A post on the FCPA Blog on 5th September starts by saying that numerous stories have appeared in the English-language press about China’s social credit system (SCS). Most of these stories focus on SCS’s system of “scoring” individuals in China.  But SCS also applies to companies operating in China and, as it develops, may impact how companies approach anti-corruption compliance.  It directs one to a report from the EU Chamber of Commerce in China for a description of SCS and its implications for companies.  The post explains that SCS establishes a system by which the Chinese government collects information and rates companies across a wide range of areas and can then reward or sanction companies based on that information and rating, and it functions as an information-sharing system among government agencies.  Roll out of SCS began in 2014, and it seems to be on track to be materially complete by late 2019 or 2020.  The comprehensive detailing of the use and possible use of SCS ends by saying that SCS will significantly impact business operations in China, and companies will need to be more attentive to compliance, including anti-corruption compliance, to mitigate both legal and business risks.  Finally, it says that (if we ignore any more potentially sinister uses or misuse of SCS) SCS can be viewed as another thumb on the scale to nudge companies to take a more proactive approach to anti-corruption compliance.

The EU Chamber of Commerce report is at –

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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