China’s anti-corruption investigators can demand your staff’s cooperation with an investigation, and impose personal liability to secure compliance. Around 20 executives in China are detained a year on grounds they are witnesses and a flight risk, even though their company is not a formal target. Even if proactively cooperating, businesspersons have significant legal exposure for perceived false or evasive statements, which can trigger parallel liability for the entity and the person. In this article, we will explain the law and how to respond, and provide best practices for protecting your interests while cooperating.

Contents

• Companies’ Obligation to Cooperate or Assist
• Executives as Covered Persons
• Investigative Techniques Used and When Cooperation Is Required
• How to Cooperate with an Investigation
• Consequences of Refusal or Obstruction
• Non-Government Employee Bribery: Police or Commission Jurisdiction?

Companies’ Obligation to Cooperate or Assist

Any public employee exercising official authority is covered under the China Oversight Act, but companies are not governed by it.[1] However, the Act’s Administrative Regulations obligate companies to cooperate with a request for information or evidence for an Oversight Commission investigation.[2] Act § 18 provides that the inspection office is empowered to lawfully obtain information and evidence from any subject organization, and it must respond truthfully and is proscribed from falsifying, concealing, or destroying evidence.[1]

Regulations § 66 requires that investigated organizations be notified they must provide evidence lawfully and truthfully, but failure to cooperate exposes both entities and individuals to legal liability.[2] Companies that receive a letter of inquiry from the Oversight Commission should proactively cooperate and assist with the investigation to limit legal exposure.

Executives as Covered Persons

Private persons such as executives are subject to the China Oversight Act, which provides jurisdiction over persons to investigate and enforce against them in connection with a government employee criminal investigation for bribery, facilitating bribery, or joint occupational crimes. (See Administrative Regulations § 49(d))[2]

In criminal influence peddling cases, the inspection office determines investigation jurisdiction for non-government employees based on the relevant government employee.

Actual controllers and executives are frequently placed in investigative detention; based on public company data, nineteen public company executives have been detained this year. This includes Wang Linpeng, chairman of Easyhome, detained by the Wuhan Jianghan District Inspection Commission, Che Jianxin, founder of Red Star Macalline, detained by the Yunnan Provincial Oversight Commission, and Lu Yong, chairman of Simen Technology, detained by the Jiangsu Qidong City Oversight Commission.[1] Note that the true number could be much higher because private companies have fewer obligations for controlling persons or executives.

Investigative Techniques Used and When Cooperation Is Required

The inspection commission may seize, seal, or impound property, documents, or electronic records relevant to establishing the subject of investigation that committed a crime, and may take action such as interrogation, compelled appearance at their office, detention, and searches.

Pharmaceutical companies served a civil investigative demand may be required to furnish transaction records and documentation relevant to health care provider payments; employers and distributors may say that they were required to appear for questioning.

These are the two most common ways cooperation with an investigation is required, but a company’s actual controller or executives may be taken into investigative detention.

The revised China Oversight Act, effective June 1, 2025, provides longer holding periods for investigative detention, under a set of revised rules for calculating it.

In most cases, an investigation subject may be detained for three months, but a three-month extension can be approved for a complex case or where other statutory exceptional circumstances apply. This adds up to a total of six months under the original and revised Act.

The amended Act adds two bases for a further extension. An additional two-month extension for crimes carrying a sentence over ten years requires National Oversight Commission approval. If investigators find the subject may have committed a felony occupational crime, the accumulated time may be recalculated from zero, but only if it is not the same class of crime, or if it is in the same class and would affect charging or sentencing. This is only available if the Oversight Commission is prosecuting the case at the provincial level, and requires national-level approval, and can only be done once.

How to Cooperate with an Investigation

A company must comply with Chinese authorities’ request to cooperate with or assist the inspection commission in an investigation, and improper responses can create significant exposure for the company and its employee. Therefore, observe the following guidelines during an investigation.

Employees should respond appropriately and candidly when representing the company or themselves. They should not be evasive or speculative, exaggerate, conceal in bad faith, or make a false or misleading statement, due to being under pressure or for another reason, and should make sure representations and statements are truthful. Recognize that the commission will investigate lawfully and respect parties’ legal rights.

