Individual Liability for Commercial Corruption Under China’s Anti-Corruption Regulations

China’s anti-corruption rules impose individual liability on company owners, directors, and employees for bribery, embezzlement, and misappropriation. Recent explainers from China’s top legal bodies clarify when corporate corruption by an entity can lead to personal criminal liability. 

 Company owners, directors, and key employees face personal criminal liability for corruption carried out both by themselves and by the company they run. Individuals can be prosecuted for bribery, embezzlement, and misappropriation of company funds, while a company engaging in corruption can lead to personal criminal liability for individuals involved as well. Liability in some instances can also run the other way, with companies held responsible for the conduct of their employees or controllers.  

This article sets out where each type of liability arises and discusses how to mitigate the risk exposure. 

Individual liabilities under China’s anti-corruption regulations 

Commercial bribery to influence business transactions 

Individual liability for acts of commercial bribery to influence business transactions has increased under the 2025 revision of the Anti-Unfair Competition Law (AUCL). Under Article 24 of the revised law, if a company’s legal representative, main person in charge, or person directly responsible bears personal responsibility for an act of bribery, or if these individuals accept a bribe, they are now liable for fines of up to RMB 1 million (US$149,151). Illegal gains will also be confiscated.

An “act of bribery” in this instance includes situations in which a company bribes staff members of a counterparty to a transaction, entities or individuals entrusted by the counterparty to the transaction to handle relevant matters, or entities or individuals who influence the transaction by virtue of their official authority or influence by providing money or goods or by other means in order to seek transaction opportunities or a competitive advantage. 

In the same way that bribery by a company can lead to individual responsibility falling on individuals, if an employee of a business operator engages in bribery, the company itself will also be held liable. However, if the company can prove that the employee’s act was unrelated to seeking transaction opportunities or a competitive advantage for the business operator, then the company will not be held liable. 

Equal treatment for corruption by individuals in private and public sectors 

A document titled Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Embezzlement and Bribery issued by the Supreme People’s Court and the Supreme People’s Procuratorate in April 2026 (hereinafter the “2026 Interpretation”), clarifies that the sentencing standards for specific acts of corruption committed against a private company or organisation will be by reference to the corresponding public-sector offences. Previously, the thresholds for conviction for corruption committed against a private entity were higher than for public entities

The specific crimes are: 

1. Acceptance of bribes by non-state functionaries accepting bribes (Article 163 of the Criminal Code);
2. Offering bribes to non-state functionaries, including bribing a staff member of a company, enterprise, or other entity for the purpose of seeking “improper benefits” and bribing a foreign public official or an official of an international public organisation for the purpose of seeking “improper commercial benefits” (Article 164 of the Criminal Code);
3. Embezzlement of corporate assets (Article 271 of the Criminal Code); and 
4. Misappropriation of corporate funds (Article 272 of the Criminal Code).

As the SPC explains in the interpretation, this change ensures “equal legal protection for enterprises of different ownership types”. 

In practice, this means the thresholds for conviction and sentencing for these crimes committed against corporate entities have been lowered, and, by extension, individual liability is now higher. Thresholds were previously set in an earlier interpretation issued by the SPC and SPP in 2016 (hereinafter the “2016 Interpretation”). 

The penalties, set in the Criminal Code, depend on the size of the sum of money or value of property involved, with the lightest penalty being up to three years’ imprisonment or criminal detention, and the heaviest being life imprisonment. 

The penalties and monetary thresholds for individual liability for these crimes are outlined below. 

Individual liability for company corruption 

Individuals may be held responsible for an act of corruption carried out by a company under the Criminal Code. For instance, if a company offers a bribe to another company, company employee, foreign public official, or an official of an international public organisation, then the company may be fined, and the directly responsible person may be liable for criminal prosecution under the applicable Criminal Code provisions (outlined in item 2 of the table above). However, individual penalties will depend on the facts and circumstances of the specific offence.

The Criminal Code states that where a company solicits or illegally accepts property from others and seeks benefits for them, the person in charge or other directly responsible persons can be held criminally liable and sentenced to up to five years’ fixed-term imprisonment or criminal detention. The company itself will also be fined.

If a company obstructs supervisory and inspection authorities from performing their anti-corruption duties, or refuses or hinders an investigation, then individuals can also be liable to fines of up to RMB 10,000 (US$1,491), while the company can be fined up to RMB 100,000 (US$14,915). 

The 2026 Interpretation clarifies that if property is accepted in the name of a company, but the intent is for personal illegal possession, or the property becomes the personal property of an individual, then the act is convicted and punished as the crime of accepting a bribe by an individual. This provides additional protection for companies against employees who accept bribes ostensibly on behalf of the company, but who retain the benefits for themselves. 

Company liability for individual corruption 

In certain circumstances, liability for the crime of an individual can fall on the company as well. The 2026 Interpretation clarifies that if a bribe is offered to a state functionary for the purpose of seeking improper benefits, the company itself can be prosecuted and punished if any of the following circumstances apply: 

1. The decision to offer the bribe is made collectively by the company, and the illegal gains accrue to the company.
2. The decision is made by the actual controller or a person in charge of the company, and the illegal gains accrue to the company. 

The above means that if an act of bribery is carried out by a member of staff who has significant control over the company, such as an ultimate beneficial owner or other person in charge, then liability for the crime can fall on the company. However, the individual’s position within the company is not enough to establish company liability; a court must show that the decision to pay the bribe was made on the company’s behalf, and that the unlawful gains accrue to the company and not to the individual.

Note that for a court to establish that a decision was made collectively, it does not need to prove that it was made through a formal process such as a shareholders’ meeting, as although such meetings are a common way in which a company’s will is formed, it is not the only one.

Where personal and company property are highly commingled, and any improper benefit obtained by an entity through bribery accrues to the individual, the act will be treated as individual bribery. 

How companies can limit their exposure 

Because a company can be held liable for bribery by staff, its actual controller, or anyone acting in its name, its contracts, approvals, and records face closer scrutiny, as they are the main evidence of whose decision a payment was and who benefited. Companies should keep clear and contemporaneous records of who authorised significant payments, gifts, commissions, and intermediary engagements, as well as the rationale behind them. Discounts and commissions that the AUCL permits must be recorded accurately by both sides, and the same approval and expense controls that apply to general employees should also apply to actual controllers and senior management. 

Companies should also keep personal and company finances separate as much as possible, as commingled finances can lead to a bribe being treated as an individual’s offence and make it harder to show who ultimately benefitted from the crime. To prevent an employee’s act of bribery from being attributed to the company, companies should be able to show anti-bribery policies, training, and expense controls, and require that payments from counterparties go into company accounts. Contracts with agents, consultants, and distributors should also prohibit improper payments to guard against violations. 

How Dezan Shira & Associates can help 

As China’s anti-corruption regulations develop, companies in China should test their anti-bribery controls before a regulator does. Dezan Shira & Associates‘ Compliance and Risk Management teams help clients identify where they are exposed and put practical safeguards in place. This includes compliance audits and health checks, reviews of contracts and counterparties for red flags, and role-based anti-bribery training for management, sales, and finance teams. Where concerns have already arisen, we can also carry out internal investigations into suspected misconduct. Contact us to speak to our experts.