Adding China-Specific Restrictions to the FCPA? The Implications of Sen. Rubio’s Proposal

A recently re-introduced bill by Senator Marco Rubio (R-FL) would seek to expand the reach of the Foreign Corrupt Practices Act (“FCPA”) over corporations operating in China.1 The Countering Corporate Corruption in China Act of 2023 aims to use the FCPA—a law generally prohibiting the use of bribes and other corrupt activities to obtain or retain business in foreign countries—as a tool to limit or prohibit corporations and individuals subject to the FCPA from publicly supporting the Chinese government.2 If the bill were enacted, it would greatly increase the cost of compliance of operating in China by requiring corporations to track and monitor the political speech of their employees.

Senator Rubio’s bill would define “an action that is taken corruptly” under the FCPA to include “an action that serves to,” among other things, (1) “deny, obfuscate, or excuse that a third party has committed” “censorship, or another activity, by the Chinese Communist Party, the Government of the People’s Republic of China, or instrumentalities of the Government of the People’s Republic of China with respect to Hong Kong,” (2) “express political advocacy in favor of the Chinese Communist Party, the system of governance of that Party, or any official of that Party,” or (3) “support, legitimize, or recognize the territorial claims of the Government of the People’s Republic of China in Taiwan, Tibet, Korea, the South China Sea, the East China Sea, or another location in which such a claim is contested.” The bill would make it unlawful to take such actions in response to a request from a foreign official or party, injury or threat of injury by economic coercion, or “a material action or announcement, including with respect to policy, by the Chinese Communist Party, the Government of the People’s Republic of China, or instrumentalities of the Government of the People’s Republic of China from which the action would rationally follow.” In addition, the bill would prohibit certain types of investments in China.

The bill also amends the available affirmative defenses specific to the above actions concerning China. First, it makes some of the existing affirmative defenses—those that excuse actions that are lawful under the foreign country’s regulations or where the expenditure was reasonable and bona fide—unavailable.3 Second, it provides that while a company may have an affirmative defense that its conduct “had a reasonable business purpose,” that does not include a purpose relating to—“(A) advertising, marketing, or public relations; or (B) entering into or obtaining any agreement, license, permit, or other arrangement with respect to market access to a jurisdiction of a government.” 

If enacted, Senator Rubio’s bill would be the first time that the FCPA sets forth country-specific standards for violations. Currently, while the compliance risks vary by country, the FCPA applies equally to activities in any foreign country. In providing a uniform standard for compliance, the FCPA allows for some measure of administrative efficiency and predictability for corporations developing and implementing compliance policies.

The China-specific proposed legislation would undermine the benefits of worldwide uniform standards that the FCPA currently provides, and would greatly increase the burden on corporations operating or seeking to operate in China. For instance, the legislation would likely require a corporation to monitor and track the political speech of its employees—not a task within the purview or competence of most corporate compliance departments. Indeed, while corporate compliance departments are adept at reporting and tracking payments, monitoring third-party risks, and performing due diligence, they are not designed to make judgments about political speech. But under the proposed bill, corporations would need to make such determinations—and risk FCPA liability if a court later determines they were wrong. 

Those judgments about political speech would not be straightforward. For example, a corporation would have to decide what kind of speech expresses “political advocacy in favor of the Chinese Communist Party” or “the system of governance of that Party.” Likewise, a corporation would need to make judgments as to what speech “obfuscates” or “excuses” certain types of Chinese government censorship with respect to Hong Kong, and who qualifies as a “third party” committing such censorship. The vague language would further complicate the job of corporate compliance employees—would a tweet approving of communism without reference to China subject the company to potential FCPA violations? What about a press release expressing approval of the company’s investment in China? Would it be unlawful for a company to deny or “obfuscate” that a social media company committed censorship regarding Hong Kong? The proposed legislation offers no clear answers to these questions, leaving corporations with no guidance on what type of speech is or is not permissible. 

Moreover, the proposed legislation captures speech that not only is requested by a foreign official, but also speech that follows a “material” announcement from the Chinese government or instrumentality. Corporations must then understand what announcements have been made by the government or its instrumentalities, whether those announcements are “material,” and whether the corporations’ employees have expressed any “advocacy” following those announcements. And, even if such corporate advocacy has a “reasonable business purpose” it could still be an FCPA violation if it relates to “advertising, marketing, or public relations”—a wide swath of core corporate activity. 

Given the serious penalties associated with the FCPA—and the innumerable operations or partnerships that corporations have in China—the proposed legislation would force corporations to expend significant time and effort trying to develop workable policies regarding political speech. And once one country-specific standard is added to the FCPA, corporations may reasonably expect that the FCPA may be amended in the future to target countries then at odds with current U.S. policy. In short, the legislation has the potential to substantially increase corporations’ China-specific FCPA compliance burdens, undermine the significant benefits of uniform FCPA standards worldwide, and put corporations in the uncomfortable speech-regulation business—all without any expectation that these changes will reduce (or even address) the foreign corruption that the FCPA is designed to prevent.

1 Countering Corporate Corruption in China Act of 2023, available at
2 Senator Rubio explained that the “legislation seeks to modernize the Foreign Corrupt Practices Act (FCPA) by clarifying that the definition of ‘corrupt intent’ includes actions that excuse the genocide in Xinjiang, advance the Chinese Communist Party’s (CCP) propaganda efforts, or ‘invest’ in core CCP activities, among other actions.” Rubio Releases Agenda to Confront China’s Economic Aggression (Jan. 31, 2023), available at
3 See, e.g., 15 U.S.C. § 78dd-1(c).

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.

Ivano Ventresca

Ivano Ventresca
Email | +1 202.778.1842

As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.