On September 19, 2014, British pharmaceutical giant GlaxoSmithKline (“GSK”) announced that the Chinese Hunan Province Changsha Intermediate Court found its Chinese subsidiary (“GSK China”) guilty of bribing doctors and governmental officials in China. GSK China as a legal entity was sentenced a record-breaking monetary penalty of RMB 3 billion (approx. US$490 million).

GSK China’s senior management personnel (its general manager and the heads of its legal, operations, business development and HR departments) as individuals were also subject to personal criminal liabilities, varying from two to four years’ imprisonment with probation. It was also reported that several other large international pharmaceutical manufacturers are now on the “blacklist” of the Chinese regulators’ investigation – the pharma industry is viewed as a high incidence zone of commercial bribery in China.

Multi-national companies’ (“MNCs”) businesses in China generally face a two-fold compliance regulation: the Chinese applicable laws, and certain jurisdictions’ extra-territorial anti-bribery legislation, including the U.S. Foreign Corrupt Practices Act (“FCPA”).

This alert aims to provide a general introduction to both Chinese laws and the FCPA’s practice relating to American entities that do business in China. To read the alert, click on the PDF linked below.

Compliance-Risks-in-China.pdf

For more information, please contact one of the lawyers listed below.