The Films Of Satyajit Ray And The GSK China Investigation: Both Game-Changers

by Thomas Fox

If you are in London this week, I might suggest that you drop by the British Film Institute (BFI), which is celebrating the work of the Indian film maker, Satyajit Ray. If you have never seen a Satyajit Ray film, all I can say is that you have missed one of the world’s greatest directors. In an article in the Financial Times (FT), entitled “A genius for looking”, Amit Chaudhuri says that “all Bengali and Indian cinema was changed” after the release of Ray’s first film, Pather Panchali. Ray followed up this first film with two more entitled, Aparajito and Apur Sansar, and all three form The Apu Trilogy. They truly were game changers for cinema across the globe.

In many ways, the ongoing bribery and corruption investigation of GlaxoSmithKline PLC (GSK) may also portend a game-changer in China. In another FT article entitled “China dream sours for foreign companies”, Tom Mitchell wrote that “The “Chinese dream” articulated by China’s new president, Xi Jinping, is fast becoming a nightmare for some of the world’s most powerful corporations.” This is because “since then, government investigations and state media exposés targeting foreign investors have become a regular feature of the country’s business landscape.” Mitchell reported that some western executives “complain that foreign groups appear to be encountering particularly heavy scrutiny under the new leadership.” That complaint might certainly be considered by GSK about now as they have become the poster child for Chinese enforcement of its own internal anti-bribery legislation.

One of the things that compliance practitioners should not lose sight of in the ongoing bribery and corruption investigation of GSK is that the investigation, detentions and arrests all involve allegations of violations of Chinese law, not the US Foreign Corrupt Practices Act (FCPA) or UK Bribery Act. And while prosecution and even indictment or arrest under the FCPA or Bribery Act could not be termed a pleasant experience, I am relatively certain that it would pale in comparison to indictment or arrest under the applicable Chinese law prohibiting bribery of Chinese officials.

But what is the Chinese law regarding bribery and corruption of Chinese officials inside of China and what might that portend for US, UK or other western companies doing business in China? In a recent client alert, entitled “Recent Developments in Chinese Antibribery Laws and Enforcement”, the law firm of Akin Gump Strauss Hauer & Feld LLP, wrote that “The recent, very public crackdowns against alleged bribery activities by foreign firms, however, should be seen in a broader historical context and as a manifestation of developments in the legal arena that have been taking place over some time.” This is because Chinese officials had previously focused on prosecution of bribe recipients, not the bribe payers. They noted that “Chinese laws against bribery can be found in the PRC Criminal Law, first promulgated in 1997. Importantly, in contrast to bribery laws in many other jurisdictions, the Chinese law applies only to the actual giving of a bribe, not to the offering of one; there is no law against attempted bribery in China. In contrast to the FCPA, the rules in China apply to bribing private individuals and entities, not just government officials.”

The client alert also reports that that the Interpretations on Several Issues Concerning the Application of the Law in the Handling of Criminal Bribe-Giving Cases, adopted jointly by the Supreme People’s Court and the Supreme People’s Procuratorate in December 2012, which became effective in January 2013, defined more clearly the various levels of bribery, issues regarding the amount of money involved, the identity of the recipient and penalties. Additionally, it notes that “Various Chinese court rulings provide some guidance on the issue; per these rulings, the following factors are key: (i) the nature and history of the relationship between the parties; (ii) the value of the gift; (iii) the purpose and timing of the gift relative to what is obtained; and (iv) to what extent the recipient has used his or her position to promote the interests of the gift giver.” However, and perhaps more ominously, the client alert also says that “given the general nature of these guidelines, prosecutors and judges have considerable discretion in determining whether a particular act amounts to an illegal bribe.”

Penalties Under Chinese Law

I am indebted to my colleague Helen Zhang, Partner in the Shanghai office of the Zhong Lun Law Firm, who provided me a copy of her presentation on Management of Corruption Exposure Legal Framework & Company Approaches, for a detailed discussion of the legal framework on Chinese anti-corruption laws. She begins with a definition of what might constitute a bribe under Chinese law. The criminal proceedings section states that bribes can include “money, property, material object or interest on property that can be counted by money, such as providing house renovation, membership card containing money, token card (coupon), traveling expenses, etc., or anything of a property nature.” In the administrative proceedings Zhang states there can be prosecutions for “any incorrectly recorded sales discounts or rebates.” Zhang gives several tests on what might constitute a legitimate gift, contrasting it with indicia of bribery. They include the following:

  • the transaction background, such as whether the transaction parties are relatives or friends and the circumstances and degree of communications between the transaction parties in history;
  • value of the money or property transacted;
  • cause, time and manner of the transaction, and whether the person offering money or property has brought forward any request towards the recipient in connection with the recipient’s duties; and finally
  • whether the recipient secures benefits for the provider by taking advantage of his duties.

In her presentation she set out the penalties for offering bribes under Chinese law. My summary takes the form of a Penalty Box Score.

Art. of PRC Criminal Law





Monetary Threshold (RMB)



Art. 389 Individual State employee 10,000 Up to Life Sentence
Art. 393 Work Unit State Employee 200,000 Fines on ‘work units’ and ind. Up to 5 years
Art. 164 Individual or Unit Non-state employee Inv.-10,000Unit-200,000 Fines on ‘work units’ and ind. Up to 10 years
Art. 391 Individual or Unit Unit 100,000 Fines on ‘work units’ and ind. Up to 3 years
Art. 163 Individual or Unit Non-state employee 5,000 Minimum 5 yrs if bribe amt over100,000 RMB
Art. 385 Individual or Unit State Employee 5,000 Minimum 10 yrs if bribe amt over100,000 RMB
Art. 387 Individual or Unit State Organ 100,000 Fines on ‘work units’ and ind. Up to 5 years

Defenses Available

Zhang also points to the Pursuant to the PRC Supreme Court’s interpretation, for the proposition that from January 1, 2013 forward “if the company adopts a collective decision or the in-charge manager of the company makes a decision to voluntarily confess the bribery activities before being pursued, the penalties on the company and its relevant responsible persons can be reduced or even exempted.” She notes that there are some defenses available. Under general Chinese law, these are voluntary confessions and contributions to other cases, other defenses applicable to bribery cases include “blackmailed bribery and no improper interest involved”.

She specifically sets out that facilitation payments are not excepted out from the Chinese bribery statutes; stating “Facilitation payments may be deemed bribery if the facilitation of the relevant government procedures constitutes an “improper interest” acquired by the briber. Pursuant to the judicial interpretations of the PRC Supreme People’s Court, any attempt to obtain advantage of competition inconsistent with the principle of fair and just may also be deemed a kind of “improper interest”.” Most relevant to the GSK matter, she writes that “Indirect payment of bribes through an intermediary is not a defense and both the intermediary and the briber may be criminally prosecuted: (a) if the intermediary introduces the briber to a public official, he may be prosecuted for the “crime of introduction of bribery”; or (b) if the intermediary assists in the payment of bribes for the briber, he may be prosecuted for the “crime of bribery” as an accomplice of the briber.”

I am not certain as to the author of the Akin Gump client alert cited in this article. However, there are two law firm contacts listed at the end of the article. If you need more information about their article, you can reach them as follows: William Rosoff, email: and Yuanming Wang, email:

Helen Zhang can be reached via email at


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Thomas Fox, Compliance Evangelist | Attorney Advertising

Written by:

Thomas Fox

Compliance Evangelist on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.