China drafts law to block foreign anti-corruption probes and assert control over overseas assets
Quick Look
China has introduced a draft law to block extraterritorial anti-corruption investigations and retaliate against foreign enforcement, aiming to close a legal gap by integrating prevention, punishment and international cooperation into a single framework, according to lawmakers and legal experts who warn it creates compliance dilemmas for multinationals and Chinese firms in hubs like Singapore.
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Why It Matters
Previously, provisions covering anti-corruption and asset recovery were scattered across China's Supervision Law and Criminal Procedure Law, complicating procedures for trials in absentia and asset recovery efforts.
The draft sets out ways to block extraterritorial investigations and to retaliate against foreign anti-corruption enforcement, drawing a firm legal boundary against foreign jurisdictions while establishing its own mechanism to police overseas assets.
In doing so, legal specialists warn, Beijing is also creating a double-edged regulatory framework that will force multinationals and Chinese businesses operating in regional hubs such as Singapore to navigate data compliance dilemmas.
During panel discussions about the legislation, lawmakers said the measures filled a crucial statutory void.
Wang Ke, a member of the National People’s Congress’ Standing Committee, said that in the past, provisions covering the area had been scattered across the Supervision Law and Criminal Procedure Law, complicating asset recovery and procedures for trials in absentia.
However, the new draft was a “fundamental law” that integrated prevention, punishment and international cooperation “into a single chain”, Legal Daily quoted Wang as saying on September 1.
Open Questions
- How will the law be enforced against foreign entities?
- What specific retaliatory measures are included in the draft?
- How will multinationals comply with conflicting data requirements between China and other jurisdictions?
