The Supervisors Law of the People’s Republic of China (“Supervisors Law“) was recently promulgated by the Standing Committee of the National People’s Congress on 20 August 2021. Together with other legislation and enforcement activities, the Supervisors Law aims to strengthen President Xi’s anti-corruption campaign and is scheduled to take effect on 1 January 2022.
- Supervisors are anti-corruption officials in China’s supervisory commissions (established by the Supervision Law in 2018 to streamline anti-corruption functions and personnel previously scattered across various judicial, governmental and administrative organs). The commissions investigate misconduct of public officials and impose sanctions on anti-bribery offences, among others.
- The Supervisors Law aims to standardize the appointment, removal, functions and duties of supervisors.
- Supervisors are elected, appointed and dismissed by People’s Congresses of corresponding levels. Their election involves open examinations, review and equal competition, and adopts the basis of competitive selection, which is the general principle for electing public servants in China.
- Compared with judges and procurators, supervisors will have relatively loose requirements in legal technical skills, e.g., they do not need to obtain a major in law or pass the national unified legal professional qualification exam, but they may be subject to stricter moral standards.
- Meanwhile, the supervisory commissions are encouraged and required to establish a proper internal supervision system to build a “loyal, clean and responsible” supervisory team.
The impact of this latest reform on the day-to-day operations of government and state-owned companies is unknown for the time being. That being said, companies doing business in China should remain vigilant and prepare for this change, especially when dealing with government officials and business partners from the public sector.