China is preparing to introduce sweeping new anti-corruption legislation that could significantly increase compliance obligations for multinational businesses. The proposed Anti-Cross-Border Corruption Law would extend China’s regulatory reach beyond its borders, require businesses to establish formal anti-corruption compliance programmes and potentially restrict their cooperation with foreign investigations.
The legislation, which was submitted for its first reading in August 2026, remains in draft form. However, it signals a significant expansion of China’s approach to corporate compliance, particularly for foreign companies operating in China and Chinese businesses with international operations.
It also follows China’s recent crackdown on supply chain due diligence, raising concerns that multinationals could increasingly find themselves caught between competing legal obligations in China and Western jurisdictions.
Mandatory anti-bribery compliance for international businesses
One of the most significant elements of the proposed law is the introduction of mandatory anti-corruption compliance requirements for businesses engaged in cross-border operations. Under Chapter 4 of the draft, Chinese businesses operating internationally and foreign companies with branches or subsidiaries in China would be required to maintain appropriate corporate integrity and compliance systems.
These requirements would include corruption risk assessments, internal reporting and whistleblowing procedures, financial controls, employee training and ongoing due diligence on third parties. The obligations would be proportionate to factors including the size and operations of the business. However, the draft does not establish a general exemption for smaller companies.
Crucially, the proposal would allow Chinese authorities to take direct enforcement action against businesses for failing to maintain appropriate compliance systems, even without establishing that a particular act of bribery occurred. Under Article 45, businesses could be ordered to correct compliance deficiencies. Failure to comply with such an order could result in suspension of operations or revocation of relevant business licences.
This would represent an important development for international companies accustomed to managing corruption risks under legislation such as the UK Bribery Act and the US Foreign Corrupt Practices Act. A multinational might already have an established global anti-bribery programme. Nevertheless, it would need to demonstrate that its policies, training, risk assessments and internal controls satisfy the specific requirements of Chinese law.
Anti-bribery training would become a legal requirement
The proposed law would also introduce explicit employee training obligations for businesses engaged in cross-border operations. Companies would be required to provide compliance training to relevant cross-border business departments and employees of overseas branches and subsidiaries, ensuring they understand and follow the organisation’s anti-corruption policies and controls.
For multinational businesses, this could mean reviewing existing training programmes to ensure they adequately address Chinese legal requirements, rather than relying exclusively on global anti-bribery courses designed around UK or US legislation.
Training should be tailored to employees’ responsibilities, particularly those involved in procurement, third-party relationships, financial transactions and dealings with public officials. Businesses should also maintain records of training completion and refresh training as risks and legal requirements change.
If enacted, these requirements would make employee training an explicit component of corporate compliance under Chinese law, with potential regulatory consequences for businesses that fail to meet their obligations.
A new legal risk for international investigations
Perhaps the most challenging provision for multinational businesses concerns restrictions on cooperation with foreign anti-corruption investigations.
Article 26 of the draft would prohibit overseas organisations and individuals from conducting anti-corruption investigations or other law enforcement activities in China without the consent of the relevant Chinese authorities. It would also restrict China-based entities and individuals from providing evidence or investigative assistance to overseas parties in this context.
Consider a US multinational investigating allegations that employees of its Chinese subsidiary bribed public officials. The company may be required to cooperate with US enforcement authorities, preserve evidence and provide relevant financial records.
If those records, communications or employees are located in China, however, transferring evidence or facilitating interviews for a foreign enforcement investigation could engage restrictions under Chinese law.
The precise scope of Article 26 remains uncertain. Routine internal corporate investigations may fall outside its intended application, particularly where they are conducted independently of foreign enforcement proceedings. Nevertheless, companies could face difficult decisions when internal investigations develop into regulatory proceedings or when overseas authorities request evidence held in China.
The proposed legislation also provides for countermeasures against certain foreign anti-corruption enforcement actions that China considers an improper exercise of extraterritorial jurisdiction. For multinationals, this introduces additional regulatory uncertainty into an already complex area of compliance.
China’s wider crackdown on corporate due diligence
The proposed anti-corruption law should also be considered alongside China’s expanding framework of laws governing foreign businesses and their compliance activities. China’s new crackdown on supply chain due diligence, the Regulations on Industrial and Supply Chain Security, which came into force on 31 March 2026, give Chinese authorities extensive powers to scrutinise supply chain activities.
