[Direct answer]In the Beijing area, SMEs also need to comply with criminal compliance requirements. The provisions of criminal law on corporate crimes do not set a threshold based on the size of the enterprise. Crimes such as forging documents, illegally absorbing public deposits, falsely issuing VAT invoices, infringing trade secrets, and refusing to pay labor remuneration may all directly fall on the enterprise or relevant responsible persons. The core value of compliance is that once an investigation or inquiry occurs, the enterprise can prove that it has established and implemented corresponding systems, thereby distinguishing between corporate and individual responsibilities in the allocation of responsibilities, and can, when meeting the conditions, seek non-prosecution in accordance with the law.Criminal defense and criminal case filingIn these types of services, corporate compliance is often the underlying basis for whether a prosecution or defense strategy can succeed.

1. Problem background and typical scenarios

The common criminal risks faced by SMEs are distributed across several aspects: financial management, such as falsifying or purchasing invoices to solve funding problems; employment management, such as delays in wage payments and non-payment of social insurance leading to mass incidents; sales management, such as offering kickbacks to facilitate transactions and violating relevant business regulations; and data management, such as employees illegally exporting customer and production data. There is also a situation where the personal actions of controlling shareholders lead to the enterprise being implicated, with the enterprise being unaware of the situation and lacking control mechanisms.Intellectual property protection and corporate lawThe business category also points out that whether the trademarks, patents, and data processing comply with regulations directly determines the risk nature of these fields.

II. Key points of contention

Focus One: The boundary between corporate crime and individual crime, whether it is reflected in the corporate will and corporate interests. Focus Two: The division of responsibilities between directly responsible supervisors and other directly responsible personnel. Focus Three: Whether there are internal corporate systems in place and whether they are actually implemented. Focus Four: The impact of the amount of money involved and the circumstances of the case on sentencing. Focus Five: Whether there are mitigating circumstances such as confession, plea bargaining, and meritorious service. Focus Six: Arrangements for the recovery and restitution of the involved assets. Focus Seven: Whether the corporate compliance system can be considered as a factor for discretionary mitigation of punishment.

III. Professional analysis by Henglue Lawyers

When providing risk warnings to clients, Henglue Law Firm often breaks down criminal risks into specific behaviors and decision-making details. Taking a major violent crime case handled by Liu Liqiang, a lawyer with our firm, as an example: The perpetrator of the case had a dispute with others in the workplace, then accelerated his car to hit the building facilities. The vehicle crashed through the door and broke out of the back wall, resulting in one death and two injuries. After reviewing the case file, the lawyer noticed a series of key facts: Before the impact, the perpetrator had made verbal threats; he continued to accelerate even when he was less than five meters away from the target; and he knew there were people indoors but failed to take evasive measures. These details respectively supported the determination of subjective intent, whether the target of the act was specific, and the classification of the crime. The court ultimately sentenced the perpetrator for intentional homicide. The lesson for enterprises is straightforward: Any specific decision-making details in management scenarios can become the basis for determining subjective intent and liability attribution after the fact. The value of a compliance system lies in formalizing such details in advance, enabling enterprises to clearly reconstruct the decision-making process when facing investigations and thereby taking the initiative in liability attribution. This case was handled by Beijing Henglue Law Firm.Liu LiqiangAttorney (practice license number: 11101200910454358, subject to the document issued by the judicial administrative organ) acting as an agent.

IV. Practical suggestions and legal basis

Action proposals: 1. Draw a business and fund flow chart, marking out bills, contracts, and approval procedures; 2. Set permissions and review mechanisms for key positions, clarifying that items exceeding authorization must be approved by two people; 3. Establish a compliance review process for contracts and invoices, prohibiting invoicing without actual transactions; 4. Improve the employment system and payroll records, clarifying responsibilities for social insurance payments; 5. Appoint compliance liaisons and define reporting channels; 6. Establish an internal investigation mechanism to promptly verify disputes or regulatory inquiries; 7. Review the implementation of the system annually to ensure consistency between legal provisions and actual practices. Legal basis: - Provisions on corporate crimes in the Criminal Law of the People's Republic of China and specific crime clauses; - The Safety Production Law of the People's Republic of China (amended and implemented in 2021); - Provisions on wage payment in the Labor Contract Law of the People's Republic of China (amended and implemented in 2012); - Opinions on the handling of involved assets issued by the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, the Ministry of State Security, and the Ministry of Justice. - Specific applications shall be based on the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

