[Direct answer]In the Beijing area, the key to preventing criminal legal risks for enterprises is to establish a truly operational, traceable, and accountable compliance system, rather than just preparing a document that is shelved without being implemented. According to Articles 30 and 31 of the Criminal Law of the People's Republic of China (amended in 2020), if a company or enterprise engages in acts that harm society and are defined by law as corporate crimes, it shall bear criminal responsibility. The company will be fined, and its directly responsible principals and other directly responsible personnel will be subject to criminal punishment. This means that the business operations of enterprises are closely linked to the personal responsibilities of employees and executives. Prevention efforts typically focus on several high-risk areas: tax and invoice management, such as false invoicing and tax evasion; bidding and business transactions, such as collusive bidding and commercial bribery; funds and financing, such as illegally absorbing public deposits, embezzlement, and misappropriation of funds; data and intellectual property, such as infringement of trade secrets and illegal acquisition of computer information system data; and production safety and environmental protection, such as major responsibility accidents and environmental pollution. An effective approach is to integrate risk identification, process control, approval traceability, training and assessment, and internal reporting into a closed loop, and regularly conduct compliance checkups.Intellectual property protection and corporate lawYou can view similar questions in this column.

I. Problem Background and Typical Scenarios

When business owners and legal staff consult on such issues, they often correspond to four scenarios: First, the enterprise has long-standing irregular practices in taxation and invoice processing, and is worried about crossing the criminal red line; Second, business personnel use kickbacks, bribes, or improperly obtain competitor information when expanding the market, and the enterprise is worried about being implicated; Third, the financing, private lending, or fund collection methods are not standardized, and the enterprise is suspected of illegal fund-raising; Fourth, there have been accidents or punishments in safety production and pollution control, and the enterprise is worried about escalating into criminal cases. In addition, there are situations where the enterprise is preparing to go public, participating in major project bidding, or accepting due diligence investigations, and needs to prove its compliance status. When preventing criminal risks in the Beijing area, business entities usually need to combine industry regulatory requirements and focus on the consistency of capital flow, bill flow, and contract flow. For contract review and commercial dispute resolution, they can refer to it together.Business and contract disputes in enterprisesColumn.

II. Key points of dispute

Focus One: The establishment of corporate crime and the allocation of responsibilities. When should the unit be held accountable, and when should the directly responsible supervisors and employees also be held accountable? Focus Two: Whether employee actions can be attributed to the unit. Key judgment points include whether the actions constitute official duties, whether they reflect the unit's will, and whether the benefits belong to the unit. Focus Three: The regulatory boundaries of tax and financial processing. How are administrative and criminal responsibilities for false invoicing and tax evasion interconnected? Focus Four: The legal boundaries of business interactions. Distinguishing between normal business hospitality and commercial bribery. Focus Five: Methods of obtaining data and trade secrets. Risks of employees taking client information or technical documents with them when changing jobs. Focus Six: Prevention of responsibilities for safety production and environmental protection accidents. The importance of tracing and rectifying potential hazards. Focus Seven: Whether enterprises that have established compliance systems but failed to implement them effectively can be considered mitigating circumstances. Specific determinations shall be based on currently valid laws, regulations, and judicial rulings.

