This means that private entities that were typically not the target of supervisory commissions may also be involved in supervisory investigations or inquiries. Foreign multinational companies operating in China and their employees are likely to face increased ABA-related compliance, especially when dealing with state entities, state-invested counterparts, or public resources.
The anti-money laundering regime was also strengthened in China, broadening the law’s application scope by expanding predicate offenses and covering non-financial businesses, responsible individuals, as well as overseas money laundering activities.
Looking ahead to 2026, with growing geopolitical tensions with the West and a continued emphasis on national security, be prepared for ongoing operational risk and challenges doing business in China.
Anti‑Unfair Competition law strengthens administrative exposure for commercial bribery
Revisions to the Anti‑Unfair Competition Law, in effect since October 15, 2025, intensify administrative exposure for commercial bribery:
- Commercial bribery now prohibits both offering and accepting bribes. Previously, only criminal liability applied to recipients; now, administrative enforcement applies too. Both companies and individuals who receive improper payments or benefits face administrative penalties such as fines and confiscation of illegal gains, regardless of any related criminal proceedings.
- Administrative liability is extended to an organization’s legal representative (法定代表人), principal persons in charge, and individuals directly responsible for the relevant misconduct, in addition to the corporate entity itself. This development underscores personal accountability and increases the potential exposure for senior personnel and those directly involved in wrongdoing.
- The maximum fine for commercial bribery has been raised from RMB 3 million to RMB 5 million.
Amendment of Supervision Law and its implementing regulations
The amended PRC Supervision Law and its implementing regulation, effective from June 1, 2025, enhanced the practicality and precision of the supervision system, with an emphasis on protecting individual rights. The supervisory mechanism has long applied to public officials and state-owned enterprise personnel, and supervisory commissions at various levels are empowered to transfer cases to the procuratorate for criminal prosecution when evidence of criminal conduct is uncovered.
As the supervisory framework has become more firmly established, its engagement with private sector employees and multinational corporations interacting with state entities, state-invested counterparts, or public resources has grown increasingly prevalent. For foreign multinationals, notable areas of focus include procurement involving state-owned enterprises, participation in tenders for public interest projects, involvement in licensing or reimbursement processes within regulated industries, and situations where personnel transition between roles in the public and private sectors.
There have been cases where an employee of a foreign-owned company, whose major client is a state-owned enterprise, has been involved with these supervision procedures. Companies must remain vigilant regarding compliance and risk management when engaging with state-linked entities.
Going forward, China will continue to strengthen international anti-corruption cooperation in accordance with the United Nations Convention Against Corruption and bilateral extradition treaties to combat state officials’ corruption.
The revised Anti-Money Laundering Law took effect
The revised Anti-Money Laundering Law, in force since January 1, 2025, has expanded to encompass proceeds derived from “other crimes” beyond the previous seven categories of predicate offenses (i.e. drug-related crimes, organized crimes in the nature of criminal syndicates, crimes of terrorism, crimes of smuggling, crimes of corruption and bribery, crimes of disrupting the financial management order, crimes of financial fraud and other crimes) and explicitly incorporates terrorist financing, increasing the array of predicate offenses that can ground money‑laundering prosecutions under Criminal Law Article 191 and administrative measures.
Anti-money laundering rules now apply to financial institutions as well as designated non-financial businesses like real estate developers, law and accounting firms, and dealers in precious metals and gems. The revised law also imposes personal liability on directors, supervisors, senior managers, and responsible staff when inadequate internal controls enable money laundering or obstruct investigations.
The law applies to overseas money laundering activities that jeopardize China’s sovereignty, adversely affect Chinese citizens, or disrupt China’s financial stability. Such conduct may be subject to investigation by Chinese authorities and, if requisite criteria are satisfied, criminal prosecution.
A notable trend in money laundering activities is the increasing use of crypto assets to disguise the origins of illicit funds. On November 28, 2025, 13 Chinese central government departments convened a meeting to crack down on virtual currency trading and speculation, emphasizing the risks of using virtual currencies, especially stablecoins, for illegal activities such as money laundering. The increasing difficulties in fund tracing posed by crypto, together with the expanding scope of the revised Anti-Money Laundering Law, will bring new anti-money laundering challenges for businesses.