These regulations restrict certain information-gathering activities and provide mechanisms for responding to foreign commercial decisions considered harmful to Chinese supply chain security. This can create difficulties for companies subject to Western legislation requiring supply chain transparency, sanctions screening and human rights due diligence.
On one hand, Chinese law would require businesses to strengthen due diligence, investigate corruption risks and maintain effective internal reporting mechanisms. On the other, Chinese law could restrict the methods used to collect information or share evidence with overseas regulators. The requirements are not necessarily incompatible. Much depends on the circumstances, the information involved and how the legislation is ultimately interpreted and enforced.
However, compliance departments can no longer assume that procedures designed to satisfy UK, US or EU requirements can be applied unchanged to their Chinese operations. A routine decision to investigate a supplier, transfer evidence to headquarters or cooperate with an overseas regulator may now require a separate assessment of Chinese legal obligations.
Why businesses must prioritise compliance with Chinese law
For organisations operating in China, compliance with local legislation needs to be a central consideration in their global risk management strategy. Companies should not assume that adherence to international anti-bribery standards or Western regulatory expectations will automatically satisfy Chinese requirements.
Equally, Chinese legal restrictions do not remove obligations imposed by other jurisdictions. Where requirements potentially conflict, businesses will need carefully structured processes to determine how they can comply lawfully with each applicable regime.
There are several practical priorities.
First, review existing anti-corruption programmes against the proposed Chinese requirements. Businesses should assess whether their risk assessments, third-party due diligence, whistleblowing systems and training programmes are appropriate for their Chinese operations. Documentation demonstrating that these measures are implemented effectively will be particularly important.
Second, establish clear procedures for cross-border investigations and information sharing. Multinationals should ensure that legal teams review requests for evidence, employee interviews and transfers of investigation materials involving China. Existing Chinese data protection, security and evidence-sharing requirements must also be considered.
Third, strengthen ongoing oversight of third parties. The draft legislation places particular emphasis on due diligence and continuing supervision of agents, intermediaries and other business partners. Screening suppliers when a relationship begins may be insufficient without subsequent monitoring and appropriate controls.
Finally, ensure that compliance training addresses Chinese legal requirements. Employees responsible for procurement, finance, international transactions and investigations need to understand the risks relevant to their roles. Global training programmes should be supported by China-specific guidance where necessary.
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China is preparing to introduce sweeping new anti-corruption legislation that could significantly increase compliance obligations for multinational businesses. The proposed Anti-Cross-Border Corruption Law would extend China’s regulatory reach beyond its borders, require businesses to establish formal anti-corruption compliance programmes and potentially restrict their cooperation with foreign investigations.
The legislation, which was submitted for its first reading in August 2026, remains in draft form. However, it signals a significant expansion of China’s approach to corporate compliance, particularly for foreign companies operating in China and Chinese businesses with international operations.
It also follows China’s recent crackdown on supply chain due diligence, raising concerns that multinationals could increasingly find themselves caught between competing legal obligations in China and Western jurisdictions.
Mandatory anti-bribery compliance for international businesses
One of the most significant elements of the proposed law is the introduction of mandatory anti-corruption compliance requirements for businesses engaged in cross-border operations. Under Chapter 4 of the draft, Chinese businesses operating internationally and foreign companies with branches or subsidiaries in China would be required to maintain appropriate corporate integrity and compliance systems.
These requirements would include corruption risk assessments, internal reporting and whistleblowing procedures, financial controls, employee training and ongoing due diligence on third parties. The obligations would be proportionate to factors including the size and operations of the business. However, the draft does not establish a general exemption for smaller companies.
Crucially, the proposal would allow Chinese authorities to take direct enforcement action against businesses for failing to maintain appropriate compliance systems, even without establishing that a particular act of bribery occurred. Under Article 45, businesses could be ordered to correct compliance deficiencies. Failure to comply with such an order could result in suspension of operations or revocation of relevant business licences.
This would represent an important development for international companies accustomed to managing corruption risks under legislation such as the UK Bribery Act and the US Foreign Corrupt Practices Act. A multinational might already have an established global anti-bribery programme. Nevertheless, it would need to demonstrate that its policies, training, risk assessments and internal controls satisfy the specific requirements of Chinese law.
Anti-bribery training would become a legal requirement
The proposed law would also introduce explicit employee training obligations for businesses engaged in cross-border operations. Companies would be required to provide compliance training to relevant cross-border business departments and employees of overseas branches and subsidiaries, ensuring they understand and follow the organisation’s anti-corruption policies and controls.
