Aug. 1 –
Chinese government officials and state-owned enterprise (SOE) leaders charged
with corruption may not find the United States a safe haven for them to flee to
anymore, despite the lack of an extradition treaty between the two countries. A
senior U.S. official recently said the United States will be working together
with China to repatriate Chinese fugitives wanted for graft, according to a
Reuters report.
During his
five-day Beijing visit last week with a focus on anti-corruption and commercial
rule of law issues, U.S. Department of Commerce General Counsel Cameron Kerry
complimented the current cooperation between Chinese and U.S. prosecutors on
repatriating graft officials or their illegally-obtained assets. He also said
prosecutors from both countries are looking to have more cooperation on various
cases in the future, including investigations into bribes paid to Chinese
officials by U.S. companies under the U.S. Foreign Corrupt Practices Act.
Although
there is no extradition treaty between China and the United States so far, some
other domestic legal mechanisms can be used to pursue and repatriate fugitives,
according to Kerry. For example, many of the fugitives have been deported under
immigration laws, since they usually fail to obtain a legal residency in the
United States.
A report
completed in 2008 (in Chinese) but only recently disclosed to the public by the
Anti-money Laundering Monitoring & Analysis Center of the People’s Bank of
China (PBC) said there have been around 16,000 to 18,000 government officials
and SOE managers who have fled overseas to escape corruption accusations since
the mid-1990s. The Reuters report also cited the Chinese police statistics in
2010, saying there were around 600 Chinese suspects at large overseas who are
wanted for economic crimes. Western countries, including the United States,
Canada, Australia and the Netherlands, have become major destinations for
officials who have embezzled large amounts of money, the PBC report pointed
out.
Beijing’s
lack of extradition treaties and its harsh penalties against corruption have
increased the complexity when the Chinese government looks for the West’s help
to repatriate the fugitives. According to China’s Criminal Law, individuals who have embezzled more than RMB100,000 could
receive a 10-year to life sentence, or even the death penalty.
However, if
we look at several major fugitive deportation cases in the past, China seems to
have been able to stick to its commitment to the international community that
extradited criminals will not face capital punishment. Canada’s recent
repatriation of Lai Changxing – who was accused to have smuggled US$6.4 billion
worth of goods into China between 1996 and 1999 and evaded a total tax payment
of US$3.96 billion – was agreed upon based on China’s promise that Lai will not
be given the death penalty.
Yu
Zhendong, a former Bank of China manager responsible for the embezzlement of
US$482 million of bank funds together with other two managers, was deported by
the United States in 2006 and received a 12-year jail sentence instead of the
death penalty.
One of the
major motivations that drive China to call its corrupt ex-officials back from
foreign countries is its concern over a massive amount of capital flight. The
PBC report estimated a total of RMB800 billion of illicit capital has flown out
of the country together with those graft fugitives since the mid-1990s,
emphasizing that it is still difficult to calculate the exact scale of asset
loss China has suffered due to the escape of corrupt individuals. Noticing the
fact that a significant amount of the illegal money is often spent overseas,
the report warns of the risk that China’s stolen social fortune will be
injected into economic development cycle of other countries, and that capital
flight to a serious level will finally harm the country’s financial stability.
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