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Cablegate: China Summit On Anti-Corruption

VZCZCXRO3741
RR RUEHCN RUEHGH
DE RUEHGH #0275/01 2050047
ZNR UUUUU ZZH
R 230047Z JUL 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6986
INFO RUEHBJ/AMEMBASSY BEIJING 1974
RUEHSH/AMCONSUL SHENYANG 1298
RUEHGZ/AMCONSUL GUANGZHOU 1271
RUEHCN/AMCONSUL CHENGDU 1300
RUEHHK/AMCONSUL HONG KONG 1441
RUEHIN/AIT TAIPEI 1109
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7554

UNCLAS SECTION 01 OF 02 SHANGHAI 000275

SENSITIVE
SIPDIS

DEPT FOR EAP/CM, INL-DAVID LUNA

E.O. 12958: N/A
TAGS: PGOV PHUM KJUS CH
SUBJECT: CHINA SUMMIT ON ANTI-CORRUPTION

(U) Sensitive but unclassified. Not for dissemination
outside USG channels; not for Internet distribution.

1. (SBU) Summary: The China Summit on Anti-Corruption, a
private-sector conference aimed at providing U.S. businesses and
multi-national companies with information on anti-corruption
best practices and strategies to comply with the Foreign Corrupt
Practices Act, took place in Shanghai from July 15 to 16. The
conference intended to feature remarks from Chinese government
officials on anti-corruption. However, these officials declined
to attend and most of the exchanges and speeches at the
conference focused on private-sector efforts to fight
corruption. The conference organizer said that officials likely
did not attend because the conference was taking place during a
sensitive time right before the Olympics and because this was
the first time that such a conference was being held in China.
She believes that there will be more Chinese governmental
participation at future conferences. (Comment: While it is
disappointing that Chinese officials did not attend the
conference, it is encouraging that Chinese authorities allowed
the conference to take place during this sensitive time period.
End Comment.) End Summary.

The China Summit on Anti-Corruption
-----------------------------------
2. (U) The American Conference Institute held an
anti-corruption conference called the "China Summit on
Anti-Corruption" in Shanghai on July 15-16. According to
organizers, this is the first time such a conference has been
held in China, and they hope to hold the conference on a yearly
basis in the future. Around 100 American and Chinese lawyers
from U.S.-based and multi-national large law firms and
accounting firms attended the conference. The conference was
also sponsored by large firms such as Price Waterhouse Cooper,
Ernst and Young, and White and Case. The purpose of the
conference was to provide information to foreign companies,
especially American companies, on how to deal with corruption
issues in China and how to comply with the Foreign Corrupt
Practices Act (FCPA). Consulate Rule of Law Coordinator (ROLC)
also attended the conference.

Where Are the Chinese Officials?
--------------------------------
3. (SBU) Noticeably absent from the conference were Chinese
officials. National Bureau of Corruption Prevention Head Ma Wen
and International Association of Anti-Corruption Authorities
Secretary General Ye Feng were listed as Keynote Speakers in the
conference materials but did not show up at the conference.
According to American Conference Institute's Senior Conference
Director Frederique Duranton, her office had been in contact
with Ma for six months but was not able to confirm her
attendance. Other Chinese officials that were supposed to
participate in the conference were also no-shows. Duranton said
that there could be two reasons for the absence of Chinese
officials. First, with the Beijing Olympic Games three weeks
away, many Chinese officials are cutting down on their public
appearances to avoid making any mistakes during this sensitive
time. Second, this is the first time that this conference has
been held in China, and Chinese officials are not yet
comfortable enough with the conference to attend. Duranton
believes that there will be more officials at next year's
conference.

How To Do Business and Avoid Corruption
---------------------------------------
4. (SBU) The conference provided participants with practical
information on how to deal with corruption issues and how to
comply with the FCPA in China. U.S. Department of Justice
Criminal Division Fraud Section Deputy Chief Mark Mendelsohn
explained to participants how the U.S. Foreign Corrupt Practices
Act (FCPA) is applied abroad. Clifford Chance partner Warren
Feldman gave a speech on how to minimize FCPA risks for Chinese
Companies operating in the United States. North Asia Motorola
China Vice President Joseph Yang introduced Motorola's internal
investigation mechanism for investing questionable payments in
China and said that Motorola set up a 24-hour hotline for
reporting misconduct. Other topics included how to carry out
due diligence in China, and explanations of the latest
international monitoring and governance initiatives.
5. (SBU) The only Chinese speaker in this Conference was Wu Wei
who is a law partner at King and Wood, a Beijing-based Chinese
law firm. She also served as a prosecutor at the China Supreme

SHANGHAI 00000275 002 OF 002


People's Procuratorate (SPP) for 10 years. She said that the
SPP set up a computer inquiry system last year that searches all
provincial procuratorate's databases. This system produces a
"black name" list of all companies that have been found guilty
of bribery by Chinese courts. According to Wu, government
officials can request information from this system to prevent
companies from getting government procurement and public
construction contracts.

Generally Satisfied
-------------------
6. (SBU) Despite the absence of Chinese Officials, participants
with whom ROLC talked said they were pleased with the
conference. 3M China Ltd. Legal Affair General Counsel June Xue
felt this Conference was very helpful for the staff of
multinational companies in meeting the challenges of complying
with the FCPA in an environment like China in which corruption
is widespread. Kohler Asia Pacific Limited Audit Manager
Charles Li agreed with Xue and said that Kohler will pay more
attention to internal investigations in relation to
anti-corruption compliance.

Comment
-------
7. (SBU) The lack of Chinese government participants at the
conference is disappointing. While participants were able to
get information on best practices to fight corruption, there was
very little information on Chinese government efforts. That
said, we would caution against taking the lack of Chinese
government attendance as an indication of Beijing's commitment
to these issues. In the lead-up to the Olympics, many Chinese
officials have cut down on their official appearances and there
are few governmental meetings taking place. The fact that the
Chinese government allowed conference organizers to hold the
conference during this sensitive time period can be seen as an
indication that it places some importance on anti-corruption
issues.
JARRETT

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