Held Hostage in China: How to Make Like Carlos Ghosn and Escape

I’ve been somewhat surprised at how many emails our international lawyers have gotten regarding Carlos Ghosn’s Hollywood-like escape from Japan.

Some — including journalists — have asked our views on what happened in Japan. We are getting these questions because we spent many years representing Sea Shepard in and against Japan, including helping out in the criminal trial of Peter Bethune in Tokyo. See Anti-whaling activist has ‘no regrets’ as his trial begins in Tokyo. I have the following three things to say about Japan based on that trial:

1. The Japanese government is uber-powerful. I have zero doubt that I was followed the entire time I was in Japan and that my phone was tapped and that my hotel room was bugged, among other things.
2. The prosecutors win something like 99 percent of the time.
3. Every Japanese lawyer I know told me exactly what the verdict in Bethune’s case would be as though they knew it before it was issued. The verdict was 100% what they predicted, convincing me that the whole thing was rigged from start to finish.

Based on the above, I do not blame Mr. Ghosn one bit for fleeing Japan.

We also have gotten a ton of questions about whether something like this could happen in China. Well, of course it could. It could happen in China because its government is uber-powerful, uber-corrupt and uber political and its important criminal trials involving foreigners are rigged and pre-ordained.

What about the escape part? If someone has actually been arrested and jailed in China, it is extremely unlikely they could mount an escape such as Ghosn’s. If Ghosn had been arrested in China on charges similar to those in Japan, he would almost certainly have been kept in a high security prison without possibility of parole.

But what if you are held in China, but not jailed? In China Product Defects, Lawsuits, Hostage Taking and Exit Ban: Please, Please, Please Read This! we wrote about how foreigners who allegedly owe money to Chinese companies are often held as debt hostages by the Chinese company to which the money is allegedly owed:

Hostage taking. The Chinese side will arrange a meeting to take place at the factory or in a hotel that cooperates with the factory. The factory staff will obtain the passport of the foreign buyer. After the passport is obtained (stolen or taken by force), the factory holds the buyer captive either in a factory dormitory or in the cooperating hotel. The Chinese call this a “soft kidnapping” because no physical threats are made. The factory simply states: we won’t let you leave until after you pay the bill. If the police are contacted, the police will usually say: “It’s none of our business. You should pay the bill.” If the local authorities are contacted, they will usually say “It’s none of our business. You should pay the bill.” Resolving the matter without making payment is nearly impossible.

We also wrote how when a foreign company allegedly owes money to a Chinese company — especially if there is a court decision ordering the foreign company to pay — the Chinese government will block key employees from the foreign company from leaving China:

Exit ban. Because of the potential for social unrest, the Chinese authorities usually will work to assist the Chinese factory in getting paid. One way they do this is through an exit ban. The foreign buyer is permitted to enter China, but when the buyer seeks to exit China, permission will be refused. The foreign buyer is told: “You will not be permitted to leave until after you have resolved your payment dispute with the factory.” Exit bans are only approved at the national level and a factory that makes a false claim will be penalized. This is why hostage taking is more common.

So what if you find yourself held hostage in China, with the tacit consent of the local authorities? Can you get out? The answer is yes. First off, in most instances, if you or your company pay all that your company allegedly owes, the odds are very good that the Chinese company holding you hostage will give you back your passport and release you and you should have no trouble getting out of the country.

We have been involved in or heard about many such cases. In those cases our own China lawyers have handled, we have sought clear written guarantees from the Chinese side that if our client does pay, the release will happen. Though such a written contract is not a true guarantee of the release, we believe it greatly increases the odds and so far this has always been the case. I do not recall a single instance (though it is possible there was one) where our client got a hostage release without paying every single dollar allegedly owed, even in those cases where our client was almost certainly being held up for more than actually owed.

What if you want to get yourself or one of your employees out of China without paying the full amount? Can that be done, Goshn-style? Yes, and our firm has been involved in a number of these as well. For obvious reasons we cannot go into full detail on what we did to get our client hostages out of China, but I can tell you the following:

1. Getting a hostage without a passport out of China is not easy and not cheap.

2. The first thing you must do is get the hostage out of the grasp of those holding him or her hostage.

3. Once released, there are essentially two ways to get the by now former hostage out of the country. One is to get them across a border (typically by land via Laos or Vietnam) without a passport or exit visa and then getting a new passport in Vietnam or Laos. Two is to get the former hostage to a Chinese city where you can get a new passport from your embassy or consulate and then flying out of China. Our China lawyers (with a lot of help from friends and others in China) did this once with a debt hostage and by pre-preparing the Embassy (I am not even going to mention the country, but I will say that they were amazingly helpful) we were able to get our client a new passport within 12 hours and have her on an airplane going from Beijing to her home country within another five hours. Let’s just say that most Western companies do not hold China’s legal system or police force in high regard and they will almost certainly be on your side in getting someone out of China who is being illegally held there.

China is a dangerous place for foreigners, and as we have been writing for at least a decade,  foreigners being taken hostage in China is way more common than generally believed. See How Not To Get Kidnapped In China. Resolve Your Debt Problems Before You Go. The real key is not to get out of China once you are held hostage, but preventing the seizure in the first place. The best way is not to go to China at all if there is anyone there who might claim your company owes it some money.

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.