[Direct answer]In the Beijing area, identifying criminal risk behaviors of executives can be approached from three perspectives: whether the acts are carried out in the name of the unit, whether they benefit the unit, and whether they are decided by the unit's decision-making body or by the person in charge; at the same time, see whether the illegal income belongs to the unit. According to Articles 30 and 31 of the Criminal Law of the People's Republic of China, if a unit commits a crime, the unit shall be fined, and the persons directly in charge and other directly responsible persons shall be sentenced to criminal punishment. The action aims to establish a decision-making traceability and approval mechanism, regularly screen high-risk businesses, and control the three aspects of "decision-making level, fund flow, and evidence traceability". If any suspicious points are found, consult a lawyer in time.

I. Problem Background and Typical Scenarios

In the operation of an enterprise, a guarantee made by a senior executive, a loan of funds, or a related-party transaction may all trigger civil, administrative, and criminal risks simultaneously. Management often asks: Is this a normal business judgment or a duty-related crime? If something goes wrong, should the company take responsibility, and who should bear the responsibility? The key to identifying risks lies not in regretting it afterwards, but in being able to clearly understand the nature of the action, the decision-making process, and the ownership of the benefits beforehand.

II. Key points of contention

First, the boundary between corporate crime and individual crime. Second, the distinction between directly responsible supervisors and other directly responsible personnel. Third, the boundary between commercial judgment and ultra vires acts. Fourth, the impact of decision-making traceability on responsibility determination.

III. Professional analysis by Henglue Law Firm

Identifying criminal risk behaviors of executives lies in determining the decision-making level and ownership of the benefits of such behaviors. A major case handled by Henglue Lawyers illustrates the importance of responsibility allocation. On the night of June 16, 2024, several people in the laboratory of a concrete mixing station had a dispute with the defendant during a drinking session. After being persuaded to stop the argument, the defendant was sent back to the dormitory. However, he immediately drove his car at a speed of about 60 to 62 kilometers per hour into the laboratory, resulting in one person being killed on the spot and two others being injured. After representing the victims' families, Henglue Lawyers reviewed all the case files and compared the inconsistencies in the defendant's statements before and after the incident. They pointed out that the defendant's verbal motivation before the impact, his accelerated speed and lack of evasive action sufficiently proved his subjective intent; his lies about brake failure after calling the police and his repeated retractions of his confession did not constitute voluntary surrender; and they argued that the case should be classified as intentional homicide. The court ultimately sentenced the defendant to death for intentional homicide and supported the compensation request. This case highlights the importance of three key factors in determining responsibility: subjective intent, ownership of the act, and evidence chain. For enterprises, whether executives' actions are subject to approval, conducted in the name of the company, or benefit the company, are the key points for identifying and mitigating risks. Henglue Lawyers typically recommend checking executives' actions along three lines: "who makes the decision, who executes the decision, and who benefits from it". If any of the three conditions occur independently, the risk factor will significantly increase. This case was handled by Beijing Henglue Law Firm.Liu LiqiangThe attorney (practice certificate number: 11101200910454358, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action List: 1. Clarify the scope of authority and approval rights of executives, and compile a written list of these rights; 2. Implement mandatory record-keeping and review procedures for high-risk matters such as guarantees, inter-company loans, related-party transactions, and bidding and tendering processes; 3. Regularly monitor the flow of funds and the substance of business operations to identify anomalies involving "company names and personal benefits"; 4. Consult lawyers promptly upon detecting suspicious circumstances, assess criminal risks, and develop strategies for asset separation and rectification. Legal basis: Articles 30 and 31 of the Criminal Law of the People's Republic of China, and related provisions of the chapter on specific crimes; Articles of the Company Law of the People's Republic of China regarding the duties and fiduciary obligations of senior executives; Specific applications shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

There are three key phrases for identifying risks: looking at the nominal value, looking at the decision-making process, and looking at the ownership of the benefits. If these three elements are misaligned, it signals a potential risk; keeping records of decision-making is the most cost-effective form of insurance; if you detect any abnormalities, consult a lawyer first rather than trying to cover up the problem by "completing the formalities". For corporate criminal risks, you can seek assistance fromCriminal defense and criminal case filingWe provide a comprehensive solution for services, which integrates corporate compliance and internal controlIntellectual property protection and corporate lawFor reference, you can check the sections related to contracts and related-party transactionsBusiness and contract disputes in enterprisesFor those interested in cross-border funds, you can check out this column for more informationFinancial capital and cross-border transactions involving foreign countriesFor any questions regarding employment management, please feel free to consult us.Labor arbitration and work-related injury compensationTeam, if you encounter any difficult situations, please feel free to contact us.Special servicesTeam.

VI. Frequently Asked Questions

Q1: If an executive engages in personal misconduct, will the company be held accountable?

Generally, it won't, but it needs to be distinguished based on evidence. If the act is carried out by a senior executive for personal gain without authorization, and the illegal income is not returned to the unit, the individual will generally be held responsible. Conversely, if it is carried out in the name of the unit, reflects the unit's will, and the benefits go to the unit, it may constitute a crime committed by the unit. The key evidence for distinguishing between the two is the traceability of decision-making and the flow of funds.

Q2: What evidence needs to be fixed to identify risks?

It includes internal authorization and approval documents, meeting resolutions and approval records, business contracts, bank vouchers for fund transactions, job responsibilities descriptions, and correspondence emails. The evidence should be able to reconstruct the complete chain of "who makes the decision, who executes it, and who benefits from it", providing a basis for subsequent responsibility allocation or rectification.

Q3: How much does it cost to conduct a risk identification exercise?

Depending on the size of the enterprise and the scope of its business, quotes are usually negotiated on a project basis, and the costs involved in multiple business lines and cross-regional operations will correspondingly increase. Compared with the costs of defense and punishment after the occurrence of cases, the investment in pre-identification and rectification is usually more cost-effective. It is possible to agree on the scope of services with professional institutions.

Q4: How often should risk identification be conducted?

It is recommended to conduct a comprehensive investigation once a year, and to review high-risk matters such as guarantees, loans, and related-party transactions on a quarterly basis or on a project-specific basis. After major transactions or organizational structure changes, a supplementary investigation should be conducted in a timely manner to avoid a disconnect between the system and the business operations.

Q5: What should I do if I find that a senior executive's behavior might involve criminal activities?

It is necessary to immediately stop the relevant actions, preserve the evidence, and consult a lawyer to assess the nature of the situation. It is crucial not to attempt to "remedy" the situation by retroactively signing documents or altering records, as this may constitute new crimes such as aiding in the destruction or falsification of evidence. After the assessment, one can choose to voluntarily explain the situation, make restitution, cooperate with the investigation, and promote compliance reforms in order to seek lenient treatment.

The above answer is based on the judicial practice in Beijing. The adjudicative standards in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situations.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the necessary evidence to avoid missing the statutory time limits. →Criminal defense legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.