[Direct answer]In the Beijing area, it is suitable and recommended for SMEs to hire criminal legal consultants as early as possible. During their operations, they are prone to criminal risks such as falsifying VAT invoices, refusing to pay labor remuneration, colluding in bidding, infringing trade secrets, and illegally absorbing public deposits. Once involved in crimes, both the enterprise and individuals are often harmed. According to Article 30 and Article 31 of the Criminal Law of the People's Republic of China (amended by the Twelfth Amendment to the Criminal Law, and the relevant provisions will come into effect on March 1, 2024), a unit committing a crime will be subject to a double punishment system. The unit will be fined, and the directly responsible person in charge and other directly responsible persons will be investigated for criminal responsibility. Criminal legal consultants can conduct compliance reviews and risk inspections in advance, assist in responding to investigations and conducting compliance rectifications during the process, and significantly reduce the probability of criminal risks worsening. Relevant enterprise legal services can be referred to for reference.Intellectual property and corporate lawColumn.

1. Problem background and typical scenarios

Such considerations are common in several situations: First, when a company enters the stages of bidding and tendering, financing, or preparing for a listing, it hopes to identify and address criminal compliance risks in advance; Second, when a company has received administrative penalties and is concerned about the escalation of administrative violations into criminal offenses; Third, when the actual controller is reported or the company is investigated, and professional assistance is needed to respond; Fourth, when employees are suspected of embezzlement, commercial bribery, or disclosure of trade secrets, and the company needs to protect its rights and handle the matter internally; Fifth, in the context of compliance reforms in involved enterprises, the company hopes to secure lenient treatment through compliance rectification. For related criminal risks and defense issues, please refer to the following materials:Criminal defenseFor the column, you can refer to the contract and governance risks in the daily operation of enterprises for referenceBusiness and contract disputes in enterprisesA column. When handling similar matters in the Beijing area, it is usually first necessary to conduct a risk assessment before determining the focus of the consulting services.

II. Key points of dispute

Focus One: The distinction between corporate crimes and individual crimes. The key lies in whether the behavior reflects the corporate will and whether the benefits accrue to the corporation. Focus Two: The scope of identifying directly responsible supervisors and other directly responsible personnel. Focus Three: The boundary between administrative violations and criminal offenses, such as the administrative pre-procedure for tax evasion. Focus Four: The applicable conditions for the compliance rectification of involved enterprises and lenient treatment. Focus Five: The application of the lenient treatment system for guilty pleas and confessions according to Article 15 of the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018). Those who voluntarily make truthful statements, admit the charges, and are willing to accept the punishment may be given lenient treatment according to law. Focus Six: The procedural compliance of internal investigations and employee handling to avoid enterprises protecting their rights and being accused of infringements. Specifically, the above content is based on the currently effective laws, regulations, and judicial rulings.

III. Professional analysis by Henglue Lawyers

Judging from the practical experience of law firms handling criminal defense cases for enterprises, the common characteristics of criminal risks faced by SMEs lie in the lack of internal systems and a mentality of taking risks. Common scenarios include: mixing company funds with shareholders' funds and transferring them from public to private accounts, which may lead to tax-related risks; failing to sign employment contracts or intentionally defaulting on salaries, which may trigger criminal charges once the amount reaches a certain threshold; participating in bid-rigging or collusion in tendering processes, mistakenly believing these are industry norms; and failing to implement confidentiality measures for core technologies, making it difficult to protect rights when employees take away clients and formulas. Lawyers from our firm typically recommend a three-step approach: First, conduct a criminal risk assessment, screening high-frequency crimes by industry and business model; Second, establish systems to standardize financial approval, contract review, confidentiality agreements, and non-compete clauses; Third, maintain records of major decisions to demonstrate the company's compliance efforts and intentions. After a case occurs, it is essential to immediately secure evidence of innocence or mitigating circumstances, cooperate with investigations, and assess opportunities for compliance improvement, avoiding either blind resistance or hasty admissions of guilt.

