[Direct answer]In the Beijing area, the implementation of criminal compliance rectification is typically divided into five steps. The first step is risk investigation, which involves sorting out the approval, authorization, capital flow, information flow, and vouchers in the business chain involved in the case to identify the specific link where the problem occurred. The second step is system revision. In accordance with Article 151 of the Civil Code of the People's Republic of China, which stipulates that contracts violating mandatory provisions and public order and good customs are invalid, as well as the provisions of criminal law regarding the constitutive elements of specific crimes, the internal system and operating norms are revised. The third step is process reconstruction, which involves establishing mechanisms for authorization grading, cross-checking, and full-process traceability. The fourth step is personnel handling and training. Those involved in the case are dealt with in accordance with the law, and compliance training is conducted for relevant departments. The fifth step is material consolidation, which involves preparing rectification reports, system documents, training records, and evidence chains for future reference. It should be emphasized that rectification is not just about supplementing documents; the core is to make verifiable changes to the way business decisions are made. For reference, please refer to the following document:Criminal defense and criminal case filingThe service description in the column.

1. Problem background and typical scenarios

Most people who consult this issue are corporate executives, legal departments, or compliance departments. There are three common scenarios: First, there are risk signals of potential crimes within the enterprise, which require investigation before the case occurs; Second, the enterprise has been held accountable for certain illegal acts and needs to complete the rectification as required to seek lenient treatment; Third, the industry in which the enterprise operates has high regulatory requirements, necessitating the establishment of a regular compliance system. In practice, a common misunderstanding is that compliance simply means writing a compliance manual. In reality, the effectiveness of the rectification mainly depends on two factors: First, whether substantive restrictions have been set at key nodes in the business process; Second, whether records of past implementations can be provided. Systems lacking implementation records are often not recognized during inspections, which is where rectification efforts are most likely to encounter problems.

II. Key points of dispute

Focus One: How to define the scope of the rectification? Is it targeted at a single case or covering all similar businesses? Focus Two: How to delineate the boundaries between the handling of responsible personnel and criminal liability? Focus Three: Arrangements for the recovery and restitution of involved assets and illegal proceeds. Focus Four: The integrity of the evidence chain for the rectification, and how to prove that the system has been actually implemented. Focus Five: The issue of the connection between the revised system and existing contracts. Focus Six: The impact of third-party assessments or considerations of non-prosecution for compliance on the rectification standards. Focus Seven: How to establish a sustainable operation mechanism after the completion of the rectification. Focus Eight: Issues related to the extension of compliance in overseas operations or cross-border businesses. For the overall risk prevention and control approach of the enterprise, please refer to the relevant guidelines.Intellectual property protection and corporate lawColumn.

III. Professional analysis by Henglue Law Firm

Taking a case handled by Attorney Liu Liqiang of our firm as an example: On the night of June 16, 2024, a concrete mixing station laboratory experienced a dispute over the quality of the concrete being produced. Staff members Zhang Bin, Li Yuanzheng, and Zhao Gang clashed with the defendant. After being separated by others, the defendant was sent back to his dormitory, but he immediately drove a vehicle at a speed of about 60 kilometers per hour into the laboratory, causing the wall to be damaged. Zhao Gang died on the spot, and Zhang Bin and Li Yuanzheng were injured. Although the case was serious, the compliance-related aspects of the defense strategy still provide valuable insights: The attorney pointed out that the involved enterprise lacked clear safety operating procedures and on-site conflict resolution mechanisms in such daily operational scenarios, which led to the escalation of the conflict in the absence of any control. In terms of compliance rectification, such problems manifested as three institutional gaps: first, the absence of internal escalation and handling procedures for major quality disputes; second, unclear authority management for the use of vehicles in the workplace; and third, no one taking responsibility for intervention and reporting obligations when conflicts escalated. The core of the rectification is to establish these three systems and leave execution traces, which is also the practical standard for judging whether the rectification has been fully implemented. This case was handled by Beijing Henglu Law Firm.Liu LiqiangAttorney (Practice Certificate No.: 11101200910454358, subject to the certificate issued by the judicial administrative organ) acting as an agent.

