[Direct answer]It is necessary. The daily work of legal affairs focuses on contract review, labor and personnel affairs, and general commercial matters, while criminal risks are characterized by low frequency but high danger: once triggered, enterprises may face fines, confiscation of property, and restrictions on business qualifications. The actual controllers and executives may also be held criminally liable, and it is difficult for ordinary legal affairs departments to handle such situations independently. According to Article 30 and Article 31 of the Criminal Law of the People's Republic of China (amended on December 29, 2023 and effective from March 1, 2024), if a company or enterprise commits acts that endanger society and constitutes a corporate crime, a double punishment system shall be implemented, which includes fining the unit and sentencing the directly responsible personnel to criminal punishment; Article 15 of the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018) establishes a leniency system for guilty pleas and plea bargains. The appointment of criminal legal advisors essentially equips enterprises with criminal risk control and crisis response mechanisms, forming a complementary rather than substitutive relationship with legal affairs departments.

I. Problem Background and Typical Scenarios

Such considerations often arise in several scenarios: First, there are historical risks of false invoicing and tax evasion in the taxation process; Second, sales rebates and gift hospitality may border on commercial bribery; Third, bidding and tendering processes may be suspected of bid-rigging and collusion; Fourth, the mobility of core technical personnel may lead to the risk of trade secret infringement; Fifth, profit commitments in financing promotions may be deemed illegal fund-raising; Sixth, arrears in wages may constitute refusal to pay labor remuneration; and Seventh, the compliance pressure in handling data and personal information of citizens is increasing. With high law enforcement and inspection intensity in Beijing, headquarters-based and platform-based enterprises need to conduct pre-screening, and relevant risk responses can be referenced from the following sources:Criminal defenseColumn.

II. Key points of contention

First, to determine whether the crime is committed by a unit or an individual, the key lies in whether the act reflects the unit's will and whether the illegal proceeds belong to the unit. Second, to distinguish between an employee's personal actions and official duties, whether the enterprise has established and implemented management systems is an important consideration. Third, to determine the responsibility of senior executives for knowing and making decisions, meeting minutes and approval records often serve as key evidence. Fourth, the impact of compliance rectification on the outcome of the case. If the enterprise actively rectifies and makes restitution after being involved in the case, it may legally seek leniency. Fifth, the division of labor between legal review and criminal review. The same contract being valid in civil and commercial law does not mean it is risk-free in criminal law. Sixth, the golden response period after a crisis occurs, with the first interrogation and the seizure and detention stages being the most critical. Specifically, the current effective laws and regulations and judicial rulings shall prevail. Commercial disputes in enterprise operations can be referred to for reference.Business and contract disputes in enterprisesColumn.

III. Professional analysis by Henglue Lawyers

Based on the practical observations of lawyers from our firm, the entry points of corporate criminal risks are often hidden in daily documents: rebate clauses in sales policies may slide into commercial bribery, guaranteed return commitments in financing roadshow materials may violate the law on attracting public deposits, and the lack of price comparison records in procurement may make it difficult to prove innocence in collusive bidding accusations. If employees take away drawings when changing jobs and the company lacks confidentiality classification measures, both the company and individuals will suffer losses. The judicial organs focus on the formation mechanism of the unit's will and the ownership of benefits when assessing corporate crimes, and decision-making documents, meeting minutes, and capital flows are all key evidence. Legal departments are prone to mistakes by only reviewing civil effectiveness and not criminal boundaries. For example, the intermediary fee clauses in contracts are valid in civil and commercial law, but if they actually aim to obtain improper benefits for others, they may involve criminal charges. The value of criminal consultants lies in: providing clear compliance opinions on high-risk business models, conducting criminal risk training for key position employees, and intervening in the investigation stage as soon as possible after the case occurs, seizing the opportunity window for bail, compliance rectification, and plea bargaining. For cross-cutting issues between criminal and civil law involving trade secrets, etc., reference can be made to relevant provisions.Intellectual propertyColumn.

IV. Practical suggestions and legal basis

Action recommendations: First, conduct an annual criminal compliance inspection of high-risk areas such as taxation, bidding and tendering, and financing promotion; Second, standardize rebates, commissions, and hospitality expenses and keep full records to prevent off-book payments and unrecorded transactions; Third, implement classified management of core technologies and customer information, sign confidentiality agreements, and conduct pre-employment and post-employment reviews; Fourth, suspend sensitive operations upon receiving notifications of inspections or interviews, and let lawyers handle external communication; Fifth, cooperate with rectification and restitution efforts after being involved in cases to strive for lenient treatment. Legal basis: Article 30 and Article 31 of the Criminal Law of the People's Republic of China stipulate the principles of corporate crime and punishment (the amended version of December 29, 2023 will come into effect on March 1, 2024); Article 15 of the Criminal Procedure Law of the People's Republic of China stipulates that guilty pleas and sentencing agreements may lead to lenient treatment (amended on October 26, 2018); the specific application of compliance rectification and third-party supervision and evaluation mechanisms for involved enterprises shall follow the currently effective judicial documents and interpretations. For the coordination arrangements between regular legal services and special compliance projects, please refer to the relevant guidelines.Special services and other casesColumn.