Some employees may think they can quickly end an investigation against them if they make false admissions, which happens because they are under significant pressure. This is mistaken and creates exposure for the individual and company, because untrue statements will frustrate the investigation by wasting oversight resources and misleading investigators.

Employees should respond calmly to the ethics inspection agency and make reasonable and lawful requests. When responding to a document production order, you may request that the scope and content requirements be revised. Take precautions when confirming interview records:

• Promptly read and correct errors in the record;
• Don’t sign to acknowledge without reviewing to see it is true;
• If unable to provide documents (whether unable to provide them, or to provide them within the time limit), politely explain and negotiate with investigators for their acknowledgment;
• Do not destroy, hide, or falsify documents;
• Mark any commercially sensitive information with “Confidential, Not for Distribution.”
• Observe non-disclosure requirements when cooperating with an inspection commission investigation.
• Administrative Regulations § 150 provides “subject organizations and individuals cooperating with the inspection office’s request for evidence shall strictly maintain confidentiality.”
• There are specific confidentiality requirements about what can be said to the company and to the public.

In most cases, companies can require that employees disclose that they have been requested to cooperate with an investigation, but they are bound by the agency’s requirements, especially if government secrets or intelligence is involved. Employees may not make social media posts or publicly discuss the investigation without prior authorization.

If you have concerns about the possibility of Chinese government investigator questions, consider asking CBL for help to get help preparing a policy or action plan, or assistance in responding to inquiries.

Consequences of Refusal or Obstruction

The China Oversight Act and its Administrative Regulations impose a duty to cooperate upon the company and its employees. The inspection office, lead agency, or the parent agency may order a covered person to cease and desist from refusal to provide information, refusal to cooperate, or obstruction.[3]

Additionally, all individuals, including employees, must cooperate with a search. Obstruction is prohibited, and obstruction by means of violence or threats creates civil liability, and if serious, criminal liability.[2] Fines, misdemeanor sentences, and sanctions may be imposed for obstructing a law enforcement investigation. (See Police Penalties Act §50 and Criminal Law Act §277)[4][5]

Companies must cooperate with a military ethics commission investigation, and it may request assistance from the local ethics commission. Failure to cooperate with the military investigation can result in termination of a contractor relationship with the military unit.

The in-house legal department can draft a process to cooperate with investigations and provide targeted training for employees and managers to understand what to do. The legal department should cooperate with investigators to determine the scope of document preparation and prepare responses.

Non-Government Employee Bribery: Police or Commission Jurisdiction?

The Administrative Regulations § 29 gives the inspection office jurisdiction over criminal corruption and bribery crimes, including corruption crimes, bribery crimes, and property disclosure offenses.[2] There is an issue of whether the commission or police department should have jurisdiction over bribery of non-government employees.

The China Oversight Act § 15 imposes oversight jurisdiction on public employees in their official capacity, whereas the Criminal Law Act § 93 covers state employees.[1][5] The Oversight Act is broader than the Criminal Law Act.

Based on a reading of the statute, the Oversight Commission has jurisdiction for bribery of non-government employees, and bribes to non-state employees include non-state employees who are also covered persons; but police agencies have jurisdiction over bribery by non-state employees to other non-state employees.

Conclusion

In this article, we learned that Chinese public corruption enforcement officials can impose significant personal liability for failure to cooperate adequately and are empowered to detain executives who are not alleged to have committed a crime.

If you have concerns about the possibility of Chinese government investigator questions, consider asking CBL for help to get help preparing a policy or action plan, or assistance in responding to inquiries.

FOOTNOTES

[1] China Oversight Act, (中华人民共和国监察法), (Supreme Procuratorate, Feb. 5, 2025), (in Mandarin)

[2] China Oversight Act Administrative Regulations, (中华人民共和国监察法实施条例), (National Oversight Commission, Jul. 20, 2021), text available at people.cn, (in Mandarin)

[3] Entrepreneurs Detained: How Private Business Can Survive, (企业家被留置：民企生存法则与破局之道), (SOHU, Aug. 7, 2025), (in Mandarin)

[4] China Police Penalties Act, (中华人民共和国治安管理处罚法), (Supreme Procuratorate, Jun. 27, 2025), (in Mandarin)

[5] China Criminal Law Act, (中华人民共和国刑法), (Supreme Procuratorate, Feb. 6, 2018), (in Mandarin)