[Direct answer]In the Beijing area, corporate criminal compliance should be initiated simultaneously at the decision-making level and the source of business, rather than relying solely on the legal department to act alone. It is advisable for the board of directors or general manager to take the lead, with the legal compliance department responsible for establishing systems and processes. Departments such as business, finance, procurement, sales, and human resources should incorporate compliance reviews into key processes, and external lawyers and third-party mechanisms may be introduced when necessary. Articles 30 and 31 of the Criminal Law of the People's Republic of China (including the Amendment (XII) to the Criminal Law, which came into effect on March 1, 2024) establish a system of double punishment for corporate crimes. When a unit is fined, the directly responsible person in charge and other directly responsible persons shall also bear criminal responsibility. Compliance is a management system that covers the entire business process. Preventive examination is far better than post-defense. For more details, please refer to the relevant documents.Criminal defense and legal services for criminal case filing.

I. Problem Background and Typical Scenarios

The criminal risks faced by enterprises permeate the entire business process: false invoicing of VAT special invoices, embezzlement, misappropriation of funds, commercial bribery, illegal occupation of agricultural land, destruction of environmental resources, infringement of trade secrets, cyber data crimes, etc. may all lead enterprises and individuals to be involved in criminal proceedings simultaneously. Common scenarios include relaxing reviews during the expansion period, irregularities in financial and taxation matters, non-compliant employment practices, incomplete project land approval procedures, gray expenditures in the sales process, and a lack of review of fund transactions between related parties. Many business owners mistakenly believe that compliance is solely the responsibility of the legal department, only to realize the source of the risks when their accounts are frozen or staff are taken away for investigation. Identifying criminal risks in advance at key business nodes such as project planning, procurement, construction, sales, and fund management is a fundamental skill for corporate governance and compliance services. The approach can be referenced from the following perspectives:Intellectual property protection and corporate legal services.

II. Key points of contention

In practice, the disputes focus on four points. Firstly, the functional attribution: whether the compliance function should be placed in the legal affairs, risk control, supervision, or audit departments, and whether its relationship is independent and whether it can directly reach the decision-making level. Secondly, the review nodes: whether the compliance opinions are embedded into the business process in advance or reviewed retrospectively, which directly determines whether the system is just a formality. Thirdly, the effectiveness judgment: the gap between the written system and actual implementation is often the key to determining whether the compliance system is truly effective after a case occurs. Fourthly, the third-party supervision and evaluation of compliance reform in enterprises involved in the case and the scope of lenient treatment. In the judicial practice of Beijing, the judicial authorities are becoming increasingly strict in reviewing corporate compliance, and superficial compliance is unlikely to receive lenient evaluations.

III. Professional analysis by Henglue Law Firm

A case of illegal land occupation investigated by Jing Weiyi Lawyer fully demonstrates how the lack of compliance in business processes escalates into criminal risks. In May 2024, Liu ** illegally occupied about 20 mu of land in Shuguang Village, Qianjin Town, A County, Henan Province for earthwork without approval, involving 0.5 mu, 0.9 mu, and 3 mu of basic farmland contracted by villagers. This resulted in land hardening, topsoil stripping, and irrigation damage, as well as the destruction of 9-year-old pepper trees and 10-year-old persimmon trees on the ground. On December 16, 2025, Jing Weiyi Lawyer assisted the villagers in mailing the "Application for Investigation of Illegal Land Occupation" to the A County Natural Resources Bureau via EMS. After receiving and verifying the application on December 17, the bureau initiated an investigation and filed a case against Liu ** for damaging farmland on April 7, 2026 (No. XJZRZL [2026]07). It was determined that Liu **'s actions violated Articles 37 and 75 of the Land Management Law. Following legal referral, the public security organ has initiated a criminal investigation against Liu ** for suspected illegal occupation of agricultural land, and Liu ** has been subject to criminal compulsory measures. The case-handling authorities confirmed the facts of illegal land occupation and initiated criminal accountability, while laying a foundation of evidence for the villagers to subsequently claim compensation for land reclamation costs and tree damage. Looking back at the entire case, if a compliance review had been conducted on the land use approval, land nature, and ecological impact before the earthwork, it could have avoided the escalation of the administrative case into a criminal investigation. Where should corporate compliance begin? The answer is: from the business departments closest to risks, led by decision-makers, organized by legal compliance departments, and with review nodes embedded in key processes across all business departments to embed risk identification into the entire process. This case was handled by Beijing Henglu Law Firm.I sincerely hope that you will be happy and healthy in the future.The attorney (practice license number: 1110120251097379, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 30 and Article 31 of the Criminal Law of the People's Republic of China (including the Amendment to the Criminal Law (Twelfth), which came into effect on March 1, 2024); Article 37 and Article 75 of the Land Administration Law of the People's Republic of China (amended in 2019 and came into effect on January 1, 2020); the requirements for the organizational structure, responsibilities, and risk investigation of compliance management in the "Measures for Compliance Management of Central Enterprises" (issued by the SASAC of the State Council and came into effect on October 1, 2022); and the relevant provisions of the Supreme People's Procuratorate on the reform of compliance of enterprises involved in cases and the third-party supervision and evaluation mechanism (specifically subject to the currently effective provisions). Action list: First, the board of directors or general manager shall appoint a lead person, establish a compliance committee or designate a compliance officer, and grant them a direct reporting channel to the decision-making level. Second, comprehensively sort out the risk points of the entire business process and form a criminal risk list. Third, embed compliance review nodes into key links such as contracts, payments, approvals, employment, and land use. Fourth, establish a reporting, investigation, and accountability mechanism, and keep records of system implementation. Fifth, if any clues of suspected crimes are found or investigations have already been initiated, promptly hire lawyers to respond in accordance with the law. For those who meet the conditions, lenient treatment for compliance rectification shall be applied in accordance with the law. For details, please refer to the relevant provisions.Criminal defense and legal services for criminal case filing.

