial (Issue 41). Law Press China (2005, p. 155). 37

3 Establishing and Improving Criminal …

67

Public-sector workers under the Criminal Law should include the following four types of persons. (1) Civil servants According to Article 2 of the Civil Servant Law of the People’s Republic of China, a civil servant is a “worker who performs public duties according to the law, who has been included in national administrative organization, and whose salary and benefits are provided by national finance.” Though the Civil Servant Law did not provide a very clear definition, it at least made clear the three basic characteristics of civil servants: First, they perform public duties according to the law, generally administrative affairs of the state, on the state’s behalf; second, they have government staff status; and third, their salaries and benefits are provided by national finance. In China, civil servants include workers of the state’s legislative, administrative, and judicial bodies; workers of CPC organizations; and workers of other political parties. “Performing public duties” is an essential part of public-sector workers’ “public service.” In other words, what the civil servants do in performing public duties belongs to “public service,” and they are thus a typical category of public-sector workers under the Criminal Law. (2) Workers of state-owned companies, enterprises, institutions, and mass organizations Some scholars propose that, instead of embezzlement, accepting bribes or misappropriation of public funds (by public-sector workers), charges brought against SOE workers shall be employee embezzlement, accepting bribes by company employees, and misappropriation of funds.39 Though making it easier to define the offenders, such a change is not advisable as classifying SOE workers as public-sector workers is not only widely accepted but manifests the determination of legislators to strictly punish crimes of appropriating or jeopardizing state-owned assets, thus important for the battle against corruption. Given the ongoing economic reforms, we propose reconsidering the scope of sate-owned companies or enterprises. Firstly, state-controlled companies should be recognized as state-owned companies. In practice, it is easy to define state-owned enterprises, and according to Article 3 of the Regulations on the Types of Enterprise Registration issued by the National Bureau of Statistics (NBS) and the State Administration for Industry and Commerce (SAIC), “ A state-owned enterprise is an economic organization—other than a corporation—whose total assets are fully state-owned and which has been registered in accordance with the Regulations of the People’s Republic of China on the Registration of Business Entity.” There has been no unanimous definition of state-owned companies. According to the Opinions of the National Bureau of Statistics on the Identification of State-owned Enterprises and Companies (No. 44, 2003), “state-owned company” can be understood in the broad and narrow senses. In the narrow sense, it refers to a wholly state-owned enterprise—i.e., all its capital is state-owned, while in the narrow sense it means a

39

Yang (2007).

68

G. Sun and X. Qian

company with state capital, and it can be a wholly state-owned company or a state-controlled company. Some scholars note, under the Criminal Law “a state-owned company only means a solely state-funded company, or a limited liability company established by two or more state-owned investors, or otherwise a joint-stock company whose all shares are state-owned.”40 The Supreme Court’s judicial interpretations endorse the definition of state-owned companies as wholly state-owned. Such a definition, however, is idealized; it will in effect weaken the protection under the Criminal Law of state-owned assets of state-controlled companies, and “incur such risks as a hemorrhage of state-owned assets, new impetuses to embezzlement, and difficulty in ensuring the gains in state capital.”41 “The Criminal Law, if unable to keep up with the time and construe state-owned enterprises and companies broadly and safeguard the integrity of public-sector workers in these organizations, will gradually lose its efficacy.”42 Therefore, consideration must be given to the reality and needs of the country’s political system. We support classifying state-controlled companies (no matter such control is achieved through holding an absolutely or relatively controlling stake, or through agreements) as state-owned companies for the following reasons. Firstly, such a classification accords with the real situation now. The sweeping reform on SOEs has changed them “from solely state-owned organizations to corporate entities with a diversity of shareholders. Most state-owned Tier-2 enterprises have been restructured into joint-stock companies that are controlled absolutely or relatively by the state.”43 While wholly state-owned enterprises and companies have become fewer, numerous state-controlled companies play a leading role in the sectors crucial for the national economy and the livelihood of people, paying dividends and bonuses to state finance and providing public services in an indirect manner. These enterprises are led administratively by the central or local governments, and their losses arising from performing public functions will directly damage or affect state and local finance. Secondly, the classification is good for state-owned assets protection. Thirdly, it helps coordinate related laws. In their 1989 judicial interpretations, the Supreme People’s Court and the Supreme People’s Procuratorate pointed out that persons managing or dealing with public property at joint-stock enterprises that had been formed on the basis of enterprises owned by the whole people can be charged with embezzlement. According to Article 2 of the Regulations on the Honest Conduct of Leaders of State-owned Enterprises, which was prepared jointly by the Central Commission for Discipline Inspection (CCDI), the CPC Organization Department, the Ministry of Supervision (MOS), and the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and issued by the General Offices of the CPC Central Committee and the State Council, leaders of state-owned enterprises

40

Liao (2007a, p. 394). Research Team on Corporate Crime, Institute of Law, Shanghai Academy of Social Sciences. “Research on Thorny Issues concerning Crime by State-owned Enterprises.” Political Science and Law, 2008 (11). 42 Lv (2007a, p. 5). 43 Wu (2009b). 41

3 Establishing and Improving Criminal …

69

include “leadership members of solely state-funded enterprises and state-controlled enterprises (including solely state-funded financial enterprises and state-controlled financial enterprises) and their subsidiaries.” In fact, some international conventions also encourage the classification of state-controlled companies as state-owned enterprises. For instance, the 1997 Explanations on the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions pointed out that “a state-owned enterprise means an enterprise over which a government may exercise dominance directly or indirectly, regardless of whatever legal form the enterprise exists in, and if, it should be particularly noted, a government owns more than half the paid-up capital of an enterprise (i.e., the government has a controlling position in the enterprise), or control a majority of voting shares in the enterprise, or is able to appoint more than half the members of the enterprise’s executive body or supervisory board, this enterprise is a state-owned enterprise discussed here.” Secondly, state-owned enterprises and companies should be recognized as such only when they are truly state-owned in nature. Some nominally mixed-ownership enterprises are in essence established solely by state-owned investors and thus should be deemed state-owned; conversely, companies or enterprises which are nominally state-owned, but which in reality are a private entity affiliated to a state-owned organization that neither contributes capital nor undertakes business risks for them, should be treated as non-state-owned enterprises. Moreover, only persons engaged in public service at state-owned companies, enterprises, or institutions should be regarded as public-sector workers. “While workers of state-owned companies, enterprises, or institutions all have certain duties of which they have opportunities to take advantage, what they do does not fall entirely into the category of public service, and therefore there are also non-public-sector workers at state-owned enterprises”.44 (3) Persons that provide public services at public agencies or public enterprises According to the UNCAC and foreign legislation, persons who provide public services at public agencies or public enterprises are regarded as public officials. Because China’s Criminal Law stresses that “public service” is in essence a job-related activity, there has been controversy over whether persons like physicians, teachers, and referees should be regarded as public-sector workers. The Opinions on Several Issues concerning the Application of Law to Criminal Cases of Commercial Bribery, issued by the Supreme People’s Court and the Supreme People’s Procuratorate, provides that medical staff at medical organizations who accept bribes from sellers of medical products such as drugs, medical devices, and healthcare supplies and take advantage of their right to prescription to help sellers earn huge profit, and teachers of schools or other educational organizations who, having accepted bribes, take advantage of their professional duties to seek huge

44

Interviews with departmental chiefs of the Supreme People’s Court and the Supreme People’s Procuratorate over the Opinions on Several Issues concerning the Application of Law to Criminal Cases of Commercial Bribery, published on Procuratorate Daily, November 25, 2008.

70

G. Sun and X. Qian

profits for sellers of textbooks, teaching materials, and school uniforms, will be punished for accepting bribes as public-sector workers, in accordance with Article 163 of the Criminal Law. Thus, job-related activities of workers of state-owned organizations should all be regarded as “public service” and these workers be classified as public-sector workers under the Criminal Law. (4) Other persons engaged in public service according to the law Article 93 of the Criminal Law uses “other persons engaged in public service according to the law” to describe those people whom the law might otherwise fail to recognize as public-sector workers. While the law may use a vague phrase like this, the judicial staff cannot generalize about whether one is a public-sector worker or not. To correctly understand the phrase, two things must be made clear. First, these people are engaged in public service, i.e., organizing, supervising or administering state, and social affairs; and second, they have obtained qualifications according to the law to engage in such public service, for which there should be a legal basis. As the phrase is in itself vague and generalized, the scope of such persons might be changeable. It is generally believed that the phrase shall include members of People’s Congresses and People’s Political Consultative Conference committees at all levels who fulfill their legally prescribed duties, the people’s assessors performing duties in relation with trials, and members of villagers committees and other village-based organizations who assist People’s Governments with some administrative work.45

45

That members of villagers committees and other village-based organizations who assist People’s Governments with some administrative work are regarded as public-sector workers is in fact a negation of the “status theory” and an essential judgment as regards public-sector workers. Situations abroad are similar also. In the USA, for example, how to determine the scope of “civil servants” has long remained the focus of controversy over legal precedents. There are two different views. The first view focuses on the form standard, also known as the status standard, placing emphasis on whether the offender is in form in a legal relationship with the federal government, e.g., having a contractual relationship with the government or having agreed to provide services as an agent of the government. The second view focuses on the substantial standard, also known as the behavioral standard, placing emphasis on whether the offender produced some degree of official responsibility or public trust because of his/her executing a federal program or policy. According to present practices of most federal courts, the “substantial standards” view has become mainstream; that is, civil servants are not restricted to persons with a civil servant status. The most influential is presumably the enlarged interpretation of “public official” that the US Supreme Court made in 1984 in Dixson v. United States, which in fact was made in view of the substantial standard and which local federal courts widely adopted later on in deciding whether an offender was a “public official.” In Dixson v. United States, a city received federal block grants from the Department of Housing and Urban Development (HUD) under the Housing and Community Development Act of 1974 and then designated United Neighborhoods, Inc. (UNI)— community-based, social service corporation—to be the city’s sub-grantee in charge of the administration of the federal grants. Dixson, hired by UNI, used his position to extract a 10% kickbacks from contractors seeking to work on housing rehabilitation projects. Consequently, Dixson was indicted on charges of bribery. In court, defendant Dixson claimed that he was not a public official acting for or on behalf of the USA under 18 U.S.C. § 201(a), because neither he and other defendants nor their employer ever entered into any direct agreement with the Federal Government. But both the local court and the appeals court contended that the term “public

3 Establishing and Improving Criminal …

3.1.1.2

71

Embezzlement and Accepting Bribes by Non-public-Sector Workers

I. Interpretation of Provisions As stated above, the Decision on Punishing Crimes Violating the Company Law, which took effect on February 28, 1995, pioneered an identity-centered legislative model in China as regards embezzlement and bribery. Based on the penal code of 1979 and other criminal statutes, the penal code of 1997 established the criminal category of embezzlement and bribery by company employees, which were dealt with in different chapters. Bribery by company employees was defined in Section 3 (Crimes against Order in Company Management) of Chapter 3 (Crimes against Order in Socialist Market Economy) in the Special Provisions of the Criminal Law while embezzlement and misappropriation of funds by company employees were defined in Chapter 5 Crimes against Property. Company (enterprise) personnel that can be charged with embezzlement and bribery under the Criminal Law changed from “directors, supervisors or staff members of a company” (under the Decision on Punishing Crimes Violating the Company Law of February 1995), to “workers of companies and enterprises (under the revised penal code of 1997), and to “workers of companies, enterprises, or other organizations” (under the Sixth Amendment to the Criminal Law, June, 2009), which better defines the scope of such offenders. While China’s Criminal Law researchers have showed consistently keen interest in the as-it-is and as-it-ought-to-be scope of “public-sector workers”, the term “non-public-sector workers” is poorly studied and is simply defined as those who are not public-sector workers. The Supreme People’s Court defines in its judicial interpretations the scope of non-public-sector workers who can be charged with employee embezzlement and accepting bribes. Scholars generally believe that since under the Criminal Law whether one engages in public service is used as a criterion to distinguish bribery by public-sector workers from that by non-public-sector workers, and since workers at state-owned organizations may not engage in public service and yet those at non-state-owned organizations may do so, the charge of bribery by non-public-sector workers may be brought against workers at both non-state-owned and state-owned organizations. Specifically, “workers of companies and enterprises” include persons who are not engaged in “public service” at private enterprises,46 enterprises formed in party with state assets, as well as official” included not only parties in privity with the USA, but also any private individuals responsible for administering federally funded and federally supervised programs. Finally the Supreme Court upheld the previous court decisions that Dixson was guilty of bribery. Yang (2008). 46 There once were views that “while the United Nations Convention against Corruption states that workers within the private sector may all constitute such crime, China only specified some enterprises and companies, without including all private enterprises” (see Zhu (2005)). That is a misinterpretation, in our view, and whether literally or from an explanatory standpoint, “companies and enterprises” under the Criminal Law cover “private enterprises.”

72

G. Sun and X. Qian

state-owned enterprises and companies.47 The offence of bribery by non-public-sector workers thus applies to non-public-sector workers who are not engaged in public service at state agencies or at state-owned companies, enterprises, or institutions.48 According to the November 20, 2008, Opinions on Several Issues concerning the Application of Law to Criminal Cases of Commercial Bribery, “‘Other organizations’ under Articles 163 and 164 of the Criminal Law include not only permanent organizations such as public institutions, mass organizations, villagers’ committees, residents’ committees, and villager groups, but also non-permanent organizations like organizing or preparatory committees set up for sport games, art performances or other legitimate activities, project contractors.” Similarly, “other organizations” may in nature be private or state-owned. The Opinions on Several Issues concerning the Application of Law to Criminal Cases of Commercial Bribery provides, for instance, that medical staff at medical organizations (whether state-owned or not) who “ accept bribes from sellers of medical products such as drugs, medical devices, and healthcare supplies and take advantage of their right to prescription to help sellers earn huge profit , will be punished for accepting bribes as public-sector workers, in accordance with Article 163 of the Criminal Law.” ii: Legislative Evaluation China’s Criminal Law system defines non-public-sector workers who have committed the offence of accepting bribes in a way that is obviously broader than how the UNCAC specified for the “private sector” perpetrator of accepting bribes. This is partly because “public-sector workers” in China is of a smaller scope than “public officials” under the UNCAC. On the other hand, China is now at a time when its social transformation deepens and corporate reform is pushed forward, and with political reform being advanced and government functions and enterprise management further clarified and separated, the scope of non-public-sector workers as offenders of embezzlement and bribery will surely be expanded. All these legislative improvements in the Criminal Law will be conducive to normal business operations, help shape a good social credit system, and contribute to an honest and clean governance system.

3.1.2

Embezzlement and Accepting Bribes by Organizations

3.1.2.1

Interpretation of Provisions

The efforts to introduce the offence of embezzlement and bribery by organizations began in the late 1980s, as a result of China’s social and economic development. As

47

Sun and Wei (2011, p. 257). Zhang (2011).

48

3 Establishing and Improving Criminal …

73

a milestone in the history of criminal legislation since the founding of the People’s Republic of China, it was for a time the focus of criminal legislation and theory. After a lapse of nearly thirty years, this system has been established. Embezzlement and bribery by organizations encompasses such offences as embezzlement, embezzlement, accepting bribes, and offering bribes, specifically including: accepting bribes by an organization (Article 387); giving bribes by an organization (Article 393); privately taking state-owned property (Article 396); misappropriation of earmarked funds and materials (Article 273); giving bribes to an organization (Article 391); giving bribes to a non-public-sector worker (Article 164); and giving bribes to a foreign public official or an official of an international public organization(Paragraph 2, Article 164). The following four categories of organizations may be charged with embezzlement or accepting bribes by organizations under the Criminal Law. (i) State organs. According to Chapter 3 of the Constitution of China, state organs include organs of state power (national and local People’s Congresses and their standing committees), administrative organs (the State Council and ministries and commissions subordinate to it, local People’s Governments and regulatory bodies), judicial organs (People’s Courts at all levels), procuratorial organs (People’s Procuratorate at all levels), and military organs (all levels of bodies governing the armed forces of the state). (ii) State-owned enterprises and companies. Companies and enterprises are the most common forms of business entity. Depending on ownership, they generally fall into the three types: (a) companies and enterprises whose assets are completely owned by the state, including solely state-funded companies or enterprises, limited liability companies established by two or more state-owned companies or enterprises, and joint ventures founded by two or more solely state-funded companies or enterprises; (b) companies and enterprises whose assets are controlled by the state, including absolutely state-controlled companies (in which the state has a 51% or higher stake) and relatively state-controlled companies (in which the state has a stake below 51% but higher than 35%); (c) enterprises and companies whose assets are owned by individuals. While there is no disagreement in criminal theory over the first and third types, controversy arises over whether the second type of organizations should be seen as state-owned. While some prefer to describe state-controlled companies and enterprises as state-owned,49 other argue against it, on the grounds that under the Criminal Law “a state-owned company only means a solely state-funded company, or a limited liability company established by two or more state-owned investors, or a joint-stock company whose all shares are state-owned.”50 As the second view was expressly endorsed by the judicial interpretations of the Supreme People’s

49

Ruan (2000), Sun (1997). Liao (2007a, p. 394).

50

74

G. Sun and X. Qian

Court, in criminal trials “state-owned companies” are restricted to purely state-owned companies. (iii) Public institutions. According to Article 9 of the Provisional Regulations on the Registration of Public Institutions which the State Council issued on October 25, 1998, a public institution “means a social service organization which is run for public purposes by a state organ or by other organization through state-owned assets and which is engaged in education, science and technology, culture, health care, etc. Criminal Law scholar Prof. Wang Zuofu holds that a public institution has the following three characteristics. First, a public institution is a social service organization engaged in education, science and technology, culture, health care, etc. This makes clear that the nature and function of the public institution and distinguishes it from a power organ or a business entity. Second, it is run by a state organ or by another organization through state-owned assets. This indicates who establishes the public institutions and their source of assets, and the state ownership of their fixed and current assets makes public institutions fundamentally from privately run non-enterprise units. “Another organization” here means a state-owned enterprise, public institution, mass organization, etc. Third, the running of the public institution is for public purposes, not for making profit or for other purposes.51 Given the nature of its assets and the purpose of its operation, the public institution has the power to distribute and manage certain public resources, and it is thus possible for them to commit embezzlement and bribery and to be criminally charged. (iv) People’s organizations. In China, people’s organizations are classified as social organizations. Social organizations, or mass organizations, have some shared features. First, they are formed for a certain purpose by citizens or legal persons on a voluntary basis and in accordance with the Constitution of China. Second, these organizations’ assets and operations are funded either by their members or by the state; they own these operating funds (except for those earmarked for special purposes according to law) and are liable for their own debts. Third, these organizations are managed by their members; and fourth, they must have their own charters and may not operate until they have been registered with the competent government authorities.52 As a particular type of social organization, people’s organizations include trade unions, youth leagues, women’s federations and other mass organizations, which have the following shared characteristics: (a) They are established by the state for certain social management purposes; (b) they are structurally complete, their legitimate activities are protected by law, and the appointment and dismissal of their members are to a certain extent associated with state organs; and (c) they perform certain functions of public management. Because people’s organizations play a part in social management and in the

51

Wang (2003, p. 112). Cheng (2003).

52

3 Establishing and Improving Criminal …

75

distribution of economic interest, they meet the conditions for embezzlement and bribery by an organization and hence are regarded by the Criminal Law as entities that may be criminally charged.

3.1.2.2

Legislative Evaluation

i. Law Enforcement Dilemma over Holding State Agencies Criminally Liable As regards forms of organization that can be held liable for a crime, the General Provisions of the Criminal Law specifies companies, enterprises, public institutions, state agencies, and mass organizations. Whether state agencies may be held criminally accountable has long been controversial. People who disagree argue that state agencies perform administrative functions on behalf of the state and their activities embody the will of the state which rules out the criminal intent; otherwise, it is natural to draw the conclusion that the state commits crime. And, moreover, since property of a state agency comes from the state treasury, imposing a fine on it is tantamount to the state punishing itself or transferring money from one pocket to another, which is of no practical significance. In the cases where state agencies were involved in criminal acts, e.g., the vehicle smuggling in Dandong, Yantai, and Hainan, only persons directly responsible, rather than the state agencies, were prosecuted. In most foreign countries, state agencies are not held liable for crimes. Even in Common Law countries like the UK and the USA which are among the first to establish criminal liabilities for legal persons, state agencies are not regarded as offenders. Among the continental law countries, France is the only one that incorporates crimes by organizations into its Penal Code, but Article 121-2 of the Penal Code explicitly rules out the possibility of state agencies being prosecuted, and specifies only local authorities, and their associations can be held responsible for offences committed in the course of activities exercised through public service delegation agreements. Those who argue for holding state agencies criminally liable point out that the commission of a crime by state agencies indeed exists and has become an important form of corruption that warrants attention. They note that holding state agencies criminally liable echoes the spirit of the State Compensation Law.53 It “shows people that any and all organizations should abide by law and none has the privilege of violating it, and that whichever breaks law will be prosecuted. It thus helps demonstrate the state’s clear stance and faith in maintaining the authority and dignity of law.”54 There are also scholars who believe making state agencies criminally liable is a double-edged sword. While it reflects the reality of harmful acts on the part of state agencies and displays the state’s stance and faith in maintaining the authority and dignity of law, the disadvantages are obvious. First of all, it lacks theoretical grounds. When Western scholars talk 53

Zhang (1995). Wang (2003, p. 15).

54

76

G. Sun and X. Qian

about the nature of legal persons, they mainly refer to businesses. The offences committed by legal persons under Western Criminal Laws are restricted to offences by companies and enterprises, rather than state agencies. Second, in judicial practice the criminal liabilities of a state agency are often rejected, and the fact that the provision for the criminal liabilities of a state agency has not been truly implemented shows the provision is worth reconsideration. Third, holding state agencies criminally liable and passing a sentence on them can be counterproductive. In view of these, the disadvantages outweigh the advantages. It is inappropriate, therefore, to hold state agencies criminally liable, and it is better to delete the term “state agencies” from Article 30 of the Criminal Law.55 Nevertheless, some other scholars believe that making state agencies criminally liable to offences by organizations “embodies effective supervision by the people over the government which democratic constitutionalism pursues, and under the People’s Congress system, such supervision is in the form of oversight citizens exercise over particular state agencies and their staff members. It better fits the essential requirement of socialist constitutionalism to hold state agencies and other organizations equally liable to organizational offences. Holding state agencies criminally liable would, of course, harm their image and even call their legitimacy into question. But conviction and punishment for their crimes that run counter to the will of the state is to protect the solemnity of the people’s will that the socialist country and its ruling party represent and therefore may be seen as a process in which the party and the country “keep to the truth and correct mistakes” at times of peaceful development, helping maintaining the nature and image of the Party ruling for the people.”56 ii: Some Basic Types of Organizations Not Included As Entities That May Be Criminally Charged Since the late twentieth century, great changes have taken place to Chinese society in terms of basic forms of organizations. On the one hand, with social transformation deepened, new forms of organizations have emerged and begun assuming

55 Ma (2007). In 2006, for instance, in its No. 24, 2006 Indictment the People’s Procuratorate of Changji Prefecture, Xinjiang, charged the Urumqi Railway Transport Intermediate People’s Court (URTIPC) with extorting and taking more than RMB 4.51 million in kickbacks in 2000–2005 from a number of Urumqi businesses, including an auction company, an investment consulting company and a pricing firm, and depositing the money in a separate bank account opened in the name of the Urumqi Judges’ Association and using part of it directly in cash, which acts the Changji Procuratorate believed had constituted an offence of accepting bribes as an organization. The bribery case sparked widespread attention and controversy because of the special nature of the URTIPC. On December 19, 2006, the Changji Procuratorate altered the indictment to the extent that instead of the URTIPC, only its former president, former enforcement director and former financial accountant were indicted. The case was heard on January 15, 2007. On February 15, 2007, the Changji Procuratorate convicted the aforesaid defendants of abuse of authority, bribery, and neglect of duty, without convicting the URTIPC of any crime as an organization. See Pan Congwu: “URTIPC President Jailed for Taking Huge Kickbacks,” published on Legal Daily, March 25, 2007. 56 Zhang (2010).

3 Establishing and Improving Criminal …

77

important social functions. forms of corporate entity, for example, have diversified as the corporate reform deepened, one-person companies are granted an independent legal status, and even under the former company system, there arises the issue of independence of a legal person’s branch. Furthermore, with China increasingly engaged in the global economy, foreign companies also expand their operations in China, and how they manage their Chinese operations in good faith also produces an impact on China’s effort to build a clean and honest governance system. All these call for a legislative reform concerning which types of organizations may be criminally liable for embezzlement and bribery.

3.1.2.3

Direction of Legislative Reform

i. Narrowing Down the Scope of Organizations That Can Be Criminally Charged (1) Restricting criminal culpability of state agencies As indicting state agencies means a self-imposed punishment on the state, legislations abroad generally adopt preclusive provisions. The Europe’s Criminal Law Convention on Corruption, for example, defines a juristic person as “any entity having such status under the applicable national law, except for states or other public bodies in the exercise of state authority and for public international organizations.” When addressing crimes by juristic persons, the Model Penal Code of the USA stresses that juristic persons do not include government agencies implementing government programs or entities which government agencies founded for implementing government programs. The Supreme Administrative Court (Council of State) of France also pointed out in a notice that a juristic person under the public law is a legal entity which is entrusted to exercise public authority and enjoys privileges in connection with this, and that putting the juristic person under supervision by the criminal court is certain to jeopardize the principle of the separation of powers.57 In China, however, setting forth the criminal liability of state agencies is significant for the fight against corruption given the fact that enterprise management is not separated from government functions in some cases; government power has not yet completely withdrawn from the market; and state agencies are often found to use their power to seek illegal gains. Legislature may consider (a) limiting the type of state agencies that may be held responsible for a crime to local entities (in fact, there have been no legal precedents where a central agency was criminally charged; and (b) when a state agency is found guilty of a crime, punishing not the agency, but the persons who actually did it on behalf of the organization and their supervisors held accountable for it. When conditions ripe (i.e., when a sound policy framework is in place to ensure a healthy and orderly

57

New Penal Code of France (2005).

78

G. Sun and X. Qian

market economy), legislature may exclude “state agencies” from entities that may be charged with a crime. (2) Excluding one-person companies from entities that can be criminally charged In the past, a limited liability company that nominally had multiple investors but was de facto funded and operated by one single person was generally denied juristic personality.58 The revised Company Law, which became effective as of January 1, 2006, allows for establishing a limited liability company that has only one natural-person shareholder. Article 58 of the Company Law stated: “A one-person limited liability company means a limited liability company that has only one natural-person or legal-person shareholder.” Because the Company Law classifies one-person limited liability companies as juristic persons, there arises the question whether such companies could be held responsible for crimes. Proponents believe that “ since one-person companies are established according to the law and assume limited liability with their juristic personality separate from natural personality (single-shareholder personality), they fit the criteria the Criminal Law set forth about the entities that can be held criminally responsible. And with juristic personality provided for by the new company law, they are included as entities that may be charged with a crime under Article 30 of the Criminal Law.”59 Some go further by citing the following reasons: “Firstly, the part of Criminal Law which is designed to regulate crimes in the field of commerce should be based on commercial laws and Regulations. The one-person company has its own property, enjoys property rights as a juristic person, assumes liability for debts with all its property, and its single shareholder undertakes responsibility for the company to the extent of the shareholder’s actually paid contribution to the company; it is thus qualified as a juristic person. These are preconditions for an organization to be held liable for a crime. Secondly, the one-person company fits the Criminal Law definition of entities that may be criminally charged. It is generally believed that an organization held liable for a crime should be an independent and legitimate organization. The one-person company has an organizational structure as required by the company law, has independently disposable assets or funds, has the capacity for action and responsibility, and is formed according to the law with approval from

58

In their joint April 2004 Answers to Questions about the Application of Criminal Laws, the Criminal Tribunal of the Shanghai Supreme People’s Court and the Public Prosecution Office of the Shanghai People’s Procuratorate specified that “a company registered with industry and commerce authorities, if there indeed is evidence that it is actually funded and operated by one single person and profits made from its operation are largely owned by this person, should be treated as a person in the sense of the Criminal Law.” See: Answers to Questions about the Application of Criminal Laws which was issued by the Criminal Tribunal of the Shanghai Supreme People’s Court and the Public Prosecution Office of the Shanghai People’s Procuratorate. Quoted from: Gu (2002). 59 Mao (2006).

3 Establishing and Improving Criminal …

79

industry and commerce authorities. Therefore, the one-person company meets all the criteria for criminally liable entities.”60 Opponents counter that as the one-person company oversteps the traditional concept of association, judicial interpretations need to be made to presume crime by the one-person company as crime by individuals unless the litigants can produce the evidence to the contrary.61 In our opinion, though the Company Law provides for the juristic personality of one-person companies, given the purpose of the Criminal Law, the “organization” involved in crime should be understood in its narrow sense; that is, only relatively independent organizations that consist of members joined together for a common purpose can be criminally charged. Such independence is manifested in the decision-making body as well as the interests of the organization. A one-person company does not possess such independence. On the one hand, the mens rea is formed by the organization’s relatively independent decision-making body and reflects the intention of the organization as a whole. In the case of a one-person company, it is impossible to separate completely the decision-making body and the shareholder, so the will of the so-called organization coincides totally with that of the natural person. On the other hand, the commission of crime by an organization is built on the interest of the organization as a whole, rather than for the interest of individual members, and thus the criteria for conviction and punishment under the Criminal Law are obviously different from those for crimes by natural persons. In the case of a one-person company, however, it is impossible to distinguish the interests of the organization and those of individuals, and the two can be presumed to be exactly the same. We thus deem it unadvisable to treat giving bribes by a one-person company in the same way giving bribes by an organization.62 And one-person companies shall be excluded from entities that can be criminally charged. ii: Widening the Scope of Organizations That Can Be Criminally Charged (1) Overseas companies As economic globalization has given rise to worldwide corruption, some embezzlement and bribery cases may involve overseas companies (including foreign companies as well as companies in Hong Kong, Macao, and Taiwan). It is worthy of research whether embezzlement and bribery committed in China or elsewhere by overseas companies registered abroad or by their branches in China on behalf of them constitute an organizational crime under the Criminal Law of

60

Tian (2007). Gong (2006). 62 Yu (2010) 61

80

G. Sun and X. Qian

China. Some scholars think that “since companies as prescribed in Article 30 of the Criminal Law of China include Chinese companies, foreign companies, and multinational companies, any offending organization should be prosecuted according to Chinese laws.”63 Judicial practices vary as regard64 whether overseas companies should be indicted, and the exercise of discretion may give rise to unfair rulings. In our view, now that overseas companies act as an independent juristic person in civil proceedings, their juristic person status should accordingly be recognized in criminal proceedings. Legislation needs to make it clear that overseas limited liability companies formed by statute, if committing crimes, need to be charged with crimes by organizations under the Criminal Law of China. Nevertheless, it should be noted that according to Article 8 of the Criminal Law, for any criminal prosecution to be initiated against overseas companies, the misconduct should be a punishable offence according to the laws of the localities where such misconduct occurred and should incur a minimum three-year sentence to the executive(s) and the person(s) directly responsible pursuant to the Criminal Law.65 (2) Branches of organizations A company may have one or more branches which has no juristic person status and which the company controls in terms of business, finance, and personnel. The Company Law states in paragraph 1 of Article 14 that “a company may set up one or more branch companies…. A branch company has no juristic person status and its civil liability is undertaken by the company.” There is controversy as to whether an offence committed on behalf of a branch company should be punished as a crime by an organization or by an individual. While some think that “when it comes to crimes by organizations, an organization’s branch is in principle not counted as ‘organization.’ If other conditions for an organizational crime are met and if a branch commits misconduct for the interest of its higher-level organization, such organization shall be held liable for the organizational crime; otherwise, the act constitutes a crime committed by a natural person.”66 Some others argue that “if a branch of a company, without the latter’s knowledge, decides to commit a crime on its own and for its own interest, the branch and its head should be held criminally 63

He (1999a). For example, judicial agencies dealt with acts of bribery by overseas companies and enterprises in different ways; in some cases, they punished these companies according to bribery by natural persons, while in others they prosecuted persons directly responsible according to crimes by organizations. Mao Youshui. “How to Understand and Apply the Opinions of the Supreme People’s Court, the Supreme Procuratorate and the General Administration of Customs on Several Issues about the Application of Law in Handling Criminal Cases of Smuggling,” an article published in Guide and Reference on the Economic Crime Trials (Vol. 1, 2003). Law Press China (2003, p. 208). 65 There are indeed some practical difficulties in prosecuting overseas companies or enterprises based on crimes by organizations; for example, it is difficult to identify the nature of overseas companies or enterprises, to summon to court their defense representatives, and to enforce judgments made. 66 Li (1999). 64

3 Establishing and Improving Criminal …

81

accountable.”67 Still others contend that “a branch which has no juristic person status but has full capacity for civil conduct and assumes civil liability independently also has criminal capacity and may be held responsible for an organizational crime”; otherwise, it shall not be held criminally liable.68 We agree to the second view. A branch company may engage in civil conduct and participate in civil proceedings on its own according to the Civil Law; it indeed has its own independent interest may be deemed independent to some extent. When a branch of a company, without the latter’s knowledge, commits a crime for its own interest, the branch should assume criminal liability; otherwise, the parent company shall be held criminally liable.69 (3) Villagers’ committees, neighborhood committees, and other autonomous organizations It is obviously inadequate for legislature to list only five types of entities that can be criminally charged. For instance, autonomous organizations such as villagers’ committees and neighborhood committees may also commit crimes for their own interest (e.g., a villagers’ committee may offer bribes to demolition leading group members in exchange for more compensation). It is necessary to close this loophole and improve legislation in this regard.

3.2

Substantive Legal Definitions of Embezzlement and Accepting Bribes

In China’s Criminal Law theory, the elements of a crime are what need to be proven before one can be convicted of it; they are the legal criteria used to define the crime and distinguish it from others. The elements required for the convictions of embezzlement and accepting bribes—two different types of offence that both involve corrupt practices—are both different and similar. To explore their substantive legal definitions, it is important to examine what the two crimes have in common and what makes them differ.

67

He (1999a, p. 268). Ma et al. (2000). 69 The Minutes of the National Workshop on Financial Crime Trials by Courts, which the Supreme People’s Court issued on January 31, 2001, specified that “A crime committed in the name of an organization’s branch or department, illegal gain from which crime is owned by the branch or department, should be regarded as a crime by an organization. In no way should such crime be treated as a crime by an individual, not by an organization, just because the branch or department has no property to pay a fine for its crime.” That is to say, whether a branch is an independent subject of interest is the key to determining whether it may be regarded as a subject of crime. 68

82

G. Sun and X. Qian

3.2.1

“Taking Advantage of Position” in the Definition of Both Crimes

3.2.1.1

Interpretation of Provisions

The inclusion of “taking advantage of position” as an element required for convictions of a corruption-related crime has undergone a tortuous process. The phrase was first written into the penal code in 1979 and its temporary removal from the Criminal Law and subsequent addition into it gave a hint about the subtle changes in the criminal justice system concerning embezzlement and accepting bribes. On March 8, 1982, about 28 months after the 1979 penal code was in effect, the Decision on Severely Punishing Crimes Harming the Economy was approved by the 22nd Meeting of the Standing Committee of the Fifth National People’s Congress to intensify crackdown on bribery. “Taking advantage of position” thus ceased to be a legal criterion for the crime of accepting bribes, though it remained an element of embezzlement which the decision did not address. Six years later, the Supplementary Provisions on the Punishment of Crimes of Embezzlement and Bribery was approved by the 24th Meeting of the Standing Committee of the Sixth National People’s Congress on January 21, 1988. It specified “taking advantage of position” as an element of crime in the newly revised legal provisions on embezzlement and bribery. The Criminal Law in 1997 continued to list it as a legal criterion for both embezzlement and accepting bribes. Despite its confirmed role as a legal criterion of convictions, the interpretation of “taking advantage of position” remains a matter for debate among scholars and juridical practitioners. i. What “Position” Means Legal scholars in China tend to define “position” either as “statutory duty” or “duty actually performed.” Generally speaking, “position” shall refer to the functions and powers of a civil servant which are prescribed by statute. However, there are often cases in which officers’ legally prescribed functions and powers vary from what they actually have. Thus, controversy may arise as to whether public-sector workers have taken advantage of their positions. Those who support “statutory duty” insist using it as the basis of judgment. “Rights and responsibilities of civil servants shall be prescribed by statute. It allows no arbitrariness.”70 Such point of view often serves as an excuse and defense grounds for the bribery defendants or their defenders. “When the functions and powers of which he has taken advantages are not derived from his position, one shall not be found guilty of bribery though he has illegally accepted property from other people and give favors to the latter.” The supporters of “duty actually performed,” on the other hand, pay more attention to the fact that some civil servants in China, especially those of leadership positions,

70

Xiao (1994).

3 Establishing and Improving Criminal …

83

have much more power than what is legally granted to them. This is mostly attributed to some persistent problems, for example, the Party and government departments having overlapping responsibilities, government administration not separated from enterprise management, and responsibilities not clearly demarcated in oversized government departments. Thus, a broader definition of “position” in a case of accepting bribes would be conducive to an effective battle against embezzlement.71 ii. “Taking Advantage of Position” in the Crime of Embezzlement In an embezzlement offence, what exactly does “taking advantage of position” mean? Criminal Law scholars provide three interpretations: broad, narrow, and middle-ground. In a broad sense, the phrase refers not only to the abuse of one’s authority in specific public affairs, but also to the exploitation of one’s influence brought as a result of the position, such as contacts and relations, to engage in corrupt conduct.72 In other words, corrupt offenders may take advantage of their position or power either directly or indirectly. The former means the offenders obtain illicit gains in the discharge of such official duties as handling and managing public property, while the latter means the corrupt practice is not directly related to one’s position, but to one’s influence or other advantages brought by such position.73 In a narrow sense, the phrase means exploiting the opportunity that one is authorized to manage public property according to the law. Thus, offenders cannot be proven having taken advantage of their positions if they took illegal possession of the public property of their department which, nevertheless, is not in their charge, or if they availed themselves of unusual opportunities provided by their jobs to obtain such illegal gains.74 The middle-ground interpretation is that a public-sector worker would be recognized as having taken advantage of his position if his official duty allowed him to take charge of, manage or handle public property, and that he would not be recognized as such if taking charge of, managing or handling public property was not part of his job—though it did facilitate his wrongdoing in some way, for example, by allowing him access to the workplace or public property, and familiarizing him with the place where such wrongdoing would occur.75 This interpretation is most widely accepted by scholars today. On September 16, 1999, the Chinese Supreme People’s Procuratorate issued the Trial Provisions on the Filing Standards of the Cases Directly Accepted and Filed for Investigation by People’s Procuratorates (hereinafter referred to as the Provisions). It states in Article 1 that in an embezzlement offence, taking advantage of position means making use of one’s official duties of taking charge of, managing and handling public property and conveniences brought by such duties.

71

Xing (1988). Hao (1985). 73 Xu (1998). 74 Yang et al. (1992). 75 Gao (1998). 72

84

G. Sun and X. Qian

iii. “Taking Advantage of Position” in the Crime of Accepting Bribes (1) How one takes advantage of his or her position. In what ways do people take advantage of their positions? The answers differ between the procuratorate and the judicature. In its 1999 Provisions, the Supreme People’s Procuratorate defined it as taking advantage of the power one has, by virtue of one’s position, to take charge of, manage and handle a specific public affair and of the conveniences created by such authority. The Supreme Court issued the Minutes of the National Workshop on Economic Crime Trials by Courts in 2003 (hereinafter referred to as the Minutes). It explained “taking advantage of position” stipulated in paragraph 1, article 385 of the Criminal Law refers not only to using one’s own official duty and function to take charge of, manage and handle a particular public affair, but also the duty and function of one’s subordinates. Thus, the public-sector workers at a leadership position may also be deemed as having taken advantage of their positions to obtain undue advantage for others even if they did it via other public-sector workers at a lower-level department which is not directly under their administration. (2) Controversy surrounding “taking advantage of position.” Whether “taking advantage of position” needs to be included as a legal criterion for the conviction of accepting bribes is a matter for debate. Some scholars argue that this phrase itself is open to question, and it does not capture the nature of a power-for-money deal. A public-sector worker shall be found guilty of accepting bribes once he or she unjustifiably or illegally accepted property or gains from other people.76 Thus, they note, criminal legislation should be revised to remove the phrase from the description of what constitutes the crime of accepting bribes. (3) Shall those who accepted bribes before taking office be recognized as having taken advantage of their position? Generally speaking, “position” in the phrase “taking advantage of position” refers to a job one is having when accepting bribes. Then there arises a question: Shall those who, in return for the bribe they accepted, promised to give personal favors when assuming a public office in the future is recognized as having taken advantage of their position? Those who answer in the affirmative argue that, though the power or influence one trades for money is not yet materialized, the act of giving and receiving a bribe does occur. Rather than an unfulfilled agreement, the power-for-money deal is completed. Thus, whether the “position” is a current or prospective one makes no real difference.77 On the contrary, those who answer negatively argue that the “position” shall not include what one might assume in the future. The offender of the accepting bribes crime must be in the capacity of

76

Li (2004). Xiao (2003).

77

3 Establishing and Improving Criminal …

85

public-sector worker. If people solicit or accept money and other benefits by exploiting their career prospect of becoming a public-sector worker, they shall not be charged with the offence of accepting bribes since they do not meet the official capacity requirements. In yet another situation in which public-sector workers who are to be transferred to another position solicit or accept bribes with the promise of providing personal favors when assuming new office, they shall not be recognized as having taken advantage of their position since they are not yet authorized to take charge of, manage or handle the specific public affairs.78 (4) Shall those who accepted bribes after leaving office be recognized as having taken advantage of their position? In a typical case of bribery, a public-sector worker provides the briber with personal favors when or after receiving money or other benefits. In recent years, however, there emerged cases in which a public-sector worker gave personal favors during his or her tenure of office, but did not receive the bribes until he or she left office. It has always been a matter of controversy whether accepting bribes after leaving office shall be treated in the same way as accepting bribes while in office. Those who say no argue that accepting bribes is a job-related offence that involves a power-for-money deal. The bribee is aware of the nature of the bribe, that is, a quid pro quo for his or her abuse of duty and thus has the intention to give favor to the briber in return. The intention to accept the bribe shall precede the intention to take advantage of one’s position to provide personal favor. If public-sector workers have no intention to accept bribes when taking advantage of their positions to give favors, they shall not be charged with accepting bribes even though they did receive rewards afterward. Furthermore, scholars on the con side argue that it is unnecessary for people to offer bribes in exchange for benefits already obtained. Similarly, the public-sector worker does not need to trade power for money as the act of performing official duties in favor of the beneficiary was already completed. The reward subsequently sent to the public-sector workers should be recognized as a gift or a token of gratitude. It is true that there is an undeniable connection between one’s official duties and the property accepted, and they are nevertheless not traded.79 On the other hand, the pro side of the debate insists that even though the public-sector workers did not intend to accept bribes in the first place, their subsequent acceptance of the property is based on the understanding that it served as a reward for what he or she had done in favor of the beneficiary. This justifies the existence of a power-for-money deal. Since the public-sector workers know the property is sent to them in consideration of their service to the beneficiaries, both the physical and mental elements of

78

Liao (2007b). Jin and Yang (2000).