III. Professional analysis by Henglue Lawyers

The consequences of criminal risks are often directly related to the survival of enterprises, which is particularly evident in some major cases. Take the criminal incidental civil lawsuit case of intentional homicide represented by Attorney Liu Liqiang of our firm as an example: In the late night of June 16, 2024, in the laboratory of a concrete mixing station, staff members Zhang Bin, Li Yuanzheng, Zhao Gang, and Zhou Xiaohua had a dispute with the defendant Zhang Daqiang over the quality of construction concrete. After the dispute was mediated, Zhang Daqiang was sent back to his dormitory. Later, he drove a white SUV at a speed of about 60 to 62 kilometers per hour into the laboratory, causing Zhao Gang's death on the spot and injuring Zhang Bin and Li Yuanzheng, with Zhou Xiaohua also affected. The court ultimately sentenced Zhang Daqiang to death for intentional homicide. This case occurred in a production and operation site, and the root cause was improper on-site management and conflict resolution. Although it was an extreme individual crime, it nevertheless highlights the importance of daily enterprise management: equipment and site management, alcohol and work discipline, conflict resolution mechanisms, and the improvement of monitoring and evidence-preservation measures are all tasks that can be done in advance but are difficult to make up for afterwards. Attorney Liu Liqiang comprehensively reviewed the case files and organized opinions around subjective intent, voluntary surrender, victim's fault, and the determination of the crime, ultimately securing compensation support for the victim's family. This process also shows that whether the evidence materials are complete and the procedures are standardized will directly affect the outcome of the case. For enterprises, it is far more economical to take preventive measures than to defend against risks after the fact: only by implementing approval authority, fund flow, document review, and personnel behavior norms into the process can they provide evidence of their compliance when risks arise. This case was handled by Beijing Henglu Law Firm.Liu LiqiangThe attorney (practice license number: 11101200910454358, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action suggestions: First, conduct a criminal risk check and sort out the risk points in the financial and taxation documents, bidding and tendering, fund financing, data and intellectual property, safety production and environmental protection, etc. Second, establish a hierarchical approval and traceability mechanism. Major transactions and payments must have written approval records to ensure that the flow of funds, documents, and contracts are consistent. Third, control invoices and accounting to prevent invoicing without real transactions and fictitious cost entries. The relevant accounting processing can be referred to for reference.Business and contract disputes in enterprises1. The first step is to establish a compliance management system, including the following aspects: a) clarifying the responsibilities of senior management and establishing a compliance committee; b) formulating and implementing compliance rules and procedures; c) conducting regular compliance audits and inspections; d) standardizing employee behavior, signing confidentiality and integrity commitments, and explicitly prohibiting accepting kickbacks and improperly obtaining others' commercial information; e) establishing internal reporting and investigation and disposal mechanisms, identifying and rectifying problems in a timely manner, and, if necessary, taking remedial measures; f) regularly conducting compliance training and assessments, and incorporating compliance performance into performance and promotion evaluations. Legal basis: Article 30 and Article 31 of the Criminal Law of the People's Republic of China (amended in 2020) regarding the provisions on corporate crimes and related crime provisions; Article 177, Paragraph 2 of the Criminal Procedure Law of the People's Republic of China (amended in 2018); the "Measures for the Construction, Evaluation, and Review of Compliance in Enterprises Involved in Legal Matters (Trial)" (issued on April 19, 2022); specific application shall be subject to the currently effective laws, regulations, and related normative documents.

5. Henglu Law Firm's Reminder

Firstly, the risk of corporate crime is often systemic, and individual employees' violations may also be attributed to the company under certain conditions, so compliance cannot simply be delegated to a specific department. Secondly, systems and documentation are equally important. Compliance without supporting records is difficult to be recognized in investigations. Thirdly, taxation and invoicing are the most common high-risk areas, and it is essential to ensure that real transactions and invoices are consistent. Fourthly, business dealings must adhere to legal boundaries. Kickbacks, bribes, and improper acquisition of competitive information may all lead to criminal risks. Fifthly, once risk signals appear, it is essential to engage professional lawyers as soon as possible to assess the situation and develop response plans. The earlier intervention takes place, the more likely it is to secure leniency through self-inspections, refunds, and rectifications. Sixthly, establishing compliance as a long-term mechanism rather than a temporary response is the real way to reduce criminal risks.

VI. Frequently Asked Questions

Q1: If an employee violates the rules, is the company also responsible for it?

Possibly. 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 directly responsible person in charge and other directly responsible persons shall be investigated for their responsibilities. Whether the employee's behavior reflects the unit's will and whether the benefits belong to the unit are important judgment points.

Q2: Can a company avoid liability just by establishing a compliance system?

Not necessarily. A system can only be considered effective and compliant if it is actually implemented and documented. A formal system alone is unlikely to serve as a basis for mitigating liability. The key lies in whether it has been implemented in practice and whether there are corresponding records and training logs.

Q3: Which areas are most prone to criminal risks?

Common high-risk areas include financial and taxation management, invoice management, bidding and business transactions, fund financing, data and intellectual property, production safety and environmental protection. Enterprises should conduct a thorough investigation based on the characteristics of their own industries.

Q4: What should I do first when I discover a criminal risk?

It is necessary to immediately entrust professional lawyers to assess the risk level, fix the business materials and approval records, stop and correct the illegal acts, and, if necessary, take the initiative to make compensation, pay back taxes, and repair the damage, so as to create conditions for lenient treatment in the future.

Q5: How often should I have a compliance physical examination?

It is generally recommended to conduct a comprehensive physical examination at least once a year. In addition, special inspections should be carried out before major investments and financing, mergers and acquisitions, listings, or regulatory inspections, as well as when there are significant changes in the business model.

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

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant 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 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.