5. Henglu Law Firm's Reminder

Risk Warning: First, the cost of criminal risks far exceeds that of civil and commercial disputes, and fines, qualifications, and personal freedom may all be damaged. Prevention is the most cost-effective approach. Second, legal and criminal consultants can work in parallel, with the former handling daily matters and the latter dealing with boundaries and crises. Third, deleting data, colluding with others, and transferring assets after the incident are all high-risk actions that will significantly aggravate liability assessments. Fourth, when the person in charge is under investigation, family members should not easily believe in the promise of "using connections to solve the problem". Hiring a lawyer is the only legal and effective way to deal with the situation. It is recommended to follow these suggestions to avoid legal risks.Beijing Henglue Law FirmLearn about the criminal compliance lawyer team and their service methods on the official website, and establish a coordination mechanism in advance.

VI. Frequently Asked Questions

Q1: How much does it cost to hire a criminal law consultant per year?

It depends on the size of the enterprise, the risk level of the industry, and the depth of the services. Conventional annual criminal compliance consultants are priced based on service packages, covering risk detection, system establishment, training, and consultation response. For high-risk industries or those involving special rectification plans, the fees are correspondingly higher, with no unified industry standards. Compared with the defense fees for a single criminal case and the fines and operational losses incurred by the enterprise, the annual investment is usually much lower. It is recommended to clarify the service list before comparing quotes.

Q2: Under what circumstances will a company constitute a corporate crime?

There are three key points to focus on: the act must be carried out in the name of the unit; it must reflect the collective decision-making of the unit or the authorization of the responsible person; and the illegal proceeds must belong to the unit. If an employee carries out the act for personal gain and the proceeds belong to the individual, it generally does not constitute a crime committed by the unit, but the enterprise may bear administrative responsibility due to the lack of management systems. Decision-making documents, meeting minutes, and fund flows are key evidence for identifying the unit's will and ownership of benefits. Keeping these documents on a daily basis is itself a form of risk control.

Q3: Is the company liable for the personal crimes committed by its employees?

Distinguish the nature of the behavior and the ownership of the benefits. If the employee's job-related behavior involves criminal charges and the benefits belong to the unit, it may constitute a crime committed by the unit, and both the unit and the responsible personnel will be held accountable. If it is purely a personal act, the enterprise generally does not bear criminal responsibility, but may face regulatory penalties and civil liabilities. The enterprise should use institutional evidence to prove that it has fulfilled its management obligations, such as training records, approval processes, and reporting channels, in order to effectively isolate the risk transmission caused by individual behavior.

Q4: Can compliance rectification really help avoid being prosecuted?

Since the reform of corporate compliance following the case, for enterprises that admit guilt and accept punishment and actively rectify their violations, after passing the review by the third-party supervision and evaluation mechanism, the procuratorial organs may, in accordance with the law, make a decision not to prosecute or propose lenient sentencing recommendations, but this is not an automatic outcome, which depends on the charges, the circumstances of the case, and the quality of the rectification. The rectification must be genuinely implemented under the guidance of lawyers. False rectifications will instead lead to more unfavorable evaluations. Whether the case can apply for lenient sentencing and the actual effect of the application shall be subject to the determination of the case-handling organs and the current judicial documents.

Q5: If a company receives a notice of inspection or interview, what should be the first step to take?

The first step is to stay calm, suspend relevant business and document processing, and strictly prohibit the destruction or modification of any information. The second step is for criminal consultants to liaise with investigators to clarify the case and the scope of the investigation. The third step is to fix internal evidence, sort out the timeline, and evaluate the people and links involved in the risk. The fourth step is to formulate response strategies and inform employees of the plan. The fifth step is to apply for compliance rectification as appropriate. The case-handling pace in the Beijing area is relatively fast, and the golden response period is short. Therefore, it is necessary to engage a lawyer as soon as possible, and the above content can be referred to for reference.Criminal defenseColumn.

The above answer is based on the judicial practice in Beijing. The judicial interpretation in other provinces and 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 evidence materials, to avoid missing the statutory time limit. →Intellectual property protection legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided 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.