China criminal lawyers

Before I explain what to do if arrested in China, I should set out the following “whys” behind this post:

  1. Foreigners get arrested overseas all the time. Not just in China.
  2. Foreigners get arrested all the time in China, for all sorts of things, including for things that would not be crimes in countries like Canada and Denmark.
  3. Foreigners get arrested all the time in China, for all sorts of things, including for things that would not be crimes in countries like Canada and Denmark.

Yesterday, a reporter called me to discuss what Michael Korvig (this is the Canadian who was just recently detained by China) should do. My response was somewhat along the following lines:

  1. It is hard to know without knowing more. When I was asked what Mr. Korvig should do, the only rumors about his detention were that they were in retaliation for Canada’s having Seized Meng Wanzhou, the high level Huawai executive. I said if this is in fact the case, there is probably very little he can do as his freedom will likely need to be negotiated government to government (Canada to China).
  2. I now know a little more. This New York Times article, China Says Detained Canadian Worked for Group Without Legal Registration, states that Mr. Korvig has been detained because the organization for which he works was not properly registered. Not a big surprise. Earlier this week, in How to Avoid Being Detained in China, I listed out the following seven things to do to avoid arrest in China:
    1. If you are doing business in China without a Chinese company (and by China, I most emphatically do not mean a Hong Kong or a Taiwan company), you had better be damn sure you do not need a company, especially since the odds are that you do. Doing Business in China Without a WFOE: Will the Defendant Please Rise.
    2. It means paying whatever taxes you or your company might owe. See China Taxes, Getting Legal, and Some Good News.
    3. It means having your visa and the visas of all of your employees in good order. See China Visa FAQs.
    4. It means not deciding you are operating legally in China based on some crap you’ve read on the Internet that feeds into your desire to believe that you are. See China Law Online: It’s All Wrong.
    5. It means protecting your company from your China employees because the odds are good it will be one of your China employees who leads to your downfall either by reporting you to the authorities or by suing you and thereby exposing something you are doing that you should not be doing. Trust us on this one. Please. See China Employer Audits: The FAQs.
    6. It means that if you are not 99.99% certain you are operating in China completely legally you either immediately do something to change that or you immediately leave the country and you take all of your foreign employees with you. And if for some reason you don’t care about one or more of your foreign employees getting into big trouble in China, note that people who go to jail for something that their company do have a tendency to sue their company.
    7. If you are in a dispute with anyone in China regarding money, you should consider paying it and getting a valid and legally sound  release in Chinese making clear that you paid it. See Maybe Owe Money To China? Don’t Go There. Or you should consider immediately leaving China.

    Note how many of these things may apply to Mr. Korvig, if the New York Times is accurate as to his detention “Wait a second,”  you may be saying. Do you really believe Mr. Korvig was detained for some alleged corporate violation of his company and not because he is Canadian and, more importantly, an ex-diplomat. I believe it is probably a combination of these things. China could no doubt have legally justified the detention of at least hundreds of Canadians but it chose this particular person, probably because he is a former diplomat and his detention sends a clear message to Canada. I called the reporter back this morning with this new assessment.

3. Contact your Nearest Embassy or Consulate. There is little doubt that the Canadian government is all over Mr. Korvig’s detention already, but what should you do if you are arrested or detained in China and you are not a former diplomat and your country is not in the midst of a knock-down drag out fight with China? Your first step should usually be to contact your nearest embassy or consulate, but recognize that it will be limited in the assistance it can provide. Foreigners arrested in China are subject to Chinese laws, not the laws of their own country. This should be obvious, but not everyone knows this.

Your embassy or consulate should be able to help you with the following:

  1. Providing you with a list of local attorneys who speak your native language
  2. Contact your family, friends or employer
  3. Visit you in jail and provide you with reading materials and maybe food.
  4. Monitor your situation in jail and help ensure that you are being treated appropriately.
  5. Provide you with an overview of the local criminal justice process

2. Hire a LOCAL Criminal Attorney. You will need a local attorney. This means if you are arrested in Qingdao you need a Qingdao criminal lawyer and not a Shanghai one. China has many terrific criminal lawyers and they usually require relatively low upfront flat fees to take on a new matter for a new client. This means it is usually relatively easy to find a good and cheap Chinese criminal lawyer, but few speak English.

It is absolutely critical that you get a good local criminal lawyer as quickly as possible. Far too often when our China lawyers get contacted regarding a criminal law situation in China, the detainee or the detainee’s friends or family believe that because the arrest was a “mistake” no lawyer is needed. Some claim they do not need a lawyer because they or someone they know has sufficient guanxi to handle the arrest lawyer-free. Even if these people are right (and they pretty much never are), it still behooves them to get a good local criminal lawyer immediately.

No ifs ands or buts: if you are arrested in China, you need a local criminal lawyer and fast. 

How do you find such a lawyer? That depends. By way of an example, one of our China lawyers was recently asked to find a criminal lawyer in a small Chinese city. This lawyer immediately emailed all of the China lawyers in our firm and we all emailed our China lawyer contacts in various cities to ask for the names of recommended Chinese criminal lawyers in this small Chinese city. The client ended up hiring a lawyer who was mentioned multiple times by the Chinese lawyers we know.

4. Contact Family and Friends but Keep Them Quiet. Sometimes. Sometimes you want your family and friends on the outside to scream up and down about your arrest. Sometimes that is the worst strategy possible. It is generally a good idea not to publicize your case unless your local criminal lawyer instructs you to do so. China is not going to release you because your hometown newspaper is saying you are being held unfairly. Instead, your publicizing the unfairness of your arrest might just cause the local prosecutor or court to double down. But see here for a case where the strategy was to generate bad publicity for the arresting country.

