An Indian case is making headlines in the US again — and Chinese companies expanding abroad should pay attention.

Here's the pattern: a transaction happens entirely outside the US. The parties are foreign. The bribes (if any) are paid to foreign officials. And yet the DOJ or SEC indicts. Why?

Because US extraterritorial reach was never about geography. It's about connection points.

What triggers US jurisdiction over a foreign case?

In my cross-border practice advising Chinese exporters and outbound investors, I see four recurring hooks:

  1. USD clearing through New York — almost every cross-border deal touches CHIPS or correspondent banks. That alone can ground wire fraud charges.
  2. ADRs or US-listed counterparties — if your trading partner has American depositary receipts or a US parent, SEC securities enforcement attaches.
  3. US institutional investors — disclosure obligations follow the money. False statements to US funds open Rule 10b-5 exposure.
  4. US persons in management — green card holders, dual citizens, even directors residing in the US can drag the entire enterprise under FCPA.

Why this matters for Chinese outbound business

Most Chinese clients I advise enter India, Latin America, or Southeast Asia thinking "we're not American, FCPA doesn't apply." That mindset is a decade out of date.

The recent indictment of senior Indian executives in New York shows the pattern clearly: bribes paid to Indian officials, projects located in India, but the financing involved US investors — and that was enough.

Practical takeaways

— Run a US-connection audit on your last 36 months of cross-border deals. Currency, counterparties, investor base, leadership nationality.

— Don't translate compliance manuals from US law firm templates. Bilingual calibration matters — what's enforceable in California isn't always operable under Chinese contract law.

— For high-risk jurisdictions (LatAm, South Asia, parts of Africa), build agent-payment trails that are disclosable and auditable. Opaque commissions are FCPA's favorite hunting ground.

I've helped clients restructure intermediary arrangements for Latin American acquisitions where the diligence alone took weeks — but it was the difference between a clean close and a subpoena two years later.

The cost of one morning of legal review is trivial compared to one DOJ inquiry. If your business has crossed a border in the last three years, this Indian headline is a free wake-up call.

Happy to discuss specific exposure. Reach me via wzklaw.com.

#CrossBorderLaw #FCPA #ChinaOutbound #InternationalLawyer #Compliance

———
Mike Wu, China-licensed Attorney · Cross-border practice
4 languages (CN/EN/ES/JA)
Site: wzklaw.com/contact.php?source=linkedin · Book consultation: wzklaw.com/contact.php?source=linkedin