5. Henglue Law Firm's Advice

The biggest enemy of compliance is "everything seems to have a system, but it's all just going through the motions when it comes to implementation". The characteristics of criminal risks are one-way and irreversible: once a case is filed, criminal detention occurs, accounts are frozen, and reputation is damaged, the operation of the enterprise will often suffer an impact far exceeding the cost of compliance. It is recommended to include compliance checkups in annual routine arrangements and set up a veto system for high-risk links; for those who have been interviewed or had their accounts frozen, they should immediately entrust lawyers to handle the matter, first to stop the bleeding and then to improve the system. Enterprises in the Beijing area can contact us to handle similar matters.Beijing Henglu Law FirmThe professional lawyer team assesses risks and designs systems.

VI. Frequently Asked Questions

Q1: If a company has implemented effective criminal compliance measures, will it necessarily avoid being prosecuted after being involved in a case?

We cannot regard the compliance system as a get-out-of-jail-free card. Under the framework of compliance reform for enterprises involved in cases, if the compliance rectification of the suspected criminal enterprise passes the third-party supervision and evaluation, the procuratorial organ may, in accordance with the law, decide not to prosecute or give a lenient punishment, but this requires satisfying the procedural conditions and ensuring that the rectification is genuine and effective. Whether to give a lenient punishment still depends on the facts of the case, the evidence, and the application of the law. No lawyer can unilaterally guarantee the outcome. The fundamental thing is to focus on conducting business in compliance on a daily basis.

Q2: What materials are needed to set up a compliance system?

The basic materials include: business license, company charter and governance structure documents; organizational structure and department responsibilities description; business contracts, financial books and tax payment materials; employment contracts, social insurance and salary records; project approval, land use and environmental impact assessment procedures; procurement and sales process documents; data and information security systems; past administrative penalties, litigation and internal investigation records. On this basis, a risk list and rectification file shall be formed for each criminal risk point. The system documents shall retain the records of issuance, training and implementation to prove that the system is actually in operation rather than just on paper.

Q3: How much does it cost to conduct compliance physical examinations and establish a compliance system?

There is no unified government pricing for these services. The fees are determined through negotiations between law firms and enterprises, and usually depend on the enterprise's size, the complexity of its operations, the scope of the physical examination, and the depth of the report. They range from basic screening costing thousands of yuan to comprehensive compliance system construction costing tens of thousands of yuan. There are also options for charging by module or including them in annual consulting services. It is recommended to first clarify your needs and budget, and require a written quotation list and an agreement on the deliverables to avoid paying excessive fees for plans that only exist on paper.

Q4: How long does it take from initiating compliance to implementing the system?

The basic risk physical examination typically takes two to four weeks to issue a report; the establishment of systems and the integration of processes usually require one to three months depending on the size of the enterprise; if the enterprise involved in the case enters the compliance rectification process, the rectification period is determined by the third-party supervision and evaluation mechanism, and in practice, it is usually more than three months. System construction is not a one-time project. It is recommended to advance in stages: first, complete the screening of high-risk areas, then gradually cover the entire process, and initiate a re-inspection and update when there are major changes in the business.

Q5: If a company wants to implement compliance, what should be the first step?

There are four steps to promote this: First, the board of directors or the general manager should clearly identify the lead person and the responsible department to form a compliance management organizational structure; Second, comprehensively sort out the business processes and list the criminal risk points in the aspects of finance and taxation, employment, land use, bidding and tendering, data, etc.; Third, prioritize the special inspection of high-risk links to form a risk list and rectification plan; Fourth, embed compliance review into key nodes such as contracts, payments, and approvals, and keep the implementation records. If conditions permit, hire professional lawyers to participate in system design and implementation guidance as soon as possible.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm about specific situations.

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.Criminal defense legal services·Attorney Shang Jiangpeng·Beijing Henglu Law Firm

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