79

86

G. Sun and X. Qian

the offence of accepting bribes are established.80 Other scholars who try to find a middle ground between the two views emphasize prior agreement decides whether the subsequent acceptance of property constitute an offence. Without a prior agreement on bribery with the beneficiary, the public-sector worker shall not be charged with accepting bribes, though other criminal sanctions may apply given the harmful impact of such act on society.81 3.2.1.2

Legislative Evaluation

i. On the Controversy Surrounding “Position” Rather than defining “position” as “statutory duty,” we believe it is more appropriate to consider it as “duty actually performed.” Statutory duty is what one is clearly authorized to perform. However, a long-standing problem in the political activities and power structure in China is that the lack of clear authorization often leads to ambiguity in one’s roles and duties and a blurred line between the responsibilities of Party and government departments and between the responsibilities of different office holders. Consequently, it is likely that one has more power than authorized. Thus, it will be more appropriate to consider the duty and function actually performed when determining whether people have abused their duties. If the power and duty of office holders allow them to grant personal favors to others and if they do receive bribes in exchange for such favors, they have abused public power and committed a power-for-money deal and thus meet the requirements of the bribery crime. The Chinese Supreme Procuratorate’s Minutes emphasized that “the position one takes advantage of is not limited to one’s roles and responsibilities assigned.”82 That means judicial practices support the definition of “position” as duties actually performed. ii: On the Controversy Surrounding “Taking Advantage of Position” in the Crime of Embezzlement It is appropriate to take the middle ground in interpreting the provision of “taking advantage of position” in the crime of embezzlement. Some propose a revision to the description of the criminal conduct in embezzlement, changing “taking advantage of position” to “taking advantage of public service.”83 This, we think, is unnecessary as public-sector workers, to whom the embezzlement and misappropriation offences apply, are engaged in public services by definition. Unlike “public service,” “position” shows the specific functions and responsibilities of the people concerned, highlights the relation between power and corrupt practices, and stresses

80

Yang (2002b). Chen (2001). 82 Xiong and Ren (2007b). 83 Ma (2003). 81

3 Establishing and Improving Criminal …

87

the nature of corruption. It is thus advisable to keep the description unchanged though close attention needs to be paid to clarify the following issues. First, the specific scope of “advantages.” Embezzlement or misappropriation involves illegal taking or possession of property. For this type of offence, “taking advantage of position” means the offender makes use of the opportunities brought by his or her official duty of supervising, managing, handling, or operating properties. Supervising refers to the right of a supervisor, for example, factory director or manager, to approve, allocate or manage public property or decide how it will be used. Managing typically involve such positions as accountants and cashiers who are responsible for managing public property in their custody. Handling means the power to deal with reimbursement, payment and asset transfer, for example, a procurement employee has the power to reimburse business expenses or to handle public properties on a business trip.84 The rights to supervise, to manage, and to handle public properties are collectively called management rights. Operating public properties refers to market activities in relation to productions and sales. All in all, the provision of “position” relates closely to the management and operation of public properties. Second, directly taking advantage of one’s official duties. A public-sector worker would be recognized as having taken advantage of his position if his official duty of supervising, managing, operating, or handle public property directly offers him the opportunity to commit the crime, and that he would not be recognized as such if he was able to complete the wrongdoing, not because of his official duty, but because of his familiarity with the workplace, easy access to the workplace, or to public property. Some argue corrupt offenders may take advantage of their position or power either directly or indirectly. The former means the offenders obtain illicit gains in the discharge of such official duties as supervising, managing, or undertaking certain public affairs, while the latter means making use of the conveniences associated with one’s position or influence. Thus, a public-sector worker who embezzles public property through employees of a lower-level department is recognized as “taking advantage of position.”85 We believe this interpretation is too far-fetched. Though a higher-level organ has the authority to oversee the administration of its subordinate units, this usually does not involve the management of properties and financial affairs. In other words, a public-sector worker may have a certain level of influence over a lower-level department by reason of his or her position, that does not mean the public-sector worker or his department has the power of managing the property of the subordinate unit. Thus, such influence shall not be regarded as “taking advantage of position.” Third, the performance of public services. Whether one takes advantage of the “power” delegated to him or her or other “conveniences,” it is important that what he or she does is in connection with the performance of public service, echoing the requirement that those charged with embezzlement and misappropriation must be engaged in public service. If one (e.g., a cashier) handles property in a regular and

84

Sun (1995a). Xu (1998).

85

88

G. Sun and X. Qian

standardized manner and by virtue of one’s job or position, such act is recognized as performance of public services, otherwise it shall not be deemed as such.86 iii. On the Controversy Surrounding “Taking Advantage of Position” in the Crime of Accepting Bribes (1) The necessity of retaining the provision of “taking advantage of position” As for the debate over whether “taking advantage of position” should be retained in legislation, we would give an affirmative answer. Doubtlessly, public-sector workers (civil servants) who accept other people’s property or other undue benefits without proper reasons undermine the public image and integrity of civil servants. And that explains why penal codes in a few countries or regions do not require an element like taking advantage of one’s position for an act to constitute accepting bribes.87 However, if accepting other people’s property is indiscriminately treated as accepting bribes, criminal sanctions will be expansive in scope. We believe “taking advantage of position” should still be an integral element of accepting bribes for reasons cited below. Firstly, it captures the very nature of the crime of accepting bribes. It is true that “taking advantage of position” is hard to define, but accepting bribes is essentially a power-for-money deal in which “position” is what a public-sector worker uses in exchange for cash. Without “position,” the transaction would hardly be made, nor is there a way to characterize the relation between accepting bribes and giving bribes (i.e., exchanging the bribe for favor in official act). The scope of the crime of accepting bribes may thus be inappropriately extended. For example, if a public-sector worker is rewarded for offering other people technical consultation or other services, the acceptance of money or other benefits has nothing to do with his or her official post, and holding the public-sector worker liable for accepting bribes would deviate from the purpose of legislators. The provision of “taking advantage of position” will help properly limit the application of the offence. Secondly, it agrees with the legislative provisions in many foreign countries. While “taking advantage of position” is not expressly laid down as an essential element of accepting bribes in a few countries and regions, most countries emphasize the relevance between soliciting or receiving bribes and official positions. “The core constituent element of bribery is the existence of bribe as a consideration to someone in exchange for his or her official act. In other words, once the relation between 86

Ren (2007). According to Article 27 of the Greenland Criminal Code, “Any public official who illegally asks for or promises to accept a bribe or other benefits shall be convicted of bribery.” Zhao (1997b). Article 3 of Hong Kong’s Prevention of Bribery Ordinance, revised in 2003, also stipulates that “any prescribed officer who solicits or accepts any benefits without the general or special permission of the chief executive has committed a crime.” In 2010, the administrative authority of Hong Kong issued a notice on acceptance of benefits to restrict public officers’ acceptance of gifts, discounts, loans or travel expenses but allow them to accept, under certain circumstances, wedding gifts from personal friends or discounts that commercial organizations also offer to non-public officials. Under other circumstances, public officials need special permission to accept restricted benefits.

87

3 Establishing and Improving Criminal …

89

official act and bribery is proven, the conviction of bribery can be made.”88 In the General Federal Bribery Statute of the USA, the term “official act” means any decision or action on any question, matter, cause, suit, proceeding, or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.89 Almost all civil law countries stress the connection between illegally accepting properties and official positions. While in the Penal Code in Japan, the scope of official post in principle should be interpreted as the official authority stipulated by statute; however, when a civil servant accepts money or other benefits from others beyond his or her scope of official post, especially when this behavior is strongly linked with his or her official post, this kind of behavior will be treated as irregular conduct that would jeopardize the impartiality of his or her official post and do harm to the public trust.90 But if this kind of irregular conduct has nothing to do with his or her official post, this behavior should be not treated as a bribery crime.91 The judicial precedents and prevailing opinions in Germany emphasize activities that are aligned with one’s prescribed duty. The Macao SAR also links accepting bribe with the bribee’s official duty, using such broad descriptions as “if a worker from the police department accepts money from others, and in exchange he informs the others about the dossier content which he had viewed without authorization when repairing the department’s computers, this kind of wrongdoing shall constitute the crime of accepting bribes.”92 UNCAC also stipulates clearly that the acceptance by a public official, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties, can be classified as an act of bribery. Article 15 of the Convention also stresses that the acceptance by a public official of an undue advantage is in exchange for the official’s acting or refraining from acting in the exercise of his or her official duties. (2) Correctly understanding the ways of “taking advantage of position” The Provisions of the Chinese Supreme People’s Procuratorate emphasize the relevance between “taking advantage of position” and the specific public affairs associated with the official post, but remove the statement of “favorable conditions associated with the position” as in its previous interpretative texts. Nevertheless, the Provisions emphasize “one’s officially invested power by reason of one’s position” and “exclude the favorable conditions created as a result of the influence of his or

88

Atsushi (2009). Wang (2002, pp. 29–30). 90 Kimura (1991). 91 For example, in a case of Japan, the defendant accepted money from a student’s parent for tutoring after class but it was not established an offence considering that the money was irrelevant to the person’s position. Jitsu (2008). 92 Shi (2009a). 89

90

G. Sun and X. Qian

her official duties over others, thus excessively limiting the scope of directly accepting bribes.”93 The Minutes of the China Supreme Court characterizes the forms of “taking advantage of position” by citing examples. The description, though applicable, lacks generalization and fails to provide a workable definition; besides, the examples given are not comprehensive enough. As accepting bribes is essentially an illegal power-for-money deal, we think an analysis of “taking advantage of position” should center on the defining feature of the offence. In other words, in order for the bribee to benefit from the deal, his or her official act must be able to influence the interests of the briber. Based on the general understanding of “position” and the judicial interpretations in recent years, such influence may be either direct or indirect. “The direct influence refers to a public-sector worker being able to influence a briber’s interests by exercising his or her official duty, while the indirect influence refers to the situation that one public-sector worker may, in exercising his or her official duties, influence the interests of another public-sector worker and through the latter, influence the interests of the briber.”94 The phrase of “taking advantage of position” should not be too narrowly defined; rather, it must cover the following seven situations. First, a public-sector worker makes use of his or her officially prescribed duty of directly administering, handling, or participating in particular public affairs. Second, a public-sector worker deals with public affairs which, though not part of his or her officially prescribed duties, is still within the scope of his or her authority. Third, a public-sector worker abused his or her power to seek undue benefit for the briber on the basis of his or her legitimate duty. Fourth, a public-sector worker makes use of his or her position of superiority, demanding, or instructing his or her subordinates to act or refrain from acting in the exercise of their duty so as to give favorable treatment to the briber. Fifth, a public-sector worker takes advantage of the official duty of another public-sector worker at a lower-level department who, nevertheless, is not his or her immediate subordinate. The public-sector worker does not act in favor of the briber in exercising his or her own duty, but makes use of his or her influence and orders, instructs, or directs another public-sector worker to do so. Sixth, a public-sector worker at a higher-level department makes use of his or her influence over a subordinate department to seek undue benefits for the briber. Seventhly, a public-sector worker at a regulatory organization uses his or her influence over those non-public-sector workers subject to oversight to seek undue benefits for the briber. (3) The relation between “taking advantage of position” and the act of “accepting bribes before taking office” China’s criminal legislation does not expressly provide for accepting money or benefits by taking advantage of a future position. Once this occurs, the judicial judgment will have to be based on the existing constituent elements and defining

93

Xiao (2006a). Li (2002a).

94

3 Establishing and Improving Criminal …

91

feature of accepting bribes under the law. The offender convicted of accepting bribes must be in the capacity of public-sector worker. If people who are not yet public-sector workers solicit or accept bribes by exploiting their career prospect of becoming a public-sector worker, and if they do not engage in public services in the end, they shall not be charged with accepting bribes since they do not meet the official capacity requirements. In another situation, people who were not yet public-sector workers when receiving bribes became one later and fulfilled their promise to the briber by virtue of their new position. Since the money-for-power deal is completed, such act shall be recognized as accepting bribes. There are also people who argue that if one revealed his or her future appointment in the public sector and in exchange for money or other benefits, agreed to seek undue benefits for the briber by taking advantage of the public-sector position, regardless of whether he or she truly acted in favor of the briber or what the outcome was, he or she would not be considered as “seeking undue benefits for others” as he or she did not acquire the status of public-sector worker in the first place. Thus, instead of criminal sanctions, he or she should be punished by party discipline, government discipline, or other administrative penalty.95 We do not think this is a strong argument. Since the individual in question became a public-sector worker and in his or her new capacity sought undue benefit for the briber, this kind of behavior has done a great harm to the integrity of civil servants. It constitutes an illegal transaction that characterizes accepting bribes and thus should be punished as such. However, if the individual did not seek undue benefits for the briber after becoming a public-sector worker, his or her prior acceptance of money and promise of helping the briber obtain undue benefits should not be treated as accepting bribes.96 Thirdly, if the individual has been a public-sector worker in the first place and accepted a bribe by exploiting the possibility of promotion or job transfer, he or she will be indicted for accepting bribes, regardless of whether the change of position was materialized and whether he or she indeed helped the briber obtain undue benefits. This is because those who are public-sector workers meet the official capacity requirement for accepting bribes. The act of accepting a bribe and in return promising to seek undue benefits for the briber may well be compared to a futures transaction that has been completed. In the same way, as a future transaction has risks, whether the promise is fulfilled would not alter the power-for-money deal that

95

Wang (2010). In fact, ROK’s penal code offers stricter provisions. According to the Paragraph 2 under Article 129, “Any person who is going to be a public servant or arbitrator, and accepts, solicits, or agrees on a bribe related to the new job before becoming a public servant or arbitrator shall be sentenced to penal servitude for less than three years or disqualification for less than seven years.” It means that as along as a bribe is accepted or agreed on and the person becomes a public servant or arbitrator, he or she will be convicted of accepting bribes no matter he/she has taken advantage of position to seek benefits for others. Penal Code of Korea (trans. Jin Yongzhe). (1996). 22. Beijing: China Renmin University Press. 96

92

G. Sun and X. Qian

characterizes accepting bribes.97 In the above-mentioned example, the individual who accepted a bribe by reason of his possible promotion to the county party chief shall be indicted for accepting bribes. (4) The relation between “taking advantage of position” and the act of “accepting bribes after leaving office” While holding office is the necessary precondition for giving others favors, it is not so for accepting bribe which may occur when one is not in office. Though accepting bribes after leaving office differs from ordinary act of accepting bribes in temporal and spatial terms, the two have the same defining feature, that is, exchanging public power for money or other benefits. “When one accepts or agrees to accept the bribe, he or she does not need to take advantage of his or her position. However, even if one has retired or left office, accepting the bribe still does harm to the professional integrity.”98 On July 19, 2000, China Supreme People’s Court issued the Notice on Dealing with the Problems of Public-sector workers Who Take Advantage of Their Positions to Seek Undue Benefits for Others and Receive Money or Benefits from them After Retirement (hereinafter referred to as the Notice). It is clearly stipulated in the Notice that a public-sector worker, who seeks undue benefit for others and has an agreement with the briber to accept the money or property after retirement, will be treated as committing the bribery crime. Article 10 of On the Opinions Related to the Applicable Laws in Dealing with Bribery, a joint notice released by China Supreme People’s Court and China Supreme People’s Procuratorate in 2007, states that “a public-sector worker who, before or after seeking undue benefit for others by taking advantage of his or her position, agrees to accept money or other benefits from the briber after retirement, shall be indicted for accepting bribes.” The Supreme Court’s judicial interpretation recognizes the crime of “accepting bribes after leaving office” and in the meantime sets a strict limit on its application; that is, there must be a predetermined agreement. This middle-ground approach, however, is not reasonable at all. In theory, an offender uses his or her power to seek undue benefits for others, which serves as a quid pro quo for bribes. The bribery does not require the intent of accepting bribes when one seeks undue benefits for others, but a clear knowledge of the power-for-money nature when committing the act. In practice, such interpretation does not reflect what happens in real life. There is a new trend in the bribery crime. Some offenders will try to avoid criminal sanctions by accepting bribes at a later time and in another place. For example, some government officials provide favorable treatment to enterprises or departments. Though they do not accept bribes when they are in office, they would choose to work at those enterprises and departments after retirement, so as to claim back large amount of benefits. This type of embezzlement, which provides an “option” to corruption on later days, is covert and not as straightforward as the conventional power-for-money deal. 97

The many cases in recent years show that some bribers offer property to help pubic-sector workers get promoted (e.g., vice mayor promoted to be mayor) in the hope that the latter would seek benefits for them after promotion and the latter also promise to do that for the bribers. In most cases, such public-sector workers are convicted of accepting bribes before promotion. 98 Deng (2005).

3 Establishing and Improving Criminal …

93

The time and spatial span of this type of embezzlement is broad. A case might last for several years, and in some circumstances, the offender may help people obtain benefits in China while accepting the bribes in a foreign country. This new type of embezzlement warrants better legislative and judicial solutions. The Supreme Court’s judicial restriction of “a predetermine agreement” is not an effective solution. It fails to take into account the real situations. Instead it provides a reason for the offenders to break loose from criminal punishment.

3.2.1.3

Direction of Legislative Reform

No revision is required as to the penal code provision on “taking advantage of position” as a legal criterion for embezzlement, provided the judicial interpretation is appropriately adjusted. However, for the crime of accepting bribes, apart from confirming the use of bribes as a reward for personal favors granted by virtue of official duty, the following revisions need to be made. i. A Broader Definition of “Taking Advantage of Position” While the existing judicial system emphasizes the relation between accepting bribes and performance of official duties, “such relevance has to be expanded to better understand the official act” according to studies of the trend and the existing judicial precedents and theories.99 “Position” as an element of crime becomes less significant nowadays; as the scope of public power broadens, the administration of modern social affairs becomes even more complex, and the individuals and departments assuming different functions are both interconnected and imposing a check on each other. Consequently, the scope of a public-sector worker’s functions and authorities is expanding. In Japan, conducts which should not have been defined as official acts are actually deemed as such if such conducts are customarily part of one’s responsibility or if one can produce an influence by reason of one’s official duties.100 In the USA, though it is necessary to prove the bribe as something in return for official acts when charging one with bribery, the term “official act” is broadly defined. General Federal Bribery Statute states “official act” means any decision or action on any question, matter, cause, suit, proceeding, or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit. Based on the trend analysis, we suggest that, by making reference to Criminal Laws in foreign countries and their relevant provisions, we should cancel the use of this broad sentence “taking advantage of position,” instead by using the statement similar to “the official act or refrain from acting in the exercise of his or her official duties.” By doing so, we can highlight the relevance between accepting bribe and official posts, making the objective condition of a bribery crime more relevant to the legislative intent. “As long 99

Atsushi (2009). Jitsu (2008, p. 578).

100

94

G. Sun and X. Qian

as the behavior for public-sector workers in demanding or accepting bribes is associated with official acts, we can confirm that the concerned public-sector workers have taken advantage of his or her official post. It is because by demanding or accepting money or property associated with official acts, the state personal has violated the un-purchasable nature of duty behavior.101 ii: Making “Accepting Bribes Before Taking Office” a New Offence If people who are not yet public-sector workers solicit or accept bribes by exploiting their career prospect of engaging in public service in the future, the existing Criminal Law provides no criminal sanctions for them. However, in terms of infringement of legal interest, the act of using a career possibility to seek undue benefits causes great harm to the integrity of official acts of public-sector workers. It is better for legislators to make such wrongdoing a punishable crime which is different from the offence of accepting bribes in the existing legislative system in both legal criteria for conviction and statutory penalties. iii. Making “Accepting Bribes After Leaving Office” a New Offence We believe that the current judicial interpretation regarding the crime of accepting bribes after leaving office is improper, especially its emphasis on the existence of a predetermined agreement in accepting the bribe after retirement, which lacks an interdisciplinary approach to Criminal Law and fails to consider the difficulty and cost of obtaining evidence. In reality, how many cases of accepting bribes would involve a predetermined agreement, and even if there is such agreement, how many people would admit it when prosecuted for bribery? The design of a substantial law must consider the procedural law, especially the possibility and difficulty in obtaining evidence. In practice, the power-for-money deal in many cases is not hard to be identified; however, because of the requirement of a predetermined agreement, much of the court debate is focused on this agreement, causing many cases to remain unsettled. It is therefore necessary to incorporate “accepting bribes after leaving office” into the Criminal Law system, so as to strengthen the combat against corruption.

3.2.2

Elements Specific to the Crime of Embezzlement

3.2.2.1

Types of Act that Constitutes Embezzlement

i. Interpretation of Provisions The Criminal Law of 1997 lists four types of act that constitutes the crime of embezzlement: unlawful possession, theft, swindling, and other means. Despite the provisions, the definition of these acts has remained a controversy among scholars.

101

Zhang (2007b).

3 Establishing and Improving Criminal …

95

(1) What is “unlawful possession?” The term is open to a number of interpretations. Some argued that it refers to the act of taking illegal possession of public property one is supervising, managing, handling, or using, by taking advantage of one’s position.102 Others argued that the term refers to the act of taking illegal possession of public property one is managing or operating, by taking advantage of one’s positions.103 Comparing the two terms of “unlawful possession” and “embezzlement,” some argued that “unlawful possession” is synonymous with “embezzlement” in a narrow sense, both meaning the act of fraudulently taking possession of public property entrusted to one’s care and custody by virtue of official duties or having such property held by a third party.104 However, there are views that the two terms are not fully interchangeable. Embezzlement is a crime, while unlawful possession, like theft and swindling, is one of the criminal acts that constitute the crime of embezzlement. The two are related but not exactly the same.105 Still other scholars indicate that the two are not equivalent. Given their connotations, embezzlement is a criminal charge and unlawful possession is one of the means of achieving the illegal end of embezzlement as well as one of the forms of embezzlement.”106 (2) What is “theft?” It is generally agreed among scholars that “theft” means the act of taking advantage of one’s position and secretly converting the public property one is entrusted with into one’s own. Can theft be listed as a distinct type of act that constitutes embezzlement? Some argue that it should have been grouped under “unlawful possession” since “theft” here, as different from the usual sense of the word, means illegally taking possession of property that is placed in one’s trust according to one’s official duties. The very reason people generally do not categorize it this way is that such act is committed by the custodian of property, and they prefer to call it “theft.”107 Furthermore, some argue that while thefts are generally committed in secrete, that is not the case for thefts in the criminal category of embezzlement, because people do not need to do it secretly to take illegal possession of what they are entrusted with.108 Therefore, strictly speaking, theft should not be deemed a distinct type of act that constitutes embezzlement; it is a form of unlawful possession.109 “Only when one, by virtue of his or her position, takes illegal

102

Yu (2001). Meng (2005). 104 Zhang (2007b, p. 860). 105 Meng and Gao (2001). 106 Meng (2005, p. 20). 107 Chen (1998). 108 He (1999b). 109 Zhao (1999). 103

96

G. Sun and X. Qian

possession of public property he or she takes care of together with others, can the act be called “theft” that constitutes the crime of embezzlement.”110 (3) What is “swindling?” Swindling is defined as the act of taking advantage of one’s position and deceptively appropriating public property placed in the custody of other workers.111 Some proceed to explain what one deceptively takes is public property that is managed by another person but which one has the authority to handle. That the property is in the custody of another person is the very reason why one uses deception to obtain it. If one has the property in his or her custody in the very beginning, there would be no need of self-deceiving.112 There are also scholars who prefer to define the term broadly. According to them, any public property, whether managed or handled by the offender or another person, can constitute the object of crime in cases of swindling.113 Some further commented that the argument of “self-deceiving” is invalid; even if the offender is managing public property, managing it does not mean owning it. In order to acquire ownership, the offender can still use deception to acquire money or property.114 (4) “Other means” is specified to avoid possible gaps in legal provisions. It covers all the situations that cannot be grouped under the three aforementioned categories and in which one takes advantage of his or her position to take illegal possession of public property ii. A Theoretical Review Regulations of the People’s Republic of China on Punishments for Embezzlement in 1952 set forth a broad range of acts that constitute embezzlement, such as “unlawful possession,” “theft,” “deceptively obtaining,” and other fraudulent methods. The Criminal Law in 1979 defines embezzlement simply as the act of “any public-sector worker embezzling public property by taking advantage of his or her position,” without specifying in which ways is the property embezzled.115 In 1985, the Supreme People’s Court and the Supreme People’s Procuratorate pointed out in Answers to Questions Concerning Law Application in Handling Cases of Economic Crimes, that embezzlement is the act of people, by taking advantage of their positions, taking public property for their own use through such acts of unlawful possession, theft, swindle, or other means. Subsequently, both the Supplementary 110

Zhang (2007b, p. 860). Wang (2001). 112 He (1999b, pp. 65–66). 113 Zhao (1998). 114 Meng and Gao (2001, 145). 115 According to Professor Gao Mingxuan, in the 33rd draft of Criminal Code, the provision of embezzlement crime was defined as a crime of stealing, embezzling, swindling, or other means, public property committed by a governmental worker by taking advantage of official capacity. During the final revision, the description of specific means was dropped because the concept of “Embezzlement” is more clear, and therefore, the enumeration of means was not necessary. See: Gao (1981). 111

3 Establishing and Improving Criminal …

97

Provisions on the Punishment of Crimes of Bribery and Embezzlement issued by the Standing Committee of the National People’s Congress and Criminal Law amended in 1997 incorporated the interpretation which combines citing examples with generalization about other situations.116 This form of legislation satisfies the requirements for clarity in law, but it also raises many controversies over judicial practices and theoretical interpretation. Some scholars have pointed out that although the current Criminal Law follows the principle of “nullum crimen sine lege” (no crime without law) and lays down clear provisions for embezzlement, the examples cited are far from exhaustive. Though the generalized “miscellaneous provision” provides a useful supplement to the illustrations, it also leads to debates in the academic community. In addition, unlawful possession, theft, swindling, and other means are often mixed to achieve a corrupt end and sometimes it is difficult to tell them apart. Thus, this model of legislation is worth examining. An obvious question is if taking illegal possession of an organization’s property by taking advantage of one’s position constitutes an offence of embezzlement, regardless of the means used, then why the need to specify the ways of doing it?117 “A detailed description of the means of embezzlement would not only make the penal code text less efficient, but may also cause confusion among judicial practitioners.”118 Therefore, some scholars argued “there is no need to itemize specific acts that constitute an offence of embezzlement, which may well be summarized as ‘take illegal possession by taking advantage of one’s position,’ in light of the provisions of the crime of employee embezzlement.”119 Discussions like these shed insight into further improvements on the legal provisions of the means of embezzlement. iii. Improving Legal Provisions The Criminal Law provisions on types of act constituting embezzlement vary between different jurisdictions around the world, and the UNCAC does not contain provisions on them at all. We believe that from the perspective of legislative perfection, such provisions are not necessary for the Criminal Law in China. Rather, any act of taking illegal possession of property by taking advantage of one’s position should constitute a crime of embezzlement. This is because: (1) It is hard to draw clear lines of demarcation among embezzlement, swindle, and other means, which are often blended in reality. Whether it is embezzlement or swindle makes no substantial difference, nor does it involve the dividing line between crime and non-crime, or between different offences. With the development of society, the means of embezzlement constantly evolve, making an exhaustive list of them not only impossible, but also cumbersome. In a homicide case, for example, whether the perpetrator used a gun, a knife, or poison will not change the nature of manslaughter. Likewise, no matter what 116

Tang (2002). He (2004). 118 Zong (2003). 119 Tang (2002). 117

98

G. Sun and X. Qian

means is used, the act of taking advantage of one’s position to take illegal possession of property should constitute embezzlement. (2) From the perspective of legislative consistency, Article 271 of the Criminal Law, which deals with employee embezzlement, simply defines the offence as taking advantage of position to take illegal possession of the organization’s property, without specifying how this is done. Both embezzlement and employee embezzlement are the offences of unlawful possession in the discharge of duties, though the types of offender and property vary between them. Thus, like employee embezzlement, legislation may define embezzlement without elaborating on which specific acts fall into its scope. (3) Some acts may be categorized as embezzlement after the means of crime is simplified in legislation. The means of embezzlement continuously evolve with the changes in asset management practices and procedures in reality. For example, it is controversial that whether fraudulent transactions occurring in enterprise restructuring should be recognized as a means of embezzlement under law. Simplified legal provisions on the means of embezzlement will facilitate judicial judgments. For another example, Article 171 of Criminal Law stipulates that an employee of a bank or other financial institutions who, taking advantage of his position, exchanges counterfeit money for real money shall be charged with the offence of bank employee exchanging counterfeit money for real money. In fact, this is also an act of embezzlement and the offender may be charged with embezzlement or employee embezzlement, depending on whether he or she is a public-sector worker.

3.2.2.2

Statutory Scope of What May Be Embezzled

i. Interpretation of Provisions The penal code of 1997 stipulates two basic types of embezzlement, namely the typical offence in Article 382 and the constructive offence in Article 394. That is, “Any State functionary who, in his activities of domestic public service or in his contacts with foreigners, accepts gifts and does not hand them over to the State as is required by State Regulations, if the amount involved is relatively large, shall be convicted, and punished in accordance with the provisions of Articles 382 and 383 of this Law.” “Public property” and gifts accepted in activities of domestic public service or in one’s contacts with foreigners were specified as object of crime in both types of embezzlement. First, according to Article 91 of the current Criminal Law, “The term public property as mentioned in this Law refers to the following property: (1) state-owned property; (2) property collectively owned by the working masses; (3) social donations or special funds for poverty alleviation and other public welfare undertakings. Private property managed, used, or transported by a state organ, state-owned company or enterprise, collective enterprise, or popular organization is

3 Establishing and Improving Criminal …

99

deemed to be public property.” This, compared with Article 81 of the 1979 version, shows no substantial changes in the interpretation of “public property,” except for the addition of “social donations or special funds for poverty alleviation and other public welfare undertakings” and terminological amendments (such as changing “property of the people” to “state-owned property”). According to traditional Criminal Law theories, the legal interest jeopardized by embezzlement is “the ownership of public property,” and the object the crime inflicts upon is—and can only be—“public property.”120 In fact, among the various types of embezzlement stipulated in the current Criminal Law, the object of crime is not limited to public property, but also includes the money of a non-state-owned insurance company (Article 183 (2) of Criminal Law) and the property of a non-state-owned organization (Article 271 (2)). Therefore, while the object of embezzlement is customarily defined as “the ownership of public property,” in the current legislation, “the core element of the offences of embezzlement and misappropriating public funds is not property ownership, but rather the perpetrator taking advantage of his or her position. From the perspective of protecting legal interest against embezzlement and misappropriation of public funds, if it is only to protect the ownership of property rather than the integrity of a public employee, then it is not necessary to prescribe such acts of infringement of property as embezzlement and misappropriation of public funds. They can be tried for theft, fraud, or misappropriation of funds.121 Second, the academic community generally holds that according to the policies of the state, any gift public-sector workers accepted in the domestic official activities or in foreign contacts is not private property, but public property temporarily in the trust of these workers. If they refuse to report and hand over the gift to the state, they are actually taking advantage of their position to unlawfully take possession of what has been entrusted to their care, an act that converts lawful custody to illegal possession and misappropriation, thus constituting the offence of embezzlement.122 But there were also people who believed gifts are simply gifts, and it is unnecessary to judge if a gift should be classified as public property and be handed over to the state.123 Some argued that “a ‘gift’ may come from public or private sources and may serve different purposes as intended by the givers who might be either a person or an organization. Nevertheless, by definition gifts are something one bestows on special occasions to say thank-you. And the recipient may be an organization, or an individual. As gifts a public-sector worker receives in domestic official activities or in foreign contacts, more or less, are connected to his or her official capacity in the public sector, the gifts are presumed to be owned by the state.”124 We believe that “what may be embezzled should not be limited to an organization’s fixed property

120

Gao and Ma (2007) Hu and Yang (2006). 122 Chu and Liang (1998). 123 Tang (2002, p. 31). 124 Tang (2007, p. 154). 121

100

G. Sun and X. Qian

and should include all income and property benefit.”125 According to the Criminal Law, failure to hand over a gift one accepted on a specific occasion and should have handed over to the state constitutes the offence of embezzlement. This shows legislation assumes and deems gifts as public property. ii. Legislative Evaluation Because of the complexity of social and economic entities and Criminal Law’s provisions on embezzlement, the definition of what can be embezzled is controversial, in both Criminal Law theory and judicial practice. At the center of the debate are the hotly discussed questions among China’s Criminal Law scholars: Does embezzlement target only publicly owned property? And should intangible property be included? (1) Can intangible property be embezzled? Traditional criminal law theories hold only tangible property can be embezzled. However, with the commercial application of science and technology, there arises the question: Could a technological achievement, which is classified as intangible property, be deemed the object of crime? A representative point of view is that it is inappropriate for infringements on technological achievements to be punished on the charge of embezzlement. The reasons for this are threefold. First, embezzlement is to take away other’s property for one’s own use. The nature of the act is to permanently exclude the property owner from exercising ownership of the property and to unlawfully keep it for one’s own use. In the civil- and commercial-law tradition, the concept of the real right is understood in light of the principle of one owner for one thing, and misappropriation will thus inevitably deprive a property owner of the rights to possess, use, make a profit from, and dispose of the property, representing an absolutely 100% loss. And the situation of stealing technological achievements and secrets, among other thefts (including the thefts in which perpetrators take advantage of their positions), is quite different. The owner suffers from decreasing revenue and competitive advantages as a result of unfair competition brought by others’ use of technological achievements and secrets which should have exclusively belonged to the owner, but he or she would not lose any of the rights to possess, use, profit from, and dispose of such technological achievements. Second, the extent of damage to society due to unlawful possession, theft, and other crimes against property is measured by the value of the property the crime inflicts on, which is more accurate and objective. The current judicial interpretations have also specified the provisions and requirements. And the act of stealing technological achievements and secrets and its extent of damage are difficult to measure with simple and objective approach. The measurement can only be achieved by incorporating a variety of other market factors. Third, the infringement on technological achievements and other trade secrets cannot be punished on the charge of a traditional crime against

125

Xiong and Ren (2007, p. 7).

3 Establishing and Improving Criminal …

101

property. The reasons are partly given in such judicial interpretation documents as Interpretation of Applicable Issues of Law for Adjudication of Theft Cases issued by the Supreme People’s Court on November 4, 1997. Paragraph 6 in the document’s Article 12 stipulates that “the act of stealing technological achievements and other trade secrets shall be convicted and punished in accordance with the provisions of Article 218 of Criminal Law.” Article 218 of Criminal Law provides for the crime of infringement on trade secrets, rather than theft. This shows the judicature recognizes the difference between stealing technological achievements and secrets and the crimes against property (including theft and embezzlement) stipulated in Criminal Law, and technological achievements and secrets are not deemed object of crime in the cases of embezzlement.126 Based on the principle of a legally prescribed punishment for a specified crime, some hold that whereas the object embezzled is “public property,” scientific and technological achievements, as distinguished from tangible property, are not in the legally prescribed scope of public property. Classifying them as objects of embezzlement and other crimes stipulated in Criminal Law would inevitably deviate from the basic principles of Criminal Law, resulting in inconsistency between its general and specific provisions.127 Others argued that because intellectual property is not tangible property, it cannot be embezzled. Therefore, a public-sector worker’s illegal possession of an organization’s intellectual property by taking advantage of his or her position does not constitute the crime of embezzlement. However, physical assets that embody such intellectual property can be subjected to embezzlement.128 We think, as the Criminal Law uses caiwu (literally “money and materials”) to denote what can be embezzled, it may be easily understood as “things corporeal.” However, property has diverse forms in modern society. According to modern Criminal Law theory, the ownership protected by Criminal Law is not limited to the right to tangible objects, but also to things intangible. For embezzlement, whether a thing can be deemed object of crime depends on whether it has the attributes of property; that is, whether it has economic value, is movable, or disposable and controllable by people. A technological achievement is the product of labor or the fruit of unique experience one has obtained by investing a certain amount of human and physical resources and even by assuming the risk of failure, and when applied in our lives, it can bring considerable benefits to society and generate greater value for the owner. Thus, it has the basic attributes of property, and can be subjected to embezzlement.129 On June 3, 1997, the Supreme People’s Procuratorate and the State Science and Technology Commission issued the Opinions on Handling the Cases of Economic Crime in Technological Activities. Its Article 3 provides that

126

Li (2002b). Zong (2003, pp. 278–279). 128 Tang (2002, p. 93). 129 Sun (1995b). 127

102

G. Sun and X. Qian

“Where public-sector workers, personnel of collective economic organizations, or other persons who handle or manage public property take illegal possession of technological achievements made as a result of official duties, or benefit from the transfer of such achievements, they should be deemed as having committed the crime of embezzlement.” (2) Can immovable property be embezzled? In the civil law system, “immovable property in a physical sense refers to an immovable thing that takes up space at a fixed location.”130 According to Article 92 of the Guarantee Law of the People’s Republic of China, “the term ‘immovable property’ as used in this Law refers to land, inclusive of buildings and goods produced above and fixed to the land, such as trees.” Criminal Law researchers are divided on the question whether immovable property can be embezzled. The negative view is that since the property cannot be moved and the transfer of ownership must go through a statutory registration process, it is impossible to misappropriate such property. The affirmative view is that immovable property can really be misappropriated in special circumstances, because the illegal possession of property does not mean the property has to be movable in space. In practice, there have been many cases of perpetrators fraudulently having immovable property registered and exercising the rights to it in the name of owners, which makes the act meet the characteristics of the crime of embezzlement.131 As we see it, the Criminal Law defines property as the object of embezzlement, without specifying it has to be movable. Since immovable property is property as well, denying it may be subjected to embezzlement is legally unfounded. The negative view only pays attention to registration procedures of immovable property ownership and the transfer of ownership, ignoring the fact that embezzlement stipulated in the Criminal Law mainly involves the act that perpetrators take advantage of their position to take illegal possession of property, thus causing the lawful owners unable to exercise their ownership. Whether a perpetrator has obtained the property by following the required registration procedures does not alter the fact of his or her possession. In other words, perpetrators who take advantage of their position to keep the immovable property for their own use may achieve this end, whether they have the property registered by deception or simply do not register it at all.132

130

Jiang (2000). Tang (2002, pp. 91–92). 132 Court cases like this are many. For example, Wang was the general manager of a food company. While he was in charge of the bankruptcy liquidation of a state-owned company, he took advantage of his position to take long-term illegal possession of the company’s villa by deliberately concealing the asset and instructing financial staff to write off the asset as bad debts. The court of second instance convicted Wang of embezzlement. See Sun (2007). 131

3 Establishing and Improving Criminal …

103

(3) Can creditors’ rights be embezzled? It is also controversial whether creditors’ rights can be subjected to embezzlement. Those who disagree argue that as creditors’ rights are the rights of claim in civil law and their enforcement depends on whether the debtors would fulfill their obligations, and gaining such rights does not mean the obtaining of the property involved, but the right to claim it. This thus excludes creditors’ rights from the objects of embezzlement which must be public property. The affirmative view is that receivables are the rights of claims in civil law, which, however, can be converted into a definite amount of property after debt fulfillment. When one concealed account receivables (claims) that belonged to a state-owned company, causing the company a loss in prospective assets, he or she has committed the offence of embezzlement. 133Still others, though agreeing creditors’ rights can be embezzled, propose a discriminative approach. According to them, the person who fraudulently obtained creditors’ rights may either take illegal possession of the property, or may not subsequently. In the former case, the act may thus be deemed an accomplished offence of embezzlement, while in the latter case, the actor does not actually possess the property, giving rise to an “impossible attempt” as Criminal Law theories term it, and the act may thus be deemed attempted offence of embezzlement.134 Admittedly, creditors’ rights differ from property in civil law, and creditors’ rights, as the rights to claim, are realized only when the debtor fulfills the obligation, which involves a certain degree of uncertainty. But creditor’s rights, which represent a kind of property relation that is transferrable, arise from the exchange or distribution of various economic benefits. The payment of debts must be on the basis of property or benefits associated with it; therefore, creditors’ rights are also property rights.135 In legislative interpretations of crimes against property, the property usually includes creditors’ rights. For example, according to the Interpretation of Applicable Issues of Law for Adjudication of Theft Cases (Fa Shi [1998] No. 4) issued by the Supreme People’s Court, payment certificates, securities, value instruments, among others can be targets of theft. For another example, the act of asking people to create the creditor’s right for oneself or for others, or to relieve oneself from debt, constitutes bribery. Therefore, we support the idea that creditors’ rights can be misappropriated. iii. Directions of Legislative Reform Controversies surrounding what may subject to embezzlement mainly arise from ambiguities and even inconsistencies in the Criminal Law itself. While the legislation emphasizes property embezzled must be publicly owned, it also classifies as object of crime “insurance money” from non-state-owned insurance companies and “property” of non-state-owned organizations elsewhere. Meanwhile, the Criminal Law emphasizes too much on the attributes of physical property when speaking of 133

Wan (2005), Hu and Cao (2005). Cao (2010). 135 Zhang (1991). 134

104

G. Sun and X. Qian

what can be embezzled, but is reluctant to address the embezzlement of property benefits. “That the Criminal Law limits the targets of embezzlement and misappropriation, among other offences, to public property would not only be of little help for convictions for these crimes, but also lead to judicial confusions and theoretical controversy.”136 In particular, the provision would adversely affect the fight against new types of embezzlement. All this suggests that the definition of what may be subjected to embezzlement does not fit the practical needs. In other countries, although legal provisions on the object of embezzlement vary, most jurisdictions do not place a limit on ownership. For example, The Penal Code of Italy provides that both public and private property may be embezzled. In the Penal Code of France, theft or concealment of property by a public official involves documents, receipts, public and private funds, bills, materials or corresponding evidence, or any other things delivered to the official due to his or her function or mission. The Criminal Law in both Switzerland and Japan defines embezzlement in the discharge of duties as fraudulently taking away property which a public office has ordered him/her to hold in custody and which belongs to another person. While Article 92 of the Criminal Law of the Soviet Union limited the object of crime to public property in cases of embezzlement or misappropriation, the 1996 criminal code of the Russian Federation stipulated that the object of crime is property entrusted to the criminal.137 Article 223.8 of Model Penal Code of the USA defines property as the object of the “theft by failure to make required disposition of funds received.” The Criminal Code of Canada uses the word “anything” when specifying the object of the offence of “public servant refusing to deliver property.”138 Thus, the general trend around the world is that legislators place fewer limits on what might fall victim to the crime of embezzlement, the scope of which is gradually expanding. Article 17 “Embezzlement, misappropriation or other diversion of property by a public official” of the UNCAC specifies the targets of the crime is “any property, public or private funds or securities or any other thing of value entrusted to the public official by virtue of his or her position,” which reflects the legislative trend. We believe that the following two revisions need to be made as to the definition of the targets of embezzlement in China: (1) Remove the limitation on property ownership Given China’s cultural tradition and reality, people often perceived and valued differ forms of ownership differently. While “public” was often associated with the socialist good, “private” was perceived the source of evils. In the era of planned economy, it was both necessary and rational to limit the object of embezzlement to public property, in order to highlight the protection of public property in the Criminal Law. However, in a market economic system where the businesses of

136

Zhao (2005). Huang (2000). 138 Chen (2008). 137

3 Establishing and Improving Criminal …

105

different forms of ownership thrive together, the practice of restricting the private sector in favor of the public sector is not only contrary to the principle of equal competition among various business entities, but also inconsistent with the definition of the object of “embezzlement, misappropriation or other diversion of property by a public official” in the UNCAC. Therefore, some Chinese scholars argued that the crimes of embezzlement and employee embezzlement specified in the Criminal Law should be merged to form a new type of crime, in order to achieve equal protection.139 As we see it, the reason for establishing embezzlement as a criminal offence is to safeguard the integrity of public-sector workers. A feasible idea is to distinguish embezzlement and employee embezzlement merely on the basis of the identity of the offender. Embezzlement is a charge brought against a public-sector worker, and distinguishing it from employee embezzlement epitomizes the principle of heavier punishment for public-sector workers. Because of this, revisions to the Criminal Law about the object of embezzlement should place all types of property, instead of “public property” alone, under protection. What matters is whether the offender is a public-sector worker, rather than who owns the property. A public-sector worker who, taking advantage of his or her position, takes illegal possession of any property he or she is entrusted to take care of or to manage, shall be indicted for embezzlement, whether the money or property is publicly owned or not; an employee of a company or other organizations who appropriates the organization’s property by virtue of position shall face the charge of employee embezzlement, whether the employee embezzles public property or not. (2) Make it explicit that any type of property may fall victim to embezzlement The UNCAC lists “any property, public or private funds or securities or any other thing of value” as the targets of embezzlement. The Convention not only defines “property” in Article 2 “Use of Terms,” but also explains that “assets of every kind is understood to include funds and legal rights to assets” in the 2006 Legislative Guide for the Implementation of the UNCAC. In China’s Taiwan, the criminal code provides that the targets of the offences of embezzlement by virtue of public duties or public interests are “things of which he has lawful possession because of his public fiduciary duty or for public interest.” A further interpretation indicates that everything that is controlled or managed by an actor by virtue of the exercise of official duties is the thing in possession due to public duty—whether it is movable or immovable property; electrical or other energy-powered or electromagnetic records—is public or privately owned.140 In fact, the concept of “property” evolves continuously, because with social progress, the types of property that can be used and controlled by people will continue to grow. It is important for our Criminal Law to take into account the Convention’s description of “property,” and through explanatory provisions, interpret the term in a way that is expanded to include

139

Zhang (2006). Yi Pin Fa Xue Yuan (2008).

140

106

G. Sun and X. Qian

property—movable or immovable, tangible or intangible—and the rights to it, all of which may fall prey to embezzlement.

