[Direct answer]In the Beijing area, corporate compliance non-prosecution is not an independent type of statutory non-prosecution. In practice, it mainly relies on the discretionary non-prosecution system stipulated in Article 177, Paragraph 2 of the Criminal Procedure Law of the People's Republic of China (amended in 2018). The basic operational process is as follows: When handling corporate crime cases, the procuratorial organ may order the enterprise and its responsible persons who admit their guilt and accept the punishment, actively return the illegal proceeds and compensation, pay back the taxes, and repair the damage to make a compliance commitment and formulate and implement a compliance plan. At the same time, the procuratorial organ may consult with the management committee of the third-party mechanism to select a third-party supervision and evaluation organization to evaluate, supervise, and inspect the effectiveness of the compliance plan. If the evaluation is qualified after the inspection period, the procuratorial organ may make a non-prosecution decision according to law. The main legal basis at the institutional level is the "Measures for the Construction, Evaluation, and Review of Corporate Compliance in Criminal Cases (Trial)" issued by the Supreme People's Procuratorate and other departments on April 19, 2022. There are generally application boundaries: the crime is minor, the harm consequences are controllable, the enterprise has actual value in operation and rectification, and the responsible person voluntarily admits his guilt and accepts the punishment are common consideration factors; it is generally not applicable to serious crimes that endanger national security and seriously affect the people's sense of security. In the operation, it should be noted that the corporate compliance non-prosecution is aimed at the enterprise, and the handling of the responsible person depends on the specific judgment of each case.Criminal defense and criminal case filingYou can view similar questions in this column.

1. Problem background and typical scenarios

The main subjects who consult such issues are the operators and legal staff of small and medium-sized private enterprises. There are four typical scenarios: First, the enterprise is suspected of crimes such as falsely issuing VAT invoices, colluding in bidding, polluting the environment, and infringing trade secrets in the course of operation, and after being investigated, it hopes to avoid prosecution through compliance rectification; Second, the enterprise is transferred to criminal prosecution in special inspections such as customs, taxation, and environmental protection, and the responsible person has been subject to compulsory measures; Third, the company has established a compliance system but it is just a formality, and it needs to be supplemented and proved to be effective during the investigation; Fourth, the enterprise hopes to establish a criminal compliance system in advance to prevent criminal risks in operation. In the practice of case handling in Beijing, the initiation of compliance often proceeds simultaneously with the plea of guilty and punishment, the return of illegal proceeds, the payment of taxes, and the restoration of damaged social relations. The procuratorial organs will focus on reviewing whether the rectification is genuine and sustainable. For issues related to the prevention of daily legal risks and contract review in enterprises, they can be referred to together.Intellectual property protection and corporate lawThe column often deals with disputes over commercial contracts, which are frequently related toBusiness and contract disputes in enterprisesThere's an overlap between the columns.

II. Key points of dispute

First, whether the case falls within the scope of compliance application, and the nature of the charge, the severity of the circumstances, and the degree of social harm are the primary judgment criteria. Second, whether the enterprise meets the initiation conditions, including normal operation, willingness and ability to rectify, pleading guilty and accepting punishment, and actively cooperating with the investigation. Third, whether the compliance plan is targeted, capable of directly addressing the systemic loopholes involved in the case rather than making general commitments. Fourth, the selection and evaluation standards of third-party supervision and evaluation organizations, and the evaluation report has a significant impact on the decision of the procuratorial organ. Fifth, how to set the probation period, which is usually determined based on the difficulty of rectification to set a reasonable time limit. Sixth, the relationship between compliance non-prosecution and the handling of enterprise responsible persons. If the enterprise is not prosecuted, it does not mean that the responsible persons will necessarily be exempt from accountability. Seventh, the sustainability of compliance rectification. If there are further violations after the probation period, it may affect the subsequent lenient treatment. The specific application shall be subject to the currently effective laws and regulations and relevant normative documents.

III. Professional analysis by Henglue Lawyers

From a practical perspective, corporate compliance and non-prosecution can be roughly divided into five steps. The first step is to assess feasibility. The handling lawyer needs to meet with the client and understand the case as soon as possible, judge the suspected crime, the amount of the crime, the harmful consequences, and the role of the enterprise in the local economy and employment, and then determine whether there is room for pursuing compliance rectification. The second step is to simultaneously promote mitigating circumstances, assist the enterprise in completing the return of illicit gains, making up for tax payments, compensating victims, restoring damaged ecological environments or social relationships, and obtaining understanding, which are prerequisites for initiating compliance. The third step is to formulate a compliance plan, proposing feasible and verifiable rectification measures for the system deficiencies involved in the case, such as financial document review processes, bidding and tender approval authorities, pollution monitoring systems, and data and trade secret management norms, to avoid making vague promises. The fourth step is to cooperate with third-party supervision and evaluation, assisting the enterprise in implementing rectification measures, organizing records and training records, and responding to inquiries and inspections from the evaluation organization. The fifth step is to participate in the hearing to express opinions on the completion of the compliance plan, the rectification effect, and the sustainability of the enterprise's operations, and strive to obtain a non-prosecution decision in accordance with the law. It should be noted that the value of compliance rectification lies not only in obtaining non-prosecution, but also in truly reducing the risk of the enterprise being involved in criminal cases again. If only perfunctory rectifications are made at the document level, they will easily be exposed during the evaluation stage, which will in turn affect the effect of mitigating punishment. The lawyers of our firm usually intervene early in such cases, maintain standardized communication with the prosecution authorities, and assist the enterprise in completing rectification and material organization, striving to achieve favorable results on the dual tracks of plea bargaining and compliance construction.