National security impacts internal investigations
Data remains one of the key considerations for multinationals conducting internal investigations in China, especially in light of the development of national security-related laws and enforcement.
With the growing U.S.-China tensions and China’s emphasis on national security, enforcement practices in China are expanding to “espionage adjacent” risks. Enforcement now covers not only conventional defense secrets but also economic intelligence and detailed supply-chain information that intersects with public and national security concerns.
This might pose a challenge for internal investigations given that ordinary corporate fact‑finding may be considered risky if it touches sensitive people, data, industries, places, or methods. Counsel should assume that investigative work touching on supply chains, procurement, technical specifications, mapping/locational datasets, and employee information may implicate national security concerns where counterparties are state‑linked or operate in strategic sectors.
Capital markets and healthcare targeted enforcement
Capital market and securities service
Issuers and securities service agencies have been frequently targeted by Chinese regulators in 2025 and may continue to be a focus in 2026. This follows the Supreme People’s Court and the China Securities Regulatory Commission jointly issuing the Guiding Opinions on ‘Supporting High-Quality Capital Market Development with Strict and Impartial Law Enforcement and Judicial Services’, aimed at reinforcing the legal and regulatory foundations of the country’s capital market.
The Guiding Opinions signal an intensified accountability regime for both securities issuers and their “gatekeepers” (i.e. securities service agencies such as underwriters, auditing institutions, credit rating agencies, law firms).
Healthcare and Pharmaceuticals
The Supreme People’s Procuratorate reports that from January to September 2025, four key sectors – finance, energy, pharmaceuticals, and infrastructure construction – frequently faced prosecution for corruption-related crimes. In particular, anti-bribery and corruption in the pharmaceutical sector have long been an enforcement priority for Chinese regulators. In January 2025, China’s State Administration for Market Regulation released the Compliance Guidelines for Pharmaceutical Companies to Prevent Commercial Bribery Risks, being the first official industry-specific compliance guidance in China. In particular, the compliance guidance highlights nine high-risk scenarios, including: academic visits and communications; business hospitality, consulting services, outsourced services, discounts/rebates/commissions, etc., and offered detailed guidance on how to mitigate these risks.
Predictions for 2026 and beyond
Risks related to sanctions and countermeasures may become an increasing concern for multinational companies operating in China as well as Chinese companies operating overseas, particularly in the fintech, TMT, defense and aerospace sectors. The State Council promulgated the Provisions on Implementation of the Anti-foreign Sanctions Law in March 2025 which refines the operational rules and enhances the enforceability of the legal framework to counter undue foreign sanctions.
The number of Chinese enterprises investing or operating overseas has significantly increased in recent years, and the compliance risk of these companies and their senior officers has become an area of concern for the Chinese authorities. To address this, the revised Anti-Money Laundering Law includes an extraterritorial clause; and the new Implementing Regulation of the Supervision Law provides channels for supervisory commissions to track suspect assets transferred overseas.
In June 2025, the Ministry of Commerce issued Guidelines for Overseas Integrity and Compliance Work of Enterprises, urging Chinese companies with outbound activity to follow local and international anti corruption rules, enhance corporate compliance systems, and integrate integrity requirements into project lifecycles. The policy emphasis is clear: Chinese companies with outbound activity are expected to maintain strong anti-bribery and internal controls suited to host-country risks and standards.
Directory quotes
“As an experienced negotiator, Melody is often called upon to assist in cross-border criminal litigation and with sensitive investigations in China, assisting clients before Chinese ministries and agencies. Melody is also a recognized industry leader in the areas of data compliance and PRC state secrecy. In addition to her advocacy work, she has been appointed as an expert witness for numerous foreign proceedings (e.g. U.S., Hong Kong, Singapore) involving Chinese law issues.” — Chambers Greater China Region Guide 2025
This article is part of the A&O Shearman Cross-border white-collar crime and investigations review 2026.
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