3.2.3

Elements Specific to the Crime of Accepting Bribes

3.2.3.1

Types of Act that Constitutes Accepting Bribes

i. Interpretation of Provisions Articles 385 and 388 of China’s Criminal Law specify four types of acts that constitute accepting bribes. (1) Soliciting bribes which means a bribee demands, in an explicit or implicit way, bribes from other people. It is important to note the two facts that the bribee asks for property in the first place, and in response the briber delivers the property to the bribee. Some argue that this act is characterized by extortion and coercion as the perpetrator takes advantage of his or her position, demanding, either explicitly or implicitly, property from a person in need of service or help by deliberately procrastinating the service or help, acting unhelpfully or coercively.141 This argument is one-sided, however. Literally, “to solicit” simply means “to ask for.” Though the methods of solicitation vary, one asks for bribes typically in the following two ways. One is to do it by force. That is, a perpetrator extorts money or other property from people by threatening certain acts or omissions in the exercise of his or her official duty, and those who refuse or fail to give bribes may have to face adverse consequences. The other is to request bribes in exchange for favor. The perpetrator solicits bribes when people ask for a favor that is related to the perpetrator’s official duty. This act may not involve extortion. (2) Accepting bribes, meaning a bribee accepts property or property benefit that another person offers. In the legal sense, the acceptance of property means that a perpetrator has obtained the property de facto and can exercise the physical control over it. And acceptance of property benefit means the benefit accruing from the property is ready for the enjoyment of or has been enjoyed by the penetrator. This type of offence is characterized by a briber’s offer and a bribee’s acceptance of the offer. It is argued that as long as the bribee has promised to act in favor of the briber, whether or not the bribe has been accepted, the act should be deemed an accomplished offence of accepting bribes.142 But this view has not been substantiated and most scholars and practitioners hold an accomplished offence of accepting bribes requires the bribee to physically obtain the property. Only when a bribee actually received a bribe, the act may 141

Liu (1996). Liu (2002).

142

3 Establishing and Improving Criminal …

107

constitute the offence of accepting bribes. If the perpetrator does not get bribes because of reasons other than his or her will, the act does not constitute accepting bribes or an accomplished offence of accepting bribes. (3) Accepting bribes in economic activities. This refers to the situations prescribed in China’s Criminal Law in which a public-sector worker illegally accepted various types of commissions or service charges during economic activities for personal gain and shall be deemed as having accepted bribes. Commissions and service charges, both a form of payment commonly seen in economic activities, might be illegitimate sometimes. The Anti-Unfair Competition Law of China provides that business entities or individuals engaged in business operations, when selling or purchasing merchandises, may explicitly offer discounts to the other party to the transaction, or commissions to the agent; and those who have accepted such discounts or commissions must truthfully enter them into their account book. Compared with the previous two types of accepting bribes, committed by public-sector workers by virtue of public power, accepting bribes in economic transactions is about public-sector workers who, taking advantage of the opportunity to participate in market transactions, trade public power for money. Although the official capacity of a public-sector worker is the prerequisite for these three forms of accepting bribes to occur, the key difference between them is that the first two types of accepting bribes involve deals taking advantage of vertical management power, whereas accepting bribes in economic transactions only take advantage of horizontal trading rights. (4) Acceptance of bribes by intermediaries. This refers to the situations prescribed in Article 388 of the Criminal Law in which the perpetrator is deemed as having committed the offence of accepting bribes. That is, a public-sector worker, by virtue of his or her position or power and through other public-sector workers’ job-related behaviors, seeks undue advantages for a person who requests a favor and solicits or accepts bribes from that person in return. Acceptance of bribes by intermediaries is also known as indirect bribery in Criminal Law theory. It must satisfy three conditions to constitute a crime. First, a perpetrator should take advantage of his or her power or position. “Take advantage of” usually means make use of something or somebody to achieve a certain end. In this case, “take advantage of position” means the perpetrator makes use of the opportunities offered by his or her position to influence another public-sector worker. Because of the public office he holds, the perpetrator is able to manage another public-sector sector who is lower in position or rank and thus has the opportunities to produce an effect on the latter. In other words, a perpetrator cannot directly take advantage of his or her official capacity to seek undue benefits for any other person. The perpetrator cannot make decisions or order another public-sector worker to make decisions in favor of other persons. However, the authority and responsibility the perpetrator has allowing him or her to influence the promotion and other benefits of another public-sector worker. The phrase “take advantage of status” means the perpetrator’s status offers him or her the opportunity to exert influence over other workers. In other words, a relationship of constraint and check is formed

108

G. Sun and X. Qian

between the perpetrator and other public-sector workers in the processes of performing duties. If other public-sector workers refuse the perpetrator’s request, the perpetrator can take advantage of his or her status to adversely influence other public-sector workers’ benefit. Its noteworthy such status is not formed due to the perpetrator’s jobs. Judicial interpretations before the amendments to the Criminal Law expressly state that utilizing friendship or family relationship in a bribery deal does not constitute a crime. Second, the act is carried out by virtue of another public-sector worker’s position. That means the perpetrator seeks undue benefits for a person who requests a favor, not in the exercise of his or her own duty, but through another public-sector worker’s performance of duties. According to Article 385 of the Criminal Law, in order for an act to constitute the crime of bribe-taking, it must involve a public-sector worker who takes advantage of his or her position when taking charge of, managing and handling a specific public affair. However, for indirect bribery, a perpetrator does not have such an opportunity, but has to resort to another public-sector worker to seek undue benefits for a person who requests a favor. This is exactly why the crime defined in Article 388 of Criminal Law is called “indirect bribery.” Third, a perpetrator seeks undue benefits for a person who requests a favor. ii. Directions of Legislative Reform Recent years have seen a heated discussion among academics about the acts that constitute bribery. Many propose extending the scope of these acts. “In fact, in more and more cases, the transaction between the briber and the bribee is not simply the direct delivery of a bribe. The transaction is done in a less conspicuous way over a much longer time. In most cases, the briber sends out the signal first and then specifies the amount of money or something valuable to be offered in exchange for what is asked for but the delivery is done a very long time after the briber’s needs are met or after the bribed public servant retires. Therefore, the bribers who have gained what they need illicitly are not brought to justice because they have made just ‘attempts’ or ‘promises’ instead of having delivered the promised money or something else at the time… Bribery compromises the professional integrity of public servants, be a bribe is delivered or promised or an attempt of bribery is made.”143 The current Criminal Law defines the scope of bribery acts too narrowly and the defenses against bribery are put up on a rather late stage, which does no good to the crackdown on the crime. It is put forward, therefore, that any “attempt” or “promise” to give or take a bribe should also be considered an offence like the “delivery” of a bribe so that all those attempting to evade legal responsibilities are brought to justice.144 We believe that it is undesirable to generalize and the types of bribery acts should be identified according to specific offence.

143

Xiao (2006b). Liu and Zhang (2005).

144

3 Establishing and Improving Criminal …

109

(1) Define “request” and “promise” as acts that constitute the crime of accepting bribes Looking at the Criminal Laws around the world, one may find that the definitions of the offence of accepting bribes vary greatly. For example, Japan’s Penal Code stipulates that the acceptance of bribes includes accepting, soliciting, or promising to accept a bribe. “Soliciting means asking for a bribe…The act constitutes a punishable crime, even if the other party did not agree to the request. Promising to accept a bribe means a bribee and a briber reach an agreement that in the future, the briber will offer bribes and the bribee will accept the bribes. Accepting a bribe means the bribee takes possession of the bribe offered by the briber.”145 Article 337 (Accepting Bribes as an Unlawful Act) of the Criminal Code of Macao provides that a public official who, by himself/herself or through another person with his/her consent or approval, solicits or accepts, for himself/herself or for a third party, undue monetary or non-monetary advantage, or solicits or agrees to a promise of such advantage, shall be sentenced to a term of imprisonment of one to eight years.” Therefore, “in Macao the expression of the intent of bribery is deemed an accomplished offence. It is a potential damage offence or consensual offence; or an offence in form as termed in some court judgments. Once the intent of committing bribery is declared, the act constitutes a punishable crime.”146 However, Article 290 of the Criminal Code of the Russian Federation provides that accepting bribes is the act of people, personally or through an intermediary, accepting money, securities, and other property or property benefits. Therefore, in Russia, if one does not take a pre-agreed bribe for external reasons (such as being stopped by a police officer when a bribe is delivered), the conduct should constitute an attempt to accept bribes.147 UNCAC defines accepting bribes in a narrow sense, specifying merely the acts of “soliciting” or “accepting” bribes. We believe that the legislative experience of these countries is worth learning. The term “solicitation” a bribe means making a request for a bribe. “Promise” or “agreement” is the act that the bribee and the briber reach an agreement on bribery. In the eyes of many people, both soliciting and promising to accept a bribe occur at a stage when the bribee and the briber are communicating their needs and desires. The criminal act is not yet accomplished. The perpetrator neither accepts a bribe, nor begins to seek benefits for other persons. It seems too harsh if the act of soliciting or promising constitutes an accomplished offence of accepting bribes. The penal codes in some jurisdictions deem “soliciting” or “promising” an act of accepting bribes, because in these countries or regions, preparation for or attempt of bribery is generally not punishable, and “because establishing ‘soliciting’ or ‘promising’ as an offence functions as a punishment on attempted crime.”148 Although the General Provisions of China’s Criminal Law specifies preparation for 145

Nishida (2007). Shi (2009b). 147 General Prosecutor’s Office of the Russian Federation (2000). 148 Nishida (2007). 146

110

G. Sun and X. Qian

and attempt of offence are punishable, people are rarely indicted for that in real life. Therefore, deeming “soliciting” or “promising” as a completed act of accepting bribes not only reflects the Criminal Law’s defense line has been moved forward to show the government’s determination to fight against corruption, but also makes the legal provisions more easily implemented, thus reducing opportunities of arbitrariness in the decisions of law enforcement agencies. (2) Make it explicit that accepting bribes, though indirectly, also constitutes a crime In judicial practices, if a public-sector worker who acts in favor of a person in response to the latter’s request refuses to accept property but asks a third party to accept it, does this act constitute a crime? In some countries, such an act is specified as an independent offence of accepting bribes. For example, Article 138 of Penal Code of Japan provides for “passing of bribes to a third party.” That is, if a public official, upon request, agrees to perform an act in connection with the official’s duty and causes a bribe to be given to a third party or solicits or promises such bribe to be given to a third party, the person shall be punished by imprisonment with work for not more than 5 years.149 There are also countries that incorporate such acts into general offences of accepting bribes. For example, when defining “benefit” involved in bribery,German Criminal Code has incorporated “donating to a third party” into the offence of accepting bribes, because, if not, a civil servant’s private property will often be cleverly transferred.150 China’s Criminal Law does not specify this. In judicial practices, if a person did not directly accept and obtain property, the person is generally not deemed having committed a crime. The Supreme People’s Court issued the Minutes of the National Workshop on Economic Crime Trials by Courts in November 2003. Article 3 (5) stipulates that a public-sector worker who, taking advantage of his or her position, seeks undue benefits for another person and requesting the latter to deliver the property to a designated third party should be indicted for accepting bribes. It makes clear that such an act should be determined as accepting bribes. The Supreme People’s Court and the Supreme People’s Procuratorate issued the Opinions on Several Issues Concerning the Application of Law on Criminal Cases of Accepting Bribes. Its Article 7 stipulates “If a public-sector worker, who, upon request, takes advantage of his or her position to seek undue benefits for a person, instructs the person to give, in one of the forms listed in this document, property to a specific contact,the public-sector worker should be indicted for accepting bribes.” Despite the effort to criminalize indirect accepting bribes, the words “designated” and “instruct” used in these documents actually impose strict limits on the application of the provisions. Both unfounded and difficult to apply, use of such words may even cause legal loopholes. In fact, an act of “instruct” is not a necessary element for a public-sector worker to be found guilty of accepting bribes, as even if a public-sector worker does

149

Criminal Code of Japan (1998). Hans-Heinrich (2004).

150

3 Establishing and Improving Criminal …

111

not give such instructions, he or she can be indicted for accepting bribes as long as the public-sector worker’s act fits all the characteristics of the offence. If a public-sector worker “has known” that one of his or her contacts accepted the property sent in exchange for the undue benefits the public-sector worker had sought for others, the public-sector worker actually consents to the specific contact’s act of soliciting or accepting bribes. The absence of “instruction” simply demonstrates that the public-sector worker does not solicit the bribe, but that does not affect the determination of the intent of crime and the act of directly accepting another person’s property. Essentially a power-for-money deal, the act shall constitute the offence of accepting bribes. Therefore, as long as the public-sector worker knew that a third party accepted the bribe offered by the person who requested a favor in connection with the public-sector worker’s position, the public-sector worker should be found guilty of accepting bribes.

3.2.3.2

Content and Scope of Bribes

i. Interpretation of Provisions For the content and scope of bribes, a long-standing debate among scholars is “law as it is” vs. “law as it should be.” There are generally four views on the scope of bribes, that is, Property Theory, Property Benefit Theory (also known as Material Benefit Theory), Benefit Theory (also known as Need Theory), and Property Benefit and Partial Non-property Benefit Theory. Property Theory is based on the provisions of the existing Criminal Law and judicial practices and limits bribes to “property” only, i.e., money and goods.151 The Criminal Law stipulates the amounts of value for a thing to be recognized as a bribe—a clear and easily applicable standard which is higher than that specified in the UNCAC, and one that would not affect Chinese government’s efforts to recover illegal proceeds from abroad.152 Therefore, property should be strictly interpreted, and its scope should not be arbitrarily expand. 153“Money” refers to the currency that is used as universal equivalents. “Goods” refers to valuable and usable corporeal things or incorporeal things that can be manipulated or managed, and can be measured by money. Property benefit and non-material benefit, other than money and goods, cannot be deemed as a bribe. Chinese Criminal Law expressly provides that a bribe only refers to property and does not include material benefit (such as hospitality and free travel) and non-material benefit (such as education, employment, job promotion, sex service).154 This conclusion is based on the law and the semantic meanings of modern Chinese language. It follows the principle of a legally

151

Gao (1989). Zhao (2005). 153 Wang (2007). 154 Chen (1998, p. 155). 152

112

G. Sun and X. Qian

prescribed punishment for a specified crime. Moreover, fitting the punishment to the value of illegal proceeds is part of China’s legal tradition, making it easy to recognize the value of property and to implement the penal provisions. In addition, China’s Criminal Law deems the value of bribes an important consideration in sentencing decisions. If the non-material benefit, other than property, is deemed to be a bribe, people would find it difficult to make sentencing decisions. “Property Benefit Theory” (also known as Material Benefit Theory) attempts to extend the scope of bribe which, it believes, should not be limited to money and goods, but should also include property benefits that can be directly measured in monetary terms. For example, supporters of this theory argue bribes include money, goods with a monetary value, and other material benefits155 such as creditors’ rights, debt waiver, hospitality, free travel, and other forms of benefits. However, it does not include non-material benefit that is not related to property, such as employment, job promotion, change in registration of households, and sex service.156 It is further argued that long-term use of houses, cars, or mobile phones borrowed from others, or residing in houses with decorations paid by others, should be included in the calculation of the monetary value of bribes. And the amount of value should be calculated by multiplying the current local price level, the length of time it has been used and annual depreciation cost.157 Benefit Theory (also known as Need Theory) is more from the standpoint of “law as it should be” and advocates that bribes should include property and non-property benefits. The reason is that “as long as there is an illegal deal between ‘public rights’ and ‘self-interest,’ it does not affect the determination of the offence of accepting bribes, whether the subject matter of the deal is in the form of property, property benefit, or non-property benefit.”158 After China’s accession to and ratification of the UNCAC, some scholars have stressed that “China’s Criminal Law expands the scope of bribes from ‘property’ to ‘undue advantage.’ This not only indicates our country’s commitment to the obligations under the international law and to the international community, but also demonstrates China’s determination to effectively fight against corruption and to promote social harmony.”159 Property Benefit and Partial Non-property Benefit Theory suggest that the two can become bribes at the current stage. How can the monetary values of such things as sex service, recruitment opportunities, and change in registration of households be measured? In market economy, there are two ways to measure value: first, the valuation through competition in an open and legitimate market, i.e., the official market; second, the valuation through exchange in a secret and informal market, i.e., private (or underworld) market. Any property that can be measured in the second way should also belong to the category of “property.” For example, sex

155

Gao and Ma (2007, p. 712). Xie (2001). 157 Hu (2001). 158 Liang (2001a). 159 Yang (2007). 156

3 Establishing and Improving Criminal …

113

service, when measured in the second way, bears no substantial difference from property benefit. Things that cannot be measured by both standards are non-property benefit outside the scope of bribes.160 ii: Legislative Evaluation To correct this understand the scope of bribes, we need to trace the meanings of the term in the past and ensure its historical continuity; at the same time, we need to respond to new developments in society, particularly the new challenges in relation to the power-for-money deal and, on the basis of a rethink of the past, redefine the scope of the term to adapt to the changes. China’s current Criminal Law limits bribes to “property,” which has been outdated already. To improve the legislation of bribery, we need to broaden the definition of bribes. (1) The necessity of broadening the definition of bribery The Criminal Law in 1997 defined the bribe as property, which reflected the cautiousness of legislators. As pointed out by some scholars, the bribe, if too broadly defined, will undoubtedly lead to increased incrimination and some side effects on political stability. However, if the scope is too narrow to reflect the diversity of bribes in reality, the deterrence of the law against bribery can hardly be achieved. Weighing the two methods against each other, we will find that a narrowly defined term has particularly prominent drawbacks. Whether a Criminal Law is overdeterrent or not depends not only on its scope in application, but more importantly, on criminal penalty.161 Given the nature of bribery, bribes serve as unlawful remunerations one receives in exchange for what one does in connection with duties, and therefore, the unlawful remuneration should reasonably include all the benefits that satisfy a person’s needs and desires.162 We believe that the definition of bribes should be expanded in accordance with the UNCAC and the need to mete out punishment for bribery. (2) Limiting bribes to “property” is outdated The changing scope of bribes is closely related to the changing social context. From the 1980s to the early 1990s, a time when consumer goods were not abundant, bribes were mainly in the form of merchandise (such as tobacco, wine, and various household appliances). In the mid- and late-1990s, a bribe was mainly paid in cash (RMB, US or Hong Kong dollars), because cash payment was hard to detect, and it also reflected the trend that bribes had become much more expensive. In the new century, with the housing system reform and rising ownership of cars and other household items, apartments, cars and other items became the preferred forms of bribe. Owning several apartments means a huge fortune. At the same time, the so-called soft bribes (not property in the traditional sense, but in the form of

160

Gao (2004). Cao (2002). 162 Ruan (2006). 161

114

G. Sun and X. Qian

services, benefits, works of art, etc.) were not uncommon. While property, or material benefit, was reasonably the most common form of bribes at a time people must work very hard to feed and clothe themselves, human needs and desires become multifaceted today, and spiritual, political or material interests can all be the “chips” in the deal between the briber and the bribee. The simple power-for-money deal in the past has evolved into more complex under-the-table deals that trade power for different kinds of advantages—debt relief, claims of creditors’ rights, uses of apartments, free travel, employment opportunities for families, sex services, etc. These new forms of bribes have caused more harm to society than cash and goods. As accepting them does not constitute a punishable offence, they have become a “haven” criminals exploited to their advantages, thus detrimental to the fight against bribery. (3) Limiting bribes to “property” does not reflect the nature of the crime The offence of accepting bribes is essentially an illegal deal between the bribee and the briber whereby the briber, taking advantage of his or her position, trades public power for personal gain, and the briber pays for the public power. As long as there is such a deal, the act may constitute accepting bribes whether the bribe is in the form of property, property benefit or non-property benefit. Anything—tangible or intangible—that can satisfy the psychological, physical, material, spiritual, or other needs of a person who bartered away his or her “public power” for “personal benefit” can be deemed object of crime in the criminal category of accepting bribes.163 Given the nature of accepting bribes, any public-sector worker who bartered public power for property benefit or non-property benefit should be deemed having committed the offence. In other words, the nature of accepting bribes requires that what is used as “consideration” for performance of duty in favor of the briber should not be narrowly defined. (4) Limiting bribes to “property” is in conflict with some of the Chinese laws Article 22 of the Anti-Unfair Competition Law of China stipulates “where a business operator practices bribery by using property or other means to sell or buy goods and where such act constitutes an offence, the business operator shall be held criminally liable.” Article 8 stipulates “a business operator shall not practice bribery by using property or other means to sell or buy goods.” In these provisions on commercial bribery, legislators do not set a limit on “other means” which shall mean any benefit (other than property) that can satisfy certain human needs. It is thus clear that limiting the bribe to property, as is defined in the Criminal Law, comes into conflicts with administrative laws where the bribe is more broadly defined.

163

Liang (2001b).

3 Establishing and Improving Criminal …

115

(5) Limiting bribes to “property” is out of line with both the definition in UNCAC and the international trend in Criminal Laws As mentioned earlier, the scope of bribe is specified as “undue advantage” in UNCAC, and the Convention requires State Parties to include it in domestic legislation. As a member participating in the preparation of the Convention, China has the obligation and reason to expand the scope of bribes in relevant laws. iii. Directions of Legislative Reform (1) A broader understanding of bribes: three proposals After China’s signing and ratification of the UNCAC, a broader definition of bribes has become a consensus of most people.164 There are three proposals for this. Proposal 1: Define bribes as all kinds of advantages, including both property benefits and non-property benefits. “China’s Criminal Law should be coordinated with the Convention. It is necessary to expand the scope of bribes and stop using ‘property,’ but instead, use such words as ‘advantage,’ ‘benefit,’ or ‘undue advantages.’”165 Given the reality in our country, one can find that some property benefits and non-property benefits, which are inconvenient for valuing, have become major means to bribe public-sector workers. Some new bribery techniques have gradually developed into “regular” practices in the real life, and their harm has been serious. The Criminal Law should appropriately and timely respond to the major changes in society. “If a stringent criminal policy is adopted to combat against accepting bribes, bribes may well be equated to ‘undue advantages.’ Therefore, whether to treat ‘undue advantages’ as bribes depends on China’s criminal policy.”166 “China is not facing the problem of non-criminalization, but the problem of criminalization. Excluding non-material benefits from the scope of bribes shows the Criminal Law is not quickly responsive to changes.”167 Proposal 2: Broaden the definition of bribes to include “property benefit.” Coordination with UNCAC is not only shown in form, but also in spirit. Extending the scope of bribes from property to property benefit is conducive not only to distinguishing serious crimes from malpractices, but also to ensuring the stability of

For example, during the meetings of “Two Sessions” in 2008, the National People’s Congress (NPC) proposed that according to our country’s real needs in carrying out policies of anti-bribery and combating corruption and the joining up of the legal requirements after accepting the United Nations Convention against Corruption, it is required to further amendment to and perfection of the provisions related to bribery crime in Criminal Law, in order to expand the scope of object of crime in bribery cases, to add non-governmental workers to criminalize trading in influence and to penalize public officials of foreign countries and international organizations, and to abolish the provisions on the amount of bribes accepted in Criminal Law. See Jilin Provincial High Court President Suggests to Cancel the Provisions on the Amount of Bribery. Procuratorial Daily, March 18, 2008. 165 Zhao and Yang (2009). 166 Chen et al. (2006). 167 Wen (2004). 164

116

G. Sun and X. Qian

current anti-corruption system, structure, and mechanism, highlight the priority in the combat against bribery. Furthermore, it also ensures the legislative changes can be effectively implemented. The proposed change, though of a narrower scope than the words used in the UNCAC in scope, will avoid problems in the judicial practices and thus may be more effectively implemented than using such words as “non-property benefit” or “undue advantages”.168 Proposal 3: Introduce the offence of “non-property bribery” while keeping the existing definition of bribes unchanged.169 (2) It is now advisable to expand the definition of bribe to include “property benefit” As we see it, the call for a more expansive definition of bribes should be rational. While changing bribes from property and property benefit to undue advantages of every description seemingly helps make the national law consistent with the UNCAC, we must consider the feasibility of such a change. Our legislative and judicial traditions value the use of both qualitative and quantitative methods to gauge the extent and degree of harm an act may inflict upon society. Such measurement would become very difficult, if not unlikely, in the case of non-material benefits that hardly have a monetary value, and this would eventually leave judicial personnel at a loss. Furthermore, “for those who solicit or accept non-property benefits, punishment may also be imposed by subjecting them to party disciplines and administrative penalty, and in serious circumstances, dismissing them of public office.”170 To make the revised definition practical and feasible, a preferred change at this stage is to expand the bribes to include “property benefit” rather than “non-material benefit.” First, inclusion of property benefits as bribes reflects China’s need to fight against corruption more intensively at present. Property benefit has gradually become a common form of bribe. A foreign scholar observed in corrupt practices involving foreign companies or individuals in China,the main form of bribe is no longer cash, and it is more likely to be a tour from China, via Los Angeles or Las Vegas for example, to the headquarters of the company sponsoring the trip, the cost of which can be deemed legitimate business expenses. He further pointed out scholarships for officials are another form of bribe.171 Invariably limiting bribes to property is clearly disregarding the reality. In fact, as early as the 1990s, scholars

168

Xiong and Liu (2007). For example, in March 2001, Weng Weiquan and other 36 members of the National People’s Congress jointly put forward a motion. They pointed out that non-property bribery, especially sex bribery, is increasing, and its harmfulness is no less than property bribery. According to our current Criminal Law, non-property bribery cannot be convicted, which is extremely detrimental to the struggle against embezzlement. Therefore, we propose that when amending Criminal Law, we should add “non-property bribery” to Chapter 8 “Embezzlement and Bribery,” in order to further improve China’s anti-embezzlement legislation. See “Sexual Bribery” should be included in Criminal Law. In the Procuratorial Daily, March 9, 2001. 170 Lv (2007b). 171 Boyd (2005). 169

3 Establishing and Improving Criminal …

117

had noted the trend for bribes to become diversified. “Though property benefits, including debt relief, free travel, and repaying another’s debt toward a third party, are not property, they are not essentially different from property … Property benefits solicited or accepted can have a monetary value… Therefore, the act should be deemed an offence of accepting bribes… Future amendments to Criminal Law may provide that the bribe includes property benefit, so that the definition will not be too narrow.”172 Second, inclusion of property benefits as bribes is in line with general perception of wealth in modern society. Doubtlessly, accepting money or gifts will result in a direct increase in one’s wealth. When a person receives a certain benefit (such as tours) from a briber, the cost the person should have incurred is now covered by the briber. This results in an increase in the bribee’s property. In addition, in modern society, personal wealth not only refers to fixed assets, but also such liquid assets as stocks, and debt claims, which often have an economic value much higher than ordinary goods. At a specific point in time, these assets can be priced in monetary terms. Thus, it is not difficult to measure their values. In other words, in contemporary society, property benefits can be traded in the same way as a commodity traded on the basis of its value and price. With “property benefit” included, the new definition of “bribe” will be more practical and inclusive, encompassing the majority of circumstances of bribery in society. It not only better meets the anti-corruption needs of society, but also takes into account the semantic meaning of the term “property.”173 Third, inclusion of property benefits as bribes not only contributes to the coordination within the Criminal Law system, but also helps improve the consistency between the system and the provisions of the UNCAC. China’s Criminal Laws in history have always stressed the relationship between punishment and the amount of illegal proceeds; non-property benefits, however, can hardly be measured in monetary values, and the severity of the offence is thus not easy to evaluate. Property benefits, on the contrary, carry a monetary value and their valuation is thus easier. Revising the definition of “bribe” to include property benefits preserves the legislative and judicial traditions of China, minimizes the adverse impacts that might be brought by legal revisions, and is conducive to improving the consistence between the Criminal Law of China and the UNCAC. Fourth, inclusion of property benefits as bribes has been affirmed by the relevant judicial interpretations. In recent years, the judicial authorities have, in most of the situations, insisted bribes are property, but there are also signs of breakthrough in the understanding of the scope of bribes. In some circumstances, property benefits that can be directly materialized are recognized as bribes.174 172

Mar (1995). Zhao (2003). 174 These judicial interpretations include ① the Minutes of the National Workshop on Economic Crime Trials by Courts, issued by the Supreme People’s Court in November 2003, provide that “the stocks have been listed and appreciated, but the actor only paid their capitals. The differences between actual prices and equity capitals when the actor “bought” the stocks should be determined 173

118

G. Sun and X. Qian

References Atsushi Y (2009) Criminal law and new cases (trans: Fu L and Liu J). China Renmin University Press, Beijing, p 276 Boyd BM (2005). Governmental embezzlement in China: application of the Foreign Corrupt Practices Act. 3 Santa Clara J. Int’ L. 235, p. 3 Cao J (2002) On integration and improvement of bribery criminal legislation. J Natl Prosec Coll 2002(5) Cao J (2010) New types of object of crime in embezzlement cases in the context of new development model of the state-owned sector. Polit Sci Law 2010(1) Chen X (ed) (1998) A comparative study on new and old criminal laws. Publishing House of People’s Public Security University of China, Beijing, p 153 Chen X (2001) A study of accepting bribes. In: Chen X (ed) The criminal law: cases and discussions, vol 3. Law Press China, Beijing, p 39 Chen L (2008) Criminal legislation and perfection of China’s anti-embezzlement from the perspective of the United Nations convention against corruption. Chinese People’s Public Security University Press, Beijing, p 174 Chen Z et al (2006) The United Nations convention against corruption: cornerstone of global anti-corruption. China Democracy and Law Press, Beijing, p 78 Cheng X (2003) An analysis of crime by organizations: from a regulatory perspective. J Henan Admin Inst Politics Law 2003(1) Chu H, Liang G (1998) On the essentials of embezzlement cum the application of Article 394 of Criminal law. China Legal Sci 1998(4) Collected Works of Marx and Engels (1961) vol 6. People’s Publishing House, Beijing, pp 291– 292 Criminal Code of Japan (1998) (trans: Zhang M). Law Press China, Beijing, p 140 Criminal Code of Portugal (2010) (trans: Chen Z). Publishing House of People’s Public Security University of China, Beijing, p 168 Deng J (2005) Complicated issues on the conviction of accepting bribes. In: Zhang Z (ed) Guide to criminal justice, vol 24. Law Press China, Beijing, p 65 Gu X (editor-in-chief) (2002) Economic criminology (1). Shanghai People’s Publishing House, Shanghai, p 51 Gao M (1981) The gestation and birth of the criminal law of the People’s Republic of China. Law Press China, Beijing, p 210 Gao M (ed) (1989) Criminal jurisprudence of China. China Renmin University Press, Beijing, p 604 Gao M (ed) (1998) Criminal jurisprudence. Peking University Press, Beijing, p 555 Gao Y (2004) Comparative study and new exploration of the scope of ‘bribery.’ Hebei Law Sci 2004(2)

as an evidence of the offence of accepting bribes. ② The Opinions on Several Issues Concerning the Application of Law on Criminal Cases of Accepting Bribes, issued by the Supreme People’s Court and the Supreme People’s Procuratorate in 2007, provide for qualitative treatments of ten types of bribery behaviors and involve the determination of the acceptance of property benefit as an offence. The Opinions on Several Issues Concerning the Application of Law on Criminal Cases of Commercial Bribery, issued by the Supreme People’s Court and the Supreme People’s Procuratorate, in 2008, specify that “The property in commercial bribery includes both money and bribes in kind, such as property benefit converted from money, for example, the provision of housing decoration, paid membership cards, tokens cards (coupons), travel costs. The actual payment shall prevail. It is thus clear that through judicial interpretations, the targets of bribery have actually expanded from “property” to “property benefit” at this stage. Pang (2008).

3 Establishing and Improving Criminal …

119

Gao M, Ma K (eds) (2007) Criminal jurisprudence. 3rd ed. Peking University Press, and Higher Education Press, Beijing, p 702 General Prosecutor’s Office of the Russian Federation (ed) (2000) Explanation of criminal code of the Russian Federation (trans: Huang D). China University of Political Science and Law Press, p 804 Gong Z (2006) Legal problems that smuggling by a one person company reveals. People’s Political Consultative Daily August 28 Hans-Heinrich J (2002) A foreword to the Penal Code of the Federal Republic of Germany, German Penal Code (trans: Xu J and Zhuang J). China Fangzheng Press Beijing, (2004), p 28 Hans-Heinrich J (2004) Preface for the criminal code of Federal Republic of Germany. Strafgesetzbuch [German Penal Code] (trans: Xu J and Zhuang J). China Fangzheng Press, Beijing, p 28 [German] Hao L (1985) Characteristics of embezzlers. Polit Sci Law 1985(5) He B (1999a) A preliminary discussion of offenders of crime by organizations under the criminal law of China. Issues and controversy over criminal law (vol I). China Fangzheng Press, Beijing, p 266 He B (ed) (1999b) Prevention and punishment of capacity-related crimes. China Fangzheng Press, Beijing, pp 470–471 He C (2004) A comparative study of embezzlement crime cum comparison of China’s Legal Institutions of Honest and Clean Government with the United Nations Convention against Corruption. Law Press China, Beijing, p 164 Hu C (2001) A study on boundaries and convictions of governmental workers’ abuse of official capacity. China Fangzheng Press, Beijing, p 351 Hu and Cao (2005) How to determine corrupt practices. Procuratorial Daily, January 10 Hu L, Yang K (2006) Reasonable limits and core elements of embezzlement crime: interpretation of embezzlement crime based on criminal policy as the core, and Zhao Bingzhi ed. Rule of criminal law in a harmonious society, vol 2. Chinese People’s Public Security University Press, Beijing, p 1660 Huang D (2000) Interpretation of criminal code of the Russian Federation, vol 2. China University of Political Science and Law Press, Beijing, p 419 Huang S (2003) Improve law on protection of state-owned assets. Fujian Daily, March 13 Jiang P (ed) (2000) Civil law. China University of Political Science and Law Press China, Beijing, p 357 Jin F, Yang X (2000) Constitutive elements and verification of accepting bribes involving the trading of power for money. The People’s Judicature 2000(2) Jitsu O (2008) Notes on the criminal law (2nd ed) (trans: Li H). China Renmin University Press, Beijing, p 580 Kimura K (ed) (1991) Criminal Jurisprudence Dictionary (trans: Gu X et al.). Shanghai Translation and Publishing Company, Shanghai, p 539 Lang S (2003) Developments in criminal legislation of China and several issues worth attention in present trial practice. Crim Trial Digest 2003 (1), Nan Y (ed) Li B (1999) On the definition of crime by an organization. Issues and Controversy over Criminal Law, vol I. China Fangzheng Press, Beijing, p 218 Li J (2002a) Interpretation and analysis of legal provisions on accepting bribes. J Henan Admin Inst Polit Law 2002(5) Li W (ed) (2002b) Investigation and application of evidence for embezzlement and bribery. Chinese People’s Public Security University Press, Beijing, pp 27–29 Li X (ed) (2004) Studies on bribery and embezzlement. Intellectual Property Publishing House, Beijing, p 225 Liang G (2001a) Loopholes and remedies for the net of bribery justice. China Legal Sci 2001(6) Liang G (2001b) Loopholes and remedies for the net of bribery justice—also on statutory interpretation of criminal law. China Legal Sci 2001(6) Liao Z (2007a) A survey of the offence of accepting bribes: from theory to practice. China Fangzheng Press, Beijing, p 380

120

G. Sun and X. Qian

Liao Z (2007b) Studies on the offence of accepting bribes: theory and practice. China Fangzheng Press, Beijing, p 160 Liu L (ed) (1996) On bribery. China Procuratorate Press, Beijing, p 342 Liu J (editor-in-chief) (1997) An interpretation of new criminal law articles. People’s Court Press, Beijing, p 1660 Liu X (2002) An empirical study on contributory bribery. Procuratorial Daily, November 22 Liu L, Zhang D (2005) A discussion about coordination between China’s Criminal Law and United Nations convention against corruption and its legislation improvement. J Chin People’s Publ Secur Univ 2005(1) Lv T (2007a) Theory and practice against bribery. Guangming Daily Press, Beijing, p 360 Lv T (2007b) Theory and practice of bribery crime. Guangming Daily Press, Beijing, p 128 Ma S et al (2000) A study of offenders of crime by organizations. J Zhengzhou Univ 2000(6) Ma C (ed) (2003) Studies on hotspot issues concerning the criminal law. Hunan People’s Publishing House, Changsha, pp 417–418 Ma K (2007) Better not to include agencies as offenders of crime by organizations, published in People’s Procuratorial Semimonthly, 2007(21) Mao L (2006) A criminal study of one person company in the context of the new company law. Legal Sci 2006(7) Mar K (1995) Exploration into criminal law. Law Press China, Beijing, pp 264–265 Meng Q (2005) Embezzlement and bribery: research on identifying and solving key, suspicious, and difficult problems. People’s Court Press, Beijing, p 19 Meng Q, Gao X (2001) Conviction and sentencing of embezzlement. People’s Court Press, Beijing, p 136 New Penal Code of France (2005) (trans: Luo J). China Legal Publishing House, Beijing, p 328 Nishida N (2007) Particular theories of the criminal law of Japan (trans: Liu M and Wang Z), 3rd edn. Renmin University of China Press, p 388 (Japanese) Oya M (2008) An interpretation of criminal law (2nd edition of the New Edition) (tran: Li H). China Renmin University Press, Beijing, p 574. (Japan) Pang J (2008) Understanding and application of the opinions on several issues concerning the application of law in criminal cases of commercial bribery. People’s Judicature (23) Ren W (2007) Several issues concerning the application of laws in criminal trials. Shanghai Judicial Pract 2007(7) Ruan F (2000) Thorny problems about the concept of public-sector worker. J Zhejiang Univ (Hum Soc Sci) 2000(2) Ruan C (2006) On the legislation of bribery crime in China versus the United Nations convention against corruption: from the perspective of localization of international criminal law. Hebei Law Sci 2006(4) Shi L (2009a) Studies on bribery in Macao. Publishing House of People’s Public Security University of China, Beijing, p 84 Shi L (2009b) A study of bribery in Macao. Publishing House of People’s Public Security University of China, Beijing, p 269 Sun G (1995a) Economics of criminology: principles and application. Nanjing University Press, Nanjing, p 567 Sun G (1995b) Principles and application of economic criminal law. Nanjing University Press, Nanjing, p 567 Sun G (1997) On several issues about public-sector workers, published in the autumn issue of Nanjing University Law Review Sun G (1998) On several issues about public-sector workers, published in the spring issue of Nanjing University Law Review Sun W (2007) End of a Villa dream: Shanghai’s first case of embezzlement despite failure to register the changes in immovable property rights. Prosec View 24 Sun G, Wei C (2011) A legislative study of the United Nations convention against corruption and the crime of embezzlement and bribery. Law Press China, Beijing, p 245 Tang S (2002) A study on embezzlement. People’s Court Press, Beijing, p 160

3 Establishing and Improving Criminal …

121

Tang B (2007) On embezzlement. China Procuratorate Press, Beijing, p 77 Tian Z (2007) One person company as subject of crime and judicial presumptions. Procuratorate Daily, March 26 Wan H et al (2005) What is the difficulty of determining new types of bribery. Procuratorial Daily, March 9 Wang X (1999) State-owned enterprises under European Communities Competition Law. Foreign Law Rev 1999(3) Wang Z (ed) (2001) A study of the practices of specific provisions of criminal law, vol 2. China Fangzheng Press, Beijing, p 1707 Wang Y (2002) Crime of bribery in the United States. China University of Political Science and Law Press, Beijing, p 28 Wang Z (2003) A study of ‘organizations’ under the criminal law, published in Zhao Bingzhi’s Criminal Law Review (vol 2). Law Press China, Beijing, p 15 Wang Z (ed) (2007) A study of the practices of specific provisions of criminal law, vol 2. China Fangzheng Press, Beijing, p 1795 Wang X (2010) Judicial interpretation of “seeking benefits for others” in an offence of accepting bribes. Hebei Law Sci 2010(4) Wen D (2004) Bribery under criminal policy. Crim Sci 2004(4) Wu J (2009a) Determination of the Status of workers at state-owned Banks. Procuratorate Daily, October 12 Wu J (2009b) Reflect on the past six decades, meet new challenges. Reading 2009(12) Xiao Y (ed) (1994) A study on the crime of bribery. Law Press China, Beijing, p 182 Xiao Z (2003) On several application issues concerning offence of accepting bribes. Law Rev 2003(1) Xiao Z (2006a) Complicated issues on bribery and embezzlement. Shanghai People’s Publishing House, Shanghai, p 151 Xiao Q (2006b). Improvement of criminal legislations on bribery in China. Seeker 2006(3) Xie W (ed) (2001) Disputed points and hotspots in determining the offences committed by governmental workers. China Fangzheng Press, Beijing, p 112 Xing W (1988) On taking advantage of position in accepting bribes. Chin J Law 1988(6) Xiong X, Liu W (2007) On legislative perfection of bribery crime: based on the United Nations convention against corruption and balanced inspection on domestic anti-corruption needs. In: Zhao B, Lang S (eds) Harmonious society and construction of modern Chinese criminal law. Peking University Press, Beijing, p 872 Xiong X, Ren W (eds) (2007a) A guide to the application of crimes under criminal law: embezzlement and bribery. Publishing House of People’s Public Security University of China, Beijing, p 5 Xiong X, Ren W (eds) (2007b) Guide to criminal charges in the penal code: embezzlement and bribery. Publishing House of People’s Public Security University of China, Beijing, p 21 Xiong X, Ren W (eds) (2007c) Applicable charging guidelines for criminal law: embezzlement and bribery. Chinese People’s Public Security University Press, Beijing, p 7 Xu W (1998) Economic crimes and economic disputes. Law Press China, Beijing, p 213 Xu D, Ma X (2010) Will the nature of duty change with restructuring of a company? Procuratorate Daily, January 2 Yang X (2002a) Legislature against embezzlement and bribery and the application of judicial interpretation. China Procuratorate Press, Beijing, p 39 Yang X (2002b) Laws on bribery and embezzlement and judicial interpretation. China Procuratorial Press, Beijing, pp 207–208 Yang Y (editor-in-chief) (2007) Comparative study on anti-corruption measures. Publishing House of People’s Public Security University of China, Beijing, p 335 Yang Y (ed) (2007b) Mechanism perfection of China’s anti-corruption and UN anti-corruption measures. Publishing House of People’s Public Security University of China, Beijing, p 339 Yang Z (2008) A study of latest developments of official bribery in the United States: Federal Bribery Statute in Focus. Crim Sci 2008(2)

122

G. Sun and X. Qian

Yang Z (2009) A study of criminal law protection of state-owned assets: from a global perspective of criminal jurisprudence. Publishing House of People’s Public Security University of China, Beijing, p 221 Yang C et al (eds) (1992) Criminal jurisprudence. Nanjing University Press, Nanjing, p 355 Yi Pin Fa Xue Yuan (2008) Model new six laws (criminal law). Rev. 4th edn. Yipin Cultural Publishing Co. p 311 Yu Z (ed) (2001) Conviction and sentencing of ten frequently occurring job-related offences. China Fangzheng Press, Beijing, p 43 Yu Z (2005) Finnish criminal policy and its reformation: a foreword. Criminal code of Finland (tran: Yu Z). China Fangzheng Press, p 18 Yu S (2010) Treat one person company and work unit alike when it comes to bribery. Procuratorate Daily, January 4 Zhang J (1991) Principles of science of civil law. China University of Political Science and Law Press, Beijing, p 548 Zhang S (1995) A look back at and into the future of Chinese legislations on corporate crime. Wuhan Univ J 1995 (6) Zhang Q (editor-in-chief) (1997) A practical guide to the revised articles of the criminal law. China Procuratorate Press, Beijing, p 111 Zhang R (2006) Criminal law’s equal protection in non-public economy: from the perspective of embezzlement legislation. Mod Law Sci 2006 (4) Zhang J (2007a) An outline of criminal law regulation and protection over non-public sectors of the economy. Publishing House of People’s Public Security University of China, Beijing, pp 131–132 Zhang M (2007b) Criminal law, 3rd edn. Law Press China, Beijing, p 880 Zhang G (2010) Quest under the criminal law for constitutionalism. Procuratorate Daily, May 27 Zhang M (2011) Criminal law. Law Press China, Beijing, p 668 Zhang J et al (2008) A general survey of criminal law. Peking University Press, Beijing, p 327 Zhao B (editor-in-chief) (1997a) New criminal law: a textbook. Publishing House of People’s Public Security University of China, Beijing, p 780 Zhao B (1997b) Issues on an extroverted criminal law. China Legal Publishing House, Beijing, p 951 Zhao B (1998) Essentials of accusation and judicial interpretation of new criminal code. Publishing House of People’s Public Security University of China, Beijing, p 477 Zhao B (ed) (1999) Identification and disposition of embezzlement, bribery and related crimes. China Fangzheng Press, Beijing, p 57 Zhao J (2003) On reorientation of the scope of bribery in China’s criminal law: the requirements of UN convention against transnational organized crime as standards. Crim Sci 2003(6) Zhao B (2005) Preliminary exploring on the coordination between China’s criminal law and order and the United Nations convention against corruption. Law Sci Mag 2005(1) Zhao G (2009) Three crimes likely to be committed by a journalist. People’s Court Daily, January 18 Zhao B, Yang C (eds) (2009) A study on implementation of UN convention against transnational organized crime in China. Beijing Normal University Publishing House, Beijing, p 83 Zhao B, Xiao Z, Zuo J (2007) A dialog on criminal law. Peking University Press, Beijing, p 425 Zhou Z (2005) A survey of studies on job-related crimes. Law Press China, Beijing, pp 109–110 Zhu L (2005) A comparative study of bribery under the United Nations convention against corruption with respect to the private sector. Forw Pos 2005(2) Zong J (2003) A criminological study of embezzlement in Chinese and Western Cultures. China Procuratorate Press, Beijing, p 268

Chapter 4

Establishing and Improving Criminal Legislation on Giving Bribes Renwen Liu and Yunbo Huang

Embezzlement and bribery are major forms of crimes associated with corrupt conducts and practices. While the crime of embezzlement has been on the decline in the past years, the crime of bribery is still rampant1 and thus remains a priority in our anti-corruption effort today. In the Criminal Law of China, the crime of bribery includes giving and accepting bribes and acting as an intermediary in a case of 1

The crime of embezzlement under China’s Criminal Law is a kind of misappropriation and job-related crime. It involves the embezzlement of public properties, and objective evidence is easy to obtain and relatively strong, making it unnecessary to rely on testimony. In comparison, the crime of bribery is transaction-based and disguised, making it difficult to obtain objective physical evidence and more necessary to rely on testimony. Moreover, it is hard to make a final decision on such cases if there is no additional evidence to support the testimony. When accounting and auditing systems are fully in place to help prevent such crimes, it is easier to support a prosecution with evidences and it will therefore be easier for criminal legislation to effectively control the crime of embezzlement, yet this is not true for the crime of bribery. Someone counted the number of cases of embezzlement and bribery filed by procuratorates nationwide from 1988 to 2009 and found that more cases of the former were filed than the latter during 1988–2005 with a narrowing gap and the opposite was true in the later years with the declining trend in the number of embezzlement cases remaining evident (see Qian 2012). Another study revealed that the number of cases filed by procuratorates nationwide for the crimes of embezzlement and misappropriation kept decreasing during 2001–2010 and the number of cases of embezzlement filed by Changshu municipal procuratorate also decreased from 2000 to 2006; yet the number of cases of bribery grew continuously in both scenarios (Shan and Chen 2013). This echoes the previously mentioned conclusion that the crime of embezzlement is generally under control, but the crime of bribery, on the contrary, was only contained for short periods in the early and late 1990s and has then gone out of control since the 2000s.