For multinational businesses, this could mean reviewing existing training programmes to ensure they adequately address Chinese legal requirements, rather than relying exclusively on global anti-bribery courses designed around UK or US legislation.
Training should be tailored to employees’ responsibilities, particularly those involved in procurement, third-party relationships, financial transactions and dealings with public officials. Businesses should also maintain records of training completion and refresh training as risks and legal requirements change.
If enacted, these requirements would make employee training an explicit component of corporate compliance under Chinese law, with potential regulatory consequences for businesses that fail to meet their obligations.
A new legal risk for international investigations
Perhaps the most challenging provision for multinational businesses concerns restrictions on cooperation with foreign anti-corruption investigations.
Article 26 of the draft would prohibit overseas organisations and individuals from conducting anti-corruption investigations or other law enforcement activities in China without the consent of the relevant Chinese authorities. It would also restrict China-based entities and individuals from providing evidence or investigative assistance to overseas parties in this context.
Consider a US multinational investigating allegations that employees of its Chinese subsidiary bribed public officials. The company may be required to cooperate with US enforcement authorities, preserve evidence and provide relevant financial records.
If those records, communications or employees are located in China, however, transferring evidence or facilitating interviews for a foreign enforcement investigation could engage restrictions under Chinese law.
The precise scope of Article 26 remains uncertain. Routine internal corporate investigations may fall outside its intended application, particularly where they are conducted independently of foreign enforcement proceedings. Nevertheless, companies could face difficult decisions when internal investigations develop into regulatory proceedings or when overseas authorities request evidence held in China.
The proposed legislation also provides for countermeasures against certain foreign anti-corruption enforcement actions that China considers an improper exercise of extraterritorial jurisdiction. For multinationals, this introduces additional regulatory uncertainty into an already complex area of compliance.
China’s wider crackdown on corporate due diligence
The proposed anti-corruption law should also be considered alongside China’s expanding framework of laws governing foreign businesses and their compliance activities. China’s new crackdown on supply chain due diligence, the Regulations on Industrial and Supply Chain Security, which came into force on 31 March 2026, give Chinese authorities extensive powers to scrutinise supply chain activities.
These regulations restrict certain information-gathering activities and provide mechanisms for responding to foreign commercial decisions considered harmful to Chinese supply chain security. This can create difficulties for companies subject to Western legislation requiring supply chain transparency, sanctions screening and human rights due diligence.
On one hand, Chinese law would require businesses to strengthen due diligence, investigate corruption risks and maintain effective internal reporting mechanisms. On the other, Chinese law could restrict the methods used to collect information or share evidence with overseas regulators. The requirements are not necessarily incompatible. Much depends on the circumstances, the information involved and how the legislation is ultimately interpreted and enforced.
However, compliance departments can no longer assume that procedures designed to satisfy UK, US or EU requirements can be applied unchanged to their Chinese operations. A routine decision to investigate a supplier, transfer evidence to headquarters or cooperate with an overseas regulator may now require a separate assessment of Chinese legal obligations.
Why businesses must prioritise compliance with Chinese law
For organisations operating in China, compliance with local legislation needs to be a central consideration in their global risk management strategy. Companies should not assume that adherence to international anti-bribery standards or Western regulatory expectations will automatically satisfy Chinese requirements.
Equally, Chinese legal restrictions do not remove obligations imposed by other jurisdictions. Where requirements potentially conflict, businesses will need carefully structured processes to determine how they can comply lawfully with each applicable regime.
There are several practical priorities.
First, review existing anti-corruption programmes against the proposed Chinese requirements. Businesses should assess whether their risk assessments, third-party due diligence, whistleblowing systems and training programmes are appropriate for their Chinese operations. Documentation demonstrating that these measures are implemented effectively will be particularly important.
Second, establish clear procedures for cross-border investigations and information sharing. Multinationals should ensure that legal teams review requests for evidence, employee interviews and transfers of investigation materials involving China. Existing Chinese data protection, security and evidence-sharing requirements must also be considered.
Third, strengthen ongoing oversight of third parties. The draft legislation places particular emphasis on due diligence and continuing supervision of agents, intermediaries and other business partners. Screening suppliers when a relationship begins may be insufficient without subsequent monitoring and appropriate controls.
Finally, ensure that compliance training addresses Chinese legal requirements. Employees responsible for procurement, finance, international transactions and investigations need to understand the risks relevant to their roles. Global training programmes should be supported by China-specific guidance where necessary.
