n the end, 13 years on the run overseas proved too much for Yang Xiuzhu. The former construction bureau chief, who had once topped China’s most-wanted list for economic crimes, finally turned herself in to the authorities on November 16, 2016.
Yang’s arrival at Beijing International Airport was broadcast live on China Central Television. Yang, now 70 years old, stepped off an American Airlines plane without handcuffs and was assisted by two policewomen, flashing an easy smile as she walked towards a waiting van.
Yang, 70, a former deputy director of the construction bureau of eastern China’s Zhejiang Province, fled China in April 2003 after being investigated for corruption. On her “Red Notice,” an international alert issued by the police-cooperation agency Interpol, her crime is listed as embezzlement, and Chinese authorities have said she generated some $39 million in illegal income from the construction industry when she held her post.
During the previous decade, Yang had been in hiding in different countries and regions, including China’s Hong Kong Special Administrative Region, Singapore, France, the Netherlands, Italy and finally the US. She applied for asylum in both France and the Netherlands, but was rejected before fleeing to the United States to seek asylum in May 2014.
The Central Commission for Discipline Inspection (CCDI), China’s disciplinary watchdog for Party officials, hailed Yang’s return as “an important achievement in anti-graft law enforcement cooperation between China and the United States.” The US is a major destination for corrupt Chinese officials and economic fugitives.
A joint taskforce has been tackling these issues, namely the “Global Hunt for Corruption Fugitives Office” (GHCFO) formed of several top government organizations including the CCDI, People’s Supreme Court, Supreme People’s Procuratorate, Foreign Ministry, Ministry of Public Security, Ministry of State Security, Ministry of Justice, and People’s Bank of China. The CCDI plays the leading role in coordinating the teamwork.
In 2013, the New Zealand government arrested millionaire businessman William Yan (aka Yang Liu, Yan Yongming and Bill Liu) in his Auckland apartment on money laundering charges. Yan had earlier been found not guilty of immigration charges at a 2012 trial in the country. Yan was put on Interpol’s list by Chinese authorities for an alleged $129 million pharmaceutical fraud before he escaped to Australia and then New Zealand as early as 2001. He was granted New Zealand citizenship by then immigration minister Shane Jones in 2008, despite his multiple identities and Interpol warning.
In 2013, the Chinese government was informed by its New Zealand counterpart of Yan’s arrest. The issue then propelled the formation of GHCFO.
After Chinese President Xi Jinping emphasized anti-corruption measures following the 18th National Congress of the Communist Party of China in late 2012, there was an urgent call for the setting up of a special agency to tackle fugitives who had fled abroad with the profits of corruption. Xi personally emphasized the importance of the global hunt for runaway officials in his speeches. “We should not allow foreign countries to be havens for those criminal officials, and however far they run, we’ll chase them back, even if it takes five, ten or even twenty years. We must cut off corrupt officials, at the root” said Xi in early 2014.
Soon afterwards, Wang Qishan, secretary of CCDI, used the same language of “real efforts addressing the root cause” during the anti-corruption campaign on several occasions. Li Yongzhong, an anti-corruption expert, explained to NewsChina that this showed China’s anti-corruption initiatives were moving forward from treating symptoms to treating fundamental causes. According to a member of staff from CCDI who spoke on condition of anonymity, tackling both the symptoms and the root means both catching fugitives and blocking them from escaping abroad. The source said that this requires coordination between different government groups, moderated by a single department or mechanism.
Thus in June 2014, GHCFO was set up. At the local level, each province, city, or even county sets up its own GHCFO branch. According to the People’s Daily, by April 2015, all the 31 provinces and regions had set up their GHCFO as required by the central government.
According to the central government’s GHCFO, the responsibilities of the office include policy advocacy, planning and coordinating the repatriation of fugitives and retrieving their illegally-acquired assets, analyzing and compiling fugitives’ information, setting up an international cooperation network and other measures.
The coordination role of GHCFO is multidimensional. Firstly, GHCFO can directly report to the central political committee, which may result in the involvement of China’s top leaders such as Xi, or action in promoting bilateral cooperation with other nations on the issue.
GHCFO can coordinate joint works among its affiliated members in solving a single case or on setting up relative policies. It can also coordinate with local offices to tackle cases from their provinces, and with foreign law enforcement agencies.
GGCFO told NewsChina that eight different government departments on both central and local levels are involved in the group. The People’s Supreme Court is responsible for drafting legal documents and explanation, and evaluating sentences for the repatriated fugitives as well as confiscating illegal assets. The Supreme People’s Procuratorate is responsible for investigating, collecting evidence, and conducting overseas assets retrieval or litigation through cooperation with foreign counterparts. The Foreign Ministry is responsible for negotiating with other countries through diplomatic channels on setting up joint conventions. The Ministry of Public Security is responsible for detecting fugitives at customs or through their online presence and cooperating with other countries through organizations like Interpol to gain information and take action. The Ministry of State Security is responsible for collecting information and investigating the whereabouts of the fugitive, and the People’s Bank of China is responsible for monitoring of and investigation into money laundering.
Liu Jianchao, head of the central government’s GHCFO told NewsChina that the eight different departments should fully display their individual strengths in the coordination and cooperation process.
