All the Stars are Aligned in the Sky(net): Why Chinese Fugitives are Being Extradited

Skynet. To most American audiences, this word is evokes images of the omniscient, malevolent computer in Arnold Schwarzenneger’s classic, The Terminator. But in 2015, Skynet also means something else. Media outlets and the blogosphere (including this blog) are abuzz over Chinese President Xi Jiping’s “Operation Sky Net”: the Chinese government’s efforts to repatriate a “most wanted” list of over 100 Chinese nationals suspected of criminal corruption. (The name “Sky Net” traces its origins to the Chinese idiom, “The sky may look thin and sparse, but it is vast and won’t let you escape.”) Forty of the 100 are suspected of being in the United States—a prime destination chosen for its high standards of living and, more importantly, lack of extradition treaty with China.

It is hardly news that China is doing all it can to repatriate these fugitives abroad, and it is also old news that the U.S. and China have a rocky history when it comes to extradition. As Rick mentioned in a prior post, the United States is extremely reluctant to negotiate a formal extradition treaty with China, and the reasons are plenty: In the U.S. view, China suffers from weak rule of law, lack of due process, and an ignominious record for human rights violations. In addition to precluding the negotiation of an extradition treaty, these factors also stymie case-by-case extraditions. Indeed, until last month, only two Chinese fugitives in the U.S. had been extradited in the previous two decades. All of the above would seem to suggest that China’s recent efforts would be a presumed uphill battle. But in September 2015 alone, two suspected fugitives, Yang Jinjun and Kuang Wanfang, wanted for their separate parts in vast bribery, money laundering, and public corruption schemes, were successfully repatriated to China. What changed?

One way to explain China’s recent success in securing extraditions from the U.S. is that China’s recent requests for assistance in repatriating alleged fugitives involved in corruption crimes have come at a time when the United States has made anticorruption a point of special focus. In short, the stars (in the Sky Net) aligned.

In particular, these extradition requests have come after a period, over the last 15 years or so, of accelerating U.S. enforcement of the Foreign Corrupt Practices Act (FCPA). The two agencies responsible for enforcing the act—the DOJ and the SEC—have made FCPA enforcement a top priority, something that shows little sign of abating. (As this update aptly shows, the two agencies combined brought only 12 actions against companies in 2005, as compared to the drastic jump to 74 in 2010.) While the average number of enforcement actions has leveled off to approximately 20-30 per year in most years following 2010, the United States is signaling with its recent institutional changes that its focus on the FCPA is only strengthening. For instance, last July the DOJ announced its intentions to hire its first ever FCPA “chief compliance officer,” who will help the DOJ decide whether to prosecute certain companies for FCPA violations, a move that signals to companies that the DOJ is serious about prosecuting suspect companies, rather than just running the current course of resolving FCPA enforcement actions with non-prosecution agreements and deferred prosecution agreements. Coupled with last month’s release of the Yates Memo (covered in more detail in this prior post), which signaled a higher standard for absolving individuals involved in all corporate crimes (including FCPA violations), the message is clear: the United States government’s will not tolerate foreign bribery–and the U.S. cares about fighting corruption in other countries.

Meanwhile, in China, President Xi Jinping launched an anticorruption campain unprecedented in its size and scope shortly after he took office in 2013. What started as domestic campaign against corrupt regional officials quickly escalated to a global scale that set the stage for the extradition negotiations at issue now. Although the timing may be coincidental, it is not hard to imagine that the United States would be especially reluctant to refuse to help China repatriate fugitives who violated anticorruption laws, lest this invite skepticism about the sincerity of the U.S. commitment to fight corruption around the world.

However, that the common ground secured the repatriation of two suspected fugitives does not mean that the mountain of extradition issues between the countries has been leveled. Human rights concerns still exist, and rule of law (or lack thereof) is still contentious. Rather, what it does likely mean is that instead of focusing on the many differences that prevented extraditions in the past, the two countries shifted to identifying and advancing a common purpose: curbing global corruption, regardless of whose law is used.

[A disclaimer: Nothing in the above discussion reflects the views of my previous employer, the Department of Justice’s Office of International Affairs, which is the national clearinghouse for incoming and outgoing extradition requests.]

14 thoughts on “All the Stars are Aligned in the Sky(net): Why Chinese Fugitives are Being Extradited

  1. Great post! This is a very interesting topic and I remember being very concerned reading in the press reporting that the French government declared at in December 2014 that it was ready to help China track down people suspected of corruption-related offences on French soil. An extradition treaty between China and France signed in 2007 but which had never been ratified by French Parliament, came into effect Last July.

