China’s Draft Anti-Cross-Border Corruption Law – How Will It Affect Foreign Companies? 

China’s draft anti-cross-border corruption law extends anti-graft enforcement to cross-border bribery by both Chinese and foreign companies. Foreign companies should prepare for the potential of new compliance obligations, investigation cooperation requirements, and risks arising from evidence-sharing restrictions.

On 26 August 2026, China’s National People’s Congress Standing Committee (NPCSC) released the draft Anti-Cross-Border Corruption Law for public comment until September 26. The draft law seeks to extend China’s anti-graft crackdown to corruption conducted across borders – both domestic companies bribing foreign officials and foreign companies bribing Chinese ones. 

For foreign companies, the central implications are broader jurisdictional exposure, positive compliance duties, mandatory cooperation and reporting expectations, restrictions on assisting foreign investigations in China, and possible countermeasures where the Chinese government considers anti-corruption action by a foreign state against a Chinese company or citizen as illegitimate. Companies should assess both compliance gaps and potential conflicts between Chinese restrictions and foreign disclosure, discovery, or enforcement demands. 

What does the draft law set out to do?

The draft law seeks to address bribery of foreign and domestic officials, organisations, and state bodies by both Chinese and foreign companies.  

Who does the law apply to? 

The draft law applies to both Chinese and foreign individuals and companies. Specifically, it applies to: 

• Chinese citizens or companies domiciled in China – whether Chinese or foreign-owned – who bribe a foreign public official or official of an international institution;
• Foreign citizens or overseas domiciled companies that bribe a foreign official or official of an international institution in China; and 
• Foreign citizens and overseas domiciled companies that bribe a Chinese public official, state organ, state-owned enterprise (SOEs), or public institution. 

What counts as cross-border corruption under the draft law?

In addition to the bribery of Chinese and foreign public officials and institutions in the scenarios outlined above, the draft captures bribery by foreign individuals or overseas-domiciled companies of foreign public officials or officials of international organisations where the conduct occurs in China. In this case, the location of the conduct is the jurisdictional connecting factor.

It also includes cases where a Chinese citizen or domestically domiciled company (including their branches and subsidiaries) engages in embezzlement, bribery, abuse of power, dereliction of duty, rent-seeking, transfer of benefits, favouritism, and waste of state assets outside of China, as well as other corrupt acts of the same nature where all or part of the acts are committed outside China and all or part of the results occur within China. 

The draft law also covers acts by individuals suspected of corruption who flee abroad or transfer corrupt assets across borders. 

Who can report cases of cross-border corruption? 

Any person or organisation can report a case of cross-border corruption. Whistleblowers’ identities will be kept confidential, and those who provide valid information will be rewarded and protected. 

What does the draft law mean for foreign companies? 

If passed in its current form, the draft law would add certain compliance burdens for foreign companies, and in some instances increase political exposure risks. 

Mandatory cooperation with investigations 

Domestic and foreign companies alike are obliged to cooperate with cross-border corruption investigations and provide materials upon request. Foreign companies should therefore establish a China-specific response protocol covering legal review, preservation, privilege, data classification, governmental approvals, and controlled production of records.  

In serious cases, the competent Chinese authorities may directly require an overseas company to cooperate. Group-level investigation procedures should identify who may receive a request from the Chinese authorities, who can authorise a response, and how headquarters, the China entity, and external counsel will coordinate without delay. 

Restrictions on foreign investigations and cross-border evidence provision  

The draft proposes restricting foreign institutions from conducting corruption investigations in China without consent from the relevant Chinese authorities. Individuals and organisations in China would also be restricted from supplying evidence or assistance without authorisation. This should be read alongside other Chinese rules governing data, state secrets, personal information, and cross-border evidence transfers.  

The conflict may be particularly acute where an overseas parent is investigated for an alleged violation of an extraterritorial anti-corruption law, such as the US Foreign Corrupt Practices Act, while relevant employees, emails, chat records, contracts, and financial records are located in China. The multinational may then face a foreign-law requirement to cooperate and, at the same time, Chinese restrictions on foreign investigative activity and the cross-border provision of evidence. If an overseas enterprise, either directly or through its domestic subsidiaries or personnel, provides relevant evidentiary materials without the consent of the competent Chinese authorities, it may be subject to blocking or other countermeasures, or be held legally liable. 

