New Anti-Bribery Judicial Interpretation (II) Effective May 1, 2026

On April 28, 2026, the Supreme People’s Court and the Supreme People’s Procuratorate issued the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Embezzlement and Bribery (II), effective May 1, 2026. The interpretation explicitly brings behaviors such as ‘kickbacks in overseas projects’, ‘commission payments to designated agents in equipment procurement’, and ‘illegitimate benefits disguised as technical service fees’ under criminal liability. It directly affects Chinese equipment exporters operating in high-risk markets—including the Middle East, Africa, and Latin America—prompting heightened scrutiny of third-party compliance audits and FCPA-aligned contractual safeguards.

Event Overview

On April 28, 2026, the Supreme People’s Court and the Supreme People’s Procuratorate jointly released the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Embezzlement and Bribery (II). The document specifies that conduct including ‘kickbacks related to overseas projects’, ‘benefits received by designated agents in equipment procurement’, and ‘illegitimate transfers of value concealed as technical service fees’ now falls within the scope of criminal prosecution. It enters into force on May 1, 2026.

Industries Affected by This Interpretation

Equipment Exporters

These enterprises are directly exposed due to their involvement in cross-border infrastructure and industrial projects. The interpretation targets specific transaction patterns common in overseas bidding and delivery—especially where intermediaries or local agents are engaged. Impact manifests in increased legal exposure for commercial arrangements previously treated as customary market practice, particularly in jurisdictions with weak regulatory enforcement but high bribery risk.

Procurement & Supply Chain Service Providers

Firms facilitating equipment sourcing, customs clearance, or logistics coordination for export projects face expanded accountability. Under the new interpretation, acting as a conduit—even without direct intent—may trigger liability if benefits flow through affiliated or de facto controlled entities. Due diligence on agent selection, fee structures, and service deliverables becomes legally material, not merely operational.

Engineering Contractors with Overseas EPC Contracts

Contractors managing turnkey projects abroad often delegate procurement, commissioning, or after-sales support to third parties. The interpretation treats ‘technical service fees’ paid to such parties—especially when disconnected from verifiable deliverables—as potential vehicles for illicit benefit transfer. This raises the bar for documentation, performance verification, and audit readiness across the entire project lifecycle.

What Enterprises and Practitioners Should Focus On Now

Monitor official implementation guidance and enforcement precedents

The interpretation introduces new categories of prosecutable conduct but does not yet specify evidentiary thresholds or jurisdictional boundaries for overseas-related acts. Enterprises should track subsequent notices from the SPC, SPP, or Ministry of Commerce on enforcement priorities, especially regarding extraterritorial application and inter-agency coordination.

Review contracts and payment flows in high-risk markets

Particular attention is warranted for active or pending projects in the Middle East, Africa, and Latin America—especially those involving local agents, bundled service fees, or non-transparent procurement channels. Audit trails for all payments labeled as ‘technical services’, ‘consultancy’, or ‘market access support’ must be strengthened ahead of May 1, 2026.

Distinguish between policy signals and enforceable obligations

This interpretation codifies judicial standards—not new legislation—but reflects an explicit shift in prosecutorial posture. Its practical effect depends on how courts and procuratorates apply it in real cases. Until first-instance rulings emerge, enterprises should treat it as a binding framework for internal compliance, not just a warning signal.

Prepare for enhanced third-party due diligence and contract revision

FCPA-compatible clauses—including representations on anti-bribery compliance, audit rights, and termination triggers for misconduct—are now functionally required for new agreements. Existing contracts with agents or subcontractors in high-risk regions should be reviewed for alignment, and supporting documentation (e.g., scope-of-work records, time logs, deliverable sign-offs) should be systematized.

Editorial Observation / Industry Perspective

Observably, this interpretation marks a deliberate expansion of domestic anti-corruption enforcement into transnational commercial conduct—particularly where Chinese enterprises interface with foreign public officials or state-owned entities. Analysis shows it functions less as an immediate enforcement tool and more as a structural signal: it redefines acceptable boundaries for commercial intermediation in global markets, shifting legal risk upstream from execution to design and contracting stages. From an industry perspective, its significance lies not in novelty of concept, but in the formalization of judicial expectations around transparency, traceability, and functional justification of payments. Continued monitoring is essential—not only for legal updates, but for early indicators of how procuratorates prioritize investigations across geographies and sectors.

This interpretation underscores a tightening convergence between China’s domestic anti-graft regime and internationally recognized anti-bribery standards. Its practical impact will depend less on statutory language alone and more on consistent application, interagency coordination, and enterprise-level adaptation. For now, it is best understood not as a sudden regulatory shock, but as a calibrated recalibration of accountability—centered on commercial integrity in cross-border equipment and engineering transactions.

Source: Supreme People’s Court and Supreme People’s Procuratorate, Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Embezzlement and Bribery (II), issued April 28, 2026, effective May 1, 2026.
Further developments—including enforcement guidance or case law—remain subject to ongoing observation.