R. Liu (&) Institute of Law, Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected] Y. Huang Law School, Tianjin University, Tianjin, China e-mail: [email protected] © Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7_4

123

124

R. Liu and Y. Huang

bribery. A bribe given may not necessarily result in the crime of taking it, yet the crime of accepting bribes usually means there has been a bribe given. Thus, we must pay close attention to the crime of giving bribes, a major cause of accepting bribes, when trying to crack down on the latter crime. However, for quite a long time, academic studies on giving bribes have lagged far behind that on accepting bribes and the gap remains wide despite all the efforts we have made lately to cover it.2 Here, I will analyze some issues concerning the crime of giving bribes in China and offer some advice on how to make improvements.

4.1 4.1.1

Legislative Activities and Judicial Practices: Past and Present A History of Legislation on Giving Bribes

On March 28, 1952, the Central People’s Government of China adopted the Regulations of the People’s Republic of China on Punishments for Embezzlement (the Regulations) and it was the first legal document containing provisions on giving bribes since the founding of the People’s Republic of China. It stipulates that everyone who gives bribes or acts as an intermediary in bribery to a public official shall be punished based on the seriousness of their offence by referring to stipulations concerning the crime of embezzlement; for especially severe cases, part or all of the offender’s properties shall be confiscated; those who confess fully and report on the offence of those who take bribes shall be fined and exempted from all other criminal punishments; those who offer a bribe in order to evade tax shall pay their due taxes and fines and be punished for giving bribes according to the Regulations; those who force or entice others to take a bribe shall be given heavier or aggravated punishment; and those who are blackmailed to offer a bribe to a public official and obtain no illegitimate gains shall be not convicted of giving bribes. In addition, it is also stipulated in the Regulations that those who offer small rebates to public officials in fair transactions before the Regulations are issued following the convention of the old times shall not be convicted of giving bribes; yet those who continue to give and take such small rebates in transactions involving public officials after the Regulations are issued shall be convicted respectively of giving bribes and accepting bribes. On July 1, 1979, the National People’s Congress adopted the first Criminal Law of the People’s Republic of China. Since embezzlement and bribery were not yet a serious problem in the country, the punishment for giving bribes was only up to

According to cnki.net, a total of 270 papers were published on “accepting bribes” and 53 on bribery in 2010; 240 were published on the former and 76 on the latter in 2011; 181 on the former and 64 on the latter in 2012; 168 on the former and 81 on the latter in 2013.

2

4 Establishing and Improving Criminal Legislation on Giving Bribes

125

three years of imprisonment or detention with no fine or property confiscation. The stipulation that encourages offenders to confess and report on the bribee was also canceled. On July 18, 1985, the Supreme People’s Procuratorate and the Supreme People’s Court jointly issued Answers to Several Questions Concerning Law Application in Handling Some Current Cases of Economic Offence (Trial), adding “seeking personal gains” to the definition of giving bribes and clarifying the scope of the crime. On March 24, 1986, the Supreme People’s Procuratorate issued Rules on the Filing of Cases of Economic Prosecution Directly Received by People’s Procuratorates (Trial), taking out “unlawful” which modifies the word “benefits” in a case of giving bribes but requiring the conduct of giving properties to be “unlawful” to constitute a crime. As embezzlement and bribery aggravated in China, old laws were no longer sufficient. On January 21, 1988, the Standing Committee of the National People’s Congress amended the 1979 Criminal Law and formulated Supplementary Provisions on the Punishment of Crimes of Bribery and Embezzlement (the Supplementary Provisions). The latter actually took the place of the Criminal Law in regard to embezzlement and bribery, playing a major role in cracking down on such offences. Article 7 of the Supplementary Provisions clearly defined the crime of giving bribes, replacing the original term “seeking illegal benefits” with “seeking undue benefits.” Article 8 stipulates punishment for the crime of giving bribes, which was heavier than before with the upper limit elevated to life imprisonment plus property confiscation. Meanwhile, bribers were again encouraged to confess and report on bribees, with lighter punishment or exemption from criminal punishment applicable to the bribers who confess their offence before being prosecuted. Article 9 provides for giving bribes by an organization and the corresponding punishment. Later on September 2, 1993, the Standing Committee of the National People’s Congress adopted the Anti-Unfair Competition Law, in which Article 8 was about the crime of commercial giving bribes.3 On March 14, 1997, the National People’s Congress made comprehensive amendments to the 1979 Criminal Law, basically following the spirit of the Supplementary Provisions of 1988 in regard to the crime of bribery and adding to it the provisions on commercial bribery stated in the Anti-Unfair Competition Law of 1993. In the new Criminal Law, Article 164 provides for the crime of giving bribes to company employees, Article 389 defines the crime of giving bribes, Article 390 stipulates punishment for giving bribes, Article 391 stipulates the crime of giving bribes to an organization, and Article 393 defines giving bribes by an organization.

3

Article 8 of the 1993 Anti-Unfair Competition Law stipulates that business operators must not offer bribes of properties or in other forms in order to sell or buy certain goods. Those who give rebates to the other party, whether it is an institution or individual, out of the account shall be held guilty of giving bribes; the other party, whether it is an institution or individual, who accepts rebates out of the account shall be held guilty of accepting bribes. A business operator who sells or buys certain goods may explicitly offer rebates to the other party or give commissions to intermediaries. Such rebates and commissions must be kept truthfully in the accounts of both the giver and the recipient.

126

R. Liu and Y. Huang

On June 29, 2006, the Standing Committee of the National People’s Congress adopted the Sixth Amendment to the Criminal Law and Article 8 of the amendment changed “giving bribes to a company employee” in Paragraph 1 of Article 164 of the Criminal Law to “giving bribes to a non-public-sector worker,” taking into consideration the activity of bribing non-public-sector workers and stipulating fines for the offence. On February 25, 2011, the Standing Committee of the National People’s Congress adopted the Eighth Amendment to the Criminal Law, making further revisions to Article 164. In addition to giving bribes to a non-public-sector worker, the crime of bribing foreign public officials and officials of public international organizations was added in Paragraph 2 under the article. A review of legislation on giving bribes after the founding of the People’s Republic of China reveals a change from a single offence to a new set covering five offences, namely giving bribes, giving bribes by an organization, giving bribes to an organization, giving bribes to a non-public-sector worker, and giving bribes to foreign public officials and officials of public international organizations.

4.1.2

Stop Giving More Attention to Accepting Bribes Than Giving Bribes

As our judicial system has long been paying more attention to accepting bribes than to giving bribes, the percentage of giving bribes cases prosecuted has been much lower than that of accepting bribes cases. However, where there is accepting bribes, there usually is giving bribes. A small percentage of cases prosecuted does not mean the occurrence of such offences is low. Therefore, in 1999, the Supreme People’s Court and the Supreme People’s Procuratorate jointly issued the Circular on Punishing Offenders of Severe Giving bribes when Handling Major Cases of Accepting bribes (the Circular), calling for enhanced efforts to fight against the crime of giving bribes. Following the circular, judicial authorities in China stepped up their efforts in this field, but the tendency of placing greater emphasis on accepting bribes was not reversed (see Figs. 4.1 and 4.2).4 The figure shows that in 2000, a total of 8,406 cases of accepting bribes and 1,200 cases of giving bribes were filed, involving 8,755 and 1,298 persons, respectively; 8,322 cases of accepting bribes and 1,686 cases of giving bribes were handled in 2001, involving 8,590 and 1,895 persons, respectively; the figures of 2002 were 8,576 cases of accepting bribes and 1,822 cases of giving bribes, involving 8,828 and 1,963 persons, respectively; in 2003, there were 8,457 cases of accepting bribes and 1,759 cases of giving bribes, involving 8,654 and 1,885 persons, respectively; in 2004, there were 8,511 cases of accepting bribes, involving 8,887 persons and 1,712 cases of giving bribes, involving 1,952 persons; in 2005, there were a total of 8,425 cases of accepting bribes, involving 8,811 persons and 1,688 cases of giving bribes, involving 1,994 persons; in 2006, there were 9,102 cases of accepting bribes, involving 9,531 persons, and 2,093 cases of giving bribes, involving 2,365 persons; in 2007, there were 9,371 cases of accepting bribes, involving 9,852 persons, and 2,346 cases of giving bribes, involving 2,691 persons; in 2008, there

4

4 Establishing and Improving Criminal Legislation on Giving Bribes

127

Fig. 4.1 Cases of accepting bribes and giving bribes, 2000–2008

Fig. 4.2 Number of people involved in cases of accepting bribes and giving bribes, 2000–2008

From the figures above, we can see that in the nine years between 2000 and 2008, the gap was huge between the numbers of cases of accepting bribes and giving bribes and the numbers of people involved in such cases handled by procuratorates, and accepting bribes obviously attracted much more attention than giving bribes. Although Chinese procuratorates realized this gap early in 1999 and the supreme judicial authorities had pledged greater efforts combating giving bribes over the following decade, the trend remained fundamentally unchanged. To break up the alliance between bribers and bribees, China’s Criminal Law encouraged voluntary surrender of bribers, stipulating that bribers who deliver themselves up to the justice and give a confession out of their own will before being prosecuted may be subject to reduced punishment or be exempted.5 Given their effects over the years, we believe these special surrender arrangements are more detrimental than beneficial and should be canceled. were 9,637 cases of accepting bribes, involving 10,216 persons, and 2,362 cases of giving bribes, involving 2,697 persons. These data came from the database of the Supreme People’s Court and the work report of the Supreme People’s Procuratorate. Also, according to the media report, during 2008–2012, the total number of those convicted of giving bribes was up by 60.4% over the five years before that and in 2013, the number of such offenders handled by procuratorates nationwide was 5,676, up by 17.3% over the previous year. However, despite such growth, the number of cases of giving bribes accounted for only 31.4% in the total bribery cases in 2013, showing that more attention is still paid to accepting bribes rather than giving bribes in spite of all the progress made over the years (see Supreme People’s Procuratorate 2013; Dai 2014). 5 The same special arrangements apply to the crime of introducing the opportunity of receiving bribes.

128

R. Liu and Y. Huang

First of all, these arrangements are in themselves the result of prioritizing accepting bribes over giving bribes. In other countries, similar legal arrangements mainly apply to highly disguised and highly harmful cases, cases of high occurrence which are difficult and costly to crack, or accessory crime.6 Such arrangements are made on the basis of distinction between principal and accessary offences. Accepting bribes and giving bribes, on the contrary, are two types of crimes of equal harm yet by making the special arrangements; they are actually defined respectively as principal and accessary crimes, which is clearly unreasonable. Moreover, bribees7 can only receive lighter or reduced punishment for surrender before being prosecuted, while bribers who do the same may receive reduced punishment or be exempted. In specific cases where such special arrangements are applied, a briber who surrenders is usually released while a bribee who does the same is still imprisoned. As giving bribes and accepting bribes are the two sides of the same coin, the differentiation in punishment would undermine the efforts to combat them. Second, the special arrangements play a limited role in breaking up the briber– bribee alliance, but run a risk of being misused. The special arrangements were designed to break up the alliance of interests between bribers and bribees.8 But since it was created in the Criminal Law in 1997, bribery has clearly increased, which means such arrangements are ineffective on the whole. This is because a certain degree of trust is important for a briber and a bribee to make a deal in the first place. Bribers have tried hard to maintain their images of credibility and will not report on their allies unless that is their last resort. Also, the special arrangements reward surrenders with reduced punishment or exemption, yet whether to offer such rewards is uncertain and subject to the discretion of the judiciary personnel. Adding to that, suspects naturally tend not to trust those who handle their cases and are unlikely to cooperate. Moreover, since the judiciary personnel have much power to decide whether the special arrangements apply, bribers may even try to bribe them for reduced punishment or exemption, which will make a new case of corruption. Third, the special arrangements may even encourage giving bribes. The purpose of criminalizing giving bribes in the Criminal Law is to prohibit it, but the special arrangements turn out to reduce the cost and risk of the crime without lowering the possible benefits and thus may serve as an incentive instead. To sum up, the special arrangements for bribers who surrender themselves should be canceled and the general provisions for surrenders in the Criminal Law shall apply instead. Some suggest a change from reduced punishment or exemption to lighter or reduced punishment for bribers who surrender before being prosecuted, and exemption only applicable for mild offenders or those with major meritorious performance. Such a change, which would mean further restrictions on obtaining a

6

Zhao and Yu (2000). The word “offender” is used in the article as it is neutral compared to “criminal” which contains dictatorial and negative implication (see Liu 2010). 8 Gao (2012). 7

4 Establishing and Improving Criminal Legislation on Giving Bribes

129

mitigation exemption, will only further dampen the effectiveness of the special arrangements in breaking up the briber–bribee alliance, for what the arrangements were introduced in the first place but which has not been well achieved. Moreover, the change would render the special arrangements virtually redundant since they would become largely the same as the general provisions in the Criminal Law concerning surrender and meritorious performance. Also, the change will not reduce the discretion of judges or the uncertainty in applying the special arrangements and thus will not prevent the misuse of power or facilitate cooperation between the offenders and the judicial personnel. The suggested change does not put an end to the greater emphasis on accepting bribes, instead of giving bribes, in criminal sanction and would not effectively deter bribers. For the above reasons, we believe minor changes will not work and the special arrangements should be eliminated altogether. Besides the special arrangements, another factor also leads to the greater emphasis on accepting bribes in judicial practices. When determining the jurisdiction of a bribery case, some enforcement agencies and personnel misunderstand the relationship between giving bribes and accepting bribes, having giving bribes cases subordinate to the associated cases of accepting bribes. That means if no criminal investigation is pursued on accepting bribes, the associated giving bribes will be left unaddressed. According to the law, public security agencies deal with such crime as giving bribes to non-public-sector workers, foreign public officials or officials of public international organizations, and procuratorates such cases as giving bribes to public-sector workers or to organizations, and giving bribes by organizations. Generally, procuratorates are mainly responsible for cases of job-related offences committed by public officials, but bribers are usually not public officials. Therefore, it is not uncommon in practice that when a public official is not prosecuted for accepting bribes, the briber in the case would not either. However, it should be made clear that according to Paragraph 2 of Article 18 of the Criminal Procedure Law, both accepting bribes and giving bribes cases are within the jurisdiction of procuratorates in China and a filed case of accepting bribes should not be taken as a precondition for investigation in a case of giving bribes. In the Criminal Law, the crimes of giving bribes and accepting bribes are equal in severity and they may be handled separately in practice without setting one as subordinate to the other. For example, if A, B, and C each give a bribe of RMB 3,000 to D who thus receives a total of RMB 9,000, then none of A, B, and C will be prosecuted for giving bribes, but D will be prosecuted for accepting bribes. In another example, A offers a bribe of RMB 3,000 to B, C, and D each, and A will thus be prosecuted for giving bribes to three (or more) people, while none of B, C and D will be prosecuted for taking the bribe.9 Therefore, it is very unreasonable 9 According to the Rules of the Supreme People’s Procuratorate for People’s Procuratorates to Accept and File Cases (Trial) in 1999, cases involving taking a bribe above RMB 5,000 shall be filed; cases involving giving a bribe above RMB 10,000 shall be filed; and cases involving giving a bribe below RMB 10,000 shall also be filed in one of the following scenarios: (1) bribery for illegal gains; (2) bribery of more than three persons; (3) bribery of Party and government officials,

130

R. Liu and Y. Huang

and goes against the law to put giving bribes in a position subordinate to accepting bribes in practice. This is something we must strive to change if we are to effectively combat the crime of giving bribes.

4.2 4.2.1

Legal Criteria for Defining Giving Bribes as a Criminal Act Replace “Property” with “Undue Advantage”

In the Criminal Law of China, when defining bribery, the word “property” is used. According to the Opinions on Several Questions Concerning Law Application in Handling Criminal Cases of Bribe Taking issued in 2007 by the Supreme People’s Court and the Supreme People’s Procuratorate, the property includes property gains with a monetary value. Later, the Opinions on Several Questions Concerning Law Application in Handling Criminal Cases of Commercial Bribery issued by the Supreme People’s Court and the Supreme People’s Procuratorate in 2008 made it clear that property in cases of commercial bribery includes not only money and physical goods but also other property gains with a monetary value. Though these stipulations have extended the concept of property to cover property gains, non-property gains are still not included. Moreover, these stipulations are only judicial interpretations, not laws. Currently, legislative authorities are about to release the Ninth Amendment to the Criminal Law. In regard to the definition of bribery, our advice is to replace “property” with “undue advantage,” a term used by the United Nations Convention against Corruption to which China has acceded so as to cover both property and non-property gains. Apart from better coordination with the Convention, we suggest this change also on the following grounds. First, the word “property” falls short of covering non-property bribes despite their great social harms. Examples of such bribes include job offers, facilitation in transfer of household registration, employment opportunities offered to the bribee’s children and other family members, job promotion, and sexual bribes. Though the detrimental consequence of such cases is no lower than bribery involving properties, it is often difficult to get the offenders prosecuted based on existing legal provisions. Some argue against taking non-property gains into the scope of bribes, saying that would make it difficult to obtain and verify evidence, thus leading to possible confusion in judicial practices.10 It should not be denied that comparing with other forms of bribes, investigation into non-property gains is often more difficult. However, similar issues also occur to other types of crimes. For example, it is often difficult to obtain and verify evidence about rape but no one argues against judicial workers, or law enforcement workers; and (4) bribery leading to major loss of national or social interests. 10 Liu and Ruan (2003), Gao (2006), Yang (2008).

4 Establishing and Improving Criminal Legislation on Giving Bribes

131

its criminalization. The real problem we now face is that even in some cases with sound evidence, it is hard to prosecute the offender because only property can be counted as bribes. For example, in the case of former Minister of Railway Liu Zhijun, Liu was proven to have accepted sexual bribes from several women arranged by someone surnamed Ding at luxurious hotels and other expensive entertainment sites, yet he was not prosecuted on that charge because existing laws do not support it.11 Here, we can see that difficulties in obtaining and verifying evidence should not be taken as a reason why non-property gains should not be regarded as bribes. For a long time, monetary values of bribes have played a dominant role in legal rulings on a case of bribery and been deemed almost the sole criterion for decisions regarding charges and sentences. However, we should be clearly aware that when deciding on whether a certain behavior constitutes a crime, the real benchmark is how much damage it does to society. It has been proved that bribery cases involving non-property gains are fundamentally nothing different from those involving property gains in their detrimental effects to the integrity of public officials. So, we should change the old mentality and base our judgment instead of how hazardous an offence is to society. Second, replacing “property” with “undue advantage” will help us solve some difficulties in judicial practice. Sexual bribery, for example, has been dealt with by judicial agencies given its social harms. In August 2002, the people’s court of Qinhuai District in Nanjing ruled on a case where a businessman Xu sent prostitutes three times to bribe someone surnamed Li, sentencing Xu to one year of imprisonment on the charge of procuration.12 In December 2006, the people’s procuratorate of Jingning She Autonomous County of Lishui, Zhejiang Province, lodged a criminal complaint against the defendant Wen for accepting bribes and counted as bribes the RMB 9,500 he had received from someone surnamed Ding to pay for prostitution. The court accepted this way of calculation and sentenced Wen to imprisonment for accepting bribes.13 In the first of these two cases, the judicial authority managed to get the offender punished, but on a charge other than bribery; in the second, the way of calculating bribes may not work if the situation becomes more complex, for example, when one accepted free sexual service directly from the bribers or their relatives, friends, or employees. At the bottom of these two cases, the problem is that the true nature of sexual bribery was neglected and what was adopted was merely a makeshift arrangement under the current legal framework.14 Third, in laws other than the Criminal Law, the scope of bribe has gone beyond properties and even beyond property gains since long ago. For example, in the Law on Practicing Doctors of the People’s Republic of China of 1998, bribes include properties and other unlawful gains; in the Law of the People’s Republic of China on Tenders and Bids of 1999, a bribe was defined as properties or other advantage;

11

Zhu (2013). Jiang (2003). 13 Fan and Zheng (2007). 14 Liu and Zhang (2010). 12

132

R. Liu and Y. Huang

and the Government Procurement Law of 2002 uses the phrase of bribe or other unlawful gains. From these, we can see that the use of “undue advantage” instead of “property” will improve the coordination between the Criminal Law and other laws of China, thus producing a synergy in governing society. Fourth, according to what we see in the legislative and judicial practices of other countries and regions, any property or non-property gain that meets the needs of the bribee falls within the scope of bribe. For example, in the Criminal Law of Germany, a bribe is described as “gain,” in Italy, it is referred to as “money or other gains,” and in Japan, a bribe is not limited to properties, may be tangible or intangible, and may cover all gains that may meet a person’s need or desire, including sexual gratification.15 For example, in 1998, an official of the Ministry of Finance of Japan was convicted for corruptly accepting hospitality valued JPY 2.58 million.16 In the Prevention of Bribery Ordinance of Hong Kong, China, bribe can be “any gain” and sexual bribe is also included in judicial practices there. For example, in 2002, a senior superintendent of police from the Narcotics Bureau, Hong Kong, was sentenced to two years of imprisonment for accepting unlawful gains (including unpaid prostitution).17

4.2.2

Replace “Giving” with “Promising, Offering or Giving”

In China’s judicial practice, criminal sanctions for preparation for, or discontinued or unsuccessful attempts of, giving bribes are almost unheard of. This shows that our Criminal Law would only deal with giving bribes at a quite late stage of the commission of the offence and this makes it easier for offenders to evade punishment. This may be attributed in part to the misuse of the special arrangements for bribers who surrender themselves, which sometimes results in the withdrawal of giving bribes cases that could have been filed (including preparation for, or discontinued or unsuccessful attempts of, committing the offence, and the offence committed), or the exemption of punishment. It may also be attributed to the fact that the crime of giving bribes is defined in our Criminal Law as “giving” a bribe.18

15

Yamaguchi (2011, p. 728). Zhi (2009). 17 Huang (2012). 18 A widely accepted view is that in regard to the crime of bribery, “giving” means actual delivery and does not cover offering or promising (see Xiao 1994; Li 2004). As we see it, since the Criminal Law does not contain the exact word “actual,” to understand “giving” as “actual delivery” constitutes to some extent an unreasonable limitation to the coverage of the Criminal Law. In fact, it is completely fine to cover offering, promising and actual giving of bribes with just “giving” (Among the three, actual giving should be treated as an accomplished offence, while offering and promising can be regarded as an unaccomplished offence). However, since it has long been widely accepted to interpret giving as actual delivery, and there are only some general principles stated in the general provisions of the Criminal Law for unaccomplished offences, with 16

4 Establishing and Improving Criminal Legislation on Giving Bribes

133

As a result, the preparation for and attempt of bribery are usually overlooked in judicial practice. In order to crack down harder on the crime of bribery, we suggest changing the legal criteria for what constitutes giving bribes in the Criminal Law. International conventions and laws of other jurisdictions show that a case of giving bribes usually has three stages, or covers three forms of behavior, each of which may be established as a criminal offence. For example, the UNCAC divides an offence of bribery into the three stages of offering, promising, and giving a bribe19; offering means expressing the intention to provide a bribe in order that the bribee acts or refrains from acting in the exercise of his or her official duties; promising means that the briber and the bribee have reached an agreement on giving and accepting a bribe20; and giving means the actual delivery of a bribe. When a briber has completed the behaviors of offering and promising a bribe, he or she can be convicted for completing these two behaviors even if the actual delivery is not completed. For another example, according to the Criminal Law of Japan, giving bribes may take the forms of offering, promising, and providing a bribe. Offering means to express the intention of bribery, asking the other party to accept it. The other party may not necessarily realize that it is a bribe, yet he/she must be in a state where he/she is able to realize it. Where the other party has not realized a bribe is intended and thus is not convicted for accepting bribes, the briber can still be found guilty of offering a bribe. Promising a bribe means to reach an agreement on offering and accepting a bribe between the briber and the bribee. Promising a bribe can also be established as a criminal offence. “Giving” a bribe is the behavior of making the other party accepts the bribe. It is the opposite of accepting a bribe in the crime of accepting bribes. When the offering, promising, and giving of a bribe are all completed, it constitutes a full offence of giving bribes.21 In a similar way, the legal provisions of China’s Taiwan specify an offence of giving bribes includes the three behaviors of offering, promising, and delivering. “Offering” means to express the intention of asking the other party to accept a bribe or other undue gains; “promising” refers to the agreement between the briber and the bribee for accepting a bribe or other undue gains; and “delivering” refers to the behavior that enables the bribee to obtain a bribe or other undue gains. One may be convicted of any of the three behaviors. Once an offering or promising is accomplished, the offender can be announced guilty for the offering or promising alone, even if the offered or promised bribe is not actually delivered. When all the three stages of offering, promising, and delivering are accomplished, only provisions concerning

no specific stipulations, leading to inadequate actual punishment for unaccomplished offences, I still suggest that we revise relevant stipulations. 19 The three stages of giving bribes may be described differently in different jurisdictions but they are the same in nature. “Offering to give” means approximately the same as “offering,” “promising to give” means the same as promising, and actual giving means the same as giving and delivering. These words are all simple and not likely to cause confusion. We will use them as appropriate in the following parts of this article. 20 Sun and Wei (2011). 21 Yamaguchi (2011), Otani (2008), Maeda (2000).

134

R. Liu and Y. Huang

the delivery of a bribe need to be applied, rather than those concerning the offering and promising of a bribe.22 Judicial practice proves it true that giving bribes can be divided into the three stages of offering, promising, and giving a bribe, or that it comprises these three behaviors. Offering or promising a bribe is sufficient to attract someone to accept the bribe and to hamper fair and clean performance of public function or the equity of market economy, regardless of whether any unlawful gains are obtained or any property is delivered, thus undermining public trust in the integrity of public officials and in the economic order. In many filed cases of bribery, the briber who had obtained undue gains eventually evaded punishment because no property had been delivered. To sum up, a revision to the Criminal Law is necessary so as to prevent giving bribes and address the problem at an earlier stage of the offence. To this end, we should learn from the UNCAC and international practices, dividing giving bribes into offering, promising, and giving a bribe23 and establishing each of the three as a criminal offence.

4.3 4.3.1

Legal Punishment for the Crime of Giving Bribes Across-the-Board Application of Financial Penalty

According to the Criminal Law of China, fines apply to the crimes of giving bribes to a non-public-sector official, to foreign public officials and officials of public international organizations, to an organization, and giving bribes by an organization. For those crimes committed by individuals, fines only apply to cases where a huge amount of property is involved. In the cases of an individual giving bribe to another individual or to an organization, fines do not apply at all. Though it is stipulated that in the cases of one individual bribing another, property confiscation may apply in very grave circumstances, with the offender sentenced to imprisonment from ten years up to life imprisonment plus property confiscation, the scope of application for such punishment is very limited. Therefore, in a case of one individual bribing another, punishment typically takes the form of imprisonment and the punitive effect of fines has not been taken into full consideration.

22

Lin (2012). In the United Nations Convention against Corruption, the three parts of a bribery offence are not listed in the order of how an offence goes on. The Convention puts them in the order of “promising, offering and giving.” However, offering means to express the intention of giving a bribe, while promising is to reach an agreement with the other party. It is clear that offering comes before promising. Also, in contract law, offering also comes before promising. Therefore, to indicate the order of the three behaviors in the process of bribery and show the progressive severity of these three offences, we believe it is reasonable to put the three in the order of “offering, promising, and giving” when revising the Chinese Criminal Law in regard to bribery.

23

4 Establishing and Improving Criminal Legislation on Giving Bribes

135

For those who are punished under law, fines cause tangible loss to their quality of life as they need money for many activities and enjoyments.24 Comparing with other types of punishment, a fine has its advantages. It can be imposed separately or on top of other forms of punishment and, as an economical way of sanction, it requires a low cost of enforcement and thus relieves the burden on the public treasury. Moreover, for offenders seeking unlawful profits, fines are a more effective deterrent. The sum of the fine can be proportionate to the severity of the crime. Fines are suitable especially for those criminal offences driven by benefits.25 Punishment should reflect the nature of the crime wherever possible. The principle of proportionality between punishment and crime leads people to weigh the motivation behind a crime against the punishment for it and may eventually cause them to give up the thought of committing a crime.26 Fines correspond to the nature of the crime of bribery and mean a financial loss to the offender who had committed the crime for pecuniary gains. If the offender has the intention to commit another crime with the property he/she owns, fines will make him/her unable to do that. This is in line with the principle that punishment should be meted out in a way corresponding to the crime.27 Giving bribes is a typical crime seeking undue profits. By applying fines, we can make bribers believe that bribery is not profitable and may even cause loss instead. Therefore, it is reasonable to apply fines to all cases of bribery. Some may say that fines have not actually played their role in the current judicial practice in China because even if fines are imposed, the enforcement is usually inadequate and the fines may not actually be collected. In such a circumstance, is it still necessary to apply fines fully to the crime of giving bribes? What these people point out is true. But we should be clear that such inadequate enforcement for fines mainly occurs to theft, robbery, fraud, and other similar property-embezzling crimes, mainly committed by people with low income. For these offenders, poverty is a major reason why they had committed offences in the first place, and it is thus natural that they are usually not able to pay the fines, making enforcement difficult.28 On the contrary, bribers are usually wealthy and more likely to afford the fines. Therefore, if fines are imposed in all giving bribes cases, unenforceability would not be a great concern. More specifically, fines for bribers may be set in proportion to the sum of the bribe involved.29 The Criminal Law may stipulate that the amount of fine imposed shall be certain times the value of the undue advantage offered, promised, or given 24

Jescheck and Weigend (1978). Stefani (1998). 26 Beccalia (1993). 27 Qiu (1999). 28 Ye (2012). 29 A fine may or may not have a limit in amount, be a certain time of the amount involved in the committed crime, or base the amount on the number of days involved. Among these, fines that are a certain time of the amount involved in the crime is in proportion to a certain amount of money involved and they may be several times of the base amount or part of it (see Gao and Zhao 2008, pp. 318–322) 25

136

R. Liu and Y. Huang

by the briber. This will facilitate enforcement since the judges and procurators may easily set the amount of the fines without worrying it will become out of date as the overall economic conditions change. Moreover, setting the fine in this way will showcase the close connection between punishment and crime, the more serious the offence, the heavier the fine and vice versa. Offenders will then feel the impact more keenly. In addition, it should be noted that since bribers are usually somewhat wealthy, fines may not be strong enough for them as punishment, so it is better to impose fines together with other forms of punishment than to apply fines alone. Meanwhile, given that punishment for criminal offences is already heavy on the whole in China, in order not to make things worse, it is suggested that we reduce jail punishment to an appropriate extent while adding fines to it.

4.3.2

Disqualification as a Criminal Sanction

Disqualification as a criminal sanction is depriving criminals of or restricting their certain rights and qualifications, thus preventing them from committing a crime again. Imposing employment restrictions on offenders can help protect the integrity of state agencies and certain occupations in some sense. Also, as a type of criminal sanction, it is not costly and is humane. Therefore, it is common in many jurisdictions around the world, with restrictions imposed on a wide range of rights such as the right to vote and to be elected and other political rights, the right to drive, do certain business, or take up a certain occupation, and the right associated with honors like symbols or logos of public honor and the various honors related to job positions, titles, and certain identities.30 In theory, this category of punishment covers any right or qualification that may be abused for criminal purposes. In the Criminal Law of China, provisions on disqualification remain to be improved in many aspects. First, there are only two types of such punishment, namely the deprivation of political rights and deportation, and the latter applies only to foreigners. Second, when someone is deprived of political rights, all rights listed in Article 54 will be deprived of, which may be excessive. Third, there lack commutation provisions specific to the penalty disqualification. According to Paragraph 2 of Article 57, when a death sentence with a reprieve or life imprisonment is reduced to fixed-term imprisonment, the term of the supplementary punishment of deprivation of political rights shall be changed to not less than three years but not more than 10 years. According to Article 12 of the Rules on Several Issues Concerning Law Application to Cases of Sentence Reduction and Probation issued by the Supreme People’s Court in 2012, when a sentence of fixed-term imprisonment is reduced, the term of the additional deprivation of political rights may also be reduced to no less than one year as appropriate. These are indeed provisions to reduce the term of deprivation of political rights, yet such reduction

30

Ma (2009, pp. 440–442).

4 Establishing and Improving Criminal Legislation on Giving Bribes

137

comes only when the main sentence is reduced and should not be taken as a real reduction in the strict sense.31 Also, no such reduction is available to those who are sentenced to public surveillance or criminal detention plus deprivation of political rights. Fourth, disqualification is not applicable to offending organizations. In the crime of giving bribes, deprivation of political rights is the only disqualification penalty that may be imposed. According to Articles 56 and 57 of the Criminal Law, those convicted of giving bribes are deprived of political rights only when they are sentenced to life imprisonment and the deprivation is for life. In practice, however, only in rare cases did the crime of giving bribes carry life imprisonment, which means most bribers were not deprived of political rights.32 Among those who give bribes, many are of distinction; they may be, for example, senior corporate executives who bribe public officials for economic gains. Some may seek social mobility. For example, a lower-level public official may bribe his or her superiors in the hope of getting a promotion. Some may be professionals such as lawyers. Therefore, if the disqualification penalty could be imposed in a reasonable manner, we may be able to tackle the problem of giving bribes at its very root. Some may argue that apart from the deprivation of political rights and deportation in the Criminal Law, other laws in China also contain a number of provisions on a disqualification, and it is thus unnecessary for the Criminal Law to introduce new types of disqualification penalty. Indeed, in some non-Criminal Laws, there are provisions prohibiting the assumption of public office. For example, according to the Civil Servant Law, any offence, intentional or unintentional, that results in criminal punishment, shall disqualify the offender from public office. There are also prohibitions from doing certain business or taking up some occupation. For example, according to the Company Law, convicted offenders shall not serve as director, supervisor, or executive of a company within five years after completing a criminal sentence for embezzlement, bribery, unlawful possession of property, or infringement of socialist market order, or within five years after completing the sentence of deprivation of political rights. Some argue, as long as we give full play to the roles of these laws, they will produce the same effect as imposing the criminal penalty of disqualification. We deem the argument questionable. First, restrictions imposed by non-Criminal Laws upon one’s qualification are not conducive to the protection of human rights. Some of these punitive restrictions relate to the way people make a living. For example, disqualifying people from practicing as a doctor or lawyer will have a serious impact on their livelihood. The right to live is a basic human right. The rights and qualifications thus deprived may actually be one of the basic human rights. Non-Criminal Laws are not supposed to impose such punitive restrictions. Since only criminal punishment imposed via court trials and verdicts can deprive people of their basic rights, it is unreasonable to do so through any other means or

31

Li and Han (1998). Li (2013).

32

138

R. Liu and Y. Huang

by resorting to any law other than the Criminal Law. Moreover, the imposition of disqualification in the absence of a court trial infringes on one’s right to appeal to a higher-level court. Though there are also provisions on the settlement of disputes, allowing the disqualified person to apply for reconsideration or launch administrative litigation, yet the protection afforded by a remedy procedure is totally different from what is provided before a verdict takes effect. Second, these provisions have their flaws. Some deprive the offenders of occupational qualifications that have nothing to do with the crime committed, whether intentionally or unintentionally. For example, according to Article 15 of the Law on Practicing Doctors, one with a criminal record shall not be registered as a practicing doctor within two years after completing the sentence, and Article 16 proceeds to stipulate that doctor licenses shall be withdrawn from those who are sentenced to criminal punishment. In these provisions, there is no mention that the criminal sentence should have something to do with the occupation of a doctor. In this case, people may ridiculously lose their doctor’s licenses because of an offence of dangerous driving. There are also provisions that set no limit for the deprivation of qualifications, eventually making disqualification a lifelong penalty. For example, according to Article 7 of the Law on Lawyers, those who have committed a crime intentionally shall not be awarded lawyer’s licenses. A criminal offence may, to some extent, indicate a person’s disrespect for the law, but an intentional offence may still be mild or severe and a criminal sentence aims at, besides punishment, building respect for the law and fostering compliance with law among offenders. Criminal sanction may turn a criminal into a good citizen with due respect for the law. It may not be appropriate, therefore, to prohibit one from being a lawyer for a lifetime because of his or her criminal records. Third, these provisions are usually not very effective in preventing offences and may sometimes not work at all in practice. Due to the lack of a holistic approach, laws in China are often poorly coordinated, making it difficult for the general public to have a complete picture of what they say about the same issue as the provisions might be found in a number of different laws. Also, after transferring a case to the court, the administrative enforcement authority will not follow up on it. Since the Criminal Law lacks provision on disqualifications, a court verdict rarely involves whether a certain right or qualification should be deprived or whether it is indeed deprived. As a result, some convicted criminals who abused their rights and qualifications and should have been deprived of them by law may be found to retain such rights and qualifications.33 For example, convicted drunken drivers sentenced to imprisonment with reprieve shall, according to Paragraph 5 of Article 91 of the Road Traffic Safety Law, have their driving licenses revoked by the traffic arm of the public security authority and be banned from driving all their life. However, it is possible that neither the traffic department nor the court sees to it the ban truly comes into force and the offender still has his or her driving license. This is mostly

33

Deng (2009).

4 Establishing and Improving Criminal Legislation on Giving Bribes

139

seen in cases involving a traffic accident that occurs outside of the offender’s place of residence. Thus, despite a great number of similar provisions in laws other than the penal code, it is necessary that we improve upon what the Criminal Law stipulates about disqualification and apply the sanction to the cases of giving bribes. First of all, we need to change the scope of rights and qualification to be restricted. (1) A distinction shall be made between different types of political right. The rights to vote and be elected are fundamental rights allowing people to participate in governing the country and exercising state power. To ensure the effective exercise of state power, it is reasonable to debar people convicted of certain political crimes or other severe crimes from voting and standing for election. However, according to Article 35 of the Constitution, the freedom of speech, press, assembly, association, procession, and demonstration is the fundamental political freedom of a Chinese citizen. And different from the rights to vote and stand for election as is provided for in Article 34, freedom in these aspects cannot be deprived of.34 Nevertheless, this does not mean that the freedom can be used arbitrarily or misused, but that it must be exercised without jeopardizing the interests of the state, society and collectives or the legitimate freedom and rights of other fellow citizens, as is stipulated in the Constitution. In China, the freedom of speech, press, assembly, association, procession and demonstration shall be exercised according to the law. The exercise of such freedom by convicted criminals would cause no danger as long as it is done within the law. When there is a way (other than what is provided by the Criminal Law) to prevent criminals from using political freedom to commit crimes again, it is unjustifiable to include the deprivation of political freedom as a kind of criminal sanction. Second, provisions should be added to prohibit certain criminals from holding certain positions. According to Article 54 of the Criminal Law, one deprived of political rights is barred from two categories of jobs: positions in state organs, including leadership positions and non-leadership positions; and leadership positions in state-owned enterprises, public institutions, and people’s organizations. The imposition of such a ban is reasonable since these organizations are closely related to public interests. However, the restrictive rule does not apply to management positions in non-state-owned institutions. In today’s highly integrated economy, private business leaders may also have a strong influence in society. Companies like Alibaba, Tencent, and Baidu are not state-owned but they can exert much greater influence than many SOEs. If powerful private business leaders take advantage of their positions to commit crimes, the damage might be beyond estimation. Therefore, restrictive stipulations should also apply to leadership positions in these institutions depending on the nature of the crime committed. Third, new provisions should be introduced to prohibit certain convicted criminals from taking up a particular occupation or activity. Some crimes can only be committed by people holding occupational or other licenses, for example, a doctor, lawyer, and driver. Depriving

34

Liu (2009).

140

R. Liu and Y. Huang

them of these licenses can help prevent further offences. Fourth, provisions should be added to prohibit institutions that have committed a crime from doing certain business and to dissolve such institutions. This offers yet another option for punishing an offending institution and helps prevent further crimes. This is in line with the purpose of criminal punishment and the general trend in the world concerning criminal legislation.35 For detailed stipulations on disqualification for institutions, we may use the example of France. The French Criminal Law contains bans that disallow an institution to do one or more vocational or social activities, either directly or indirectly, to publicly raise fund, to participate in public projects, to sign any check or use any credit card, etc.36 Second, we need to change the way disqualification appears in the legislation. Internationally, it is typically found in the following laws: (1) In Japan, it is found in criminal penalty provisions of the laws other than the penal code; (2) In Germany, it is provided for in the penal code rather than any other laws or statutes; (3) In France, it is seen in both the penal code and other laws that either contain criminal penalty provisions or deal with a specific criminal matter.37 In our opinion, having the disqualification clause in law other than the penal code might cause it to be overlooked by the general public, thus undermining the deterrence of the punishment. The second legislative approach may make it difficult for the public to understand the criminal consequences of violating a law other than the penal code, hampering the preventive effect. We would recommend the third approach which, as a combination of and balance between the first two, is easy to use and promotes the general preventive effect. While disqualification should be provided for in detail in the penal code, in other laws there should also be punitive restrictions of right or qualification based on the crime they deal with. It should be noted, however, such penalty provisions should echo what is provided for in the penal code or serves as an extension, and it is the court that decides how these provisions shall be applied in practice. Third, we should change the way disqualification is applied. As was mentioned earlier, according to the Criminal Law of China, if a court verdict includes the deprivation of political rights, it means all political rights are deprived. Such punishment might sometimes be excessive as it goes against the requirement that criminal punishment should be based on specific circumstances of a case. Therefore, it is suggested that when disqualification applies, the court needs to decide on a case-by-case basis whether the restriction is imposed on all or some of the rights and qualifications concerned. Lastly, the law should specify the ways of restoring deprived rights and qualifications when criteria are met. As a way to reduce the duration of the criminal punishment, this should occur only when the intended effect and purpose of the criminal punishment have been achieved. The goal is to avoid excessive criminal

35

Gao and Zhao (2008, pp. 388–389), Chen (2007). Ma (2009, 442). 37 Gao and Zhao (2008, pp. 356–389). 36

4 Establishing and Improving Criminal Legislation on Giving Bribes

141

punishment and encourage convicted offenders to truly repent their behavior.38 The provision on restoration will fill a gap in the existing Criminal Law of China.

