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Corruption in China

Chinese prosecutors back leniency for entrepreneurs tangled up in graft cases

Guidelines meant to calm jittery businesspeople and benefit the economy, veteran lawyer says

PUBLISHED : Wednesday, 13 December, 2017, 11:01pm
UPDATED : Thursday, 14 December, 2017, 9:15am

The Chinese justice system should show some leniency to businesspeople forced to give bribes to officials, the top prosecutor’s office has said in new guidelines to fortify the country’s entrepreneurs.

But the Supreme People’s Procuratorate also warned there would be severe consequences for businesspeople who went out of their way to offer bribes to corrupt officials to cultivate political influence.

The guidelines follow Chinese President Xi Jinping’s push to encourage and protect entrepreneurship, and his repeated warnings to officials against the dangers of corrupt business interests.

Under the guidelines, all prosecutor’s offices had to foster an environment for entrepreneurs and their businesses, “strengthening their sense of personal and wealth security, and boosting confidence and providing incentives for businesspeople to innovate and start businesses”, the official Procuratorate Daily quoted a spokesman for the top prosecutor’s office as saying on Wednesday.

Prosecutors should consider whether a businessperson sought out an illegal benefit and whether he or she actively cooperated with graft investigations, according to the guidelines.

Prosecutors are also advised to avoid impinging on commercial operations while the owner of the business is under investigation.

How China’s new anti-graft super body will work, and why calling a lawyer won’t be an option

In addition, prosectors should prevent law enforcement from allowing ordinary civil or contractual disputes to turn into criminal proceedings.

Veteran criminal lawyer Zhou Ze said the guidelines were partly aimed at minimising the damage caused in the nationwide anticorruption campaign.

“Every time a corrupt official falls, a handful of entrepreneurs around him are usually rounded up,” Zhou said. “It’s no help to the economy if each of these investigations is followed by a wave of bankruptcies.”

He said there was also a high level of insecurity among China’s businesspeople because of harsh law enforcement, particularly in the last five years during the sweeping anticorruption campaign.

“Entrepreneurs are often under huge pressure to testify against officials, or they could be sentenced for bribery themselves,” Zhou said.

Under Chinese criminal law, giving money to a civil servant does not amount to bribery if the payer is being blackmailed or has not actively sought illegal benefits. That condition was underscored in the top procuratorate’s directive, which Zhou said could be an official signal that the law was not always followed.

Crimes committed by individuals would be treated differently from those by companies, to avoid “unnecessary” corporate losses or bankruptcies caused by “overly simplistic enforcement of the law”, it said.

‘I was framed’: court outburst by mining tycoon Liu Han as he is sentenced to death

The Supreme People’s Procuratorate did not refer to a specific case but Zhou said it had been common for businesses to go bankrupt after their owners were imprisoned.

“It’s common in so-called crackdowns on organised crime for a business owner to be caught and his whole company to be paralysed as authorities confiscate property,” he said.

In one high-profile case, operations at Hanlong Group, once Sichuan province’s biggest private enterprise, ground to a standstill after a court found company chairman Liu Han guilty on 13 charges, including murder, running casinos and selling firearms. Liu was executed in 2015.

Before Liu’s formal arrest, the authorities seized all of his assets, despite police claims that less than one-fifth was linked to crime. The group eventually collapsed.

Liu was a close associate of disgraced security tsar Zhou Yongkang, who is still the most senior official to be jailed for corruption.