    It was reported by the press that, in return, France had asked China for more help in investigating illegal wire transfers in order to help recover money lost by French companies ($370 million) in this manner.

    Without being an expert regarding the Human rights situation in China, I know several organizations are often raising concerns. Pursuant to steps taken by the US and France to assist China in repatriating people suspect of corruption-related offences, I am wary of the fact that fight against corruption might trump Human Rights considerations. I wonder if you came across sources on that issue while writing your post.

    • I wasn’t aware China’s extradition efforts in France, so was very interested to learn that extradition negotiations with the French government seems to have occurred on an essentially quid pro quo basis. Thanks for sharing that fact!

      While I didn’t come across direct sources addressing the balance between anticorruption efforts and upholding human rights principles, there are academic articles that point to China’s willingness to alter its stance on the death penalty in the context of extradition treaties. For example, in China’s extradition treaty with France, there is a “conditional extradition” provision that bars China from imposing the death penalty on repatriated fugitives. Whether or not this is strictly adhered to is another issue (in an extradition case with Canada pursuant to a treaty with a similar death penalty prohibition provision, China executed the returned individual despite assuring Canada that it wouldn’t), but perhaps it’s somewhat promising that 1) China takes international concerns regarding human rights seriously in the extradition context and 2) has shown willingness to adjust its domestic policies to meet these international standards.

  2. Thank you for an interesting post. It is surely worth keeping an eye on future developments in the US-China anti-corruption cooperation. Also, I would expect China to face similar difficulties if it were to request extradition of Chinese fugitives from the EU member states. Not only do most of the EU states not have extradition treaties with China, but they are also prevented by the jurisprudence of the European Court of Human Rights from extraditing suspects who potentially face capital punishment back at home.

  3. Thanks for a fascinating update. Is there any information publicly available about the terms of the two recent repatriations? I wonder what substantive conditions the parties were willing to accept. Did the United States relax their human rights expectations? Did China promise certain procedural safeguards? Did the United States make other assurances? I’m assuming some terms of repatriation must be standard, but curious where each state might have been willing to negotiate.

    • Along these lines, even if there is public information about the terms of these repatriations, I would guess that the quid pro quo nature of such a deal extends beyond corruption-related matters. Is there any discussion of these repatriations being used as a political tool in the broader context of diplomatic relations between the United States and China? Is this potentially worrisome in that the anti-corruption commitments of both the United States and China might be co-opted as mere tools in a broader diplomatic game?

    • You and Daniel both raise very good questions, and all the ones those concerned with extraditions with countries with spotty human rights records (like China) ask. Unfortunately, because the repatriations were executed on an ad hoc (rather than treaty) basis, there are no public records, save a few media speculation, about the terms of the extradition.

      However, some past cases of repatriation through the immigration rather than extradition process may serve as a predictive standard for acceptable terms to the US in the extradition context: in 2004, a Chinese national was returned to China via the US immigration process. Included in the terms of his return was the prohibition of death penalty and torture, and a sentence limit to what he would’ve received under the US sentencing guidelines. Further, as I mentioned above in my reply to Sarah, China’s past actions on the international stage indicate that it is willing to accept more “human rights friendly” terms, so I think there is some grounds to believe that the US did not have to relax its core expectations with regards to human rights.

      • I add to your point about immigration deportation, the fact that China has apparently used similar concessions (such as taking the death penalty off the table) to lure alleged corrupt officials back to China voluntarily. It’s also been reported that taking the death penalty off the table was a condition of France’s collaboration with China on extraditions. At the very least, this seems like a dimension on which the Chinese government is willing to compromise.

        I think an equally interesting issue will be the extent to which the US collaborates with the Chinese on investments in the US that were allegedly financed by ill-gotten means. In particular, it has been suggested that some of the influx of Chinese investment in the United States in 2013 was a response to President Xi Jinping’s increasing anticorruption efforts. Officials who were concerned about the safety of their assets — whether corrupt or not — moved money into the United States and Canada. (As an aside, It would be interesting to see if there is any overlap between the individuals the Chinese government accuses of corruption and the list of people who have sought residency in the United States under investor immigration laws.) I, for one, am dubious the US government will hand over these large assets to the Chinese government — but it’s clearly something the China will be asking for going forward. (http://www.reuters.com/article/2015/09/26/us-usa-china-corruption-idUSKCN0RQ02B20150926)

  4. What a fascinating problem. I do think you’re right that the willingness to extradite might be tied to a federal policy of greater enforcement of anticorruption measures. Are there reasons why increased FCPA enforcement and allowing more voluntary extraditions for corruption-related offenders might be different or even at odds? For instance, I wonder what would happen where an international businessperson was facing investigation under the FCPA and was also the subject of an extradition request. Also, my understanding of the FCPA and recent enforcement efforts tends overall more toward a focus on institutional compliance while extradition targets individuals. At a more abstract level, are the FCPA mandates for transparency at odds with the need for secrecy or at least opacity in deciding whether or not to grant extradition requests? Of course the FCPA involves private actors rather than the government, but conceptually there seems to be some tension between the two.

