Foreign companies doing business in China must navigate a business culture in which bribery is rife, finding ways to remove obstacles to expanding in the world’s second-largest economy without running afoul of local or home-country laws.
Especially in areas such as dealing with local officials in charge of permits, it is still common for bribes, whether cash or illegal gifts, to be expected in return for providing the necessary approvals, industry and legal experts say.
For U.S. companies in particular, that means they need to take pains not to run afoul of the Foreign Corrupt Practices Act (FCPA), which bars U.S. firms and others from paying bribes to officials of foreign governments.
“Any industry that you see that is heavily regulated typically is high-risk,” said Meg Utterback, a partner at the law firm King and Wood Mallesons in Shanghai who frequently deals with corporate investigations.
Utterback named health care, construction…
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