4.3.3

Equal Punishment for Giving Bribes and Accepting Bribes

There is a growing call today for equal punishment for bribers and bribees. According to a survey by the Theoretical Research Center of People’s Tribune, 61% of the respondents believed that to apply equal punishment to bribers and bribees is the best way to maintain justice.39 An international survey also shows that equal punishment for the two categories of offenders is a common practice in most of the least corrupt countries such as New Zealand, Finland, Singapore, and Switzerland. For example, Article 105 “Embezzlement and Bribery of Official” in the Crimes Act of New Zealand goes like this: (1) Every official is liable to imprisonment for a term not exceeding seven years who, whether within New Zealand or elsewhere, corruptly accepts or obtains, or agrees or offers to accept or attempts to obtain, any bribe for himself or herself or any other person in respect of any act done or omitted, or to be done or omitted, by him or her in his or her official capacity. (2) Everyone is liable to imprisonment for a term not exceeding seven years who corruptly gives or offers or agrees to give any bribe to any person with intent to influence any official in respect of any act or omission by him or her in his or her official capacity.40 In Chapter 16 “Offences against the public authorities” of the Criminal Code of Finland, Section 13 stipulates that “a person who promises, offers or gives to a public official in exchange for his or her actions in service a gift or other benefit intended for him or her or for another, that influences or is intended to influence or is conducive to influencing the actions in service of the public official, shall be sentenced for the giving of bribes to a fine or to imprisonment for at most two years.” Section 14 of the chapter states that “if in the giving of bribes (1) the gift or benefit is intended to make the person act in service contrary to his or her duties with the result of considerable benefit to the briber or to another person or of considerable loss or detriment to another person, or (2) the value of the gift or benefit is considerable and the bribery is aggravated also when assessed as whole, the offender shall be sentenced for aggravated giving of bribes to imprisonment for at least four months and at most four years.” Section 14a, Chapter 16 stipulates that a person, who gives bribes to a member of Parliament, shall be sentenced to a fine or imprisonment for at most two years. Chapter 40 of the same code contains provisions for “offences in office.” In it, Section 1 stipulates that “if a public official, for his or her actions while in service, for himself or herself or for another accepts a 38

Yu (2002). Luan (2013). 40 Crimes Act of New Zealand (1961). 39

142

R. Liu and Y. Huang

gift or other benefit, he or she shall be sentenced for acceptance of a bribe to a fine or to imprisonment for at most two years. Section 2 states that “If in the acceptance of a bribe (1) the public official stipulates the bribe as a condition for his or her actions or it is his or her intention, because of the gift or benefit, to act in a manner contrary to his or her duties to the considerable benefit of the party giving the gift or of another, or to the considerable loss or detriment of another, or (2) the gift or benefit is of significant value and the acceptance of a bribe is aggravated also when assessed as a whole, the public official shall be sentenced for aggravated acceptance of a bribe to imprisonment for at least four months and at most four years and in addition to dismissal.” Section 4 says that for acceptance of a bribe as a member of Parliament the offender shall be sentenced “to a fine or to imprisonment for at most two years.” Here, we can see that in Finland, besides dismissal for a public official, the punishment for giving and accepting bribes is generally the same.41 In the Prevention of Embezzlement Act of Singapore, Section 11 provides for “bribery of member of Parliament” and Section 12 provides for “bribery of member of public body” and the punishment is the same for both: A person who is guilty of an offence shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding seven years or to both.42 In the Swiss Criminal Code, Art. 322b “Bribery” provides that “Any person who offers, promises or gives a member of a judicial or other authority, a public official, an officially appointed expert, translator or interpreter, an arbitrator, or a member of the armed forces an advantage which is not due to him, or offers, promises or gives such an advantage to a third party, in order to cause that public official to carry out or to fail to carry out an act in connection with his official activity which is contrary to his duty or dependent on his discretion, is liable to a custodial sentence not exceeding five years or to a monetary penalty.” Art. 322c “Acceptance of bribes” states that “any person who as a member of a judicial or other authority, as a public official, officially-appointed expert, translator or interpreter, or as an arbitrator demands, secures the promise of or accepts an advantage which is not due to him for himself or for a third party in order that he carries out or fails to carry out an act in connection with his official activity which is contrary to his duty or dependent on his discretion, is liable to a custodial sentence not exceeding five years or to a monetary penalty.” Art. 322d “Granting an advantage” states that “Any person who offers, promises or gives a member of a judicial or other authority, a public official, an officially-appointed expert, translator or interpreter, an arbitrator or a member of the armed forces an advantage which is not due to him in order that he carries out his official duties, is liable to a custodial sentence not exceeding three years or to a monetary penalty.” Art. 322e “Acceptance of an advantage” goes that “Any person who as a member of a judicial or other authority, as a public official, officially-appointed expert, translator or interpreter, or as an arbitrator, demands, secures the promise of, or accepts an

41

Criminal Code of Finland (2005). Penal Code of Singapore (2006).

42

4 Establishing and Improving Criminal Legislation on Giving Bribes

143

advantage which is not due to him in order that he carries out his official duties, is liable to a custodial sentence not exceeding three years or to a monetary penalty.”43 In the legislative sense, it is more reasonable to treat the giving and taking of bribes equally than differently. First of all, giving bribes is usually the cause of accepting bribes, and the opposite rarely occurs. In practice, it is more commonly seen that the giving of a bribe results in the taking of it. It has been proved that in a market economy, most bribers are rent seekers who proactively “inflict damage.” They can do everything possible to get what they want, seeking all opportunities and taking every advantage they may. Actually, in some international conventions, giving bribes has been defined as active corruption, while accepting bribes is passive corruption.44 Secondly, giving bribes and accepting bribes essentially infringe on the same legal interest. In the Chinese Criminal Law, a common belief is that the crime of accepting bribes by a non-public-sector worker and the crime of giving bribes to a non-public-sector worker both hamper the normal management order of a company, enterprise, or other institution and the cleanness of its employees, while the crime of accepting bribes and the crime of giving bribes both infringe on the cleanness of public officials in performing their duties.45 Here, we can see that the crime of giving bribes and the crime of accepting bribes actually infringe on the same legal interest and the difference lies only in that accepting bribes hampers cleanness from the inside while giving bribes hampers it from the outside.46 Thirdly, by treating giving bribes and accepting bribes equally, we can change the long-term practice of putting more emphasis on accepting bribes than on giving in the judicial system. The procuratorates tend to put giving bribes subordinate to accepting bribes; as a result, a case of giving bribes is seldom filed unless the corresponding bribee is prosecuted. By giving equal punishment to both offences, we will be able to correct this bias. It should certainly be noted that countries that impose equal punishment on giving bribes and accepting bribes are generally countries with light criminal punishment, but China remains a country with heavy punishment. For example, accepting bribes, in the most serious case, can result in a death sentence, while giving bribes, in the most severe case, can bring a sentence of life imprisonment. Therefore, it should be made clear that although we believe giving bribes and accepting bribes should be treated equally, it does not necessarily mean that the most severe punishment for accepting bribes, i.e., death sentence, is applicable to bribers as well. Currently, we are trying to diminish death-eligible offences in both legislation and judicial practice, and it is therefore more likely that death sentence

43

Swiss Criminal Code (2004). Convention drawn up on the basis of Article K.3 (2) (c) of the Treaty on European Union on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union 1997 (Zhao et al. 2004). 45 Gao and Ma (2011). 46 Zhou (2012). 44

144

R. Liu and Y. Huang

will be eliminated for a non-violent crime like accepting bribes. Actually, the proportion of death sentence for accepting bribes cases has already reduced sharply. Here, what we mean by treating giving bribes and accepting bribes equally is that the special arrangements for surrenders shall be eliminated for bribers to remove the difference between the two in the reduction of punishment; the same criteria shall be adopted for the filing of giving bribes and accepting bribes cases, and the same criminal punishment should apply to giving bribes and to all types of accepting bribes (e.g., accepting bribes by person of influence, accepting bribes by non-public-sector workers) except for accepting bribes by a public-sector worker; and when appropriate, death sentence should be abolished for the crime of accepting bribes so as to ultimately eliminate the difference of life and death between giving bribes and accepting bribes, achieving truly equal treatment for the two.

4.4

Classification of Crimes Involving Giving Bribes

After years of development, China’s Criminal Law now places five offences under the category of giving bribes: giving bribes, giving bribes by an organization, giving bribes to an organization, giving bribes to a non-public-sector worker, and giving bribes to foreign public officials and officials of international public organizations. While this system is commended for giving meticulous attention to the complexity of how a crime is committed and which criminal sanction it is subjected to and is aimed to ensure every criminal is brought to justice whenever possible, there is still room for improvements. One recommended change is that the offences of giving bribes to an organization and giving bribes by an organization be canceled and those suspected of such acts be charged with the more general offence of “giving bribes.” The reasons for so doing are specified below. First, the punishment for the crime of giving bribes to an organization is not reasonable. Usually, giving bribes to an organization involves a wider scope than giving bribes to an individual and tends to cause greater harms to society. However, an individual who gave a bribe to an organization may be sentenced to three years of imprisonment at most, while one who gave a bribe to an individual may be sentenced to a maximum of life imprisonment. Simply put, the punishment set for the former is much milder than that for the latter. This is inappropriate given the social hazards of the crime of giving bribes to an organization and highly disproportionate to the punishment set for all other offences under the category of giving bribes. Second, the classification criterion used for “giving bribes by an organization” is inconsistent with what is typically used for other similar crimes. “Giving bribes by an organization” was introduced as a new criminal offence by Article 9 of the Supplementary Provisions, given the fact that organizations bribed public officials in quite some cases. While the commissioning of bribery is for the benefit of an organization instead of the individuals who give the bribe on its behalf, the act spoils the integrity of public officials nevertheless, and criminal sanctions shall

4 Establishing and Improving Criminal Legislation on Giving Bribes

145

apply in severe circumstances.47 However, the imposition of criminal sanctions does not necessarily justify its existence as an independent offence. The Criminal Law of China of 1997 makes no distinction between the same criminal act committed by an organization and by an individual, with the only exception of bribery stipulated in Chapter 8, Part 2 “Specific Provisions.”48 And even in those cases where an organization gives a bribe to a non-public-sector worker, foreign public officials, and officials of international public organizations, the wording used in Article 164 of the Criminal Law is “the organization shall be fined and the head of the organization and other persons directly accountable should be punished according to Paragraph 1 above.” Here, no independent offences are introduced. Therefore, making “giving bribes by an organization,” a separate offence undermines the legislative consistency both in the criminal category of giving bribes and in the Criminal Law as a whole, bringing no tangible benefits in judicial practice. Third, the criteria used for identifying and classifying the range of conduct that should fall within the criminal category of giving bribes are confusingly inconsistent. The three offences of “giving bribes,” “giving bribes to a non-public-sector worker,” and “giving bribes to foreign public officials and officials of international public organizations” differ from each other on the basis of who is bribed. When introducing the offence of “giving bribes by an organization,” however, legislators focused on the offending organization that offered bribes. In the offence of giving bribes to an organization, the focus shifted, still again, to the organization the offender bribed. While it is reasonable to use the identity of the bribee to distinguish these offences, we deem it totally unnecessary to consider the additional criterion whether the bribee or briber is an organization. This is because the use of inconsistent criteria for the same category of crimes will only cause confusion, preventing the judicial staff from correctly applying them. For example, if an organization gives money or property to a state organ and to its staff members at the same time in exchange for undue advantage, should it be a case of giving bribes by an organization or to an organization? Or should the offender be sentenced for both crimes? It is clearly hard to decide. Thus, we recommend removing the offence of giving bribes to an organization, having such an act dealt with in the same way as the more general offence of giving bribes. By doing so, we will be able to apply heavier punishment to such offences and avoid the confusion caused by varied criteria. Also, in line with the common practice in the criminal legislation in China and to ensure consistency of the Criminal Law system, the offence of giving bribes by an organization should be merged into the offence of giving bribes and accordingly, the offenders of such a crime may be either an individual or an organization. Another recommended change is to introduce a new offence of giving bribes which corresponds to the crime of accepting bribes by person of influence.

47

Criminal Law Office of the Law Committee of the Standing Committee of the National People’s Congress (2009). 48 Liang (2009).

146

R. Liu and Y. Huang

The Seventh Amendment to the Criminal Law adds a paragraph to Article 388, dealing with the offence of “accepting bribes by person of influence.” People punishable under it are defined as the close relatives of public officials or other people with close ties to the incumbents, former public officials, their close relatives or people with close ties to them. In this new criminal offence, the legislators highlight the social identity of the offender. Before the amendment, China’s penal code had no provisions dealing with the above-mentioned non-public-sector workers who accepted bribes without the knowledge of the relevant public official. However, a new problem arose in that the newly introduced offence breaks the one-to-one correspondence that previously existed between the two criminal categories of giving bribes and accepting bribes.49 Since giving bribes is usually the cause of accepting bribes, it is difficult for this new offence to achieve its preventive purpose if the corresponding act of giving bribes is not punished. Therefore, a corresponding offence should be added to the giving-bribes category, which, like other offences within the category, uses the identity of the bribee as the criterion for classification. What should the new offence be called? There is a difference of opinions. Some argue for “giving bribes to specially related persons,” while others prefer to call it “giving bribes for influence”50 which seems to better correspond to the offence of “accepting bribes by person of influence.” In our opinion, both names are questionable. First, “accepting bribes by person of influence” (Article 388 (1), Criminal Law) itself is not precisely defined in the Criminal Law, as the definition fails to capture the true nature of the crime. Trading in influence is essentially about using influence to obtain favor, and whoever accepts bribes does not change the nature of trading at all. The Criminal Law sets forth the types of person who might be charged with the offence, including close ties of incumbent or former public officials, which is totally unnecessary.51 Likewise, the name “giving bribes to specially related persons” would be so misleading that judicial personnel may move away from what the offence is truly about and instead focus on who may be deemed “specially related persons.” The other name proposed, “giving bribes for influence,” though better corresponding to the crime of “accepting bribes by person of influence,” may cause confusion in judicial practices as well because it fails to make it clear that the person who can exert influence is the one the offender tries to bribe. A more appropriate name, we think, is perhaps “giving bribes to persons of influence” which emphasizes the connection between the bribee and influence, rather than who the bribee is, thus highlighting the nature of trading in influence. With the above changes, the proposed criminal category of giving bribes shall include the following offences: giving bribes, giving bribes to a non-public-sector worker, giving bribes to foreign public officials or officials of an international public

49

The criminal category of accepting bribes also needs adjustments but this is out of the scope of this chapter. 50 Chu and Yan (2012). 51 Zhao (2009).

4 Establishing and Improving Criminal Legislation on Giving Bribes

147

organization, and giving bribes to persons of influence. Compared to the existing system, it will be simpler yet clearer, providing more effective criminal sanctions for giving bribes and in the meantime making it easier for judicial staff to understand and use relevant provisions.

References Beccalia C (1993) Dei Delitti E Delle Pene. Chinese edition: Beccalia C (1993) On crime and penalty (trans: Huang F). Encyclopedia of China Publishing House, Beijing, p 57 Chen X (ed) (2007) On categories of criminal punishment, 2nd edn. China Renmin University Press, Beijing, pp 420–422 Chu H, Yan Y (2012) Several difficult issues in the application of the crime of taking bribes by making use of influence. J Jiangsu Police Officer Coll 2012(1) Crimes Act of New Zealand (1961) Chinese edition (2007) (trans: Yu Z, Zhao S). China Fangzheng Press, Beijing, p 48 Criminal Code of Finland (2005) Chinese edition (trans: Xiao Y, rev.: Lu J). Peking University Press, Beijing, pp 53–54 Criminal Law Office of the Law Committee of the Standing Committee of the National People’s Congress (2009) Explanations and legislative grounds of the criminal of the People’s Republic of China and relevant provisions. Peking University Press, Beijing, p 795 Dai J (2014) Procuratorates to crack down more heavily on bribe-giving. Procuratorate Daily, 25 Apr 2014, p 1 Deng W (2009) On the structure of criminal punishment. Publishing House of China People’s Public Security University, Beijing, pp 304–305 Fan Y, Zheng J (2007) The first in Zhejiang: counting prostitution fee as a bribe. Procuratorate Daily, 23 Jan Gao Y (2006) Why can’t we regard sexual bribery as a crime? Legal Forum (5) Gao M (2012) Birth and development of the criminal law of the People’s Republic of China. Peking University Press, Beijing, p 613 Gao M, Ma K (eds) (2011) Criminal jurisprudence, 5th edn. Peking University Press and Higher Education Press, Beijing, pp 393–395, 629–636 Gao M, Zhao B (2008) Comparative study on the general provisions of criminal punishment. Peking University Press, Beijing Huang X (2012) Clean governance: anti-embezzlement in Hong Kong. Guangming Daily Press, Beijing, pp 210–233 Jescheck H-H, Weigend T (1978) Lehrbuch des Strafrechts. Duncker und Humblot, Berlin. Chinese edition: Jescheck H-H, Weigend T (2001) Textbook of German criminal law (trans: Xu J). China Legal Publishing House, Beijing, p 929 Jiang H (2003) Who set this trick of prostitution? Prosecutorial View 2003(8) Li X (ed) (2004) Study on the crime of embezzlement and bribery. Intellectual Property Publishing House, Beijing Li C (2013) Studies on bribery offences. China University of Political Science and Law Press, Beijing, p 160 Li K, Han Y (1998) Legal principles for criminal enforcement. China Renmin University Press, Beijing, p 192 Liang W (2009) A study on classification of the crimes of bribery. West Law Rev 2009(3) Lin S (2012) On crimes in the criminal law (Part 2) (5th Revised edn.). Peking University Press, Beijing, pp 27–28 Liu R (2009) Allow parades wherever possible, nurture rationality in citizens. Southern Weekly, 14 Sept

148

R. Liu and Y. Huang

Liu R (2010) From reforming criminal legislation to creating criminal law. Chin J Law 2010(1) Liu X, Ruan C (2003) It is unwise to regard sexual bribery as a crime. Rule Law Forum (2) Liu R, Zhang X (2010) United Nations convention against corruption and the coordination and improvement of criminal laws of China. In: Zhao B (ed) Implementation of United Nations conventions in the field of criminal law. Publishing House of China People’s Public Security University, Beijing, pp 698–699 Luan D (2013) Who should suffer more, the briber or the taker? People’s Tribune 2013(28) Ma K (ed) (2009) Overview of foreign criminology (continental law system). China Renmin University Press, Beijing Maeda M (2000) Specific part of the Japanese criminal law (trans: Dong F). Wu-Nan Publishing Co., Ltd., Taipei Otani M (2008). Specific part of criminal law (new version 2) (trans: Li H). China Renmin University Press, Beijing Penal Code of Singapore (2006) Chinese edition (trans: Liu T, Ke L). Peking University Press, Beijing, p 153 Qian X (2012) Study on the macroscopic effect of Chinese legislations on the crime of embezzlement and bribery. Jinan J (Philos Soc Sci) (6) Qiu X (1999) Review of penal rationality. China University of Political Science and Law Press, Beijing, p 471 Shan M, Chen L (2013) Development trend and governance strategy for two types of embezzlement crimes in China amid accelerating transformation. In: Chen Z, Li S, Huang J (eds) Proceedings of the National Annual Criminal Law Conference 2013: Social Transformation and Criminal Law Adjustments in Contemporary China. Publishing House of China People’s Public Security University, Beijing Stefani G (1998) General provisions of the French criminal law (trans: Luo J). China University of Political Science and Law Press, Beijing, p 491 Sun G, Wei C (2011) Study on international anti-embezzlement conventions and legislations on embezzlement. Law Press China, Beijing, p 431 Supreme People’s Procuratorate (2013) Nearly 200,000 people involved in embezzlement cases over five years. Chongqing Economic Times, 23 Oct 2013, p 3 Swiss Criminal Code (2004) Chinese edition (trans: Xu J, Zhuang J) (2004). China Fangzheng Press, Beijing, p 101 Xiao Y (ed) (1994) Study on the crime of bribery. Law Press China, Beijing. Li X (ed) (2004) Study on the crime of embezzlement and bribery. Intellectual Property Publishing House, Beijing Yamaguchi A (2011) Criminal law: specific part, 2nd version (trans: Wang Z). China Renmin University Press, Beijing Yang X (2008) Three reasons for not regarding sexual bribery as a crime. Legal Daily, 14 Aug Ye R (2012) Application of and reflection on fine penalty. Ph.D. Dissertation, Southwestern University of Finance and Economics Yu Z (2002) Study on the criminal punishment annihilation system. Law Press China, pp 567–580 Zhao B (2009) Outline of China’s criminal legislations on embezzlement. Jianghai Acad J 2009(1) Zhao B, Yu Z (2000) On the special arrangements for surrenders in the specific provisions of the criminal law of China. People’s Procuratorial Semimonthly 2000(3) Zhao B, Wang Z, Guo L (2004) United Nations convention against corruption and other important instruments. Publishing House of China People’s Public Security University, Beijing, pp 241– 242 Zhi Z (2009) Transaction of power and sex in a perspective of legal culture. Democracy Legal Syst 2009(17) Zhou D (2012) Thoughts on applying heavy punishment for the crime of bribe-giving. Master’s Dissertation, Southwest University of Political Science and Law, p 31 Zhu L (2013) Regarding Sexual Bribery As A Criminal Offence: A study on the Liu Zhijun case. Zhejiang Legal News, 4 July

Chapter 5

Legal Proceeding for Embezzlement and Bribery Cases Xinlin Peng and Ke Ma

Generally speaking, the legal proceeding for embezzlement and bribery refers to the process, sequence, and form of activities carried out by judicial authorities with the participation of litigants and other participants in order to solve a criminal case of embezzlement and bribery. Such proceedings typically include case filing, investigation, prosecution, trial, and enforcement. While a case of embezzlement or bribery has its special features compared to other criminal cases (e.g., the investigation is mostly carried out by the people’s procuratorates, and technical investigation may be pursued in severe cases), the legal proceedings are largely the same. The legal proceedings now prescribed for embezzlement and bribery have basically met the needs of prosecution since the adoption of the reform and opening-up policy in China, playing a positive role in promoting social stability and progress. For a better understanding of these procedures, this chapter will introduce the different components of the legal proceeding for embezzlement and bribery, identify major problems, and suggest solutions.

X. Peng (&) College for Criminal Law Science, Beijing Normal University, Beijing, China e-mail: [email protected] K. Ma Institute of Law, Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected] © Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7_5

149

150

5.1

X. Peng and K. Ma

Legal Proceeding for Embezzlement and Bribery Cases

5.1.1

Case Filing

Filing is the first and also indispensable step for the initiation of a criminal lawsuit. Only after a case is filed investigation, prosecution and trial will be conducted on a sound legal basis. In the same way as for other crimes, the legal proceedings for embezzlement and bribery start with the filing of a case, which includes accepting a case, reviewing documents, and supervision over whether the case is filed or not.

5.1.1.1

Accepting a Case

Accepting a case refers to the act that the public security authority or judicial authority receives a report, accusation or complaint of criminal activity, or suspects who voluntarily turn themselves in, and keeps relevant documents. During this phase, attention shall be paid to the following matters. First, when any organization or individual knows or suspects embezzlement or bribery is being committed, it is their right and obligation to report it or lodge the complaint to the public security authority, people’s procuratorate, or people’s court. Second, the public security authority, people’s procuratorate, or people’s court should accept any report of crime brought to their attention or the suspects who turn themselves in. Cases out of their scope of responsibility will be transferred to the competent authority with a notice given to the one who has reported the crime or the suspect who has turned in. Should circumstances warrant, immediate action needs to be taken before the case is transferred to other agencies. Third, a report, accusation or complaint can be submitted in written or in oral form. Fourth, in order to ensure the truthfulness of accusations and complaints, the officer who receives the report should explain the legal liability one shall assume for any false accusation. However, an accusation or complaint should not be taken as false as long as no fabrication or falsified evidence is involved, even if the information offered may not be totally true. Fifth, the public security authority, people’s procuratorate, or people’s court should ensure the safety of those who lodge the complaints, accusations, or reports and of their family, and when they choose not to make their identity and act publicly known, keep such information confidential.

5.1.1.2

Document Review and Handling

Article 110 of the Criminal Procedure Law provided for the principles of the review and handling of documents for case filing. “People’s courts, people’s procuratorates, or public security authorities should review documents of case reports, accusations, complaints, or surrenders promptly according to their respective scope

5 Legal Proceeding for Embezzlement and Bribery Cases

151

of duty; where criminal facts are identified and investigation is needed, the case should be filed; where no criminal fact is found or the criminal facts identified are clearly mild and no investigation is needed, the case shall not be filed, and those who report the case shall be informed of the reason for not filing the case. In case of any dispute, the reporter may apply for a review.” For the crime of embezzlement and bribery in particular, public security authorities, procuratorates, and courts, with different duties for relevant criminal litigations, handle different cases, and each has its own ways of handling case reports. It should be noted here, however, that cases of embezzlement and bribery fall outside the scope of private prosecutions and should not be brought to the people’s courts by individuals or private organizations. Therefore, any such case brought to the court by individuals or private organizations should be transferred to the public security agency or people’s procuratorate that has the power to deal with them.

5.1.1.3

Supervision Over Decisions of not Filing a Case

Supervision is exercised to prevent and correct incompliances and to ensure any decision to file or not to file a case is made according to the law, crimes are timely and effectively combated, the legitimate rights and interests of citizens are safeguarded, and laws are administered properly and consistently. Article 111 of the Criminal Procedure Law stipulates that “where the people’s procuratorate believes a case should be filed but the relevant public security authority does not file it, or where a victim appeals to the people’s procuratorate for a case that should be filed but is not by the relevant public security authority, the people’s procuratorate should require the relevant public security authority to provide grounds for not filing the case. Where the people’s procuratorate does not take the grounds as acceptable, the people’s procuratorate should inform the relevant public security authority, and the public security authority, upon receiving the notice, should file the case immediately.” For the crime of embezzlement and bribery in particular, Article 563 of the Criminal Procedure Rules of the People’s Procuratorate stipulates that “the investigation supervision department or public prosecution department of the people’s procuratorate, on finding the investigation department of the same procuratorate not file a case that should be filed or file a case that should not, should advice the investigation department to file or withdraw the case; when such advice is not accepted by the relevant investigation department, a report should be submitted to the chief procurator for a decision.”

5.1.2

Investigation Procedure

Investigation is an independent part of the criminal prosecution process and also an important stage in which investigators find and collect evidence, ascertain criminal facts and discover the criminals. Investigation has a direct bearing on prosecution

152

X. Peng and K. Ma

and trial. In a case of embezzlement or bribery, how well the investigation process is carried out matters greatly to whether the criminals could be correctly and timely brought to justice.

5.1.2.1

Jurisdiction for Investigation

Which agency has the power to investigate cases of embezzlement and bribery depends on such factors as its defined scope of responsibilities, geographical range of authority, level in the judicial system, and designation. Clearly defined and reasonably granted jurisdiction matters a great deal to the success of the anti-corruption efforts.1 The Criminal Procedure Rules of the People’s Procuratorate (the Rules) and the Procedure Provisions for the Public Security Organs to Handle Criminal Cases (the Provisions) address this issue in great details, setting out the general rules regarding jurisdiction over cases of embezzlement and bribery in China. In terms of jurisdiction arising from an agency’s defined responsibility, Article 8 of the Rules stipulates that the people’s procuratorate shall investigate cases of embezzlement and bribery; misconduct by public officials; infringement on the personal rights of citizens by a public official making use of his power, such as false imprisonment, torture to exhort confession, retaliation and frame-up, and unlawful search; and infringement on the democratic rights of citizens. Among these, cases of embezzlement and bribery refer to those provided for in Chapter 8 of the Specific Provisions of the Criminal Law and in all other chapters of it that is clearly stipulated to be handled according to relevant provisions in Chapter 8. Cases of misconduct by public officials refer to those provided for in Chapter 9. Cases of infringement on personal rights and democratic rights include the following: (1) unlawful detainment; (2) unlawful search; (3) extort confession by torture; (4) extort testimony by violence; (5) physical punishment and maltreating of prisoners; (6) retaliation and frame-up; and (7) undermining elections. Other crimes that fall in the category of embezzlement and bribery, such as accepting bribes by non-public-sector workers, giving bribes to non-public-sector workers, and the like, shall be investigated by the public security authorities. Here we can see that procuratorates are the most important agencies invested with the power to investigate embezzlement and bribery cases, an arrangement consistent with those in most other countries. As for location-based jurisdiction, Article 15 of the Rules reads: “Cases of job-related crimes fall into the jurisdiction of the people’s procuratorate of the region where the suspect’s work institution is located; where it is more suitable to put such a case in the jurisdiction of the people’s procuratorate of another region, the case may be taken over by another people’s procuratorate.” Article 17 reads: “When a case may fall into the jurisdiction of a number of people’s procuratorates, 1

Shi (2012).

5 Legal Proceeding for Embezzlement and Bribery Cases

153

the one first receives it shall take it. When necessary, such a case may also be put in the jurisdiction of the people’s procuratorate of the main location where the crime occurs.” Thus the jurisdiction over most cases in the category of embezzlement and bribery is determined by the location where the suspect works. For cases to be investigated by public security authorities, such as accepting bribes by non-public-sector workers and giving bribes to non-public-sector workers, the jurisdiction is in principle determined by the place where the crime occurs. For example, Article 15 of the Provisions reads: “a criminal case shall fall in the jurisdiction of the public security authority of the location where the crime occurs; where it is more suitable to put such a case in the jurisdiction of the place of residence of the suspect, this may also apply.” And Article 18 goes: “When a case may fall into the jurisdiction of a number of public security authorities, the one first receives it shall take it. When necessary, such a case may also be put in the jurisdiction of the public security authority of the main location where the crime occurs.” With regard to jurisdiction on the basis of administrative level, Article 13 of the Rules reads: “for cases accepted directly by a people’s procuratorate, investigation shall be conducted by a procuratorate of the appropriate level. The Supreme People’s Procuratorate shall investigate major criminal cases on the national level; the people’s procuratorates of provinces, autonomous regions, and municipalities shall investigate major criminal cases on the provincial level; and branch procuratorates and prefecture and municipal procuratorates shall investigate major criminal cases within their respective scope of responsibility; and basic-level people’s procuratorates shall investigate criminal cases within their own scope of responsibility.” According to this, law enforcement agencies at which level shall have the power of investigation is determined by the importance of the matters handled: those of national, provincial, or municipal importance shall be handled by the procuratorate at the corresponding level, and all other cases handled by county-level people’s procuratorates. A similar system applies to cases of embezzlement and bribery that fall within the responsibility of public security agency, though most of such cases are handled by public security agencies at county level. As for agencies designated to investigate a case, Article 16 of the Rules stipulates: “Where it is difficult to decide which people’s procuratorate’s jurisdiction a case falls into, the several people’s procuratorates that are involved may decide through consultation. Where disputes arise or the circumstance is special, an upper-level people’s procuratorate of all procuratorates involved shall designate one to take the case.” And Article 18 reads: “An upper-level people’s procuratorate may designate one of its lower-level people’s procuratorates to investigate a case with unclear jurisdiction or require a change of jurisdiction.” These two provisions provide the basis for solving disputes concerning jurisdiction in judicial practice and to some extent fill a blank in this aspect left by the Criminal Procedure Law. Also, Article 19 of the Provisions points out that for criminal cases involving disputes over jurisdiction or with unclearly defined jurisdiction, relevant public security authorities may make a decision through consultation. When consultation fails, a shared upper-level authority shall make the decision. In special

154

X. Peng and K. Ma

circumstances, the jurisdiction for a criminal case may be decided by a shared upper-level public security authority.

5.1.2.2

Conclusion of Investigation

Conclusion of investigation is the final step in an investigation process. The investigators are required to determine based on the collected evidence whether the suspect is guilty and submit to a procuratorate or the public prosecution department of the procuratorate the proposal for prosecution or the opinions on withdrawing the case. i. Transfer the Case to Prosecutors If investigators at a people’s procuratorate or public security agency conclude criminal facts are clear, evidences accurate and sufficient, and prosecution needs to be pursued, an investigation report should be prepared and a proposal for prosecution should be submitted. Meanwhile, the suspect and his or her attorney should be informed of the transfer of the case. ii. Case Withdrawal If, after the investigation, the conclusion is that the suspect shall not be held accountable, the case should be withdrawn. If the suspect is already arrested, he/she should be released immediately, with a statement of release provided, and the people’s procuratorate that approved the arrest should be informed. For a case of embezzlement and bribery, should the people’s procuratorate find one of the following, the investigation unit should prepare a written opinion recommending withdrawal and submit it to the chief procurator or the procuratorate committee for a decision: (1) one of the situations provided for in Article 15 of the Criminal Procedure Law; (2) no criminal fact, no criminal liability according to the Criminal Law, or no criminal case; (3) the criminal facts to be committed not by the suspect. In cases of joint offence, if one of the above is found to be true for one of the suspects, the suspect should be removed from the case.

5.1.3

Prosecution

Prosecution in the context of criminal proceedings refers to the process by which the people’s procuratorate or an individual brings a criminal charge before the competent court according to the law, requesting the court to hear the case and mete out criminal punishment on the accused. Based on who prefers the charge, prosecutions can be divided into two categories, public prosecution, and private prosecution. Cases of embezzlement and bribery should be prosecuted by public prosecutors.

5 Legal Proceeding for Embezzlement and Bribery Cases

5.1.3.1

155

Pre-prosecution Review

All cases of public prosecution must go through a review, a prescribed step between investigation and trial. According to Article 167 of the Criminal Procedure Law, any case that requires public prosecution shall be reviewed and decided on by the people’s procuratorate. Whether it is investigated by a public security authority or a people’s procuratorate, a case of embezzlement and bribery shall always be reviewed by the people’s procuratorate for prosecution after the investigation is concluded. The review department of a procuratorate shall accept a case transferred from the public security authority or the investigation department of the same people’s procuratorate after preliminary procedural review. For a case brought to its attention, the procuratorate shall review: (1) identity of the suspect; (2) criminal facts and processes; (3) whether the nature of the crime is correctly understood and the right charge is made; are there grounds for lighter, reduced, or exemption from, punishment; whether the criminal liability of suspects in a case of joint offence is correctly identified; (4) whether the evidence, including decisions based on technical investigation, is transferred together with the case; whether evidence to prove relevant properties to be illegal gains is transferred together with the case; whether the list of evidence not suitable for transfer, their replicates, photos, or other relevant documents are transferred together with the case; (5) whether the evidence is sound and complete, gained via legal means; whether there is any ground for the exclusion of illegitimate evidence; (6) the legal procedures and instruments of the investigation; (7) any omitted criminal offence or suspect to be held accountable; (8) any ground for not holding the suspect accountable; (9) whether it is proper to take compulsory measures, and whether it is necessary to keep the arrested suspect in detention; (10) whether the investigation is legal; (11) whether the properties involved in the case are sealed up, seized, frozen and kept in custody, whether a full list is available, and whether the documents for the transfer are fully in place. As for the timeframe for review, a people’s procuratorate should decide on the prosecution of a case within one month. For a major and complicated case for which a decision is hard to make, 15 more days can be allowed with the approval of the chief procurator. If the jurisdiction over a case shifts from one procuratorate to another, the timeline should start from the day the latter procuratorate receives the case. A people’s procuratorate may ask the public security authority to provide evidence necessary for a trial; where there may be evidence collected through illegal means as prescribed in Article 54 of the Criminal Procedure Law, it may require an explanation concerning the validity of the evidence collected. Where the additional investigation is needed, the case may be transferred back to the public security authority for more investigation or be kept at the procuratorate for investigation. The additional investigation should be completed within one month and two rounds of such additional investigation may be carried out at most. When a case is again transferred to a people’s procuratorate after additional investigation, the review for prosecution shall be started again with the same timeline.

156

5.1.3.2

X. Peng and K. Ma

Public Prosecution

By making a public prosecution, a people’s procuratorate, on behalf of the state, brings a criminal suspect to a people’s court and requests the court to hold him/her criminally liable through a trial. After the procuratorate initiates a public prosecution, a suspect becomes a defendant. i. Condition and Procedure The condition for initiating a public prosecution is that the people’s procuratorate believes that for the case in question, criminal facts are clear, evidence is sound and complete, and the suspect should be held criminally liable according to the law. The criminal facts can be regarded as clear when a case meets one of the following criteria: (1) It involves one single crime and the found facts are sufficient for conviction and sentence or facts related to the conviction and sentence are already clear, though those unrelated cannot be clarified. (2) It involves multiple crimes and facts for one of them are clear and sufficient for prosecution while those for others cannot be clarified. (3) The criminal tools and booties are not found but other evidence is sufficient for conviction and sentence. (4) The testimony of witness, the confession and defense of the suspect, and the statement of the victim are generally consistent with only minor inconsistency that does not prevent the conviction. For cases meeting criteria (2), prosecution should be initiated based only on the crime with clear facts found. Evidence is sound and complete when the following criteria are met: (1) All facts quoted for the conviction and sentence are supported by evidence. (2) All evidence quoted for the conviction is proved valid through legal procedure. (3) When all evidence of the case is considered, reasonable suspicions for the confirmed facts are all eliminated. When initiating a public prosecution, the people’s procuratorate should comply with rules concerning the jurisdiction for trials. A public prosecution submitted to a people’s court that does not have the jurisdiction for it will not be accepted and trial won’t be initiated. A case of embezzlement or bribery that the people’s procuratorate believes should be handled by a higher-level procuratorate or one on the same level but of a different jurisdiction according to relevant provisions in the Criminal Procedure Law should be transferred to the proper people’s procuratorate. When it is deemed necessary to designate a people’s procuratorate to handle the case according to the Criminal Procedure Law, consultation should be held with other procuratorates on the same level for the designation. ii. Bringing the Case to Court When a people’s procuratorate initiates a public prosecution for a case of embezzlement or bribery, it should submit to a people’s court the indictment, case files, and evidence. Materials of the withdrawal of confession or testimony by a suspect, defendant, or witness, as well as other evidence and materials in favor of the suspect or defendant should also be sent to the court. When the court sends a written request for additional materials and the procuratorate considers it necessary to do so, the

5 Legal Proceeding for Embezzlement and Bribery Cases

157

procuratorate should do it within three days after receiving the request. Any material collected, after the public prosecution is initiated but before the judgment is pronounced, should be transferred in a timely manner from the procuratorate to the court. The procuratorate may also submit a sentencing proposal, if any, to the court together with the indictment.

5.1.3.3

Non-prosecution

When a people’s procuratorate, after reviewing a case that had been investigated by the public security authority or by its own investigation department, finds that what the suspect has done does not meet the criteria for prosecution or that it is unnecessary to initiate a prosecution, it will decide not to bring the suspect to a people’s court for trial and punishment. i. Categories of Non-prosecution According to the Criminal Procedure Law, there are four categories of non-prosecution: statutory non-prosecution, discretionary non-prosecution, non-prosecution for insufficiency of evidence, and conditional non-prosecution. Cases of embezzlement or bribery mainly involve the first three categories. For a case of embezzlement or bribery where there is no criminal fact or which meets one of the criteria stipulated in Article 15 of the Criminal Procedure Law, the people’s procuratorate should decide not to prosecute. For a case of embezzlement or bribery where the offence is minor and it is unnecessary to sentence the offender to any criminal punishment or the offender should be exempted according to the law, the people’s procuratorate may decide not to prosecute. Such cases are subject to the discretion of the people’s procuratorate. For cases of embezzlement or bribery that require additional investigation, if the people’s procuratorate finds the evidence insufficient for prosecution after the additional investigation is done, the people’s procuratorate should decide not to prosecute. ii. Procedure When the people’s procuratorate decides not to prosecute for a case of embezzlement or bribery, the procuratorate should prepare a written decision of non-prosecution and release the properties sealed up, seized, or frozen during the investigation process. For a suspect involved in a case of non-prosecution that should be subject to administrative punishment, penalty, or confiscation of unlawful gains, the people’s procuratorate should provide its opinion and transfer the case to a relevant authority for further action. The decision of non-prosecution should be announced, and the written decision should be serviced to the person involved and the organization he/she works for. If the person is in detention, he/she should be released immediately. For a case of bribery transferred from the public security authority, if the people’s procuratorate decides not to prosecute, it should deliver a written decision of non-prosecution to the relevant public security authority.

158

5.1.4

X. Peng and K. Ma

Court Proceedings

Trials lie at the core of the criminal proceedings. A criminal trial is a legal process that may include proceedings at the first instance and proceedings at the second instance, and in some cases, review of a death sentence and trial supervision are required though they apply only in special circumstances—for embezzlement and bribery as well as for other criminal cases.

5.1.4.1

Proceedings at the First Instance

For any criminal case, proceedings at the first instance are the core and fundamental part of court procedures. Since cases of embezzlement and bribery require public prosecution, the first-instance procedure for public prosecution cases applies. It includes pre-trial review, pre-trial preparation, trial, postponement, suspension, etc. i. Pre-trial Review After reviewing a case of embezzlement or bribery, the people’s court should carry out a trial for it as long as there are facts of the accused crime together with case files and evidence; it shall not refuse to try for the insufficiency of these materials. If a case is transferred from the people’s procuratorate without these materials, the people’s court may request the people’s procuratorate to provide them, and the people’s procuratorate should do so within three days after receiving such a request. ii. Pre-trial Preparation After deciding on a trial of a case of embezzlement or bribery, to ensure that the trial will be carried out smoothly, the people’s court should do a series of preparations before opening a court session. These include: (1) determine the chief judge and the collegiate bench; (2) service the indictment to the defendant and the defender ten days before the court opens; (3) inform the litigants, statutory agent, defender, and agent ad litem to provide the list of witnesses and appraisers and the evidence to be presented in court; where witnesses, appraisers, and people with expertise are required to appear in court, the name, gender, age, occupation, address, and contact information of them should be provided; (4) inform the people’s procuratorate of the time and venue of the trial three days in advance; (5) service the subpoena to the litigants and the notice of trial to the defender, agent ad litem, statutory agent, witness, appraiser, and relevant persons; people to appear in court may also be informed by phone, text message, fax, email, or other means through which the recipient can be confirmed to have received the notice; (6) for cases for open trial, the summary, name of defendant, and time and venue of the trial shall be released three days in advance. Records should be kept for all these preparations. In addition, for cases meeting one of the following criteria, the judges may call for a pre-trial conference: (1) a litigant and his or her defender or agent ad litem

5 Legal Proceeding for Embezzlement and Bribery Cases

159

require illegal evidence to be eliminated; (2) there is much evidence, and the case is complicated and of great significance; (3) other situations that require a pre-trial conference. Based on specific conditions, the defendant may be asked to participate in the pre-trial conference. iii. Trial A trial generally goes through five stages: opening, court investigation, court debate, final statement by defendant, and deliberation and pronouncement. (1) Opening When a trial opens, the chief judge should confirm whether the litigants are present, announce the cause of action, call out the members of the collegiate bench, clerk, public prosecutor, defender, agent ad litem, appraiser, and interpreter, inform the prosecution that they are entitled to challenging any of these people, and inform the defendant of his or her right to defend himself/herself. (2) Court investigation Court investigation is a process hosted by the judges and participated in by the litigants, in which the facts and evidence of the case are examined and verified. It is a core part of a trial. All evidence must be verified in court before it can be used for making a judgment. The court investigation shall cover the criminal facts that the people’s procuratorate accuses the defendant of and the evidence to prove the defendant to be guilty or innocent, or the offence to be mild or serious. (3) Court debate Court debate provides an opportunity for both parties to fully elaborate on their positions and grounds, and it is important for safeguarding the rights of litigants, seeking out the truth, and making a fair judgment. When the collegiate bench considers the investigation to be thorough and the facts to be clear, the chief judge should announce the end of court investigation and the start of court debate on the facts, evidence, and applicable laws to be used for determining the conviction and punishment. A court debate, hosted by the chief judge, should proceed in the following sequence: (a) statement by the public prosecutor; (b) defense by the defendant; (c) defense by the defender; (d) debate between both parties. For a case where the defendant has pleaded guilty, the parties may be guided in the court debate to negotiate mainly over the measure of punishment and other disputable issues. For cases where the defendant pleads not guilty or the defender seeks innocence in the defense, the two parties may be guided to first negotiate over the conviction and then move on to the measurement of punishment. During the court debate, the chief judge should listen fully to both parties, warn them against or stop any statement by either party that is irrelevant to the case, repetitive, or accusative. During the court debate, if the collegiate bench finds any new facts relevant to the conviction and punishment, which requires further investigation, the chief judge may suspend the debate and restart court investigation, and the debate shall resume after the investigation.

160

X. Peng and K. Ma

(4) Final statement by defendant When the chief judge announces the end of the court debate, the collegiate bench should make sure that the defendant fully exercises his or her right to make a final statement. If the defendant repeats his or her position for multiple times during the final statement, the chief judge may stop him/her. Where a final statement expresses despise of the court or public prosecutor, infringes on the interest of others or the public interest of the society or is irrelevant to the case, the defendant should be stopped. In a public trial, if the final statement by the defendant involves state secret, privacy or trade secret, the defendant should be stopped. If a defendant mentions new facts and evidence which the collegiate bench believes may have an impact on the judgment, court investigation should be launched again; if the defendant offers new grounds to defend himself/herself, which the collegiate bench believes may have an impact on the judgment, court debate should be restarted. (5) Deliberation and pronouncement After the final statement by the defendant, the chief judge should announce an adjournment for the collegiate bench to deliberate. The deliberation should be carried out based on clarified facts, evidence, relevant legal provisions, and full consideration of the opinions of both parties, so as to determine whether the defendant is guilty, what is the accusation, and whether there is any ground for a lighter, heavier, or reduced sentence or an exemption; whether he/she should be sentenced to criminal punishment, what should the punishment be, and how to handle the properties sealed up, seized, or frozen and the interest thereof. And judgments should be made based on the following: (a) For a case with clear facts and sound evidence where the defendant is believed to be guilty according to the law, the defendant should be pronounced guilty; (b) For a case where the defendant is found not guilty, the defendant should be pronounced not guilty; (c) For a case with insufficient evidence to pronounce the defendant guilty, the defendant should be pronounced not guilty for lack of evidence to support the accusation.