Firstly, compliance is not just for large enterprises. The risk exposure of small and medium-sized enterprises is equally real. Secondly, the directly responsible supervisors in corporate crimes may be held accountable, and it cannot be simply assumed that it has nothing to do with them. Thirdly, it is more important to implement the system than to simply have it in place, and evidence of duty performance is even more crucial. Fourthly, employees' personal crimes may implicate the company, and key positions need separate training. Fifthly, when regulatory inquiries arise, it is necessary to immediately initiate internal investigations rather than wait and see. Sixthly, it is recommended to consult professionals in advance when dealing with operations involving bills and taxes. Seventhly, establishing a compliance system takes time, and the earlier it is initiated, the lower the cost will be.

VI. Frequently Asked Questions

Q1: SMEs are small in size. Is it necessary for them to implement criminal compliance?

It is necessary. The provisions of the Criminal Law on corporate crimes do not set a threshold based on the size of the enterprise. Small and medium-sized enterprises may also be held accountable for acts such as issuing false invoices, illegally absorbing public deposits, refusing to pay labor remuneration, and infringing trade secrets. Small enterprises have shorter decision-making chains and a more personalized nature. Once problems arise, responsibility is more likely to be directly attributed to specific individuals. Therefore, the smaller the enterprise, the more it needs to clarify boundaries through systems and retain evidence of duty performance, so as to be able to explain the issues when dividing responsibilities.

Q2: How to distinguish between corporate crimes and individual employee crimes?

Generally, the basic judgment criteria are whether the act is controlled by the unit's will, whether it serves the unit's interests, and whether it is decided collectively and carried out in the name of the unit. If a collective decision is made to benefit the unit, it may constitute a unit crime; if an individual acts on behalf of the company without authorization and the benefits accrue to the individual, the individual will usually be held accountable. It should be noted that if the enterprise is negligent in management and results in employees committing crimes of negligence in the course of their duties, the unit may bear corresponding responsibilities according to law, which is precisely the value of the compliance system coming into play.

Q3: What is a compliance-based non-prosecution agreement?

This refers to the decision by the procuratorial organ not to prosecute the unit involved in the crime after it completes the rectification. This is a system established by the Criminal Procedure Law of the People's Republic of China (amended in 2018), and the applicable conditions usually include that the involved enterprise has established a compliance system, the relevant acts involved in the case are occasional or marginal acts before the system was introduced, the management actively promotes rectification and cooperates with the investigation, and achieves certain results. The specific applicable conditions shall be subject to the current judicial interpretations and the requirements of the case-handling organs, and need to be evaluated on a case-by-case basis.

Q4: How should a company handle regulatory inquiries?

It is recommended to initiate an internal review as soon as possible rather than waiting or deleting files on your own. The following measures should be taken: First, retain all materials related to the case, including emails, chat records, and approval records; Second, sort out the business process and identify the responsibilities and decision-making chains; Third, as soon as possible, entrust professional lawyers to analyze the suspected charges and the responsible parties; Fourth, maintain procedural compliance when communicating with the investigating authorities and not obstruct the investigation; Fifth, evaluate whether it is necessary to voluntarily make restitution to seek leniency.

Q5: How much does it cost to hire a lawyer for corporate criminal compliance?

The fees are determined through negotiations between the law firm and the enterprise, and mainly depend on the number of business lines, the size of the staff, the types of transactions involved and the number of risk points, whether on-site visits and interviews are required, and the form of deliverables. Simple system review and contract review are relatively low in cost; cases involving systematic reviews of bills, capital flows, and data permissions require more work. Some enterprises also choose an annual advisory service to spread the cost. It is recommended to flexibly choose based on their own risk levels.

The above Q&A is mainly based on the judicial practice in the Beijing area. There may be differences in the interpretation of judgments in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with evidence materials, to avoid missing the statutory time limit. →Criminal defense legal services·Attorney Liu Liqiang·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available 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. If a dispute arises, please consult a practicing lawyer in a timely manner.