Foreign Executives in China. Worry Me Yes or Worry Me No?

With the media recently paying so much attention to foreigners businesspeople getting in trouble in China, the phones of our firm’s China lawyers have been ringing off the hook from worried Americans based in China. We are getting the following kinds of questions and we are giving the following kinds of short answers (needless to say, our long answers are much more nuanced):

1.  Should I leave China? Not unless you or your company have violated Chinese law in such a way that you are at risk for going to jail.

2. But isn’t China arresting innocent foreigners?  Not as far as we can tell. We obviously do not have all of the facts or even close to the facts we need to answer this question with any sort of certainty, but it appears that China is going after foreigners it honestly believes have violated Chinese law. We see so many foreign companies operating in violation of Chinese law that we almost have to believe that no matter what the reason is for China’s increased crackdown against foreigners, there is no need for China to start arresting people for no legal basis at all.

3. What about my D&O insurance, that will cover me won’t it? Not exactly. It will may prevent you from having to pay for your own defense but it sure as heck isn’t going to keep you out of a Chinese jail.

4. But if they come after me, I’ll have time to just leave on an airplane right? Very doubtful.

5. Is this crackdown really any worse than it’s always been. We are not sure. It feels like it is but that is always hard to gauge.

6. What should I do to avoid going to a Chinese jail. Don’t violate the law. More importantly, make sure nobody else in your company is violating the law.

7. Am I crazy to be worried? Absolutely not. You’d be crazy not to be worried. Your worry will lead to you and your company taking necessary steps for protection, so it’s a good thing. Just don’t worry too much and don’t let it paralyze you. Again, it just does not seem that China is acting randomly here.

8. But what about Chinese companies, aren’t they all doing what these foreigners are getting arrested for? Yes, but so what? How will that help you?

7. Should I leave China right now?  See #1 above.

I am going to conclude this post with a really really long list of the posts we have done over the years relating to criminal liability for foreigners. I am providing this long list to show that this issue goes all the way back to the inception of this blog in 2006, to show the panoply of criminal issues that can impact a foreign business in China, and mostly just to show that China has not and probably is not going after people without any legal basis for doing so.

• China Corruption Crackdown Continues Apace. Next Stop Edelman?
• China: Bad Meat, Cultural Differences And Anti-Corruption Compliance
• Foreign Company Corruption In China. If You Have To Ask…
• China’s Corruption Clean-Up. Get On Board Or Go To Jail.
• China And The FCPA. Just When You Thought It Could Not Get Any Worse.
• Going To Jail For China Bribery. Now That We Have Your Ear…. (on a Wall Street Journal article written by our compliance attorney, Chris Priddy)
• China Law Enforcement Efficiencies Rising
• Rule One For Doing Business In China. No Bribery. Rule Two, Make Sure Of It.
• The Double Standard “Tax” On Foreign Companies Doing Business In China. What To Do?
• Dude, Didn’t Your Mamma Tell You Not To Engage in China Bribery Through Intermediaries?
• Doing Business In China Without An Anti-Corruption Compliance Program? Are You Crazy?
• Doing Business In China Illegally. Calling A Table A Chair Does Not A Chair Make.
• How To Handle A Chinese Government Raid. Very Carefully.
• China Customs Problem? Keep Your Mouth Shut!
• Bribery In China. Is It Worth It?
• Doing Business In China. Do Not Pass Go. Do Not Go Directly To Jail.
• Judicial Reform In China And Its Impact On Foreign Investment. Part Two, The Criminal Side.
• China’s Detention Of Foreigner For Alleged Customs Violation Should Be A Strong Warning
• The Sentencing Of Matthew Ng. A Very Long “No Comment.”
• China Business. China Jails. China Hostages.
• Bribery In China And How To Get Caught. Have Employees.
• China Corruption. Et Tu? Do You Even Know?
• Giving Gifts In China. Giver Beware.
• China State Secrets. Buyer Beware.
• Defining State Secrets In China, Part II.
• Is China Cracking Down On Foreigners? Again.
• Google, Rio Tinto And The State Of Business In China.
• A Google-China Cheat Sheet. Rio Tinto. Rio Tinto. Rio Tinto.
• China, Haiti, Patty Murray, And Why Following The Law Makes Sense. Always.
• China Food And Drug Outsourcing Gets Criminal. Fast.
• Understanding China FCPA Risks. Who Is A Foreign Official?
• The Foreign Corrupt Practices Act. Can You Say China Relevant?
• Sanlu’s Lessons For Foreign Managers In China….Because Jail Is Probably Not Where You Want To Be.
• Avoiding Chinese Jails. The Thai Bar Edition.
• Avoiding Chinese Jails. I’m Talkin’ To You.
• Sanlu’s Lessons For Foreign Managers In China….Because Jail Is Probably Not Where You Want To Be.
• China Joint Ventures And Really Bad Milk. What Can You Do?
• Beijing Olympics — You Want Jail Time With That?
• Bad China Products. Hey, It’s A Criminal Thing, Part II
• Bad China Products. Hey, It’s A Criminal Thing.
• Chinese Nationalism: Want Jail Time With That?
• Are Some US Firms Violating US Law In China?
• Bribery In China. Violate The Law, Go To Jail
• Criminal Law And Business In China — A Strong Caution
• Amazing Lawyers And The Criminal Side of China Business