5.1.4.2

Proceedings at Second Instance

Proceedings at second instance, also known as appellate procedures, are usually the last-instance proceedings for criminal cases. The court hearing an appeal will, further examine and verify information on crimes, reject the appeal if it is proved groundless according to the law, and sustain the correct judgment made at first instance. Or, if the first-instance decision is found to be erred, it will correct the previous conviction, ensure that punishment is commensurate to the crime committed, protect the legitimate rights and interests of the defendant, and facilitate the supervision of a higher-level court over a lower-level one.

5 Legal Proceeding for Embezzlement and Bribery Cases

161

i. Initiation of Second-Instance Procedures (1) Who may initiate the procedures For a case of embezzlement or bribery, the appeal may be initiated by the defendant, his or her statutory agent, or the defender or one of the defendant’s close relatives authorized by the defendant to do so. In addition, a people’s procuratorate may also initiate a protest. It is worth mentioning here that in a case of embezzlement or bribery, the alleged victim and his or her statutory agent are also litigants but do not have the right to appeal. In case they refuse to accept the decision of the first-instance court, they can only apply for a protest through the people’s procuratorate. (2) For what reason Like in other ordinary criminal cases, in a case of embezzlement or bribery, there is no restriction on the cause of an appeal. The appeal, whether on any ground or not, can be initiated as long as it is within the time limit. However, a procuratorate’s protest is subject to certain conditions. Specifically, a protest may be lodged only when the procuratorate believes the judgment at first instance by a people’s court at the same level as the procuratorate is incorrect. ii. Trial at the Second Instance (1) Reviewing cases of appeal or protest When an appeal or protest is lodged, the people’s court of second instance shall review all the facts confirmed and the legal provisions applied at the first instance, rather than merely what falls within the scope of the appeal or protest. For a case of joint offence where only some of the defendants file an appeal, the whole case should be reviewed. (2) How is the trial conducted According to the Criminal Procedure Law, a case of appeal and a case of protest are tried differently. While a court session is required for all the protests lodged by a procuratorate and, in principle, for appeals, it may be replaced by investigation and interrogation in some cases of appeal. If no court session is opened, the defendant should be interrogated and opinions should be solicited from other litigants, the defender and agent ad litem; all members of the collegiate bench should read through the case files and when necessary should provide written opinions. Cases of embezzlement or bribery that meet the following criteria should be handled in court: (a) The defendant and his or her statutory agent raise a dispute over the facts and evidence confirmed at first instance, and it may have an impact on the conviction and the measurement of punishment. (b) The defendant is sentenced to an immediate death penalty. (c) the protest is filed by a people’s procuratorate. (d) Other situations where a court session is required.

162

X. Peng and K. Ma

(3) Decisions of the court of second instance After a trial, the court of second instance may make the following decisions: (a) Where the original judgment is correct in terms of the confirmed facts, the legal provisions applied, and the punishment, the appeal, or protest should be rejected and the original judgment sustained. (b) Where the confirmed facts are correct but the applied legal provisions or the punishment imposed are not, the judgment should be amended. (c) Where facts are unclear or evidence is insufficient for the original judgment, amendment may be made after facts are clarified, or the original judgment can be withdrawn with the case transferred back to the previous people’s court for a retrial. Yet if the case has been returned for a retrial and the judgment is once again challenged by the defendant or the people’s procuratorate, the court of second instance should make a judgment according to the law and the case must not be returned to the previous court again.

5.1.4.3

Prohibition of Reformation in Peius

Prohibition of reformation in peius means that in a second instance the people’s court where the defendant or his or her statutory agent, defender, or close relative raises an appeal, the people’s court must not impose heavier punishment than the sentence of the first instance. For a case returned to the previous people’s court for a retrial, the punishment must not be heavier than before unless the people’s procuratorate initiates new prosecution with new facts. Where the original judgment must be amended according to the law, the case should be put to court again after the verdict of the second instance takes effect according to trial supervision procedures. However, for a case protested against by the people’s procuratorate, this principle does not apply.

5.1.5

Enforcement

An effective verdict only announces whether the defendant is guilty and what punishment applies. It does not really punish the criminal. Punishment can be imposed only through enforcement.2 Enforcement is the last part of a criminal litigation, and it has direct bearings on how well the Criminal Law completes its mission and fulfills its purpose.

2

Chen (2011).

5 Legal Proceeding for Embezzlement and Bribery Cases

5.1.5.1

163

Who Enforces the Verdict and on What Grounds

According to relevant provisions in the Criminal Procedure Law, criminal punishment may be enforced by the people’s court, the prison, the public security authority, the lockup, the detention house, the reformatory, and community service facilities. Enforcement is done on the basis of legally binding judgments and verdicts, which include the following: (1) judgments and verdicts that receive no appeal or protest till the end of the statutory timeline; (2) judgments and verdicts of the final instance; (3) sentence to death approved by the Supreme People’s Court and death sentence with two-year reprieve approved by a superior people’s court.

5.1.5.2

Enforcement in Cases of Embezzlement and Bribery

i. Immediate Death Sentence To enforce an immediate death sentence, an order must be signed by the President of the Supreme People’s Court, and a lower-level people’s court should enforce it within seven days after receiving the signed order. However, in the following cases, the enforcement should be suspended, and a report should be submitted immediately to the Supreme People’s Court for a decision: (1) It is found before enforcement that the judgment may be wrong. (2) The defendant reveals major criminal facts or present major meritorious performance before the enforcement, which may result in an amendment to the sentence. (3) The criminal is pregnant. If the enforcement is suspended on the basis of (1) or (2) above, when the basis ceases to be valid, a report must be submitted to the president of the Supreme People’s Court for another order before the death sentence can be enforced. If the enforcement is canceled for pregnancy, it should be reported to the Supreme People’s Court for an amendment to the original judgment. In addition, the people’s court of the first instance should inform the people’s procuratorate at the same level three days in advance to oversee the enforcement of a death sentence on site. A death sentence may be enforced by shooting, injection, or other means, and it may be done on an execution ground or in a place of custody. In the execution process, the judicial personnel who directs the process should confirm the identity of the criminal, ask for last words or letters before handing the criminal over to the executor. Should any mistake be identified before the execution, the process should be suspended, and a report should be delivered to the Supreme People’s Court for a decision. Execution should be announced ahead of time and not displayed to the public. The people’s court that hands over the criminal for enforcement should report the enforcement process to the Supreme People’s Court and inform the criminal’s families after the execution.

164

X. Peng and K. Ma

ii. Death Sentence with Reprieve, Imprisonment and Detention

Life

Imprisonment,

Fixed-term

Criminals sentenced to death with reprieve, life imprisonment, or fixed-term imprisonment for the crime of embezzlement or bribery should be transferred by the public security authority to a prison for enforcement. Criminals who are sentenced to fixed-term imprisonment but have less than one year to serve at the time of the transfer should be kept in a lockup instead of a prison. Criminals sentenced to detention should be kept in custody by the public security authority. A juvenile criminal should be kept in a reformatory. Enforcement of such sentences should be done in a timely manner and the families of the criminal should be informed. iii. Surveillance, Reprieve, and Deprivation of Political Rights Criminals sentenced to surveillance and reprieve should deliver community service, of which community service facilities are in charge. Deprivation of political rights shall be enforced by the public security authority. When the term is fully served, the enforcement institution should provide a written notice to the criminal, the organization he/she works for, and the basic-level organization of his or her place of residence. iv. Fines and Confiscation Sentences of fines and confiscation of properties shall be enforced by a people’s court. When a criminal sentenced to a fine does not pay it when it is due, the people’s court should force him/her to; if the criminal cannot pay it due to force majeure, the fine may be reduced or canceled. A sentence of confiscation of properties, whether it is imposed independently or as a supplementary punishment, shall be enforced by a people’s court and the public security authority may join the effort when necessary.

5.1.5.3

Changes of Enforcement

i. Temporarily Allowed to Serve Sentence Out of Prison In this situation, there occurs a change to both the venue and the way in which the offender serves his or her sentence. Those who are sentenced to fixed-term imprisonment or detention for the crime of embezzlement or bribery may serve their terms out of prison in the following cases: (1) he/she suffers from serious disease that requires medical parole. (2) A women criminal is pregnant or is breastfeeding her child. (3) The criminal cannot take care of him/herself and causes no hazard to society if he/she serves the term out of prison. Temporary service out of prison does not apply to criminals sentenced to death with reprieve or to life imprisonment. Medical parole does not apply to criminals who may cause hazards to society or may hurt him/herself. Those who indeed require medical parole for serious medical conditions need to have a diagnosis and statement issued by a hospital designated

5 Legal Proceeding for Embezzlement and Bribery Cases

165

by the competent provincial people’s government. Before the criminal is handed over for enforcement, the decision of temporary service out of prison should be made by the people’s court; while after the handover, it is up to the prison or the lockup to submit a written application for temporary service out of prison to the provincial prison management authority or a municipal public security authority for approval. ii. Change to a Death Sentence with Reprieve A death sentence with reprieve applies to criminals who have committed extremely severe offences but does not need to be executed immediately with the purpose of keeping them in custody to reform them. It is of great significance to the restricted application and reduction of death sentences. For criminals who are sentenced to death with reprieve for embezzlement or bribery, if no intentional criminal offence is committed within the two-year reprieve, a commutation should apply. For this, the enforcement institution shall provide a written opinion and submit it to a superior people’s court for a decision. If such a criminal commits an offence intentionally during the reprieve, which is verified through investigation, he/she should be executed, in which case the competent superior people’s court shall report to the Supreme People’s Court for approval. iii. Commutation and Parole If a criminal sentenced for embezzlement or bribery to surveillance, detention, fixed-term imprisonment, or life imprisonment abides strictly by all rules of the prison, accepts all reformation efforts and shows repentance, or renders meritorious performance when serving his or her term, a commutation may apply; for those who prevent a major criminal offence by others or render any other major meritorious performance, a commutation should apply. To apply a commutation, the enforcement institution shall submit a written opinion to a people’s court above the intermediate level, and the people’s court should form a collegiate bench to review it and grant the commutation if the repentant or meritorious performance is confirmed. No commutation can be applied without going through statutory procedures. Criminals who are sentenced to fixed-term imprisonment for embezzlement or bribery and have served more than half of the original sentence, or criminals who are sentenced to life imprisonment for embezzlement or bribery and have served more than 13 years in prison, during which period they have abided by all prison rules, accepted all reformation efforts, rendered repentant performance, and showed no sign of causing hazard to society, may be granted parole. In special circumstances, a parole may be granted as approved by the Supreme People’s Court without meeting the above conditions. When considering a parole, the possible influence of the criminal on his or her community after the parole is granted should be taken into account.

166

X. Peng and K. Ma

iv. Ensuring law compliance It used to be a frequently reported problem in some places that convicts of embezzlement and bribery managed to evade criminal punishment. It is somewhat true that those who have power usually enjoy more commutation after being sentenced, are more likely to be granted parole and temporary service out of prison, and serve shorter terms in general. And in particular, some commutation and parole are granted out of fraud or trade of power and money, or some other corruptive practices, severely hampering justice and judicial credibility and arousing intense criticism in society. Fortunately, the central judicial authorities have realized this problem in recent years and taken effective institutional measures to prevent judicial corruption involving commutation, parole, and temporary service out of prison. For example, the Committee of Political and Legislative Affairs of the CPC Central Committee issued Opinions on Being Strict with Commutation, Parole, and Temporary Service Out of Prison and Effectively Preventing Judicial Corruption in 2014. It contains guiding opinions for commutation and parole for job-related criminal cases, requiring that relevant rules concerning the start, interval, and extent of commutation be followed strictly. For those sentenced to life imprisonment, a commutation cannot be applied until they have served at least three years in prison and the term of imprisonment after the commutation may be between 20 and 22 years; after a life imprisonment is commuted to fixed-term imprisonment, further commutation should reduce the term by no more than one year each time and the interval between two commutations should be more than two years. After a death sentence with reprieve is reduced to life imprisonment, further commutation may not be applied until the criminal has served at least three years in prison, the term may be reduced to 25 years, and after a life imprisonment is reduced to fixed-term imprisonment, further commutation should reduce the term by no more than one year each time, and the interval between two further commutations should be more than two years. Based on this, we can see that the minimum term of imprisonment served by a criminal of embezzlement or bribery who is originally sentenced to life imprisonment is 17 years when all possible commutations are granted; and for one sentenced originally to death with reprieve, the minimum term served is 22 years. This is very stringent. Following these opinions, the Supreme People’s Court convened a video conference on March 14, 2014 for the implementation, requiring people’s courts to follow five requirements. It also issued in a timely manner the Rules of the Supreme People’s Court on the Procedures for Commutation and Parole. Focusing on the key points involved in commutation, parole, and temporary service out of prison, the rules raises clear requirements for relevant decisions, showing the strong determination of the Supreme People’s Court to eliminate judicial corruption with the most stringent measures.

5 Legal Proceeding for Embezzlement and Bribery Cases

5.2

167

Problems and Possible Solutions

Since crimes of embezzlement and bribery have been occurring frequently, the number of such cases prosecuted is growing year by year.3 As the government steps up its effort to fight against the two types of crime, there is a call for the legislative authorities to move faster to improve the legal proceeding so as to meet the increased anti-corruption needs while effectively protecting human rights. Both embezzlement and bribery are crime types that are not easy to detect, and great difficulties exist in collecting evidence, substantiating the charge and tracking down and capturing fleeing criminals. The existing legal proceeding for such cases needs to be improved in many aspects. For example, the power for investigating is scattered among different authorities, active investigation measures are far from enough, the evidence system needs to be improved to make it easier to confirm relevant facts, the existing system of trials by default cannot effectively fight against crimes, and there are many limitations to the systems of assistance in obtaining evidence and indirect property recovery.4 These problems have, to some extent, hampered the government’s effort to fight against the crimes. For reasons of space, here we will only offer a brief analysis of how to prove an offence of embezzlement or bribery, how to encourage the accused to testify, how to determine the conviction and the punishment for an accused person on the run, and how to improve judicial credibility.

5.2.1

Burden of Proof for Prosecution and Improvement in Presumption Rules

Since the evidence of embezzlement and bribery (the latter in particular) is often circumstantial, difficult to obtain and subject to change, it is very common in such cases that insufficient evidence makes criminal sanction difficult. One of the major

3

According to statistics, from January to August 2013, procuraotrates nationwide handled a total of 13,163 cases of embezzlement and bribery, involving 18,616 people, which all occurred at the basic level and caused damage to the interests of the general public; filed for investigation more than 18,000 major cases of embezzlement and bribery, accounting for 80.8% of the total and up by 5.7% over the previous year; and filed for investigation embezzlement and bribery cases of great significance involving 1,761 persons, including 126 officials above bureau level. See Wang (2013). In 2013, procuratorates nationwide handled a total of 5,676 persons involved in cases of bribery, up by 17.3% over 2012. See Lei (2014). Since 2014 the number of cases of embezzlement and bribery handled by procurorates and the number of people involved have grown, respectively, by 24% and 19.8% over the previous year, and the number of embezzlement cases has been rising rapidly in all provinces. For example, in Gansu Province, the people’s procuratorates handled a total of 150 such cases involving 245 persons, up by 87.5% and 75%, respectively. See Peng (2014). 4 Ren (2010).

168

X. Peng and K. Ma

difficulties here is to prove the intent to embezzle or bribe. Take the crime of accepting bribes for example. According to Article 385 of the Criminal Law, a public official who takes advantage of his job to solicit properties from others or take properties from others illegally and seek gains for them commits the crime of accepting bribes. In our judicial practice, many public officials do not take any bribe themselves but have their families, mistresses, or other relatives to do it on their behalf.5 They will then claim that they know nothing about it and thus deny any commission of the crime of accepting bribes. In this case, the accuser usually finds it very difficult to prove the intent of the official. In the Opinions on Law Application in Criminal Cases of Bribe Taking issued by the Supreme People’s Court and the Supreme People’s Procuratorate in 2007, Article 76 makes it clear that a joint offence of accepting bribes by a public official and his or her relatives or other persons can be confirmed only when the accuser successfully proves that there is a collusion between these people, which, in practice, is also very difficult. Usually, such relatives and other persons will have an agreement with the public official involved to keep them all safe from any legal punishment. Although Article 137 of the Amendment No. 7 to the Criminal Law stipulates that non-public-sector workers may also be convicted of and punished for accepting bribes, if the public official involved refuse to confess his or her intent in the joint offence, the only thing the Criminal Law can do is to punish those people associated with the public official, not the public official him/herself. From the analysis above, we can see that it is very difficult to prove the intent of the accused. If our legislation fails to offer an effective solution to this, the fight against corruption will suffer. As we see it, establishing and improving the rules of presumption in penal codes helps solve this problem. As a substitute for litigation evidence,8 presumption offers 5

Investigation reveals that up to 80–90% of cases of accepting bribes today involve persons of special relations. See Xiang (2003). Zou (2001). 6 Article 7 of the Opinions on Law Application in Criminal Cases of Bribe Taking issued by the Supreme People’s Court and the Supreme People’s Procuratorate on July 8, 2007, reads: “A public official who, taking advantage of his/her job, seeks gains for a briber and hint to the briber to give properties to a person of special relation in ways listed herein shall be held accountable for the crime of accepting bribes. A person other than those of special relations, who collude with a public official to seek gains for an briber by taking advantage of the job of the public official and share the properties given by the briber shall be held accountable for joint offence of the crime of accepting bribes.” 7 Article 13 of the Amendment No. 7 of the Criminal Law reads: “Where a close relative or other persons having close relations with a public official makes use of the job-related behavior of the public official, or the convenience offered by the power or position of the public official, or makes use of the job-related behavior of another public official to seek undue benefits for an briber and solicit or accept properties from the briber, if the amount is big or there are other serious circumstances, he/she shall be sentenced to no more than three years of imprisonment or detention and a fine; if the amount is huge or there are other serious circumstances, he/she shall be sentenced to three to seven years of imprisonment and a fine; and if the amount is extremely huge or there are other very serious circumstances, he/she shall be sentenced to more than seven years of imprisonment and a fine or confiscation of property.” 8 Wang and He (2008).

5 Legal Proceeding for Embezzlement and Bribery Cases

169

an important device to prove legal facts in special types of crime. According to Article 28 of the United Nations Convention against Corruption adopted by the 58th General Assembly on October 31, 2003,9 knowledge, intent, or purpose required as an element of an offence established in accordance with this Convention may be inferred from objective factual circumstances. This means that for a case of embezzlement or bribery, inference about knowledge, intent, purpose, or other mental elements may be drawn from proven facts to help investigators prove a crime and to facilitate the fight against corruption. Provisions about presumption in cases of embezzlement or bribery can also be found in the Criminal Law of China and relevant judicial interpretations. For example, according to Article 395 of the Criminal Law, the crime of possession of assets of massive value with unidentified sources is a crime of presumption. When a public official holds properties or shows expenditures far above what he/she can afford with his or her income and he/she fails to provide a legitimate source of such properties, the part of the properties that exceeds his or her income level will be presumed as unlawful gains. For another example, Article 6 of the Interpretation of Several Issues Concerning Law Application to Cases of Misappropriation issued by the Supreme People’s Court on May 9, 1998, stipulates that those who flee with misappropriated public funds shall be accused and punished according to Articles 382 and 383 of the Criminal Law. Yet the two articles quoted here are for the crime of embezzlement. This means that when the basic fact of fleeing with misappropriated public funds is confirmed, the offender can be presumed to subjectively have the intention of taking public fund into possession and thus can be convicted of embezzlement and punished accordingly. Clearly, such a presumption rule is of great significance to our fight against relevant criminal offences. However, we should also be aware that such a presumption rule has its limitations. First, there is no provision for the procedure of the presumption to ensure effective application of the presumption rule. From the above, we can see that we have, to some extent, established and put into use penal presumption rules for the crime of embezzlement and bribery, but there is not yet any procedural rule to

This is the first legal instrument adopted by the United Nations to guide the international fight against corruption and the most complete, comprehensive, extensive, and innovative legal instrument in this regard. It shows the basic trend in today’s world in terms of anti-corruption and showcases the attitude and determination of the international community to fight against corruption. Taking effect on December 14, 2005, the Convention contains a preamble, and 71 articles in eight chapters, and covers the legislation, jurisprudence, administrative enforcement, national policy, international cooperation, and public opinions concerning the fight against corruption. It establishes preventive measures, criminalization and enforcement mechanisms, international cooperation models, asset recovery mechanisms, mechanisms for technical assistance and information exchange, and the mechanism for performing the Convention and relevant monitoring. It has exerted important and positive influence on the strengthening of internal anti-corruption activities of the state parties, the effectiveness of the punishment and prevention of embezzlement and bribery crimes, and the international cooperation to fight against corruption. China signed the Convention on December 10, 2003, and it was rectified by at the 18th meeting of the Standing Committee of the 10th National People’s Congress on December 10, 2005.

9

170

X. Peng and K. Ma

support them. Second, the presumption rule applies only to a very limited scope. Basically, the penal presumption rule applies only to the crime of possession of assets of massive value with unidentified sources and to the crime of embezzlement converted from the crime of misappropriation. No other provision is yet in place in this regard. Also, the penal presumption rules are used mainly to presume unlawful gains and the intention of taking into possession by illegal means, not to other major subjective requirements such as intent and knowledge. Based on the above, we believe legislation regarding penal presumption for this category of crimes may be improved in the following aspects: First, set procedural rules for presumption. For example, to prevent the misuse of presumption and ensure the right of the litigants to be informed, we may require by legislation that a judge shall inform all relevant parties before applying presumption. It may also be stipulated that presumption is not a preferred rule but a last resort that can be used only when all other methods have been used but to no avail10; it can be used only when the basic facts are valid and in a way that fits empirical or logical rules; a presumption can be rejected; a presumption that transfers the responsibility of evidence collection should have sound legal basis. Second, apply presumption to a wider scope. Besides the situations mentioned above, the presumption rule may also apply to some special cases of embezzlement or bribery. And in line with Article 28 of the UNCAC, we may also apply the presumption rule to some mental elements of an offence that are truly hard to prove, including the purpose of illegal possession, intent, knowledge, etc. We may stipulate by legislation that once a particular related person or some other person accepts a bribe from someone by taking advantage of a public official’s job and the public official seeks gains for that someone, it can be presumed that there is a joint intent. Presumption rules may also be established for some special cases. For example, it may be stipulated in the Criminal Procedure Law that when a public official is proved to have solicited or accepted properties from someone who has job-related connections with him/her and sought gains for this person by taking advantage of his or her job, he/she should be held accountable for accepting bribes unless the opposite can be proved. Third, adjust existing presumption rules. For example, part of the Paragraph 1 of Article 395 of the Criminal Law may be changed from “may require him/her to identify the source” to “should require him/her to identify the source” so as to facilitate the presumption of illegal gains for the crime of possession of assets of massive value with unidentified sources. Also, the wording of “the sources of which cannot be identified” may be changed to “for which the person involved refuse to identify the sources” to make it easier to put the provision into use, better fulfill the original purpose of the provision, and delineate the scope covered by the Criminal Law.

10

Wang and He (2008).

5 Legal Proceeding for Embezzlement and Bribery Cases

5.2.2

171

Lack of Incentives for Suspect Testimony and Establishment of the Witness Immunity System

Currently, in China, there is a lack of effective incentives to motivate insider suspects to testify, which may break up criminal alliances from the inside and deal heavy blows on embezzlement. In our current legal system, the mechanisms that encourage the accused to cooperate with the state and provide evidence have severe limitations, mainly manifested in the following aspects: First, take surrender as a meritorious performance. It is stipulated in Article 67 of the Criminal Law of China that for a criminal who surrenders himself/herself, lighter or reduced punishment may apply. For mild offences, such criminals may be exempted from punishment. Article 68 reads: “For criminals who report offences of others, once the report is verified, or who provide important clues that lead to the cracking of another case, may receive lighter or reduced sentence for his or her own offence; for major meritorious performances, a criminal may receive a reduced sentence or be exempted. The Paragraph 2 of Article 390 reads: “bribers who confess before being prosecuted may receive a lighter sentence or be exempted. According to the Interpretation of the Supreme People’s Court to Law Application for Cases Involving Surrender and Meritorious Performance, a criminal who surrenders him/herself may receive a lighter or reduced sentence, or be exempted if his or her offence is not serious; those who render meritorious performance may receive a lighter or reduced sentence, those who render major meritorious performance may receive a reduced sentence or be exempted; those who surrender themselves and render major meritorious performance should receive a reduced sentence or be exempted. Criminals involved in a joint offence who report on the accomplice when arrested may receive a lighter sentence if appropriate.” These provisions surely have some positive influence on the fight against accepting bribes and encouraging bribers and intermediaries to cooperate with the authority. However, we must also be aware that these provisions have major limitations. First of all, a surrender or meritorious performance cannot exempt a criminal from his conviction but can only reduce his sentence. Second, one cannot be sure whether his or her sentence will be reduced. According to the above-mentioned provisions, even if a prosecuted person surrenders him/herself or renders meritorious performance, the people’s court ‘‘may,’’ instead of ‘‘should’’ grant them lighter or reduced sentences in most cases. Third, a meritorious performance and a surrender in a case of joint offence usually involve the conviction and sentence of another suspect, and the litigant is, therefore, likely to have to take the risk of retaliation. However, our current system is in lack of effective protection for persons who surrender or render meritorious performance, and their close relatives. As a result, provisions concerning surrender and meritorious performance can hardly play their role to the full. Lastly, in 2009 the Supreme People’s Court and the Supreme People’s Procuratorate jointly issued the Opinions on the Identification of Surrender, Meritorious Performance, and other Circumstances for Reduced Sentence in Cases of Job-related Crimes, setting more stringent rules in this regard, which, to some extent, has reduced the application of

172

X. Peng and K. Ma

relevant provisions. It is fair to say that all the above factors have undermined the effectiveness of provisions related to surrender and meritorious performance in encouraging suspects to cooperate with the authority. Second, the discretionary non-prosecution system. According to Paragraph 2 of Article 173 of the Criminal Procedure Law, for minor offences that do not require criminal punishment or allow for an exemption according to the Criminal Law, the people’s procuratorate may decide not to prosecute. Discretionary non-prosecution is another way to break up criminal alliances from the inside and encourage prosecuted persons to cooperate with relevant authorities to crack down on severe embezzlement. However, this system also has many limitations. First of all, based on the above provision, discretionary non-prosecution applies only to minor offences. As stipulated in the Opinions on Several Issues Concerning the Implementation of the Procedure Laws in Case Review, Arrest, and Public Prosecution issued by the Supreme People’s Procuratorate in 1996, minor offences refer to offences that although constitutes violation of the Criminal Law, do not require a criminal sentence or allow for an exemption considering the motive, means, consequence, and post-offence attitude of the offender. As pointed out by Peng Dong, Deputy Director of the Public Prosecution Department of the Supreme People’s Procuratorate, in principle, minor offences refer to those for which the maximum term of imprisonment stipulated by law is three years.11 This is a strict restriction over the application of discretionary non-prosecution. Second, the application of discretionary non-prosecution is also subject to tight control within the people’s procuratorates. According to Article 406 of the Criminal Procedure Rules of the People’s Procuratorate (Trial),12 a decision of discretionary non-prosecution must be approved by the chief procurator or the procuratorate committee. Moreover, for job-related crimes, according to some internal rules of the Supreme People’s Procuratorate, such a decision must also be submitted to a higher-level procuratorate for approval after it is considered by the procuratorate committee and put under the supervision of the people’s supervisor. In addition, it is a common practice in procuratorates at all levels that the rate of no-prosecution, especially discretionary non-prosecution, should be kept at a low level. Third, the close attention from the media to cases of embezzlement and bribery also makes it difficult for procuratorates to apply discretionary non-prosecution to such cases. Generally, the application of discretionary non-prosecution is squeezed by both internal and external pressures. As we see it, if we wish to encourage those who commit only minor offences to confess and report on others in order to break up the alliances of embezzlement and bribery from the inside, it is necessary that we establish the witness immunity system. Stain witnesses are defendants who receive reduced sentence because they report on

11

Chen (2005). Article 406 of the Criminal Procedure Rules of the People’s Procuratorate (Trial) reads: “The people’s procuratorate may decide not to prosecute, with the approval of the chief procurator or the procuratorate committee, if the offence is minor and it is unnecessary to impose criminal punishment or the offender can be exempted according to the Criminal Law.” 12

5 Legal Proceeding for Embezzlement and Bribery Cases

173

accomplices,13 or to put it in another way, they are witnesses who are criminal offenders themselves. They have taken part in activities that constitute a criminal offence according to the Criminal Law,14 but to reduce or exempt themselves from criminal punishment, they opt to cooperate with the authorities and serve as witnesses to testify the criminal facts of others. Witness immunity, also known as transactional immunity or immunity grant, refers to the following scenario: The witness, who is also a suspect, reaches a deal with the prosecution based on his or her connections with the criminal offences of the accused so that he/she will not be prosecuted and the criminal offences of others can be revealed. In such a case, the judge will issue immunity, and the prosecution will not prosecute the witness so that the witness can identify the other criminals and testify.15 Simply put, witness immunity is a system where a prosecuted person testifies for the prosecution so that he/she is not prosecuted or can receive a lighter or reduced sentence or be exempted. Article 37 of the UNCAC provides for witness immunity: 1. Each State Party shall take appropriate measures to encourage persons who participate or who have participated in the commission of an offence established in accordance with this Convention to supply information useful to competent authorities for investigative and evidentiary purposes and to provide factual, specific help to competent authorities that may contribute to depriving offenders of the proceeds of crime and to recovering such proceeds. 2. Each State Party shall consider providing for the possibility, in appropriate cases, of mitigating punishment of an accused person who provides substantial cooperation in the investigation or prosecution of an offence established in accordance with this Convention. 3. Each State Party shall consider providing for the possibility, in accordance with fundamental principles of its domestic law, of granting immunity from prosecution to a person who provides substantial cooperation in the investigation or prosecution of an offence established in accordance with this Convention. As China has ratified the Convention, it is necessary that we move faster to align our prosecution procedures for embezzlement and bribery cases with the Convention. One of the measures to be taken is to establish the witness immunity system. The judicial practice in many countries has proved this system to be effective in lowering the cost and improving the efficiency of litigations, promoting reasonable allocation of judicial resources, cracking down on organized crimes from the inside, getting more cases cracked, and improving the overall quality of case handling. It can also help prevent crimes from the very beginning, avoid illegal investigation,16 and promote adversary court trials.17

13

Xin and Song (2008). Chen (2003). 15 Zhang (2003). 16 Tan and Dong (2004). 17 Hui (2014). 14

174

X. Peng and K. Ma

As we see it, the following can be done to establish the witness immunity system in China: Firstly, in terms of the type of witness immunity, limited immunity, not immunity based on the use of testimony, is recommended. The immunity applies only to those offences involved in the testimony and participated in by the stain witness, not the accountability for giving false testimony. If the immunity is based on the use of the testimony, the stain witness will not be totally free of concerns and the immunity system will not be able to fully play its role. Secondly, as for who can be granted the immunity, the system should apply only to suspects or defendants who played secondary or auxiliary roles in the offence and committed only minor offences, not to the leading, core, or principal offenders or other criminals who committed severe offences. Thirdly, in terms of the conditions for witness immunity, the following should generally be included: the evidence or testimony provided by the stain witness is difficult for the procuratorate to obtain otherwise; the embezzlement case in question is relatively severe, and the testimony and other evidence provided by the stain witness is a key to the prosecution; and the witness immunity causes no damage to society. Fourthly, who are to decide on the granting of witness immunity? It is suggested that we give the power to recommend witness immunity to the procuratorate and put the court in the position to decide whether to grant it. These two roles must not be shouldered by one authority because if the procuratorate can grant a stain witness the immunity via non-prosecution, the power may be misused, leaving criminals at large and causing embezzlement in the judicial system.18

5.2.3

Difficulty in Convicting the Fugitives and the Establishment of Trial by Default System

As our society evolves, the crimes of embezzlement and bribery, as a kind of power-based job-related crime, now require more intelligence and are in disguise in more and more cases. The trial procedures provided for in the current Criminal Procedure Law are the result of certain social conditions in the past and designed for ordinary criminal offences, without taking into consideration the special circumstances in embezzlement and bribery cases. Therefore, they cannot meet the special needs of trials for such cases.19 Since relevant laws and regulations are inadequate, we have seen more and more corrupt officials flee the country in the past years yet the extradition of these officials seldom succeeds because of the principles of non-extradition of capital prisoner, non-extradition of political prisoner, and non-extradition for the risk of 18

Tan and Dong (2004). Wang and Liu (2008).

19

5 Legal Proceeding for Embezzlement and Bribery Cases

175

excruciation. According to a survey of the Ministry of Commerce, about 4,000 corrupt officials have fled over the past years, taking with them approximately USD 50 billion, and only a small part of them have been repatriated and returned the proceedings.20 A prediction by a scholar of the Chinese Academy of Social Sciences maintains that given the great pressure imposed by the government now, corrupt officials will find it more and more difficult to stay in China and more of them will probably flee in 2014; especially those who have placed relatives and transferred assets abroad.21 In such a circumstance, it is urgent that we find ways to convict and punish corrupt officials on the run. It should be noted that the 2012 revision of the Criminal Procedure Law provides for the procedures for the confiscation of unlawful gains from suspects or defendants who have gone into hiding or deceased. Following this, discussion has been heated in the academia concerning whether China should establish the trial by default system. It is for sure necessary that we put in place some steps to timely freeze and recover unlawful gains of criminals of embezzlement and bribery, so as to crack down harder on the crimes and align our legal systems to the UNCAC. However, there are disputes over whether these provisions alone in the revised Criminal Procedure Law represent the establishment of the trial by default system. Prof. Song Yinghui once said in an interview that the provision for the confiscation of unlawful gains in the revised Criminal Procedure Law can be regarded as the establishment of the trial by default system in the Criminal Procedure Law.22 Yet some other scholars believe differently. They believe this provision to be merely a procedure to handle proceedings of crime and unlawful gains, having nothing to do with the conviction and punishment of suspects and defendants; therefore, it cannot be regarded as the trial by default system.23 In addition, some other scholars maintain that the confiscation of unlawful gains is to confiscate properties without holding the person involved guilty; therefore, it is not a trial procedure and for sure not a procedure for trial by default. In nature, it is a special procedure that separates the offender from unlawful gains.24 As we see it, the provision for the confiscation of unlawful gains in the new Criminal Procedure Law represents the basic spirit of criminal trial by default but does not constitute a trial by default system in the strict sense. This is because as a special procedure for the confiscation of unlawful gains when the suspect or defendant involved has fled or deceased, it has nothing to do with the conviction and punishment of the suspect or defendant. To hold these persons criminally guilty, we still need to follow the ordinary procedures specified in the Criminal Procedure Law. Based on the above, it is necessary that China borrow relevant experience from other countries to establish a criminal trial by

20

Quoted from Wang and Liu (2008). Li and He (2014). 22 Li (2011). 23 Chen (2012). 24 Sun (2011). 21

176

X. Peng and K. Ma

default system that suits the specific national conditions of the country. In nature, a criminal trial by default is a court trial participated in only by the prosecution and the defender of the defendant, not the defendant himself/herself.25 This system is in place in many countries with highly-developed legal systems in the world. For example, in the Magistrates’ Courts Act 1980 of Britain, Section 11 reads: “Subject to the provisions of this Act, where at the time and place appointed for the trial or adjourned trial of an information the prosecutor appears but the accused does not, the court may proceed in his absence.” In the USA, courts at all levels all hold that if an accused person has appeared in court in the early stage of a trial and then choose to be absent, he/she will lose the right to appear in court and the trial will proceed in his or her absence. According to Article 487 of the Criminal Procedure Code of Italy, if a summoned defendant does not appear in court without reasonable ground, the judge shall solicit opinions from the litigants and then announce the defendant to be absent, in which case the trial may proceed by default.26 Article 270 of the Criminal Procedure Code of France stipulates that if the defendant is not captured or fails to appear in court, a trial by default should be carried out. And Paragraph 2 of Article 410 stipulates that a trial by default should be carried out if all conditions of a summon are met yet the defendant does not appear in court without reasonable ground. By establishing the trial by default system for cases of embezzlement and bribery, we will be able to bring fugitive corrupt officials to justice, make it impossible for suspects or defendants to evade court procedures, enable courts to make timely judgments, and maintain the authority of judicial institutions. On the contrary, if we do not have such a system, the proceedings of embezzlement and bribery cases will be delayed, pushing up relevant costs, making it possible for the accused to evade criminal punishment, and hampering the intimidation role of criminal punishments. For the above reasons, it is necessary for us to establish the trial by default system. To establish this system, we must take into full consideration the many realistic factors and actively learn from other countries. Specifically: First, there must be strict restrictions concerning the scope of application of this system. It is hereby suggested that this system applies only to the following two categories of embezzlement and bribery cases: (1) major embezzlement and bribery cases where there is evidence to show that the defendant has fled the country and intentionally refused to appear in court; (2) embezzlement and bribery cases where the defendant appears in court but prevents the trial from proceeding by severely violating court rules and refusing to be disciplined after the court has taken disciplinary measures. Relevant legal provisions should hold the accused liable for the consequences of trial by default in these two types of cases so as to prevent intentional non-appearance in court and despise of court order by the accused. Second, there must be clearly defined conditions for the application of the system. Since trial by default may, to some extent, infringe on the right of the

25

Deng (2007). Deng (2007).

26

5 Legal Proceeding for Embezzlement and Bribery Cases

177

defendant to appear in court, clear conditions should be defined for the application of this system so as to prevent the infringement wherever possible, balancing between the protection of human rights and punishment for criminals. In many countries, a defender is required to appear in court for a trial by default. For example, according to Paragraph 2 of Article 411 of the Criminal Procedure Code of France, when a defendant who has committed a minor offence is absent, the court should hear a statement from his or her defender. In the Criminal Procedure and Investigations Act 1996 of Britain, Section 49 stipulates that a trial by default will only occur if “the accused is represented by a legal representative”. Third, the procedure for the application of this system must be clearly defined. For the trial by default system to run smoothly, there must be clear and specific procedures in place. In addition to the rules for ordinary criminal trials, there should also be dedicated rules for the preparation for and notice of a trial by default. To deliver the notice of the trial to a defendant at large, for example, may be done via a close relative of the defendant, via certain media, or via a foreign judicial authority so that the defendant knows what rights he/she has, as well as the time of the trial, and the legal consequence of being absent. Fourth, remedy measures must be fully available. As trial by default for cases of embezzlement and bribery occurs only in special circumstances, the corresponding remedy mechanism and dedicated remedy measures must be put in place to fully ensure justice and protect the rights of the defendant. According to Article 571 of the Criminal Procedure Code of Italy, for a trial by default, the defendant may appeal in person or via a special agent; and his or her defender may appeal only when entrusted by the defendant. In France, an objection for a verdict made in the absence of the defendant may be raised only against a verdict made by default and only by a litigant absent during the trial via some special ways and within a specific time period.”27 China may learn from these countries to create its own remedy mechanism. For example, a defendant at large may be granted the right of objection to some extent and a close relative of the defendant may independently enjoy the right to appeal, so that there are ways to appeal to a higher-level court if the defendant does not accept a judgment made. Fifth, there should also be arrangements for the cancelation of a trial by default. For a trial by default carried out because the accused has fled or refused to appear in court, when the accused is arrested or appears in court, the court should cancel the trial by default. This mainly applies to the scenario where the accused does not appear in court and is, therefore, presumed to have given up the right to appear.28 In the German Code of Criminal Procedure, Article 235 stipulates that in a case of minor offence, if the defendant rejects the judgment, he/she may apply for restitution within one week after being serviced. In France, according to Article 693 of the Criminal Procedure Code, if a defendant surrender him/herself, or is arrested before the term of the criminal punishment ends, the judgment made through a summon rejection procedure will

27

Stefani (1998b). Deng (2007).

28

178

X. Peng and K. Ma

automatically become invalid and all procedures following the decision to prosecute and detain the accused will be canceled, with the decision of detention still valid. And measures to confiscate his or her properties will also hold temporarily. However, civil punishment will be annihilated. In such a circumstance, the person accused of serious offence will be submitted to the court for trial following ordinary procedures.29

5.2.4

Judicial Credibility Concerns and the Establishment and Improvement of the Off-Site Trial System

Another major problem in the proceedings of embezzlement and bribery cases is the institutionalization and standardization of off-site trial. At the local level, the power structure is highly complicated and the judicial authorities are heavily influenced by the local Party, government, and people’s congress organizations. Following the case of Mu and Ma in Liaoning, in order to maintain judicial credibility, off-site trial has been conducted for basically all cases of embezzlement and bribery that involve high-ranking officials in China. The purpose is to avoid the influence of local vested interest and the complicated local interpersonal relationships on judicial activities. For sure, an off-site trial protects the judges from threats from the high-ranking officials involved in such cases. Although off-site trial incurs high costs and has low efficiency, and its legitimacy is also questionable,30 still, it has been proved effective in avoiding undue influences and resistance in the processing of embezzlement and bribery cases involving high-ranking officials, and in eliminating public concerns and misunderstandings. It plays a positive role in both the legal sense and in bringing social benefits, meeting the needs of our anti-corruption campaigns today. However, at present, off-site trial for embezzlement and bribery cases is still not institutionalized, with no clear rules to regulate it. Many problems remain in its practical use. Clear standards for its application remain to be provided for. An off-site trial consumes much judicial resources and hampers judicial efficiency, and the coordination between an off-site trial by the court and an off-site investigation by the procuratorate. The off-site trial system can only be improved by first solving these problems. Based on the above, our suggestion is that we take measures to institutionalize and standardize off-site trial for embezzlement and bribery cases as soon as possible. Specifically, the following should be done: First, personal jurisdiction rules need to be developed to clear any doubt over off-site trials for embezzlement and bribery cases. There are some disputes over the legitimacy of off-site trial. Some believe it to have sound legal basis which is found in provisions of designated jurisdiction as provided for in Article 26 of the Criminal

29

Stefani (1998b). Li (2009).