IV. Practical suggestions and legal basis

Action proposals: 1. Establish a rectification team led by the legal department, clarify responsibilities and timelines; 2. Comprehensively retrieve contracts, approval documents, financial vouchers, and communication records related to the involved business to form a list of issues; 3. Revise internal systems and re-issue them in accordance with the involved criminal charges and relevant legal requirements; 4. Rebuild authorization and approval mechanisms, clarify approval authority and review requirements for amounts and matters; 5. Establish requirements for full-process documentation, specify formats for meeting minutes, acceptance records, and abnormal situation reporting; 6. Handle relevant personnel in accordance with the law and conduct comprehensive training, maintaining attendance and assessment records; 7. Prepare a comprehensive rectification report and evidence dossier for reference. Legal basis: - Provisions of the Criminal Law of the People's Republic of China regarding the constitutive elements of specific criminal charges; - Article 153, Civil Code of the People's Republic of China (effective January 1, 2021); - The Anti-Unfair Competition Law of the People's Republic of China and relevant industry regulatory provisions (based on the current effective version); - The specific application of compliance-based non-prosecution shall be governed by current effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

First, the core of the rectification is to change the behavioral patterns, not to increase the number of documents. Second, a system without implementation records is equivalent to not existing, and it is impossible to prove that it has been implemented during the inspection. Third, the handling of the involved personnel and the rectification should proceed simultaneously to avoid leaving hidden risks of unclear responsibilities. Fourth, the arrangements for recovering illicit gains and making restitution should be initiated as soon as possible, which is an important basis for obtaining lenient treatment. Fifth, the scope of the rectification should not be too narrow, only focusing on repairing a single case without covering similar businesses, as problems will often recur. Sixth, after the revision of the system, corresponding training and assessments should be provided, otherwise employees will still operate according to old habits. Seventh, the rectification materials should be systematically archived, as they may need to be used to explain the progress of the rectification to regulatory authorities or judicial organs in the future. Eighth, enterprises engaged in cross-border business also need to pay attention to overseas legal and compliance requirements to avoid complying with regulations domestically while violating them abroad.

VI. Frequently Asked Questions

Q1: How does the process of criminal compliance rectification typically begin?

The process typically begins with a comprehensive investigation of the business chain involved in the case. Contracts, approval records, fund flows, vouchers, and communication records related to the relevant business are retrieved one by one, and the business processes and decision-making nodes are sorted out to identify which links lack constraints and which approvals are just a formality. After the investigation results are compiled into a problem list, the system is revised accordingly. Skipping the investigation and directly writing a manual may lead to a disconnect between the system and actual business operations.

Q2: What level of rectification constitutes completion?

There are three criteria for evaluation: First, substantive restrictions have been set up for key risk links, such as authority grading, mandatory review, and abnormal reporting; Second, the system has been actually implemented and records can be checked, such as new approval documents, meeting minutes, and acceptance records; Third, the responsible personnel have completed the processing and training and have corresponding proof. Those who only have the system documents but no implementation records are usually not recognized as having completed the rectification. The specific standards should be determined in accordance with the requirements of the regulatory authorities.

Q3: Will complying with the requirements for non-prosecution affect the standards for rectification?

This will have an impact. If the enterprise meets the relevant conditions and has the willingness to rectify the situation, the procuratorial organ will comprehensively consider the rectification situation during the handling of the case. Therefore, the integrity and authenticity of the rectification are particularly crucial at this time. In practice, it is necessary to conduct a thorough investigation of the problems, implement the rectification measures, deal with the responsible personnel in accordance with the law, dispose of the involved assets in accordance with the law, and present all these in the case file in a comprehensive manner. The specific applicable conditions shall be subject to the currently effective laws, regulations, and judicial rulings.

Q4: What should employees pay attention to during the rectification period?

The key point is not to repeat similar actions during the rectification period, and it's also important to keep the work records. Any new violations that occur during the rectification period may directly affect the evaluation results. In daily work, we should strictly follow the new process to carry out approvals and reviews. If there are any uncertainties, we should consult the legal department before taking action, rather than making decisions based on our own experience. In addition, the procedures involving funds, external guarantees, and contract signing need to be carried out in strict accordance with the new process.

Q5: Do small and medium-sized enterprises need to conduct criminal compliance?

It is recommended to do this, but it can be implemented in a phased manner. SMEs have limited resources, so there's no need to set up a massive compliance system from the outset. They can prioritize addressing high-risk areas, such as contract and stamp management, fund payment approval, external guarantees and authorizations, data and trade secret protection, and human resources and employment compliance. Implementing each of these measures and keeping records of them will collectively form an effective compliance defense system. For related ideas, please refer to the following link:Intellectual property protection and corporate lawThe description of the column.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards 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 the evidence materials, to avoid missing the statutory time limit. →Criminal defense legal services·Attorney Liu Liqiang·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. If you encounter disputes, please consult a practicing lawyer in time.