Foreign companies with operations in China have been put on notice that they are now under scrutiny. From antitrust to anti-bribery, the Chinese government has undertaken a number of investigations recently that have made headlines around the world. In the anti-bribery context, the alleged behavior of employees of some multinationals being investigated is likely to have significant Foreign Corrupt Practices Act (FCPA) implications for those companies in the U.S.
Foreign companies have always been held to a higher standard of ethical behavior than Chinese companies. The government’s enforcement actions are not always consistent, but when it decides that a message needs to be sent to curtail certain behavior, the axe falls on foreign companies first. The government does not even need to come knocking at a company’s door; many times investigations are set in motion by a disgruntled employee.