30

5 Legal Proceeding for Embezzlement and Bribery Cases

179

Procedure Law,31 the Interpretation of the Supreme People’s Court to Several Issues Concerning the Implementation of the Criminal Procedure Law of the People’s Republic of China, and the Criminal Procedure Rules of the People’s Procuratorate (Trial).32 However, some others hold that off-site trial may not be legitimate. In their opinions, Article 26 of the Criminal Procedure Law is clearly interpreted in Article 18 of the Interpretation of the Supreme People’s Court to Several Issues Concerning the Implementation of the Criminal Procedure Law of the People’s Republic of China as the following: “When it is inappropriate for a people’s court to perform its jurisdiction on a case due to involvement of the president in the case or other reasons, it may request the case to be transferred to a higher-level people’s court or designate another people’s court at the same level to handle it.” According to this, the precondition for designated jurisdiction is that the president of the original people’s court is challenged, but this is not true for off-site trials for embezzlement and bribery cases. I would not like to elaborate much on this issue. As we see it, it is a must that we set standards for personal jurisdiction for an institutionalized off-site trial system if we are to maintain the judicial credibility in regard to embezzlement and bribery cases. Once such standards are put in place, designated jurisdiction will have clear operational rules to follow, and off-site trials will be legitimate. Thus, it is unnecessary to continue the debate on whether off-site trials are legitimate for the time being. Our suggestion is to add provisions on personal jurisdiction in existing legislation to allow for off-site trial for embezzlement and bribery cases. Actually, in some other countries, the jurisdiction can be determined based on the special identity of the accused, or the special nature of a case, instead of where the offence is committed or where the accused lives. In France, in addition to general courts, there are also the supreme special tribunal and the republic special tribunal. For these two types of tribunals, cases are put into their jurisdiction based on the identity of the offender (personal jurisdiction). The supreme special tribunal is established according to Article 67 of the 1958 constitution as a tribunal of political nature. It handles only cases of treason committed by the president of the republic. The republic special tribunal is established according to a constitutional law of 1993 to handle cases involving criminal offences committed by members of the government when performing their official duties.33 The French scholar circle believes that to determine jurisdiction based on identity does not violate the constitution. This is because though all the citizens are equal in the eyes of law (in a court) (Article VI, Declaration of the Rights of Man and of the Citizen), it is essentially not a violation of this principle to establish by legislation dedicated courts to handle certain cases based on the age or personal status of an offender at the time of the

Article 26 of the Criminal Procedure Law reads: “An upper-level people’s court may designate a lower-level people’s court to handle a case with unclear jurisdiction or request one lower-level people’s court to transfer a case to another people’s court for trial.” 32 Wang et al. (2007). 33 Stefani (1998a). 31

180

X. Peng and K. Ma

offence for the best interest of criminal judicial practice.34 For the same reason, we believe it reasonable to institutionalize personal jurisdiction for embezzlement and bribery cases as necessary. Second, the word “off-site” should be clearly defined. Considering the existing rules concerning location-based jurisdiction and the practice of off-site trials for embezzlement and bribery cases, we need to define “off-site” precisely to best ensure justice. Now embezzlement and bribery cases involving provincial and ministerial officials tend to be handled in a different province, while cases involving bureau-level officials are generally handled at a different place within the province. If a case of bureau-level officials may have connections with some higher-level officials, the case may also be handled in a different province. There should be more specific provisions in this regard and the scenarios where lower- or higher-level officials are involved should also be covered. Third, the conditions, scope, and criteria for off-site trials need to be clearly defined. Rules need to be developed to provide better guidance on the following issues: under what circumstances off-site trials are required, might be needed, or are not necessary, how to handle cases of joint offence, etc. Since excessive application of off-site trial may squeeze the room for a local judicial institution to perform its functions, hamper its credibility, and weaken its strengths to supervise local powers, we should put in place strict rules for off-site trial to ensure that only those cases that fully meet relevant criteria will be handled off-site, while other cases may be handled in a local court with judges transferred from another court. By doing so, we will prevent the excessive application of off-site trials and the harms it may cause.35 Fourth, the procedure for the designation of a court for off-site trial needs to be more transparent and operable. We should put in place clear rules for initiating, performing, changing, suspending, and terminating an off-site trial, assign the responsibility of designating a court for off-site trial to an appropriate level, strictly prohibit a second designation, and provide for dispute and remedy procedures. Also, we need to improve the existing case transfer system, making it clear that in special circumstances, the Supreme People’s Court, the people’s court that handles the case, and a people’s court at a higher-level may decide to transfer the case to a court located out of the place where the offence occurs and where the defendant lives to meet judicial needs.36 Fifth, supporting measures for off-site trials should be improved. Here, the key is to ensure adequate human resources, fund and supplies for off-site trials, and do a

34

Stefani (1998a). The major harms that regular off-site trials may cause are as follows: It makes it difficult for the judicial institution to collect and verify evidence; makes it inconvenient for people involved to participate; undermines the educational and preventive role of the case among the general public, hampers the right of local residents to hear the trial, may damage the trust of local residents in the local judicial authorities and hamper the credibility of these authorities, is likely to cause suspicion of the independence of the local judicial authorities, and may push up the cost of litigations. Sang and Yang (2013). 36 Li (2009). 35

5 Legal Proceeding for Embezzlement and Bribery Cases

181

good job in the detention of defendants and the protection of witnesses, so that off-site trials can be carried out smoothly. Since prosecution always goes before trial, an important point is to ensure good coordination between the people’s procuratorate who is to prosecute and the people’s court who is to conduct the trial. In addition, various problems that may occur in off-site investigation, off-site detention, and other relevant processes should also be taken into full consideration when making relevant Legislation.

References Chen G (2005) Criminal procedure law. Peking University Press and Higher Education Press, Beijing, p 321 Chen L (2012, April) New criminal procedure law: a hard blow on fugitive corrupt officials. Legal Daily Chen W (ed) (2011) On criminal procedures. China Legal Publishing House, Beijing, p 423 Chen X (2003). Preliminarily on witness immunity. J National Procurators College, 2003(6) Deng S (2007). Study on criminal trial by default. Chinese J Law 2007(3) Hui Q (2014) Study on witness immunity. Soc Sci J Universities in Shanxi 2014(6) Lei H (2014, April 29). China will be harsh on bribers. Legal Weekly Li L, He T (2014) Rule of law blue book: report of the rule of law development in China Social Sciences Academic PressBeijing, p 69 Li Y (2011) Outflow of 650 billion yuan pushes for trial by default. Law Life 2011(9) Li Y (2009) Off-site trial and the reform and improvement of China’s Criminal Jurisdiction System. Crim Sci 2009(2) Peng B (2014, May 19) Supreme people’s procuratorate: anti-embezzlement efforts will focus on bribers. Democracy Law Ren X (2010) Study on the special procedures for litigations on embezzlement cases. Ph.D. dissertation Shanghai Jiao Tong University, pp 19–26 Sang B, Yang S (2013) Analysis on three major disputes over off-site trial of cases involving high-ranking officials. People’s Tribune 2013(4) Shi L (2012). On the investigation jurisdiction of job-related criminal cases in a unitary investigation system. J Henan University 2012 (3) Stefani G (1998a). General provisions of the french criminal law (vol 1). (trans: Luo J.). China University of Political Science and Law Press, Beijing, p 442 Stefani G (1998b) General provisions of the French criminal law, (vol 2). (trans: Luo J.). China University of Political Science and Law Press, Beijing, p 811 Sun Y (2011, August 30) Laws to ensure that corrupt officials gain no economic benefit. Procuratorate Daily Tan S, Dong W (2004) On witness immunity in bribery cases. Humanit Soc Sci J Hainan University 2004(4) Wang J, He S (2008) Discussion on several basic theories of criminal presumption. Law Science 2008(6) Wang L (2013) Procuratorates target at embezzlement at the basic level. Procuratorate Daily Wang Q, Liu Z (2008) Reflection on and reconstruction of the litigation procedures for embezzlement and bribery cases. Criminal Research 2008(4) Wang J et al (2007, January 1) Off-site trial for high-ranking officials: a unique Chinese scenario. Democracy Law Xiang X (2003, June 3). Thoughts on New Trend in Offence of Accepting Bribess. Procuratorate Daily

182

X. Peng and K. Ma

Xin Q, Song L (2008) An empirical analysis on the establishment of witness immunity system in China. Evid Sci 2008(16) Zhang C (2003) Witness immunity. ECUPL J 2003(2) Zou Z (2001) Judicial investigation into cases of accepting bribes. Shanghai Procuratorate Study 2001(2)

Chapter 6

International Cooperation in Tracking Down and Capturing Fugitive Officials Renwen Liu and Jun Liu

6.1

Background

For some time, pursuing fugitive corrupt officials has been a major component of China’s anti-corruption efforts. According to the annual work reports submitted by the Supreme People’s Procuratorate to the National People’s Congress over the years, from late 2000, when a fugitive pursuit campaign was jointly launched by the Supreme People’s Procuratorate and the Ministry of Public Security to 2013, a total of 16,644 fugitives suspected of serious embezzlement or bribery offences were arrested and RMB 111.92 billion ill-gotten proceeds were recovered.1 The flee of corrupt officials hampers the judicial work, causes difficulties in the handling of criminal cases, damages the overall legal environment in China, and undermines China’s image in the international community. Meanwhile, as fugitive corrupt officials usually transfer their proceedings abroad in huge amounts, their fleeing is also very likely to cause a severe outflow of state-owned assets, hampering the normal fiscal and financial order of the country. In 2004, the Chinese Academy of

1

The data come from the work reports of the Supreme People’s Procuratorate each year. Between late 2000 and 2002, a total of 5,115 fleeing suspects of job-related crimes were arrested, directly recovering more than RMB 22 billion of fund; during 2003–2007, 4,547 out of the 5,724 fleeing suspects of job-related crimes were captured, recovering more than RMB 24.48 billion of criminal proceedings. From 2008 to 2012, 6,220 suspects were arrested with RMB 55.3 billion recovered in cooperation with other relevant authorities. In 2013, 762 suspects were captured with RMB 10.14 billion recovered in cooperation with other relevant authorities.

R. Liu (&) Institute of Law, Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected] J. Liu Law School, Jiangxi Normal University, Nanchang, China e-mail: [email protected] © Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7_6

183

184

R. Liu and J. Liu

International Trade and Economic Cooperation, an organization under MOFCOM, published a report titled “Offshore Financial Centers Become Transit Stations for Fleeing Capital from China,” since China launched the reform and opening-up policy in 1978, 4,000 corruptive officials or other people have fled the country, taking with them over USD 50 billion of funds.2 Clearly, fugitive corrupt officials have become a serious problem and the government must do something to contain this trend. Over the years, the Communist Party of China and the Chinese government have taken various measures to monitor, prevent, and fight against corruption and fugitive corrupt officials. For example, the CPC Central Committee issued in early 2005 the Implementation Outline for the Building of an Anti-Corruption System Equally Emphasizing Education, Institutionalization and Supervision and it was followed by the 2008–2012 Work Plan for the Establishment of an Anti-Corruption System and the subsequent 2013–2017 edition. They together have made clear China’s anti-corruption goals and priorities in the coming years. Detailed institutional arrangements have also been made. For example, in order to enhance border control and make it more difficult for corrupt officials to flee, the Organizational Department of the CPC Central Committee, the Ministry of Public Security, and other authorities issued successively the interim rules for strengthening control over outbound trips of public officials for personal purposes, measures for the management of passes and passports of officials of Party and political organs, and judicial and public security authorities and the interim rules for strengthening control over public officials whose spouse and children have emigrated. Various government departments have worked together to prevent suspects from leaving the country and to effectively fight against fugitives. To improve on the anti-corruption legal system, the Anti-Money Laundering Law was released, and the People’s Bank of China issued Anti-Money Laundering Rules for Financial Institutions and the Management Measures for Financial Institutions to Report Large and Suspicious Transactions. These all improved the country’s ability to prevent and monitor money laundering. Also, by amending the Criminal Law, legislators revised provisions concerning money laundering, accepting bribes by non-public-sector workers and other crimes closely related to embezzlement and added new offences such as accepting bribes by the person of influence and bribery of foreign public officials and officials of international public organizations. The Criminal Procedure Law was also amended to establish procedures for confiscating unlawful gains of suspects and defendants who have gone into hiding or deceased, which helps solve the problem of recovering criminal proceeds from fugitive corrupt officials. To bring fugitive corrupt officials back to justice, China successively acceded to the United Nations Convention against transnational organized crime and the United Nations Convention against Corruption, stepped up judicial cooperation with other countries to fight against corruption, and managed to capture,

2

Zheng (2004).

6 International Cooperation in Tracking Down and Capturing …

185

prosecute, and bring fugitive corrupt officials to trial, thus holding down relevant offences and deterring potential offenders. China has been trying to bring back fugitive corrupt officials via the following four channels. The first is extradition or other similar judicial procedures. According to the Extradition Law of the People’s Republic of China and the bilateral and multilateral treaties signed with relevant countries for extradition and mutual legal assistance, the Ministry of Foreign Affairs may raise requests for extradition or repatriation from countries involved. The second is the International Criminal Police Organization (Interpol). If the Interpol issues a red notice, the police of relevant countries will arrest the person wanted according to the charter of the Interpol and other relevant rules and regulations upon receiving the notice. The third is the diplomatic channel for specific cases. For countries with which it does not have an existing extradition treaty, China seeks judicial cooperation via diplomatic means based on the principle of equality and mutual benefit. The fourth is relevant to international conventions. In 2005, the UNCAC took effective globally, and China acceded to it upon the ratification by the Standing Committee of the National People’s Congress. On the basis of mechanisms defined in this convention for the pursuit of fugitive corrupt officials and the recovery of criminal proceeds, China may request appropriate collaboration from other state parties. Apart from these, a new way has also been found to bring fugitive corrupt officials back, that is, by persuasion. Government departments will first contact the fugitives, send staff members or seek help from their families to reach out directly to them, and talk or negotiate with them so that they will choose to return to surrender themselves. The first fugitive suspect of embezzlement persuaded to return is Hu Xing, former deputy director of Yunnan Provincial Transport Department. He was suspected of accepting bribes worth RMB 40.29 million and fled to Singapore holding a fake passport on January 19, 2007. Since China had not signed any treaty of extradition or criminal legal assistance with Singapore, the competent judicial authority sent staff members for a face-to-face meeting with Hu, informing him of the legal risks he was facing and how his life would be if he remained abroad or if he returned to China. Hu came back to China for legal investigations on February 18, 2007. On August 8 of the same year, Hu was sentenced to life imprisonment by Kunming Municipal Intermediate People’s Court. Other corrupt officials persuaded in similar ways include Yang Shenghua, a major suspect of the Yang Xiuzhu case in Zhejiang; Gao Shan, head of the Hesongjie Sub-branch, Harbin, of the Heilong Branch of Bank of China; and Li Dongzhe. Undoubtedly, China has spared no efforts to bring fugitive corrupt officials back. However, problems and difficulties are many in this regard. Here, I would like to elaborate on the major obstacles encountered when using the above four channels.

186

6.2 6.2.1

R. Liu and J. Liu

Four Different Approaches: Strengths and Weaknesses Bilateral Extradition and Legal Assistance Treaties: Cooperation Platforms to Be Improved

As economic exchanges grow between different countries, people flow more frequently across borders, and transnational crimes increase. As a result, it has become an important task for various governments to get criminal suspects, defendants, and criminals back to justice via extradition or repatriation. Bilateral and multilateral treaties of extradition and legal assistance help one country obtain assistance from another so that it can carry out judicial activities smoothly. Such treaties also play a positive role in getting fugitives extradited or repatriated and in recovering the ill-gotten assets.3 Thailand is the first to sign a bilateral extradition treaty with China. Since 1994, a number of important suspects have been extradited from the country; a notable recent example being the extradition of Chen Manxiong and Chen Qiuyuan. As general manager and legal representative of Zhongshan Industrial Development Co., Ltd., respectively, the couple colluded with Feng Weiquan and Chi Weiqi, chief and deputy chief of the deposit and remittance section of Zhongshan Branch of Bank of China to misappropriate huge amounts of funds from the bank via malicious overdraft for gambling in Macau. When suspected of criminal offences, the couple immediately transferred RMB 420 million abroad and fled to Chiang Mai in 1995, using fake Thai IDs. Chen Manxiong was reported to have radically changed his appearance through plastic surgery and bleached his skin. In November 2000, the Chiang Mai Provincial Court sentenced Chen Manxiong to the imprisonment of 27 years and eight months and Chen Qiuyuan to the imprisonment of 22 years and eight months for illegal immigration, illegal residence, and illegal holding and using of fraudulent documentations. On December 8 of the same year, the Chinese embassy in Thailand issued an official diplomatic note to the Ministry of Foreign Affairs of Thailand for the extradition of the couple. The extradition request was approved by the Supreme Court of Thailand on November 15, 2002 and took effect on December 1. China and Thailand agreed that the time period for China to prosecute the requested criminals shall be no longer than three years from the day the two accused were transferred to China, and the term of detention for the 3

An extradition treaty is a treaty signed between different countries, according to which when a person in one country is accused and sentenced to criminal punishment in another country, the latter country may request the person be transferred to it for trial and punishment. A legal assistance treaty is one signed between two countries so as to provide mutual assistance in performing certain litigation procedures and some concrete rights, usually including service of criminal legal instruments; assistance in investigation and evidence collection; inquiry, search, freezing, seizure, and confiscation of criminal proceedings and tools, notice of the results of criminal litigations and the provision of criminal records; exchange of legal documents; and assistance in other forms that do not violate the laws of the country requesting the assistance.

6 International Cooperation in Tracking Down and Capturing …

187

two served in China would be counted as term served in Thailand. On December 26, the couple was successfully extradited. Then, on December 23, 2004, Guangdong Zhongshan Intermediate People’s Court announced the verdict for the case, sentencing Chen Manxiong to life imprisonment with deprivation of political rights and Cheng Qiuyuan to 14 years of imprisonment for the crime of misappropriation. During the entire process of the case, besides the determination and the lasting efforts of the Chinese government, the bilateral extradition treaty between China and Thailand also played a crucial role. Fleeing corrupt officials tend to choose their destination in the following ways. Low-ranking officials involved in cases with a small number of illegal proceeds usually go to neighboring countries such as Thailand, Myanmar, Malaysia, Mongolia, and Russia. Those of higher rankings and with cases involving larger amounts usually go to developed countries in the West like the USA, Canada, Australia, and the Netherlands. Those who fail to obtain documents necessary for them to go to the developed West usually hide in smaller countries with inadequate legal systems in Africa, Latin America, or East Europe, waiting for opportunities. Some others may flee via the Hong Kong SAR, making use of its status of an international aviation center and the convenience of visa on arrival policies of many countries of the British Commonwealth nations for Hong Kong residents.4 Due to political, legal, and cultural discrepancies, the bilateral treaties of extradition or legal assistance signed by China are not many. By the end of 2013, only 37 extradition treaties and 49 legal assistance treaties had been concluded.5 As there are over 200 countries in the world, these treaties are clearly not enough to meet the needs for the pursuit of fugitive corrupt officials. Moreover, countries that have signed such treaties with China are mainly in East Asia, Southeast Asia, the former USSR, and East Europe, plus several small countries in South America and Africa, while none of the more likely destinations like West European and North American countries have had such treaties with us. In other words, existing extradition treaties play a very limited role in helping China get fugitive corrupt officials back and more needs to be done in this regard. The political, legal, and cultural discrepancies mentioned above mainly refer to the different attitudes toward the death penalty, double criminality, political crimes, and sharing of criminal proceeds. Death penalty can be applied to the crimes of both embezzlement and bribery as provided for in articles 383 and 386 of the Criminal Law of China. Specifically, an offender shall be sentenced to death plus confiscation of properties in cases of embezzlement exceeding RMB 100,000 and extremely severe offences. Most fugitive corrupt officials transfer millions or even billions of criminal proceeds abroad before leaving the country, and once they are back to China, it will be very likely that they will face the possibility of death penalty. However, a widely

4

Tracks of Fleeing Chinese Corrupt Officials: List of Some Captured Corrupt Officials. Procuratorate Daily, September 6, 2015. 5 Source: website of the Ministry of Foreign Affairs of China.

188

R. Liu and J. Liu

accepted principle in the world is for humanistic considerations countries will refuse to extradite criminals that may face the death penalty. Without doubt, the death penalty is a major obstacle to the signing of extradition treaties with many countries and a critical issue when a specific extradition request is handled. Therefore, the ultimate solution to this is to cancel the death penalty for embezzlement and bribery and even for all economic crimes. This will largely improve the efficiency for law enforcers, improve China’s image in the world, and prevent inequalities in death sentences to criminals at home. Moreover, no death penalty for economic crimes is highly justifiable according to criminal theories and is also supported by international laws.6 In the past years, China signed extradition treaties with several developed countries in the West, such as Spain, France, and Australia. In these treaties, it is clearly stipulated that where the requested person may be sentenced to death for the crime that serves as the basis for the extradition request, China may get the person extradited by promising not to impose a death sentence or not to enforce such a sentence. While some question about the appropriateness of granting the fugitives exemption from death punishment, they also show the strong determination of China to bring corrupt officials back to justice. Thus, it does more good than bad. Based on the double criminality principle, one may be extradited only when the act for which extradition is requested constitutes a crime in both the requesting and requested countries. And, since political criminals shall not be extradited, a country may reject an extradition request on the basis that the offence committed by the requested person is a political crime. These are all widely accepted principles in the international community. However, some developed countries in the West, due to ideological differences, tend not to trust China for its legal system and human right conditions, and thus it is quite difficult to meet the standard of double criminality and to reach an agreement concerning what is a political crime when an extradition request is made. As a result, it is very difficult for China to conclude extradition treaties or launch judicial cooperation with these countries. Given these facts, China should take active measures to reduce discrepancies, win necessary trust from developed Western countries by taking moves in areas such as human right protection and rule of law. As the rule of law improves in China, extradition treaties have been signed with more developed countries, and this may encourage more countries to do the same. When recovering criminal proceeds, a major issue is how to share the recovered proceeds with the other country involved. Many Western countries claim part of the proceeds. They argue that they have spent a lot of resources for the extradition, and the cost should be covered by sharing the recovered proceeds. Moreover, sharing the recovered criminal proceeds among countries that cooperated in the case is a common practice of many Western countries in the fight against transnational crimes. Unlike a traditional judicial agreement, the agreement to share criminal proceeds focuses on how to share what is gained by cracking a case, and it may

6

Liu (2013).

6 International Cooperation in Tracking Down and Capturing …

189

even occur without a judicial agreement. In China, it is more commonly believed that criminal proceeds are originally assets of the country that requests the extradition, and they are also critical evidence to be used in the trial that will follow an extradition. Moreover, it is also stipulated in the Model Treaty on Extradition, and the UNCAC that it is the obligation of the country requested to extradite to transfer all the criminal proceeds to the requesting country. Today, to better meet the practical needs of the pursuit of fugitive corrupt officials, it may be advisable that the Chinese government takes a different attitude and adopts the practice more commonly accepted in the international community. For the extradition of criminals for cases of embezzlement and other economic crimes, Western countries have established an effective system of incentives and cooperation in which the two countries involved in an extradition may sign an agreement on the sharing of criminal proceeds that have already been transferred across the border through consultation. If we do not follow this practice, it will be difficult for us to recover the state-owned assets that have been transferred abroad, and it will also be likely that we will lose more.

6.2.2

Red Notice: Useful, Up to a Point

Around noon on April 20, 2003, Yang Xiuzhu, 58, former deputy director of Zhejiang Construction Bureau, together with her daughter, son-in-law, granddaughter, and some other family members, was at the Shanghai Pudong International Airport in a hasty getaway out of the country. When Yang served as deputy mayor of Wenzhou, she was in charge of urban construction. At the time, the city was growing at an extraordinary speed, and this made it very convenient for Yang to seek undue personal gains. Reports have it that Yang’s case involved a total of RMB 253.2 million, 19 people were investigated, including nine public officials at county level, and nine were transferred to judicial authorities. On February 12, 2004, at a meeting of the Zhejiang Provincial People’s Congress, Chief Procurator Zhu Xiaoqing revealed that the provincial procuratorate had already obtained evidence and issued a red notice via the Interpol to capture Yang Xiuzhu who was on the run at the time. Then, after more than a year, as the general public shifted their attention away for this red notice with disappointment, Yang was captured in the Netherlands by Interpol in mid-May, 26 months after her departure from China.7 However, nearly a decade having elapsed, Yang is still not back to China. To understand this, we first need to have a better understanding of Interpol and the red notice. Founded in 1923 as International Criminal Police Commission, the Interpol acquired its current name in 1956. It has a general assembly, an executive committee, a general secretariat, and national central bureaus. The national central

7

He (2005).

190

R. Liu and J. Liu

bureaus are the permanent bodies of Interpol in each of its member countries, and they are in charge of the cooperation and coordination between national police and the Interpol. The Interpol has a total of 190 member countries, and its mission is “preventing and fighting crime through enhanced cooperation and innovation on police and security matters.” A major part of its job is to report on clues of important criminals and to pursue, capture, and extradite them. The Interpol issues red, blue, green, yellow, and black notices, which are named after the color tag in the upper left corner of the document. The red notice is used to fight against international crimes in a prompt manner. It is issued jointly by the chief of the national central bureau involved and the secretary-general of the Interpol General Secretariat. With a red notice, all national central bureaus may arrest the person wanted immediately. It is widely recognized as an international certificate for temporary detention. On receiving a red notice, all member countries should organize police forces to search for the wanted persons, and, once they are spotted, take action to arrest them immediately. A red notice contains the name, photo, fingerprint, and crimes of the wanted and stays valid for five years. The validity may be extended for five more years each time if the suspect is not captured when the notice expires until the wanted person is arrested. China became a member country of the Interpol and established the national central bureau in 1994. Over the past 30 years, China has maintained close cooperation with the organization and hosted its 64th General Assembly in 1995. So far, the national central bureau of China has issued over 800 red notices, and some 230 fleeing criminals have been captured and transferred back to China from more than 30 countries. For example, on May 17, 1998, employees Mai Ronghui and Xie Bingfeng of the Danzao office, Nanhai Sub-Branch of Bank of China fled via Hong Kong to Thailand with criminal proceeds. In August 2000, pressed hard by a red notice, Mai Ronghui surrendered himself to the Chinese Embassy in Thailand and was extradited back to China. Xie Bingfeng was soon arrested by the Thai police on November 8. Similarly, in a case of fraud that occurred in April 1993, the national central bureau of China issued a red notice only 20-plus hours after the suspect was found to have fled, and the huge amount of money transferred out of China was immediately frozen. The fund had been transferred using about 200 spot exchange cheques, USD 50 million each, and to the UK, the US, Canada, and Australia. Each of these countries managed to freeze the money upon receiving the red notice, and all the bills were recovered. However, the Interpol is still subject to various restrictions in its effort to capture corrupt officials because of its status and some realistic factors. The Interpol does not have the power to force any country to take any action. It is not an organization of “super police” that overrides the police forces of all member countries. Instead, it is an inter-governmental organization mainly mandated to coordinate between the police forces of various countries, and it relies mostly on national central bureaus to take action. The Interpol has no power to search or arrest. In Yang Xiuzhu’s case, say the Dutch police force, with the coordination of the Dutch national central bureau of the Interpol, took temporary

6 International Cooperation in Tracking Down and Capturing …

191

enforcement measures against Yang Xiuzhu based on Dutch law.8 By issuing a red notice, the Interpol only enables an arrest notice issued by one member country to apply to all member countries. Yet the red notice, in nature, does not have the legal status to ensure enforcement. It is not the obligation of any member country to capture any suspect wanted by a red notice. The Interpol only requires its member countries to assist in investigation and capture, but it is up to the member country involved to decide whether to arrest the wanted person. Usually, the first thing a member country considers on receiving a red notice is whether it is legitimate according to domestic law to arrest the wanted person. How effective a red notice can be also depend on the specific institutional discrepancies, the political and diplomatic relations, and the economic and cultural ties between the countries involved. Here is an example. In 1994, Qian Hong, on his flee, left Country A for Country B with a fake passport. The national central bureau of China requested the Interpol to issue a red notice for Qian.9 In July, Country B informed China that Qian was detained for entering the country with a fake passport, and the Chinese police immediately requested the police of Country B to keep Qian detained. Two teams were soon sent to Country B for negotiations, but still, the authority of Country B, under the pressure of various parties, released him in August 1996. The pursuit of Qian thus fell into an impasse. Later on November 20, 2000, Qian was again arrested in the USA for running an illegal private bank and was tried in the immigration court. Since Qian held a passport of Panama at the time, he was sent to Panama on February 26, 2001, after being sentenced to fixed-term imprisonment. In May, the Panama authority agreed to deport Qian and send him back to China. In this whole process, Qian was arrested twice by the authority of two different countries but was not extradited to China in both cases. Instead, he was announced not guilty and released on one occasion and sent to another country on the other. Though the red notice was of some help in this process, how things finally turned out to be depended heavily on the attitude of the countries involved and how the relations were between these countries and China.

6.2.3

China-US Cooperation: A Case Study

Well prepared, former presidents Yu Zhendong, Xu Chaofan, and Xu Guojun of the Guangdong Kaiping Sub-Branch of Bank of China fled to Canada and the USA via Hong Kong on October 12, 2001. The three started to embezzle and appropriate large amounts of interbank funds by taking advantage of loopholes in the bank management system and transferred the funds abroad to run their businesses, invest in foreign stock markets and exchange markets, squander wantonly, and gamble. In

8

Beijing News (2005). Qian Hong defrauded up to 48 Chinese companies of a total of RMB 500 million in 1993.

9

192

R. Liu and J. Liu

total, they embezzled USD 82.47 million and misappropriated USD 132 million plus RMB 237 million and HKD 20 million. In November 2001, the Ministry of Public Security issued via the Interpol a red notice worldwide and managed to freeze assets of the three promptly in Hong Kong, the USA, and Canada through international cooperation in enforcement. Based on the bilateral treaty for criminal legal assistance between China and the USA, the Chinese government requested assistance from the US federal government for the pursuit of the suspects who had fled to the USA, and the huge criminal proceeds transferred to the country. On December 19, 2002, Yu Zhendong was arrested in Los Angeles for an accusation of illegal entry, and the US authority transferred USD 3.55 million of his criminal proceeds to China in September 2003. Later, in February 2004, he was tried in the federal court in Las Vegas and was sentenced to 144 months of imprisonment for illegal entry, illegal immigration, and money laundering. Based on a plea agreement reached in advance with the local judicial authority, Yu gave up his right to a hearing and appeal and made no additional request. On April 16, based on an agreement between the two countries, the USA sent judicial staff to escort Yu back to China after deporting him from the USA, and Yu was finally tried in a Chinese court after three years on the flee. On March 31, 2006, the Guangdong Jiangmen Intermediate People’s Court announced Yu Zhendong guilty of embezzlement and misappropriation and sentenced him to 12 years of imprisonment plus confiscation of personal properties worth RMB 1 million. The repatriation of Yu Zhendong was a landmark in the legal cooperation between China and the USA in that Yu was the first suspect of serious economic offences that was escorted back to China by the USA after going through stringent legal procedures in the USA since diplomatic relations were established between the two countries. Also, it was the first time that a corrupt official was repatriated from the USA to China after the two countries signed the treaty for assistance in criminal justice and after both countries acceded to the UNCAC. Moreover, this case set an example for all similar cases involving the two countries in the following years. Without an extradition treaty in place, the two countries opted for joint law enforcement based on the bilateral treaty for criminal legal assistance and their respective jurisdictions, finally achieving a result that was acceptable to both sides. Suspects who flee to the USA usually transfer money via illegal means in advance and enter the country illegally. These are both against US laws, and relevant judicial authorities may accuse the persons on this basis. Then the Chinese judicial authority can provide sufficient evidence to prove their offences, which benefits both sides. In Yu’s case, the US authorities accused the suspects of illegal money transfer and illegal entry mostly on the basis of evidence provided by Chinese judicial authorities. Yu and the others started their criminal offences in China before money laundering was committed, and they got their travel documents and visas by fraud in China. So after Yu fled, Chinese authorities took initiative to provide evidence to their US counterparts. Moreover, during the investigation process, the US judicial authorities also cited the China-US Agreement on Mutual Legal Assistance in criminal matters to raise requests for evidence from the Chinese side. Both China

6 International Cooperation in Tracking Down and Capturing …

193

and the USA have their jurisdiction for Yu’s criminal offences, each lodging litigations within their own territory based on domestic laws and seeking assistance from the other when necessary. In practice, such overlapping litigations in different countries would not hamper the jurisdiction of either side or the mutual assistance between them but would result in synergy in the fight against crimes and fill the gaps caused by the absence of an extradition mechanism.10 Meanwhile, the two sides were practical and flexible in the cooperation for the transfer and repatriation of the criminal. To have Yu accept repatriation willingly, the US authorities required Yu to cooperate with criminal justice authorities of China and its Hong Kong SAR and confess his crimes in the plea bargaining, suggesting that by doing so, Yu may receive a lighter sentence from the US court. Also, the US court offered to be lenient to Yu’s wife who had committed the crime of illegal immigration and allow her to stay in the USA on the premise that Yu cooperated and confessed. In the meantime, the Chinese authorities also showed some flexibility in regard to possible punishment Yu would receive after being tried in a Chinese court if he opted to come back to the country on his own initiative. They agreed to reduce his sentence within the range allowed by law and promised the US side that once Yu was back, his sentence would be no more than 12 years of imprisonment. This may result in discrepancies with other similar cases in terms of the punishment imposed, but it served as deterrence to other criminal suspects on the run, urging them to make a rational choice and facilitating China’s efforts to capture fugitives and combat corruption. On January 31, 2006, the US judicial authority accused the other two major suspects of the BOC Kaiping case, Xu Chaofan and Xu Guojun and five of their family members of 15 crimes including visa fraud, money laundering, and illegal entry. The two may also reach a plea agreement with the US authority on similar conditions as in Yu’s case and avoid death sentences after coming back to China. On May 7, 2009, the two were sentenced, respectively, to 25 and 22 years of imprisonment by the federal court in Las Vegas for fraud, money laundering, cross-border transfer of stolen money, passport forgery, and other offences, and their spouses were also sentenced to eight years of imprisonment. Meanwhile, they were also ordered to return USD 482 million of criminal proceeds. According to the US immigration bill, a foreigner announced guilty of a felony shall be deported in any case. Although there are some remedy measures available for these people (e.g., to file an asylum application), foreigners sentenced to more than five years of imprisonment may be deprived of the right to resort to these measures if the Attorney General decides to do so. This means that though sentenced to imprisonment in the USA, it was still possible that Xu Chaofan and Xu Guojun may be repatriated to China if the two sides make more joint efforts toward this direction. In the past years, great progress has been achieved in the cooperation between China and the USA on law enforcement, which can be attributed mainly to the following four reasons. First, the two countries signed the treaty for mutual

10

Huang (2006).

194

R. Liu and J. Liu

assistance in judicial affairs, which provided strong legal basis for cooperation between the two sides. According to it, the two sides will help each other service legal instruments for criminal litigations, carry out investigation and obtain evidence, and take measures of freezing, seizing, and confiscating illegal proceeds. Over the past ten years, these arrangements have effectively enhanced mutual assistance, mutual trust, and cooperation in the fight against severe crimes. Second, both countries signed the UNCAC in November 2003. Since the international community had been calling vigorously for effective collaboration to prevent and combat corruption and various countries shared the same strong will and determination to fight corruption, the US government had to consider such an international situation when making decisions on relevant issues. Third, the domestic policies of the USA also played a role. On January 12, 2004, at a special meeting of the Summit of America, George Bush, then US President, released a bill, announcing that the USA would deny entry to people who had committed the crime of embezzlement, participated in an offence of embezzlement, or obtained personal gains from such offences in the capacity of public officials. More specifically, the following four categories of people were denied entry to the USA: those who accept money or any other advantage and take advantage of their jobs as a public official to offer convenience for those who offer the money or advantage; those who bribe the above-mentioned public officials in exchange of advantages; public officials who misappropriate public funds, intervene in judicial activities, elections, and other public affairs; and the spouses, children, and other family members of the three categories of people listed above. This effectively boosted the fight against corrupt officials who had fled to the USA. Fourth, China offered great help to the USA in the pursuit of criminals, the fight against transnational crimes, and international anti-terrorism activities. For example, in November 2001, Gu Wenzhen, a Chinese American was arrested by the US judicial authority for collusion, bribery of public official, and smuggling to the USA. During the probation period, Gu fled the USA and went into hiding in Shanghai. Then in August 2004, the US authority issued a note to the Chinese police, requesting assistance in the arrest and repatriation of Gu. In response to this request and a red notice of the Interpol, and based on a notice of arrest issued by the US procuratorate, a letter of the US authority to invalidate Gu’s passport, a written request for legal assistance, and relevant evidence, the Chinese police took enforcement measures upon Gu and sent him from Shanghai back to the USA on June 10, 2005. This marked the start of concrete cooperation on law enforcement between China and the USA and laid a solid foundation for future efforts of both sides to repatriate criminal suspects with streamlined procedures, join hands to crack down on cross-border and transnational crimes, and bring corrupt officials to justice. Despite all these, we must still be clearly aware that we have not removed the major obstacles that lie between China and the USA for cooperation in combating fugitive corrupt officials. Currently, criminal justice cooperation between the two countries remains on a low level. On February 23, 2005, Thomas V. Fuentes, Director of the FBI Office of International Operations, said during his visit to China that if any Chinese criminal suspect went to the USA and the Chinese judicial

6 International Cooperation in Tracking Down and Capturing …

195

authority request an investigation, we would do it, and if our investigation confirmed his or her criminal offences in China, we would surely send him/her back to China.11 However, there are still some thorny problems that cannot be addressed effectively with the existing treaty of mutual legal assistance. In such cases, the two countries will have to resort to diplomatic channels. Also, given the large number of fleeing Chinese corrupt officials in the USA, it is too costly to capture them through cooperation on a case by case manner. Therefore, we must do all we can to remove obstacles and build mutual trust between the two countries and strive for an extradition treaty, for that is the only way to ensure adequate institutional support for the joint efforts to fight corrupt officials and cooperate in other aspects of criminal justice, and that is the highest level of judicial cooperation between the two countries.

6.2.4

UNCAC

On December 14, 2005, the UNCAC entered into force globally. The first legal instrument adopted by the United Nations to guide the global fight against corruption, the Convention is also widely acknowledged as the most complete, comprehensive, inclusive, and innovative international legal instrument against corruption. The Convention offered a reasonable understanding and working mechanism for the fight against corruption and created a positive international environment as well as guidelines and legal support for international cooperation in this regard. As Article 1 of the Convention goes, “the purposes of this Convention are: (a) to promote and strengthen measures to prevent and combat corruption more efficiently and effectively; (b) to promote, facilitate, and support international cooperation and technical assistance in the prevention of and fight against corruption, including in asset recovery; and (c) to promote integrity, accountability, and proper management of public affairs and public property.” According to Article 68, the Convention shall enter into force on the ninetieth day after the date of deposit of the thirtieth instrument of ratification, acceptance, approval, or accession. Thus, it entered into force on December 14, 2005, and by 2013, it had 167 states parties.12 As we can see, the Convention focuses on both the fight against and the prevention of corruption. It puts governments in the leading position while also calling upon the civil society to join the efforts, with a view to punish corruptive public officials as well as corrupt officials in the private sector. Also, while supporting the anti-corruption efforts of each State Party, the Convention calls vigorously for international cooperation in criminal justice. Specifically, it encourages extradition

11

Yang (2004). For the background, formulation process, and main content of the Convention, see Liu and Zhou (2005).

12

196

R. Liu and J. Liu

and legal assistance, asset recovery, and technical assistance; forges international consensus on crimes of corruption and their control and evaluation; and promotes coordination in responses to corruption. It is fair to say that the Convention is highly inclusive and innovative. Here, we would like to introduce the provisions of the Convention on the pursuit of corruptive officials and asset recovery. First, in regard to the pursuit of corrupt officials, articles 43–50 in Chapter 4 of the Convention are provisions to promote international cooperation in combating corruption. While adhering to basic legal principles and judicial practices in terms of extradition, mutual legal assistance, and law enforcement cooperation, these provisions also improve and strengthen the conditions for extradition, application of mutual legal assistance, and cooperation in law enforcement based on the characteristics of corruption-related crimes and the actual needs of the prevention of and fight against corruption. For example, it is stipulated in Article 43 that in matters of international cooperation, whenever dual criminality is considered a requirement, it shall be deemed fulfilled irrespective of whether the laws of the requested State Party place the offence within the same category of offence or denominate the offence by the same terminology as the requesting State Party, if the conduct underlying the offence for which assistance is sought is a criminal offence under the laws of both States Parties. Article 44 is about the principles and conditions of extradition. It affirms the principle of double criminality and exceptions, establishes the principle that corruption is not a political crime, and, in response to the legal provisions in some states parties that extradition must be based on a bilateral extraction treaty, makes the following distinctions: If a State Party that makes extradition conditional on the existence of a treaty receives a request for extradition from another State Party with which it has no extradition treaty, it may consider this Convention the legal basis for extradition in respect of any offence to which this article applies. States Parties that do not make extradition conditional on the existence of a treaty shall recognize offences to which this article applies as extraditable offences between themselves. In addition, the Convention also urges states parties to seek to conclude bilateral and multilateral agreements or arrangements to carry out or to enhance the effectiveness of extradition. And Article 46 stipulates that States Parties shall afford one another the widest measure of mutual legal assistance in investigations, prosecutions, and judicial proceedings in relation to the offences covered by this Convention. From these, we can see that the Convention serves not only as a supplement and reinforcement of existing bilateral treaties of extradition and mutual legal assistance but also as a guide for countries without such treaties to cooperate in criminal matters and jointly fight corruption. If the Convention can be implemented effectively, it will surely be easier for China to cooperate in the matter of extraditions with countries with which an extradition treaty is lacking, thus providing a new channel for the pursuit of fugitive corrupt officials. Therefore, China should make active efforts to call upon major states parties to implement the above-mentioned provisions of the Convention.

6 International Cooperation in Tracking Down and Capturing …

197

As for the recovery of assets, the Convention creatively establishes a mechanism for direct recovery and one for indirect recovery via confiscation. According to Article 53, states parties may take the following measures to recover criminal proceeds directly: (a) Take such measures as may be necessary to permit another State Party to initiate civil action in its courts to establish title to or ownership of property acquired through the commission of an offence established in accordance with this Convention; (b) Take such measures as may be necessary to permit its courts to order those who have committed offences established in accordance with this Convention to pay compensation or damages to another State Party that has been harmed by such offences; and (c) Take such measures as may be necessary to permit its courts or competent authorities, when having to decide on confiscation, to recognize another State Party’s claim as a legitimate owner of property acquired through the commission of an offence established in accordance with this Convention. According to Article 54, each State Party shall: (a) Take such measures as may be necessary to permit its competent authorities to give effect to an order of confiscation issued by a court of another State Party; (b) Take such measures as may be necessary to permit its competent authorities, where they have jurisdiction, to order the confiscation of such property of foreign origin by adjudication of an offence of money laundering or such other offence as may be within its jurisdiction or by other procedures authorized under its domestic law; and (c) Consider taking such measures as may be necessary to allow confiscation of such property without a criminal conviction in cases in which the offender cannot be prosecuted by reason of death, flight or absence, or in other appropriate cases. In Chapter 5 of the Convention, the return of assets is confirmed as a fundamental principle of the Convention, and States Parties are required to afford one another the widest measure of cooperation and assistance in this regard. This not only contains the frequent flight of corrupt officials but also offers an effective way of international cooperation between states parties to recover and return assets, effectively assisting in the fight against international money laundering. Currently, many developed countries in the world have signed and ratified the Convention. We are confident that as the number of states parties to the Convention and the Convention’s international influence grow, more countries, developed and developing, will accede to it, and the global anti-corruption force will become stronger. This will eventually lead to the formation of a unified inclusive international anti-corruption alliance and enhance the Convention’s effectiveness around the world. The Chinese government has always taken a positive attitude toward the development of and China’s accession to the Convention. In the preparation phase of the Convention, China was actively engaged in the entire negotiation process and provided many constructive opinions. On December 10, 2003, then Vice Minister of Foreign Affairs Zhang Yesui signed the Convention on behalf of the Chinese government, and on October 27, 2005, the Convention was ratified unanimously by the Standing Committee of the National People’s Congress. China’s accession to the Convention was highly significant. For one thing, we can borrow international experience to build a system for the punishment and prevention of corruption that encompasses education, institutional arrangements, and supervision. It should be

198

R. Liu and J. Liu

noted here that the principle of equal emphasis on prevention and punishment of the Convention actually goes perfectly in line with the principles set by the CPC Central Committee for China’s fight against corruption. For another thing, it is also highly meaningful for the fight against corruption and for strengthened international cooperation because it creates a global net to keep fugitive corrupt officials in and helps us take outflowing funds back. In addition to international cooperation, it is more important that we improve domestic laws on corruption. As required by the Convention, competent authorities of China have taken actions to align domestic legislation to the Convention. Such efforts include formulation of the Anti-money Laundering Law, revised Criminal Law to redefine corruption, and amendments to the Criminal Procedure Law to change the procedures concerning special investigative tools and the confiscation of criminal proceeds of fugitive corrupt officials.13 China improved its anti-money laundering legal provisions and enhanced international cooperation in this regard. The Anti-money Laundering Law adopted by the Standing Committee of the National People’s Congress on October 31, 2006 systematically provides for the supervision and administration against money laundering, financial institutions’ obligations, investigations, and international cooperation in this area. People’s Bank of China issued the anti-money laundering regulations for financial institutions and management methods for financial institutions to report large and susceptible transactions. These are all institutional arrangements aimed to contain money laundering. Meanwhile, the Standing Committee of the National People’s Congress adopted amendments to the Criminal Law to change the constitutive requirements for the crime of money laundering and define crimes of embezzlement and bribery and financial crimes as predicate offences of money laundering. This amendment was one of the things we did after acceding to the Convention in order to fulfill our international obligations as a State Party. And it would, without doubt, facilitate the pursuit of fugitive corrupt officials in the future. China has also made great progress in international cooperation against money laundering. On October 6, 2004, China, as a founding member, joined the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG), a regional anti-money laundering organization, and established bilateral anti-money laundering working mechanisms with Russia, Hong Kong, Macau, and other countries and regions. On June 28, 2007, China was unanimously accepted to be a member of the Financial Action Task Force on Money Laundering (FATF).14 These have all played active roles in China’s international cooperation in combating money laundering.

13

For a comparison between the Convention and Chinese Criminal Laws, see Liu and Zhou (2005). The Financial Action Task Force on Money Laundering (FATF) is one of the most authoritative international organizations in the field of anti-money laundering. Its 40+9 recommendations have been accepted by the IMF and the World Bank and become an important part of the United Nations Convention against Corruption. Since its establishment in 1989, FATF has been making ceaseless efforts to call upon various countries and the international community to formulate laws and reform regulations to better fight against money laundering and funding for terrorism globally. By June 2014, FATF had had a total of 36 members and more than 20 observers.

