On 11 August 2014, a Shanghai Court sentenced two Corporate Investigators to two and a half years imprisonment. Peter Humphrey and his wife, Yu Yingzeng, were held guilty of stealing and selling personal information for profit once they confessed having obtained private information on Chinese citizens by illegal means. Together with his wife, Peter Humphrey has established “ChinaWhys”, an investigation consultancy through which the couple assisted in assessing corporate risks, primarily relating to corruption and fraud. Recently, the company has conduced work on behalf of numerous internationl companies that have become subject of allegations of bribery in China. The reported outcome of their delicate case emphasizes the risks associated with gathering and transmitting personal information of Chinese citizens: investigations that are conducted in compliance with anti-corruption legislation (e.g. U.S. Foreign Corrupt Practices Act) will become more challenging in the future. Companies operating in China will have to act more cautiously, when trying to verify the accuracy of business or private financial information by means of external counsel. In the light of Humphrey’s case, investigation consultancies may be more reluctant to offer their well-needed services. In a nutshell, the court’s decision signals once more the increasing desire of Chinese authorities to regulate access to business and private information. A summary of court proceedings is available on the Wallstreet Journal’s website via the following link: http://online.wsj.com/articles/china-trial-of-british-american-investigators-begins-1407469079 More specific information, back-ground reports and interviews on the issue are available at the international news center of CNN : http://edition.cnn.com/2014/08/11/world/asia/china-investigators-sentenced/
Nicolai Behr is a compliance and dispute resolution attorney in Baker & McKenzie’s Munich office. He is a member of the steering committee of GlobalComplianceNews, a compliance news website with global reach moderated by Baker & McKenzie. He is a member of the committee "International" of the German Institute for Compliance. Dr. Behr is a regular speaker on compliance and white collar topics.