  5. I echo the others thanking you for introducing them to an unknown issue that seems very much worth discussing. There have been some big, noteworthy engagement efforts by the Obama administration to engage with states despite persistent human rights concerns, at least on specific issues (Iran, Cuba). Part of me wants to put this in the line of that, though I suppose Cuba might be a bit different from this case or Iran; the former could arguably be a reflection of the belief that engagement will ultimately lead to greater democracy and the promotion of human rights, while the latter seems like a pragmatic assessment that engagement in pursuit of specific substantive issues is worthwhile (regardless of specific human rights concerns). I’d be interested to hear the answers to Danielle’s questions, too.

  6. Pingback: All the Stars are Aligned in the Sky(net): Why Chinese Fugitives are Being Extradited | Anti Corruption Digest

  7. As the United States becomes more willing to extradite to China for corruption charges, there will be an interesting line to walk in each case between politics and corruption. What should the United States do if it is simultaneously convinced that a Chinese national in the U.S. is both 1. guilty of corruption and 2. only being prosecuted because of political reasons? This is somewhat distinct from the Human Rights concerns because even given a fair trial, this person could be legitimately convicted, but for bad reasons. In a country with widespread corruption, a policy that simply deported those the U.S. thought were probably guilty as long as they would likely receive a fair trial could have the inadvertent effect of allowing the Chinese government to crack down on dissenters and those not in favor with the highest leaders.

    As a side note, I wonder what the combination of the loss of currency value in Russia and the increased extradition of corrupt actors to China will do to the price of apartments on Manhattan’s Billionaire row, which had been selling largely to extremely wealthy foreigners.

    • Your point is well taken. Just to clarify your hypothetical, do you mean to imply in (2) that the political motive is clear because there are others who have committed similar corrupt acts, but because are politically aligned with current ruling party, have not been prosecuted? If this is your question, then you squarely address one of the most contentious provisions in many extradition treaties–the political exception provision. This provision is meant to protect individuals from being extradited on purely “political” offenses. What constitutes a “political” offense is normally undefined and up to the judge to decide on a case-by case basis, but I’m sure you can see the difficulty of its applicability in cases where the individual is also likely guilty of corrupt acts (e.g. exploitation of exception to cloak their actually corrupt acts). While the outcome is difficult to contemplate absent a US-China extradition treaty, my guess is that even if there was one, the individual would not be able to successfully argue that the political offense except applies due to procedural limitations extradition hearings that disfavor the individual: hearsay is admissible, there is no right to confrontation, bar from contesting probable cause finding or offering different theory of case, etc.

      As to your second point, I think demand will drop, although unclear whether it’d be enough to actually move the property price points by any significant amount. I’d heard anecdotally that foreign buyers are preferred over domestic ones because they are more likely to make a complete cash purchase, which is preferable to the more common downpayment/mortgage combination offered by domestic buyers. So, even if the cash offers dry up, the next-best offer will still be available.

      • The political offense exception is really interesting and I confess I am not familiar with it. Just by guessing, however, I would assume that it usually applies when the charge itself is for a political action (say a ‘free speech’ crime) rather than when the crime is legitimate but the motives for prosecution are political. If my guess is accurate, that means that it would not apply in corruption cases.

        I don’t know how I come down on the ethics of the U.S. helping to extradite in those cases; on one hand it can help cement the power of those in charge and tamp down on dissent, but on the other hand it could reduce corruption across the board by letting officials know that there is no foreign escape hatch to give them immunity for corrupt acts if they fall out of favor at home.

  8. Cindy,

    A very interesting article. I believe several of those wanted under the Sky Net are in Australia, and extradition was resisted for many years because Australian policy is not to extradite where the death penalty will be invoked.

    Last year, while in China, I noted this article in the South China Morning Post: http://www.scmp.com/news/china/article/1625701/china-considers-abolishing-death-penalty-nine-crimes and shortly after, Within a few days of returning home, this was in The Australian: http://www.theaustralian.com.au/business/latest/australia-considers-extradition-treaty-with-china/news-story/6894e162cb6e334f858150dfe711926d

    It seems the stars are aligning as China shifts its position on what justifies state sanctioned executions.

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