Multinational companies operating in the country should adapt
their compliance programs in light of the risk of civil and
criminal penalties.
Fraudulent official receipts—or
"fapiao"(the Chinese word for an official
invoice)—pose serious obstacles to multinational corporations
operating in China and underscore the need for both flexible
compliance procedures tailored to country-specific risks and
significant internal investigative responses to travel and
entertainment irregularities in Chinese operations.
Recent news reports disclosed that major
investigations have been undertaken on allegations that fraudulent
fapiao are being exploited by employees of multinational
corporations to conceal improper payments.1 Our
experience conducting internal investigations and compliance
reviews in China has confirmed that fraudulent fapiao are
widely available in black markets and are used as a means to
fraudulently obtain funds from legitimate company
