At the core of the international effort to combat corruption is the 'home country' anti-corruption legislation that penalises companies in their home state for engaging in corruption extraterritorially. This article examines the application of Australia's foreign bribery legislation to the Chinese tax context. The legal test for Australia's extraterritorial bribery legislation rests heavily upon a finding that an extra-legal advantage gained, or benefit provided, is 'illegitimate'. While the assumption that formal law is aligned with legitimacy is reasonable in many contexts and practical in the application of the law, a focus on legality does not align well with legitimacy in China. In China, vague laws are created by the central government in order to facilitate flexible and localised implementation. In a system where formal legal institutions are underdeveloped, informal rules are significant in guiding the actions of local officials. Australia ought to consider the nature of the relationships between China's central and local governments prior to implementing its extraterritorial jurisdiction. Upon doing so, it will become apparent that a strictly 'legal' analysis is an inappropriate yardstick by which to gauge the legitimacy of an official's behaviour.
|Number of pages||21|
|Journal||eJournal of Tax Research|
|Publication status||Published - 1 Dec 2017|