5. Hire an Attorney in Your Home Country (Sometimes). Our China attorneys get contacted by arrested Westerners maybe ten times a year. If the matter is something like a shoplifting arrest, we usually do little more than provide the family or the arrested with a few tips and find them a good local criminal lawyer and sometimes a good local translator. This is the case for nine out of ten. But in some cases — when the Westerner arrested is from the United States or Spain or Germany where we have our own attorneys — we do considerably more.

By way of one example, our firm a few years ago represented an American charged by China with massive financial fraud. We stayed involved in this case from its beginning through sentencing (note that more than 99 percent of those charged with a crime in China end up being convicted). For this client we did the following:

  • Found him a top-tier criminal lawyer. This lawyer did not speak Chinese and so we often served as the intermediary.
  • We often served as an intermediary with the US Consulate.
  • We would communicate with the detainee’s family in the United States
  • We gathered up key mitigating documents from the United States and other countries outside China.
  • Perhaps most importantly, we explained China’s legal system to the detainee and his family and, in particular, the huge benefits of admitting to the crime and setting up a procedure to reimburse those who harmed by the crime and a rehabilitation plan. We also explained China’s sentencing and early release laws and the importance/benefit of reimbursing the victims so as to get a sentence term that allowed for early release.

We did this in Japan a few years ago in a very high profile case and you can go here (CNN), here (The Guardian), here (ABC News), here (Los Angeles Times)  to read more about that case. In that case, our goal was to publicize the trial as much as we could, so as to convince Japan that releasing the detainee would make life better/easier for Japan than holding him. We also used the press to send various messages to the Japanese authorities to make them feel better about releasing the detainee. It worked. The detainee was found guilty but immediately deported instead of being imprisoned.

But these two cases on which are firmed worked were long ago and the rare sort of case. In the typical case, you do not need a foreign lawyer and you will want to stay quiet.

The one thing you must bear in mind when doing business in China is that China criminalizes many things related to doing business that are not typically criminalized in the West. We actually wrote about this in 2006 in a post entitled, Criminal Law And Business In China — A Strong Caution:

In the U.S. and in Europe, it is quite uncommon for a dispute between two business people to become subject to criminal law enforcement. This is not true in China. In doing business in China, you need to be aware of two things: the scope of economic crime there is far broader than you probably expect and the Chinese party with whom you are conducting business is far more likely to pursue a criminal complaint than you would expect.

China has developed elaborate laws concerning “economic crimes” that parallels its civil law system. The area of economic crime is quite extensive. My Chinese textbook on economic crime is over 1500 pages long and it describes 105 separate crimes, divided into eight categories. Dealing with economic crimes has become an increasingly large portion of the workload of the average Chinese court. Many of these crimes are garden variety crimes, such as smuggling or passing bad checks, that would be considered a crime in any jurisdiction. However, a whole host of crimes applies to areas most Western business people would think would be dealt with by private litigation. For example, one general area of crime is “Disturbing the Market Order.” Another is called “Damaging the Management Order of a Company or Enterprise.” Crimes in these categories can be very broadly described and can often be applied in areas that are surprising to a Western business person. For example, criminal fraud is very hard to prove in the United States. This is not true in China.

Here are some examples of the ways Western business people can find themselves in China’s criminal system:

  1. There is a sale of product. The Chinese party complains that the product is defective. The foreign seller insists the product meets standards and it is the buyer’s own processing that caused the problem. This normal business dispute may be transformed into the crime of sale of defective products.
  2. A Chinese company pays a substantial deposit to a foreign service provider to develop a sophisticated market access program for the United States. There is a dispute over the quality of the service provided by the foreign provider. The foreign provider does not collect the remainder of its fee, but refuses to refund the deposit. This normal business dispute may be transformed into the crime of contract fraud.
  3. A Chinese company insists on a guarantee of payment from a foreign seller through deposit of promissory notes issued by a foreign party. When the Chinese party attempts to collect on the notes it cannot do so due to banking regulation or some other technical matter. The foreign seller does not make alternative arrangements for payment. This normal business dispute may be transformed into the crime of financial fraud.

The offended Chinese business person is also much more likely to pursue a criminal complaint than his or her Western counterpart. This is particularly true outside China’s major cities, where the private court system is less developed. There are a number of reasons for this. First, there is the longstanding tradition in China that law is basically a criminal matter. Many Chinese judges are more comfortable handing out criminal sanctions than deciding the merits of private commercial activity.  Second, many Chinese businesspeople are more comfortable beseeching the police, the prosecutors, and/or the courts for justice than pursuing justice on their own. Third, there is an economic incentive. If the state pursues the claim, the offended person or company saves on the expense of hiring a lawyer. Fourth, as part of the criminal action, the state will seek to force the defendant to pay redress to the offended party. In China, the state is more likely than a private party to be able to obtain assets from a defendant.

If you are involved in a business dispute in China, you should immediately consider the risk it will be transformed into a criminal matter. If the other side in your business dispute threatens criminal sanctions against you, you should take this seriously. You need to make sure you are completely prepared to deal with the issues. Moreover, you need to be completely sure that what you consider to be an entirely innocent commercial dispute is not in fact a potential crime under the wide application of economic crime applied in China. And if it is, you need to prepare for that

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.