On February 1, Fu Yaobo, a fugitive official from China’s northeastern Liaoning Province was arrested by local police on an island in the eastern Caribbean. It had been over 16 months since he started his flight from China and transferred through a couple of different countries. He couldn’t get in touch with his family for fear of being detected. “Every day, I was suffering from fear, illness, and the feeling of missing home, and once in a while I even thought of going back home for prison,” Fu confessed later to the authorities when back in China. “Thus when police caught me, I immediately expressed my willingness to be repatriated.” During his stay abroad, the only way he could express his feelings toward his wife was to stay silently online in the same game channel that she normally visited every day. It was through this exposure that domestic investigators could finally locate his IP address and track him down.
According to GHCFO, commonly adopted methods for returning fugitives include extradition, repatriation and persuasion. By September 2016, China had set up extradition treaties with 47 countries, most of them developing countries in Asia. Among developed countries, only a few, including France, Spain, Italy and Australia, have signed such treaties. Many popular countries for fugitives, including the US, Canada, and New Zealand, have refused to sign treaties that would make transfers more routine, expressing concerns about China’s use of the death penalty and alleged political persecution.
The GHCFO source told our reporter that at the moment China resorted to persuasion as its preferred method, followed by repatriation. Persuasion refers to persuading fugitives through various means to have them voluntarily return to China to accept trial, judgment and sentencing. A cooperative attitude can mean an easier time for their family and themselves. If they agree to surrender themselves to police, they will receive a lesser or mitigated punishment. Unwilling returnees face much harsher punishments.
Liu Jianchao admitted that repatriation of corruption fugitives remains a critical challenge for China despite the creation of mechanisms like the GHCFO and a more favorable global environment. One major challenge, according to Liu, are the differences between China and other countries due to China’s “unique” legal system.
To be more specific, China is required to provide a complete chain of evidence to the overseas countries. However, some fugitives have been on the run for too long, which might cut the chain of evidence. Thus to collect overseas evidence of fugitives’ criminal actions, the Chinese investigators have to resort to proving charges such as illegal immigration or money laundering. However, when the fugitives are legal immigrants, one road is blocked; the investigation of money laundering is even harder since fugitives often transfer their assets through illegal private banks. Both national level and provincial level databases for the information on fugitives have been set up across China, and information is required to be kept up-to-date.
Apart from efforts in chasing and repatriating fugitives, preventing the escape of corrupted officials has become even more important. GHCFO indicated to NewsChina that the prevention system focuses on strict regulations on passports and restrictions on Chinese officials’ freedom in going abroad.
The efforts have paid off. In 2014 alone China successfully brought home some 600 fugitive officials. By 2016, official statistics recorded that China had recovered 35 of the top 100 economic fugitives on the red list.
After the police raid on Yan Yongming’s house in Auckland, New Zealand in August, 2014, Yan’s personal assets of 43 million New Zealand dollars (US$30.97 million) were frozen. On November 12, 2016, Yan was repatriated. His assets were later split between New Zealand and China. Apart from real estate assets, the New Zealand authorities finally re- turned a total of 3.4 million New Zealand dollars (US$3.13 million) to China.
Another case was the embezzlement of over US$480 million by three bank officials in Guangdong Province from 1992 to 2001. The three officials fled to the US and Canada and were finally captured in the US. In December 2001, the US arrested Yu Zhendong, one of the fugitive officials, based on evidence provided by China. A total of US$3.55 million was returned to China by the US on September 23, 2003. “The retrieval of illegal assets is intended to prohibit fugitives from enjoying the gains of corruption, and at the same time, to minimize the losses to our country,” said Liu Jianchao to our reporter.
At present, China is closely following the money flow through the anti-money laundering monitoring center established by the People’s Bank of China. Furthermore, in late 2015, China committed to the Organization for Economic Co-operation and Development’s (OECD) global standard for automatic exchange of tax information and will start to automatically exchange information with other countries’ tax authorities by September 2018. China has signed declarations with over 40 countries so far on the automatic exchange of tax information, including Switzerland and New Zealand.
In September 2016, during Chinese Premier Le Keqiang’s visit to Canada, the two countries signed an agreement focusing on the “returning” and “sharing” of money generated through criminal activity. The new deal with Canada is regarded as an extension of the foxhunt launched in 2013.
Under the deal, if the courts in either country determine the legal ownership of the money transferred overseas, the assets, once recovered, have to be immediately returned to their legitimate owners. However, if the courts cannot make a decision about who owns the money, the two sides will then enter into negotiations to determine how much either side will be entitled to.
The deal signed between China and Canada this winter was the first specific agreement China has signed with another country on recovering income generated through funds stolen from China that are transferred overseas. According to a report by China Radio International, China now has 79 bilateral legal assistance agreements with 60 different countries, as well as extradition treaties with 46 countries. China plans to continue negotiating to increase those numbers.
Last December, Liu Jianchao attended the 17th UN conference on corruption in Panama. He discovered that illegal asset retrieval had gained more and more international acknowledgment as a vital issue for the anti-corruption movement. During last year’s G20 summit meeting held in China, in the G20 Leaders’ Communique, members endorsed the 2017- 2018 G20 Anti-Corruption Action Plan drafted by China, to improve public and private sector transparency and integrity, implementing a stance of “zero tolerance” against corruption, “zero loopholes” in institutions and “zero barriers” in actions.
Liu Jianchao told our reporter that China has established a leading role in global anticorruption campaign. “In recent years, when I attended international conferences and mentioned our country’s initiatives in fighting‘tigers’ and ‘flies’ [powerful leaders and lowly bureaucrats] in the anti-corruption drive,” Liu added: “I no longer needed to explain the common metaphor [created by Chinese President Xi Jinping] to the audience.”