14

6 International Cooperation in Tracking Down and Capturing …

199

In response to the requirements of the Convention for states parties, the Standing Committee of the National People’s Congress also amended the criminal code. For example, in Amendment No. 6 adopted on June 29, 2006, provisions on money laundering were revised to meet the requirement given in Article 23 of the Convention that each State Party shall include as predicate offences at a minimum a comprehensive range of criminal offences established in accordance with this Convention. Specifically, the crime of accepting bribes by employees of companies and enterprises was changed to the crime of accepting bribes by non-public-sector workers, covering a wider range of offenders. Since the offenders of this crime can be employees of other organizations besides companies and enterprises, this provision constitutes an excellent supplement to the Criminal Law and in the meantime meets the Convention’s requirement of fighting against corruption in the private sector. In the meantime, the crime of giving bribes to foreign public officials and officials of international public organizations was added to the portfolio. In the Seventh Amendment adopted on February 28, 2009, one more crime, accepting bribes by person of influence, was added, incorporating people other than public officials into the scope of offenders of bribery. In addition, punishment for possession of assets of massive value with unidentified sources was increased. According to requirements of the Convention, the National People’s Congress adopted an amendment to the Criminal Procedure Law on March 14, 2012. A new section titled “technical investigation measures” was added to the chapter on investigation15 to make it clear that procuratorates have the power to use special investigative techniques for corruption cases and that the evidence thus obtained can be presented directly in court. This was highly meaningful to our fight against job-related crimes and in line with the provisions concerning special investigative techniques laid out in Article 50 of the Convention. Also, based on the mechanism of recovery of property in the event of the absence of the offender provided for in Article 54 of the Convention, the revision added procedures for the confiscation of the criminal proceeds of fugitive corrupt officials. For major criminal cases of embezzlement or bribery, or terrorist activities, if the suspect or defendant is on the run and not captured after being wanted for a year, or if the suspect or defendant is dead, the illegal proceeds and other properties involved in the case shall be recovered according to the Criminal Law. In such a case, the people’s procuratorate may make an application to the people’s court to confiscate the illegal proceeds. More detailed procedures were also provided for.

15

Paragraph 2 of Article 148 of the revised criminal procedure law stipulates that after a case is filed, the people’s procuratorate may, for major cases of embezzlement and bribery, and major crimes committed by taking advantage of one’s job that severely infringes on the personal rights of citizens, adopt technical investigation measures which shall be carried out by competent authorities, based on actual needs of the investigation and through stringent procedures for approval.

200

6.3

R. Liu and J. Liu

Outlook and Recommendations

With more and more bilateral treaties signed for extradition, mutual legal assistance, and the transfer of convicts, trust and cooperation growing between countries, and especially with an increase in the signatories to UNCAC, the international community is reaching better understanding on the ideas and practices of the fight against corruption. This will facilitate the efforts to bring fugitive corrupt officials to justice. However, great challenges will remain in the near term for the following reasons. First, as globalization continues and China goes ahead with the reform and opening-up, foreign trade will grow and transnational crimes such as money laundering and illegal immigration will also rise. This will give corrupt officials more opportunities to flee. Second, the differences in the ideological and legal spheres between China and the world’s major developed countries will not disappear within the short run. They will become a major obstacle to international cooperation. Also, the number of Western countries that have officially ratified and acceded to UNCAC is still low, and thus it will take some time for the Convention to fully play its role globally. Moreover, the absence of an effective supervision mechanism also hampers its effective implementation. Third, China is still in the middle of a transition right now and loopholes remain in some of its political and economic systems. In particular, since the socialist market economy is not yet fully developed and standards and norms remain to be improved in some important sectors of the economy, a sharp decline in economic crimes, including corruption, will be difficult in the short run. In view of these, China should focus on the following two aspects. First, it should enhance the effort to sign bilateral treaties for extradition, mutual legal assistance, and transfer of convicts with more countries; strengthen cooperation with major developed countries on legal matters, and wherever possible, make use of the mechanisms offered by international organizations and conventions, including the Interpol and the UNCAC, to help track down and capture fugitive officials and to facilitate extradition, repatriation, and asset recovery. Second, and more importantly, China should move faster to improve its corruption punishment and prevention system that covers education, institutional arrangements, and prevention. For this purpose, the following measures are recommended. First, we should make necessary legal changes to better align our laws to international laws. Although we have made the above changes to the Criminal Law and the Criminal Procedure Law according to the requirements of UNCAC, much more remains to be done. For example, bribery under the Criminal Law involves property with a value above RMB 5,000; otherwise, the conduct will not constitute a criminal offence. This is inconsistent with UNCAC which broadly defines bribery as giving “undue advantage.” China thus needs to consider a broader definition that is appropriate for it. Also, in the Criminal Law of China, an offence of accepting bribes must have the intention of “seeking benefits for others” or “seeking undue benefits.” Yet this also narrows down the scope of the crime and may leave some

6 International Cooperation in Tracking Down and Capturing …

201

criminals unpunished. Likewise, in the criminal category of misappropriation, what is unlawfully appropriated is limited to public fund or a specific category of fund and materials. It may be advisable to criminalize the misappropriation of general public property. The Criminal Law goes on to stipulate that for an act to constitute the crime of misappropriation of public funds, the misappropriated funds must be used for one of the three specified purposes. This represents yet another inconsistency with UNCAC and should be removed. For job-related crimes, the Criminal Law of China has a full range of provisions, but the institutional system needs to be further improved to fight corruption effectively. In addition, the legislative authorities may also consider creating a supporting system for the recovery of assets. This includes standard procedures for the affirmation of criminal proceeds, better banking systems, an asset declaration system, and a system for international cooperation and asset sharing in relevant cases.16 Second, we should strengthen the management and supervision of public officials. President Xi Jinping has emphasized on various occasions that we must strengthen our control and supervision over the execution of power, keep powers in an institutional cage, create a disciplinary system that deters public officials from corruptive deeds, a prevention system that makes it impossible for anyone to become corruptive, and a support system that makes any corruptive deed difficult to complete. To this end, we must first take concrete measures to make government affairs transparent and grant the general public the right to information to the greatest possible extent. Second, we must implement a truly effective system for public officials to declare their assets. Public officials must report regularly the assets in their possession as well as in the possession of their spouses and children, including the amount, sources, and changes of the assets. It is a punishable crime to possess a large amount of assets that go beyond what their income may allow them to have, for which they cannot identify the sources. Meanwhile, they should also be held accountable for dishonesty and violation of the asset report system if they fail to declare their assets fully and timely even if all the assets in their possession have clearly identified sources. Third, it may be advisable to formulate an anti-corruption law to clearly define the specific responsibilities and work procedures for each competent department involved in the fight, as well as their liabilities when they fail to perform their duties. We may learn from the Republic of Korea, Singapore or Hong Kong SAR and set up a dedicated department to combat and prevent corruption effectively. Also, we can incorporate into the legislation existing anti-corruption measures used by the discipline inspection and supervision authorities, such as the requirements of giving a truthful account of one’s wrongdoings at a specified or designated time and location, so as to make such compulsory requirements a part of judicial procedures. Fourth, we should encourage public participation in the fight against corruption. Newspaper, TV, radio, and other media agencies should be allowed to use news

16

Zuo Weiming and Kuang Ke. On International Legal Cooperation against Corruption: From the Perspective of Asset Recovery. Proceedings of the 22nd Conference of the Law of the World. pp. 180–183.

202

R. Liu and J. Liu

reports, investigations, commentaries, or other means to place government officials and administration of public affairs under public supervision. Also, the general public should be encouraged to take part in the fight against corruption. Only by doing so can we ensure our anti-corruption campaign a lasting success. To sum up, we must give equal emphasis to prevention and control. Specifically, to track down and capture the fugitives, we should, on the one hand, improve international cooperation, in particular in extradition, mutual legal assistance and case-specific cooperation, making good use of the mechanisms afforded by the UNCAC and the Interpol. On the other hand, we should also strive to improve the political systems, especially the supervision over public officials in order to prevent corruption and prevent corrupt officials from fleeing the country. Since the new administration took office, China has devoted more efforts than ever to the fight against corruption. Policies such as “eight-point austerity rules” and measures regarding officials who have moved their families abroad demonstrate the government’s zero tolerance to corruption and strong determination to combat the crimes and will effectively deter potential fugitives.

References Beijing News (2005) How far is Yang Xiuzhu from a trial? Beijing News, June 1 He C (2005) Fleeing corrupt official Yang Xiuzhu captured by interpol in the Netherlands. China Youth Daily, May 31 Huang F (2006) Analysis on the repatriation of Yu Zhendong. Beijing Criminal Law Website, July 9 Liu R (2013) Death penalty in international and Chinese perspectives. China Social Sciences Press, Beijing, p 93 Liu R, Zhou Z (2005) Criminal justice report of China 2004. Blue book on the rule of law (2004). Social Sciences Academic Press, Beijing Yang L (2004) The US will repatriate fugitive Chinese officials charged with corruption. Beijing Youth Daily, February 23 Zheng F (2004) 4,000 corrupt officials taking away USD 50 billion: off-shore companies help with money laundering. The Mirror, August 16

References

Books, In Chinese A study of the practices of specific provisions of criminal law. In: Wang Z (ed) vol 2. China Fangzheng Press, Beijing (2001) A guide to the application of crimes under criminal law: embezzlement and bribery. In: Xiong X, Ren W (eds). Publishing House of People’s Public Security University of China, Beijing (2007) A practical guide to the revised articles of the criminal law. In Zhang Q (ed). China Procuratorate Press, Beijing (1997) A study on implementation of UN convention against transnational organized crime in China. In: Zhao B, Yang C (eds). Beijing Normal University Publishing House, Beijing (2009) An interpretation of new criminal law articles. In: Liu J (ed). People’s Court Press, Beijing (1997) Beccalia C (1764) Dei Delitti E Delle Pene. Chinese edition: Beccalia C (1993) On crime and penalty (trans: Huang F). Encyclopedia of China Publishing House, Beijing Chen X (1998) A comparative study on new and old criminal laws. Publishing House of People’s Public Security University of China, Beijing Chen G (2005) Criminal procedure law. Peking University Press and Higher Education Press, Beijing Chen Z et al (2006) The United Nations convention against corruption: cornerstone of global campaign against corruption. China Democracy and Law Press, Beijing Chen X (2007) On categories of criminal punishment. China Renmin University Press, Beijing Chen L (2008) Criminal legislation and making China’s anti-corruption legislation more effective: what we can learn from the United Nations convention against corruption. Publishing House of People’s Public Security University of China, Beijing Civil law. In: Jiang P (ed) China University of Political Science and Law Press, Beijing (2000) Comparative study on the general provisions of criminal punishment. In: Gao M, Zhao B (eds). Peking University Press, Beijing (2008) Conviction and sentencing of ten frequently occurring job-related offences. In: Yu Z (ed). China Fangzheng Press, Beijing (2001) Cotterrell R (1989) The sociology of law: an introduction (trans: by Pan D). Huaxia Publishing House, Beijing Crimes Act of New Zealand (trans: Yu Z, Zhao S). China Fangzheng Press, Beijing (2007) Criminal Code of Finland (trans: Xiao Y, Lu J). Peking University Press, Beijing (2005) Criminal Code of Portugal (trans: Chen Z). Publishing House of People’s Public Security University of China, Beijing (2010) © Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7

203

204

References

Criminal Code of Japan (trans: Zhang M). Law Press China, Beijing (1998) Criminal jurisprudence, 5th edn. In: Gao M, Ma K (eds). Peking University Press and Higher Education Press, Beijing (2013) Criminal Jurisprudence, 3rd edn. In: Gao M, Ma K (eds). Peking University Press and Higher Education Press, Beijing (2007) Criminal jurisprudence of China. In: Gao M et al (eds) China Renmin University Press, Beijing (1989) Criminal iurisprudence. In: Gao M (ed). Peking University Press, Beijing (1998) Criminal Jurisprudence. In: Yang C, et al (eds). Nanjing University Press, Nanjing (1992) Deng W (2009) On the structure of criminal punishment. Publishing House of People’s Public Security University of China, Beijing Disputed points and hotspots in determining the offences committed by Public-sector workers. In: Xie W (ed). China Fangzheng Press, Beijing (2001) Explanation of criminal code of the Russian Federation. In: General Prosecutor’s Office of the Russian Federation (ed) (trans: Huang D). China University of Political Science and Law Press, Beijing (2000) Explanations and legislative grounds of the criminal of the people’s Republic of China and relevant provisions. In: Criminal Law Office of the Law Committee of the Standing Committee of the National People’s Congress (ed). Peking University Press, Beijing (2009) Gao M (1981) The gestation and birth of the criminal law of the people’s Republic of China. Law Press China, Beijing Gao M (2012) Birth and development of the criminal law of the people’s Republic of China. Higher Education Press and Peking University Press, Beijing Gao M, Zhao B (2007) Evolution of China’s criminal law. Law Press China, Beijing German Penal Code (trans: Xu J, Zhuang J). China Fangzheng Press, Beijing (2004) Guide and reference on the economic crime trials. In: The No. 2 Criminal Tribunal of the Supreme People’s Court (ed) vol 1. Law Press China, Beijing (2003) Harmonious society and construction of modern Chinese criminal law. In: Zhao B, Lang S (eds). Peking University Press, Beijing (2007) He C (2004) A comparative study of corruption as a crime cum comparison of China’s legal institutions of honest and clean government with the United Nations convention against corruption. Law Press China, Beijing He Z (2002) A study of corruption in China in the period of transformation. Central Compilation & Translation Press, Beijing Hu C (2001) A study on boundaries and convictions of public-sector workers’ abuse of official capacity. China Fangzheng Press, Beijing Huang X (2012) Clean governance: combating corruption in Hong Kong. Guangming Daily Press, Beijing Identification and disposition of embezzlement, bribery and related crimes. Zhao B (ed). China Fangzheng Press (1999) Improvement in China’s anti-corruption law and UN anti-corruption measures. In: Yang Y (ed). Publishing House of Chinese People’s Public Security University of China, Beijing (2007) Interpretation of criminal code of the Russian Federation (trans: Huang D). China University of Political Science and Law Press, Beijing (2000) Investigation and application of evidence for embezzlement and bribery. In: Li W (ed). Publishing House of People’s Public Security University of China, Beijing (2002) Jescheck HH, Weigend T (1978) Lehrbuch des Strafrechts. Duncker und Humblot, Berlin. Chinese edition: Jescheck HH, Weigend T (2001) Textbook of German criminal law (trans: Xu J). China Legal Publishing House, Beijing Jescheck HH (2004) A foreword for the penal code of the federal Republic of Germany, published in German penal code (trans: Xu J, Zhuang J). China Fangzheng Press, Beijing Kimura K (1991) Criminal jurisprudence dictionary (trans: Gu X, et al). Shanghai Translation and Publishing Company, Shanghai

References

205

Li C (2013) Studies on bribery offences. China University of Political Science and Law Press, Beijing Li K, Han Y (1998) Legal principles for criminal enforcement. China Renmin University Press, Beijing Li L, Tian H (2014) Rule of law blue book: report of the rule of law development in China (2014). Social Sciences Academic Press, Beijing Liao Z (2007) A survey of the offence of accepting bribes: from theory to practice. China Fangzheng Press, Beijing Lin S (2012) On crimes in the criminal law (Part 2) (5th Revision). Peking University Press, Beijing Liu R (2013) Death penalty in international and chinese perspectives. China Social Sciences Press, Beijing Lv T (2007) Theory and practice of bribery crime. Guangming Daily Press, Beijing Ma K (1995) Exploration into criminal law. Law Press China, Beijing Ma D, Xu A (2004) Studies of property-oriented penalties. China Procuratorate Press, Beijing Maeda M (2000) Specific part of the Japanese criminal law (trans: Dong F). Wu-Nan Publishing Co., Ltd, Taipei. Meng Q (2005) Embezzlement and bribery: research on identifying and solving key, suspicious, and difficult problems. People’s Court Press, Beijing Meng Q, Gao X (2001) Criminal conviction and sentencing for corruption. People’s Court Press, Beijing Minoru O (2008) An interpretation of criminal law (trans: Li H). China Renmin University Press, Beijing New Penal Code of France (trans: Luo J) China Legal Publishing House, Beijing (2005) New criminal law: a textbook. In: Zhao B (ed). Publishing House of People’s Public Security University of China, Beijing (1997) Nishida N (2007) Particular theories of the criminal law of Japan (trans: Liu M, Wang Z) China Renmin University Press, Beijing On Criminal Procedures. In: Chen W (ed). China Legal Publishing House, Beijing (2011) On bribery. In: Liu L (ed). China Procuratorate Press, Beijing (1996) Overview of foreign criminology (Continental Law System). In: Ma K (ed) China Renmin University Press, Beijing (2009) Penal Code of Korea (trans: Jin Y). China Renmin University Press, Beijing (1996) Penal Code of Singapore (trans: Liu T, Ke L). Peking University Press, Beijing (2006) Prevention and punishment of job-related crimes. In: He B (ed). China Fangzheng Press, Beijing (1999) Qiu X (1999) Review of penal rationality. China University of Political Science and Law Press, Beijing Shi L (2009) Studies on bribery in Macao. Publishing House of People’s Public Security University of China, Beijing Stefani G (1998) General provisions of the French criminal law (trans: Luo J). China University of Political Science and Law Press, Beijing Studies on embezzlement and bribery. In: Li X (ed) Intellectual Property Publishing House, Beijing (2004) Studies on hotspot issues concerning the criminal law. Ma C (ed). Hunan People’s Publishing House, Changsha (2003) Study on the crime of bribery. In: Xiao Y (ed). Law Press China, Beijing (1994) Sun G (1995) Economics of criminology: principles and application. Nanjing University Press, Nanjing Sun G, Wei C (2011) A legislative study of the United Nations convention against corruption and the crime of embezzlement and bribery. Law Press China, Beijing Swiss Criminal Code (trans: Xu J, Zhuang J). China Fangzheng Press, Beijing (2004) Tang S (2002) A legal study of embezzlement. People’s Court Press, Beijing

206

References

Tang B (2007) On embezzlement. China Procuratorate Press, Beijing United Nations convention against corruption and other important instruments. In: Zhao B, Wang Z, Guo L (eds). Publishing House of People’s Public Security University of China, Beijing (2004) Wang Y (2002) Crime of bribery in the United States. China University of Political Science and Law Press, Beijing Xiao Z (2006) Complicated issues on embezzlement and bribery. Shanghai People’s Publishing House, Shanghai Xu W (1998) Economic crimes and economic disputes. Law Press China, Beijing Yamaguchi A (2009). Criminal law and new cases. (trans: Fu L, Liu J). China Renmin University Press, Beijing, p 276 Yamaguchi A (2011) Criminal law: specific part (trans: Wang Z). China Renmin University Press, Beijing Yang X (2002) Laws on embezzlement and bribery and judicial interpretation. China Procuratorial Press, Beijing Yang Z (2009) A study of criminal law protection of state-owned assets: from a global perspective of criminal jurisprudence. Publishing House of People’s Public Security University of China, Beijing Yi P, Fa XY (2008) Model new six laws (Criminal Law). Rev. 4th edn. Yipin Cultural Publishing Co Yu Z (2002) Study on the criminal punishment annihilation system. Law Press China, Beijing Yu Z (2005) Finnish criminal policy and its reformation: a foreword, criminal code of finland (trans: Yu Z). China Fangzheng Press, Beijing Zhang J (1991) Principles of science of civil law. China University of Political Science and Law Press, Beijing Zhang X (2003) Essentials of criminology. Law Press China, Beijing Zhang J (2007) An outline of criminal law regulation and protection over non-public sectors of the economy. Publishing House of People’s Public Security University of China, Beijing Zhang M (2007) Criminal jurisprudence. Law Press China, Beijing Zhang J et al (2008) A general survey of criminal law. Peking University Press, Beijing Zhang M (2011) Criminal law. Law Press China, Beijing Zhao B (1997) Issues on an extroverted criminal law. China Legal Publishing House, Beijing Zhao B (1998) Essentials of accusation and judicial interpretation of new criminal code. Publishing House of People’s Public Security University of China, Beijing Zhao B, Xiao Z, Zuo J (2007) A dialog on criminal law. Peking University Press, Beijing Zhou Z (2005) A survey of studies on job-related crimes. Law Press China, Beijing Zong J (2003) A criminological study of embezzlement in Chinese and Western cultures. China Procuratorate Press, Beijing Zuo W, Kuang K On international legal cooperation against embezzlement: from the perspective of asset recovery. In: Proceedings of the 22nd conference of the law of the world

Journals, In Chinese Cao J (2010) New types of object of crime in embezzlement cases in the context of new development model of the state-owned sector. Polit Sci Law 2010(1) Cao J. (2002). On integration and improvement of Bribery criminal legislation. J National Prosecutors College 2002 (5). Chen X (2003) An analysis of crimes by organizations: from a regulatory perspective. J Henan Adm Institute Politics Law 2003(1) Chen X (2003) Preliminarily on witness immunity. J National Procurators College 2003(6) Chu H, Liang G(1998) A primer on embezzlement and the application of article 394 of criminal law. China Legal Science 1998(4)

References

207

Chu H, Yan Y (2012) Several difficult issues in the application of the crime of accepting bribes by making use of influence. J Jiangsu Police Officer College 2012(1) Deng S (2007) Study on criminal trial by default. Chinese J Law 2007(3) Gao Y (2004) Comparative study and new exploration of the scope of bribery. Hebei Law Science 2004(2) GaoY (2006) Why can’t we regard sexual bribery as a crime? Legal Forum 2006(5) Guan B (2007) An interpretation of scientific legislation. J Soc Sci 2007(3) Hao L (1985) Characteristics of embezzlers. Polit Sci Law 1985(5) Hu A, Guo Y (2002) The economics of embezzlement among civil servants: a cost-benefit analysis. Comp Econ Soc Syst 2002(4) Jiang H (2003) Who set this trick of prostitution? Prosecutorial View 2003(8) Jin F, Yang X (2000) Constituent elements and verification of accepting bribes involving the trading of power for money. People’s Judicature 2000(2) Lang S (2003) Developments in criminal legislation of china and several issues worth attention in present trial practice (ed: Nan Y). Criminal Trial Digest 2003(1) Li J (2002) Interpretation and analysis of legal provisions on accepting bribes. J Henan Adm Inst Politics Law 2002(5) Li Y (2009) Off-site trial and the reform and improvement of china’s criminal jurisdiction system. Criminal Science 2009(2) Li Y (2011) Outflow of 650 billion Yuan pushes for trial by default. Law Life 2011(9) Liang G (2001) Loopholes and remedies for the net of bribery justice. China Legal Science 2001 (6) Liang W (2009) Study on a reasonable accusation system for the crime of bribery. Western Law Review 2009(3) Liu F (1993) Work report of the supreme people’s procuratorate at the 1st session of the 8th national people’s congress on March 22, 1993 Liu L, Zhang D (2005) On improving china’s criminal law and by drawing from the United Nations convention against corruption. J Chinese People’s Public Security University 2005(1) Liu R (2010) From reforming criminal legislation to creating criminal law. Chinese J Law, 2010(1) Liu X, Ruan C (2003) It is unwise to regard sexual bribery as a crime. Rule Law Forum 2003(2) Luan D (2013)Who should suffer more, the briber or the taker? People’s Tribune 2013(28) Ma S (2000) A study of entities that can be criminally charged. J Zhengzhou University 2000(6) Mao L (2006) A criminal study of one-person company in the context of the new company law. Legal Science 2006(7) Ni X, Wang L (2004) Assessing corruption in china and an estimating its consequences. Xinhua Digest 2004(3) Pang J (2008) Understanding and application of the opinions on several issues concerning the application of law in criminal cases of commercial bribery. People’s Judicature 2008(23) Qian X (2008) Study on the macroscopic effect of chinese legislation on the crime of embezzlement and bribery. Jinan J (Philos Soc Sci) 2012(6) Qiang H (2014) Study on witness immunity. Soc Sci J Universities in Shanxi 2014(6) Qu X, Liang S (2008) An empirical analysis on the establishment of witness immunity system in china. Evid Sci 2008(16) Ren J (1989) Work report of the supreme people’s procuratorate at the 10th session of the 8th national people’s congress standing committee on October 25, 1989. Ren W (2007) Several issues concerning the application of laws in criminal trials. Shanghai Judicial Practice 2007(7) Research Team on Corporate Crime, Institute of Law, Shanghai Academy of Social Sciences (2008) Research on thorny issues concerning crime by state-owned enterprises. Political Science Law 2008(11) Ruan C (2006) On the legislation of bribery crime in china versus the united nations convention against corruption: from the perspective of localization of international criminal law. Hebei Law Science 2006(4)

208

References

Ruan F (2000) Thorny problems about the concept of public-sector worker. J Zhejiang Uni (Humanit Soc Sci) 2000(2) Sang B, Yang S (2013) Analysis on three major disputes over off-site trial of cases involving high-ranking officials. People’s Tribune 2013(4) Shi L (2012) On the investigation jurisdiction of job-related criminal cases in a unitary investigation system. J Henan University 2012(3) Sun,G. (1997) On Several Issues about Public-sector Workers. Nanjing University Law Review, 1998 (autumn). SunG (1997) On several issues about public-sector workers. Nanjing University Law Review 1998 (spring). Tan S, Dong W (2004) On witness immunity in bribery cases. Humanit Soc Sci J Hainan University 2004(4) Wang J, He S (2008) Discussion on several basic theories of penal presumption. Law Science 2008(6) Wang C Corruption incidence analysis of the chinese society in 1990–1999. CASS J Political Science 2001(1) Wang Q, Liu Z (2008) Reflection on and reconstruction of the legal proceeding for embezzlement and bribery cases. Criminal Research 2008(4) Wang X (2010) Judicial interpretation of “seeking benefits for others” in the offence of accepting bribes. Hebei Law Science 2010(4) Wang X (1999) State-owned enterprises under European communities competition law. Foreign Law Review 1999(3) Wang Z (2003) A study of ‘organizations’ under the criminal law (ed: Zhao B). Criminal Law Review 2003(2) Wen D (2004) Bribery under criminal policy. Criminal Science 2004(4) Wu J (2009) Reflect on the past six decades, meet new challenges. Reading 2009(12) Xiao Q (2006) Improvement of criminal legislation on bribery in China. Seeker 2006(3) Xiao Z (2003) On several application issues concerning the offence of accepting bribes. Law Review 2003(1) Xing W (1988) On taking advantage of position in accepting bribes. Chinese J Law 1988(6) Yang Z (2008) A study of latest developments of official bribery in the united states: federal bribery statute in focus. Criminal Science 2008(2) Zhang, R. (2006). Criminal Law’s Equal Protection in Non-public Economy: Lessons From the Legislation on Embezzlement. Modern Law Science, 2006(4). Zhang C (2003) Witness immunity. ECUPL J 2003(2) Zhang S (1995) A look back at and into the future of chinese legislation on corporate crime. Wuhan University J 1995(6) Zhao B, Yu Z (2000) On the special arrangements for surrenders in the specific provisions of the criminal law of China. People’s Procuratorial Semimonthly 2000(3) Zhao B (2005) On some basic issues in strengthening china’s criminal statutes by drawing from the United Nations convention against corruption. Law Science Magazine 2005(1) Zhao B (2009) Outline of China’s criminal legislation on embezzlement. Jianghai Academic J 2009(1) Zhao J (2003) On reorientation of the scope of bribery in China’s criminal law: the requirements of UN convention against transnational organized crime as standards. Criminal Science 2003(6) Zhi Z (2009) Transaction of power and sex in a perspective of legal culture. Democracy Legal Syst 2009(17) Zhu L (2005) A comparative study of bribery under the United Nations convention against corruption with respect to the private sector. Forward Position 2005(2) Zou Z (2001) Judicial investigation of accepting bribes cases. Shanghai Procuratorate Study 2001 (2)

References

209

Newspapers, In Chinese Beijing News (2005) How far is Yang Xiuzhu from a trial? Beijing News, June 1 Chen L (2012) New criminal procedure law: a hard blow on fleeing corrupts. Legal Daily, April 2 Chongqing Economic Times (2013) Supreme people’s procuratorate: nearly 200,000 people involved in embezzlement cases over five years. Chongqing Economic Times, October 23 Dai J (2014) procuratorates to crack down more heavily on bribery. Procuratorate Daily April 25 Fan Y, Zheng J (2007) The first in Zhejiang: counting prostitution fee as a bribe. Procuratorate Daily, January 2 Gong Z (2006) Legal problems that smuggling by a one-person company reveals. People’s Political Consultative Daily, August 28 He C (2005) Fleeing corrupt official Yang Xiuzhu captured by interpol in the Netherlands. China Youth Daily, May 31 Hu M, Cao J (2005) How to determine corrupt practices related to creditor’s rights. Procuratorial Daily, January 10 Huang S (2003) Improve law on protection of state-owned assets. Fujian Daily, March 13 Lei H (2014) China will be harsh on bribers. Legal Weekly, April 28 Liu X (2002) An empirical study on contributory bribery. Procuratorial Daily, November 22 Liu B et al (2006) The two Xus refusing to be repatriated in the Yu Zhendong way. Beijing News, February 10 Peng B (2014) Supreme people’s procuratorate: anti-embezzlement efforts will focus on giving bribes. Democracy & Law, May 19 Procuratorate Daily (2008) Interviews with departmental chiefs of the supreme people’s court and the supreme people’s porcuratorate over the opinions on several issues concerning the application of law to criminal cases of commercial bribery. Procuratorate Daily, November 25 Sun, Y. (2011). Laws to Ensure that Corrupt Officials Gain No Economic Benefit. Procuratorate Daily, August 30. Tian Z (2007) One-person company as subject of crime and judicial presumptions. Procuratorate Daily, March 26 Wan H et al (2005)What is the difficulty of determining new types of bribery. Procuratorial Daily, March 9 Wang J et al (2007) Off-site trial for high-ranking officials: a unique scenario of China. Democracy & Law, January 1 Wang L (2013) Procuratorates target at embezzlement at the basic level. Procuratorate Daily, October 18 Wu J (2009). Determination of the Status of Workers at State-owned Banks. Procuratorate Daily, October 12 Xiang X (2003) Thoughts on new criminal trend in accepting bribes. Procuratorate Daily, June 3 Yang L (2004) The US will repatriate fleeing Chinese corrupt officials. Beijing Youth Daily, February 23 Yang X (2008) Three reasons for not regarding sexual bribery as a crime. Legal Daily, August 14 Yu S (2010) Treat one-person company and work unit alike when it comes to bribery. Procuratorate Daily, January 4 Zhang G (2010) Quest under the criminal law for constitutionalism. Procuratorate Daily, May 27 Zhao G (2009) Three crimes likely to be committed by a journalist. People’s Court Daily, January 18. Zheng F (2004) 4000 corrupts taking away usd 50 billion: off-shore companies help with money laundering. The Mirror August 16 Zhu L (2013) Regarding sexual bribery as a criminal offence: a study on the Liu Zhijun case. Zhejiang Legal News, July 4

210

References

Contributions, In Chinese Answers to questions about the application of criminal laws issued by the criminal tribunal of the Shanghai Supreme People’s court and the public prosecution office of the Shanghai People’s procuratorate. In Gu X(ed) Economic criminology. Shanghai People’s Publishing House, Shanghai Application of law in cases of economic crime: a summary of discussions at national workshop on economic crime trials by courts. Reference to Criminal Trial (Issue 41). Law Press China, Beijing (2005) Chen X (2001). A study of accepting bribes. In: Chen X (ed) Law: cases and discussions 39(3). Law Press China, Beijing Deng J (2005) Complicated issues on the conviction of accepting bribes. In: Zhang Z (ed) Guide to criminal justice 65(24). Law Press China, Beijing He B (1999) A preliminary discussion of entities that can be criminally charged under the criminal law of China. In: Issues and controversy over criminal law, vol. we. China Fangzheng Press, Beijing Hu L, Yang K Reasonable scope and core elements of corruption as a type of criminal act: a policy interpretation of corruption as a type of criminal act. In: Zhao B (ed) Rule of criminal law in a harmonious society, vol 2. Chinese People’s Public Security University Press, Beijing Li B (1999) On the definition of crime by a work unit. In: Issues and controversy over criminal law, vol. we. China Fangzheng Press, Beijing Liu R, Zhang X (2010) United National convention against corruption and the coordination and improvement of criminal laws of China. In: Zhao B (ed) Implementation of United Nations conventions in the field of criminal law. Publishing House of China People’s Public Security University, Beijing Liu R, Zhou Z (2005) Criminal justice report of China 2004. In: Rule of law blue book (2004). Social Sciences Academic Press, Beijing Peng Z (2007) Explanatory notes on the draft regulations of the People’s Republic of China on punishments for embezzlement. In: Gao M, Zhao, B (eds) Selected documents on China’s criminal legislation. Law Press China, Beijing Shan M, Chen L (2013) Development trend and governance strategy for two types of crimes involving corruption in china amid accelerating transformation. In: Chen Z, Li S, Huang J (eds) Proceedings of the national annual criminal law conference 2013: social transformation and criminal law adjustments in contemporary China. Publishing House of China People’s Public Security University, Beijing Wang, Z. (2003).A Study of ‘Organizations’ under the Criminal Law. In Zhao B (ed )Criminal law review, vol 2. Law Press China. Xiang C (2007) Report on the results of the NPC Law committee’s deliberation of the draft supplementary provisions on the punishment of embezzlement and bribery and smuggling. In: Gao M, Zhao B (eds) Selected documents on China’s criminal legislation. Law Press China, Beijing

Theses and Dissertations, In Chinese Ren X (2010) A study of the special procedures for litigations in embezzlement cases. Ph.D. Dissertation. Shanghai Jiao Tong University, China Ye R (2012) Application of and reflection on fine penalty. Ph.D. Dissertation. Southwestern University of Finance and Economics, China Zhou D (2012) Thoughts on applying heavy punishment for the crime of bribery. Master’s Dissertation. Southwest University of Political Science and Law, China

References

211

Websites, In Chinese Huang F (2006) Analysis on the repatriation of Yu Zhendong. Beijing Criminal Law Website. http://www.criminallawbnu.cn/criminal/Info/showpage.asp?pkID=8620 Lin P, Hong W (2005) Records of embezzlement trial of Chen Manxiong and Chen Qiuyuan. China Court Website. http://www.chinacourt.org/public/detail.php?id=146273 Wang Y, Zhou Q (2002) A look at the phenomenon of fugitive corrupt officials. Xinhuanet. http:// news.xinhuanet.com/newscenter/2002-09/28/content_578629.htm Zhu X (2004) The fleeing corrupt official Yang Xiuzhu from Zhejiang took bribes worth more than 200 million yuan. Xinhuanet. http://news.xinhuanet.com/legal/2004-12/08/content_2306760. htm

English Bruce MB (2005) Governmental corruption in China: application of the foreign corrupt practices act. Santa Clara J Int 3:235 Colin N, Daniel T, Bacarese A, Hatchard J (2011) Corruption and misuse of public office 2nd Revised edn. Oxford University Press Gong T, Ma SK (2011) Preventing corruption in Asia. Routledge.

Index

Symbols 侦查程序, 151 侦查管辖, 151 侦查终结, 153 刑罚配置, 134 受理案件, 150 同等处罚, 141 审判程序, 157 瑞士联邦刑法典, 143 立案程序, 149 索贿, 142 罚金刑, 134 资格刑, 136 起诉程序, 154 刑事追诉程序, 149 立法沿革, 124 贪污贿赂犯罪, 166 A Abstraction, 94, 95, 97, 100, 104 Acceptance of gifts in domestic official or in foreign relations activities, 99 Accomplished offence, 103, 106, 109 Actual amount of accepted cases, 38 Actual amount of cases placed on file, 38 A huge quantity of possessions with unidentified sources, 15, 19, 21 Amendment to the criminal law, 25–27, 45, 50, 71 Amount of discovered cases, 39 Anti-corruption Ordinance, 96 Appointment, 25 Arranged in advance, 109

Assessment of Legislative Effectiveness, 31 Assign, 55, 56, 60, 62, 64, 66 Autonomous organization, 81 B Benefit Theory, 111 Branch of a work unit, 80 Bribe-giving by an organization, 23 Bribe-giving offence, 4 Bribe-introducing offence, 4, 7, 8, 10 Bribery and corruption (position-related embezzlement) committed by company employees, 23, 71 Bribery of foreign public officials and officials of public international organizations, 27 Bribery taking advantage influence, 21 Bribe-soliciting, 8, 25 Bribe-taking, 13, 21–23, 25, 106, 108–115, 117 Bribe-taking by a company employee, 16, 23, 26, 29 Bribe-taking in economic transactions, 107 Bribe-taking offence, 5, 8–14, 20, 25, 26, 28, 54–56, 58, 59, 63, 66, 67, 70–73, 76 C Capacity, 95–98, 100, 102, 104, 107, 111–113 Civil servant, 32, 52, 58, 59, 65, 67, 70 Claims, or creditor’s rights, 103, 112, 114, 117 Codification, 7 Company Law, 9, 16, 18, 21, 23, 24, 28, 29, 66, 71, 78–80

© Social Sciences Academic Press 2019 R. Liu (ed.), China’s Criminal Legislation on Embezzlement and Bribery, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-32-9313-7

213

214 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 61 Conversion, 95–98, 105 Corruption and bribe-taking by natural persons, 54 Corruption offence, 7 Corruption offence by non-public-sector worker, 4 Corruption Perceptions Index (CPI), 34, 35 Corruption Punishment Regulation, 55 Corruption Punishment Regulation of the People’s Republic of China, 53 Crime name system, 31, 49, 54, 71 Crime of bribery, 34, 45, 54 Crime of bribery and corruption (duty-related embezzlement) by staff members of companies and enterprises, 71 Crime of bribery and embezzlement of national wealth, 101, 102 Crime of commercial bribery, 13 Crime of corruption, 3, 5, 8, 9, 11–13, 22, 25, 28, 29, 42, 54, 55, 58, 67, 68, 94–102, 104, 105, 125 Crime of embezzlement, 46, 58, 66, 67 Crime of embezzling funds, 67 Crime of embezzling particular funds or property, 72 Crime of giving a bribe by a work unit, 45, 73 Crime of giving a bribe to a work unit, 73 Crime of misappropriation of funds, 99 Crime of offering a bribe to a foreign public official or an official of an international public organization, 73 Crime of offering a bribe to a non-public-sector worker, 73 Crime of offering bribes, 73, 80 Crime of taking a bribe by company or enterprise employee, 45 Crime punishment system in relation to organizations, 53 Crimes of bribery and corruption, 3–12, 16–27, 29, 31–33, 36–39, 43–47, 49, 53, 55, 64, 65, 71, 73, 74, 77, 79 Crimes of bribery and corruption by organizations, 72, 75, 77, 79 Criminal Code of Finland, 65 Criminal Code of 1979, 43, 44, 53 Criminal Code of 1997, 43, 45, 71 Criminalization, 12, 17–19, 115 Criminal Law Convention on Corruption, 77 Criminal offence of misappropriation, 97, 105

Index D Dark figure of corruption, 32, 36, 37 Dark figure of crime, 32, 37, 38 Death penalty, 5, 7, 9, 11, 13, 20, 25, 29 Death sentence, 66 Decision on Punishing Crimes Violating the Company Law, 9, 23, 24 Decision on Punishment for Violations of the Company Law, 71 Decision on Severely Punishing Crimes Harming the Economy, 8, 11 Delivering, 104, 109 Dualistic punishment model, 28–30 Dualistic punishment system for corruption, 9 Dualistic subject type system, 49 Duty, 54, 56–58, 60, 63, 65–69, 71, 72 E Embezzlement, 3, 4, 12, 16, 24, 29, 66, 67, 71, 94–97, 103–105 Embezzlement of public funds, 22 Engage in public service, 45, 55–57, 59, 60, 62, 64–67, 69–71 Extorting bribes, 106 F Foreign company or enterprise, 77 Frequency of corruption, 35, 37, 52 Funds misappropriation, 16, 24, 29 G Give a bribe to a company employee, 24, 26 Give a bribe to a non-public-sector worker, 21, 26 Give a bribe to an organization, 22, 25 Giving a bribe to a non-public-sector worker, 27 Government agency, 3, 4, 9 Governmental workers, 96, 99, 101, 102, 105, 107, 114, 115 Governmental workers, collective economic organization workers or other persons who handle or manage public property, 102 H Huge property of unknown origin, 49, 50 I Identity-centered dualistic regulation system, 49 Immovable property, 102, 105

Index Impose legally prescribed punishment, 13 Imposition of heavier punishments, 18, 20 Imposition of legally prescribed punishment, 24, 29 Institution, 55, 57, 59, 60, 62, 64, 67, 69, 72, 74, 75 Intangible property, 100, 101 Intention of acquiring material gain for any other person, 106, 107, 110 Investigation, 46–51 L Lawyers’ Law, 58 Legal interest, 27, 32, 65, 99 Legally prescribed punishment, 11 Legal person, 12, 45, 67, 74, 75, 77–80 Legal-person personality, 78 Legal person under the public law, 77 Life imprisonment, 5, 7, 9, 11, 13, 14, 25, 29 Life sentence, 66 M Mass organization, 55–58, 64, 67, 74 Mediatory bribery, 107 Mediatory bribe-taking, 22 Meritorious service, 29 Misappropriation offence, 10 N Natural-person personality, 78 Neighborhood committee, 81 97 Penal Code, 98 Non-governmental workers, 110 Non-property benefit, 111, 112, 114–117 Non-public-sector worker, 4, 6, 16, 27, 54, 61, 63, 69–72 O Objective measurement method, 35 Offence of bribe-giving by an organization, 15 Offence of concealing bank deposits abroad, 15 Offence of embezzling public funds, 14 One-person company, 77–79 Other means, 12, 94, 96 Other persons engaged in public service according to law, 56, 70 Other persons performing public service according to the law, 9 Overseas company or enterprise, 79, 80 P Penal code of 1979, 7–9, 11, 17, 20, 23, 24, 27, 71 Penal code of 1997, 21–23, 25–28, 71

215 Penal system, 3, 4, 6, 11, 24 People’s organization, 9, 22 Perform public service, 9, 11, 14, 15, 25 Persons that provide public services at public agencies or public enterprises, 69 Popular organizations, 98 Position, 9–11, 14, 21, 22, 24 Promise, 26 Property, 3–5, 9, 10, 12, 14, 16, 22–24, 26, 58, 60, 68, 69, 72, 76, 95, 96, 98–100, 102–106, 111–117 Property benefit, 100, 104, 106, 111, 112, 114–117 Property Benefit and Partial Non-property Benefit Theory, 111 Property Benefit Theory, 111, 112 Property Theory, 111 Public employee, 3, 6 Public enterprise, 59, 61 Public institution, 9, 14, 22 Public official, 27, 53, 58, 61, 62, 69, 72, 73 Public property, 9, 12, 14, 96, 99–103 Public-sector worker, 4, 6, 9–16, 21, 22, 24, 26, 27, 54–73, 96 Public-sector workers, staff members of economic organizations with collective ownership, or other persons who deal with or manage public property, 12 Public servants, 32, 104, 115 Public service theory, 59, 65 Punishment for crime, 38 Punishment imposition, 4, 5, 8, 11, 14 R Regulations of the People’s Republic of China on Punishments for Corruption, 2 Regulations on Punishments for Corruption, 2, 3, 7 S Same punishment, 11 Seek benefit for others, 14, 20, 58 Seek illegal interests, 54 Self-surrendering, 44 Sentencing according to the amount of proceeds of crime, 11, 13, 24 Sentencing based on amount of proceeds, 6 Separately implemented criminal law, 7, 9, 11, 17, 19, 23, 25, 43, 53, 55, 71 Sexual bribery, 116 State agency, 55, 57, 58, 60, 62, 64, 72, 73, 75, 77 State organs, 98 State-owned company or corporation, 98

216 State-owned company or enterprise, 55–60, 62–64, 66–69, 72, 73 State-owned enterprises, 22 State workers, 36, 44, 45 Status theory, 59, 65 Subjective measurement method, 33, 36 Supplementary Provision, 8, 12–15, 19–25, 28, 29, 97, 125 Supplementary Provisions on the Punishment of Crimes of Bribery and Corruption, 8 Supplementary regulation, 43, 45, 54 Surrender, 29 Swindle, 12, 96 Swindling, 3, 4, 94–96 T Take a bribe, 63 Take advantage of official capacity for personal gain, 96, 98, 106, 110

Index Take advantage of position, 9, 10, 14, 16, 20, 24, 25, 96 Taking advantage of position, 11 Tangible property, 100 Three Oppositions, 2, 7 Type of subjects of crime, 45 Types of offence, 3, 6, 8, 21, 24 U Undue advantage, 112, 115, 116 United Nations Convention against Corruption, 21, 26, 27, 72, 105, 115 Use influence to take a bribe, 26 V Villagers’ committee, 57, 81