IV. Practical suggestions and legal basis

Action recommendations: First, sort out the list of high-frequency crimes by business type. For trade-related businesses, focus on preventing tax-related crimes; for labor-intensive businesses, focus on preventing refusal to pay labor remuneration; for technology-related businesses, focus on preventing infringement of trade secrets. Second, establish four basic systems including finance, employment, bidding, and confidentiality, and provide regular training. Third, introduce criminal compliance reviews for major contracts and investment and financing arrangements. Fourth, if any illegal clues are found among employees, first conduct internal investigations to collect evidence, and then decide whether to report the case to the police or handle it internally. Fifth, if the company is already under investigation, engage a lawyer as soon as possible to seize the window period for plea bargaining and compliance rectification. In terms of 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 its punishment, and Article 15 of the Criminal Procedure Law of the People's Republic of China stipulates leniency for plea bargaining. For the construction of corporate compliance systems, reference can be made to the relevant provisions of the Guidelines for the Construction of Corporate Compliance Systems issued by the Ministry of Justice of the People's Republic of China.Special services and other casesColumn.

5. Henglue Law Firm's Reminder

Risk Warning: Firstly, criminal risks are irreversible, and the cost of prevention in advance is much lower than that of remediation afterwards; Secondly, a common misconception among SMEs is that criminal cases are far from their reach, but in fact, the threshold for criminal charges in most cases is not high; Thirdly, there are applicable conditions for compliance rectification and lenient treatment, which are not applicable to all cases; Fourthly, employees' personal crimes may implicate the company, and internal handling should balance protecting rights and ensuring procedural legitimacy. It is recommended to establish a criminal compliance mechanism as soon as possible and seek advice when necessary.Beijing Henglu Law FirmThe similar columns on the official website are customized by professional lawyers.

VI. Frequently Asked Questions

Q1: Is it really necessary for small and medium-sized enterprises to hire criminal law consultants?

It's necessary. SMEs are a high-risk group for corporate-related crimes. The threats of crimes such as falsifying VAT invoices, refusing to pay labor remuneration, and colluding in bidding are direct, and the unit crime is subject to a double punishment system, so both the enterprise and individuals may be held accountable. Criminal legal advisors can resolve risks before they occur through risk assessment, system construction, and employee training, which costs far less than defending criminal cases. The more employees and tax-related links a company has, the more it needs regular criminal compliance support.

Q2: What specific work do criminal legal consultants do?

The services include: - Pre-event: criminal risk physical examination, establishment of compliance systems, review of contracts and financial/taxation processes, employee training; - During the event: design of response plans for reports and investigations, internal investigation evidence collection, assistance in communicating with law enforcement agencies; - Post-event: formulation and implementation of compliance rectification plans, response to asset disposal in legal cases, and legal arrangements for business recovery. The services may be provided on an annual retainer basis or as special projects, with the scope subject to the terms of the consulting contract.

Q3: What is the approximate cost of hiring a criminal law consultant?

Generally, legal services are charged on an annual basis or as a fee for specific services, depending on the size of the enterprise, the complexity of its operations, the level of risk, and the scope of services provided. There is no standard pricing model. The fees for annual legal advisory services and one-time risk assessments vary significantly, and the cost of responding to legal disputes is also higher due to the high level of professional expertise required. It is recommended that enterprises first clarify their service requirements, negotiate pricing with law firms based on the service list and response mechanism, and avoid comparing prices without considering the actual service content.

Q4: The company has already been investigated. Is it still useful to hire a consultant?

It's useful and advisable to seek professional legal help as early as possible. Professional lawyers can intervene in the investigation stage to help sort out the facts, fix evidence of innocence or mitigated guilt, evaluate whether to apply for leniency in pleading guilty and accepting punishment, and assist in the compliance rectification of the involved enterprises, striving for non-prosecution or lenient handling; at the same time, they can help deal with seizure, attachment, and freezing measures, and safeguard the legitimate rights and interests of enterprises and employees. Delaying response often misses the best window period. The earlier the intervention, the more options there are to choose from.

Q5: How to select a suitable criminal law consultant for a company?

First, check the professional background to see if they have practical experience in criminal defense and compliance for companies involved in legal cases. Second, assess their understanding of the industry to see if they are familiar with the business model and regulatory environment of the company's industry. Third, evaluate their service mechanism to see if they can provide regular check-ups and rapid responses. Fourth, review their communication and confidentiality arrangements. It is recommended to interview two to three firms, clarify the service list and pricing model before signing a contract, and refer to relevant corporate legal services for reference.Intellectual property and corporate lawColumn.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as 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 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 a dispute arises, please consult a practicing lawyer in time.