New anti-corruption compliance obligations 

The draft proposes proportionate integrity and compliance obligations on companies engaged in cross-border operations. Relevant entities include branches and subsidiaries established in China by overseas companies, as well as Chinese companies operating internationally. The content and intensity of the programme should remain proportionate to and take into account factors such as company size, business scope, and operating revenue. For a foreign company in China, the core obligations are likely to include demonstrable local implementation – not merely a global policy – across the following areas: 

• Compliance management system: formulate and maintain integrity and compliance policies, procedures, approval controls, and investigation and remediation mechanisms.
• Compliance structure: appoint compliance officers or other responsible personnel, define reporting lines, and provide appropriate management oversight and resources.
• Risk assessment and internal reporting: assess corruption risks periodically, establish confidential reporting channels, protect whistleblowers, preserve evidence, investigate allegations promptly, and remediate substantiated violations.
• Financial and accounting controls: establish robust books, records, accounting procedures, payment controls, and supporting document requirements capable of identifying improper payments and concealed entries.
• Supervision of third parties: conduct risk-based due diligence, obtain compliance commitments and audit rights, monitor performance, and escalate warning signs involving agents, distributors, consultants, joint venture partners, and acquisition targets.
• Integrity education: provide role-based training and periodic communications to directors, employees, and relevant third parties, with enhanced coverage for high-risk functions and markets.

The draft also envisages reporting suspected corruption to supervisory, public security, or other competent authorities. Companies should define the threshold for escalation, preserve relevant records, involve counsel promptly, and coordinate any external reports with employment, privacy, data security, privilege, and non-retaliation requirements. 

Anti-Foreign Sanctions Law application 

The draft law extends China’s powers to impose countermeasures under the Anti-Foreign Sanctions Law (AFSL) to cases where a foreign government sanctions or imposes other restrictive measures against a Chinese citizen or company under the pretext of anti-corruption.

This provision extends the AFSL’s jurisdiction to foreign anti-corruption laws that could be used to prosecute Chinese companies and citizens and is largely political in nature. While there have been limited cases of foreign anti-corruption laws being used against a Chinese citizen or company, it could be invoked in cases such as the 2020 sanctioning of the Chinese state-owned company Union Development Group (UDG) for alleged corrupt activity in Cambodia under the US’s Global Magnitsky Human Rights Accountability Act, a move that China strongly condemned at the time.  

While likely limited in applicability, depending on its interpretation, the provision could risk foreign companies getting caught in the crosshairs of a political spat or competing legislation. In early August, China added six US companies to the “countermeasures list” for their role in assisting US sanctions related to Xinjiang, barring any Chinese organisations or individuals from engaging with them, in retaliation for the US sanctioning 43 companies under the Uyghur Forced Labor Prevention Act (UFLPA). 

How should foreign companies prepare?

While the law is still at the first-reading draft stage, the current materials already clearly outline the potential integrity and compliance duties and legal liabilities for companies. It would therefore be prudent for foreign companies to begin targeted readiness reviews now, while keeping implementation proportionate to their risk profile and monitoring amendments to the draft. 

Companies should also assess potential conflicts between the draft’s blocking provisions and foreign discovery or enforcement requirements. Their response framework should include legal approval before interviews, forensic collection, remote access, or transfer of China-sourced evidence, a process for assessing Chinese consent and data transfer requirements, documented good-faith efforts to reconcile competing regimes, and, where appropriate, early engagement with the relevant regulators. 

How Dezan Shira & Associates can help 

Dezan Shira & Associates’ Compliance and Risk Management team can help review and strengthen internal anti-corruption controls, identify gaps against the draft law’s compliance obligations, and support fraud prevention and investigations across China and broader Asia operations. We also monitor regulatory developments as the law moves through the legislative process, helping clients stay ahead of emerging risks and adapt their compliance frameworks as new requirements take shape. Contact us today for help.