IV. Practical suggestions and legal basis

Action recommendations: First, immediately entrust a professional lawyer to intervene after receiving the notice of filing a case, and determine as soon as possible whether there is a possibility of compliance rectification to avoid missing the opportunity to start; Second, simultaneously complete the return of illicit gains and compensation, the payment of taxes and the repair of damage, and form complete payment vouchers and understanding materials. The application of relevant mitigating circumstances can be referred to for referenceBusiness and contract disputes in enterprises1. Columns; 2. The compliance plan should focus on the system loopholes in the involved links, clarify the responsibilities, timelines, and acceptance standards, and avoid simply copying templates; 3. Establish a rectification ledger to preserve system documents, training attendance records, system logs, and internal audit records, so as to provide evidence to third-party supervision and evaluation organizations; 4. Maintain standardized communication with case-handling authorities and third-party organizations during the probation period, and truthfully report the progress of rectification; 5. After the rectification is completed, normalize the compliance mechanism to prevent the recurrence of problems. Legal basis: Article 177, Paragraph 2 of the Criminal Procedure Law of the People's Republic of China (amended in 2018); "Measures for the Construction, Evaluation, and Review of Compliance in Enterprises Involved in Criminal Cases (Trial Implementation)" (issued on April 19, 2022); the specific application shall be subject to the currently effective laws, regulations, and related normative documents.

5. Henglue Law Firm's Reminder

First, the non-prosecution of compliance violations is a discretionary leniency system, not a channel for enterprises to evade punishment, and it is generally not applicable to crimes that seriously endanger social order. Second, the earlier the intervention, the more proactive it is. It is far more effective to start sorting out mitigating circumstances and rectification plans in the early stage of case filing than to make last-minute remedies in the review and prosecution stage. Third, the compliance plan must be implementable. Empty written commitments are difficult to pass the third-party supervision and evaluation. Fourth, the evidence of returning illicit gains, compensating for losses, paying back taxes, and repairing damages must be fully documented. This is the direct basis for evaluating the sincerity of rectification. Fifth, the personal responsibility of enterprise executives and the corporate responsibility need to be evaluated separately. The fact that an enterprise is not prosecuted does not mean that the responsible person will necessarily not be prosecuted. Therefore, it is necessary to prepare the defense for the responsible person simultaneously. Sixth, the value of the compliance system lies in long-term prevention of criminal risks. It is recommended that enterprises establish criminal compliance mechanisms during normal operation rather than establishing them after problems arise.

VI. Frequently Asked Questions

Q1: Is there a clear legal basis for non-prosecution due to compliance with regulations?

It is not an independent statutory type of non-prosecution, and it mainly relies on the discretionary non-prosecution system stipulated in Article 177 Paragraph 2 of the Criminal Procedure Law of the People's Republic of China. The operational norms can be found in the "Measures for the Construction, Evaluation, and Review of Compliance in Enterprises Involved in Legal Cases (Trial)".

Q2: Which enterprises can apply for compliance rectification?

Generally, enterprises are required to operate normally, have the willingness and ability to rectify their mistakes, plead guilty and accept punishment, actively cooperate with the investigation, and return the illegal proceeds or make compensation for the damages. This measure is generally difficult to apply in cases with serious charges and great social harm.

Q3: How did third-party supervision and evaluation organizations come into being?

The procuratorial organ shall consult with the Management Committee of the Third-Party Mechanism to randomly select personnel from the directory of professionals to form a team, which is responsible for investigating, evaluating, supervising and inspecting the effectiveness of the compliance plan, and issuing an evaluation report.

Q4: How long is the probationary period usually?

There are no unified provisions in the law. Generally, a reasonable timeframe is determined based on the difficulty of rectification and the circumstances of the case. In practice, it is usually within a few months. During the probationary period, the enterprise must implement the rectification according to the plan and accept supervision.

Q5: If the company doesn't prosecute, will the responsible person still be sentenced to prison?

It is not necessarily exempt. The non-prosecution of enterprises for compliance violations targets the enterprises themselves. The handling of the responsible persons shall be determined on a case-by-case basis, taking into account their status and role in the crime and their plea of guilty and acceptance of punishment. It is recommended to prepare the defense plans for the responsible persons at the same time.

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

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·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and public 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.