[Direct answer]In the Beijing area, the core of an enterprise's criminal compliance system is to prevent and control criminal risks in advance through systems, processes, and training, to avoid units and executives violating the provisions on unit crimes in the Criminal Law. According to Articles 30 and 31 of the Criminal Law of the People's Republic of China, companies and enterprises that commit acts harmful to society and are legally defined as unit crimes shall bear criminal responsibility. The system should cover five aspects: risk identification, system standardization, decision-making and approval, reporting and investigation, and training and assessment, and be supported by third-party compliance supervision and evaluation. Whether the system can truly prevent risks depends on whether it is implemented in practice rather than just on paper. It is recommended that professional lawyers diagnose risk points based on industry and business scenarios, and, if necessary, use the compliance rectification mechanism of the involved enterprises to strive for leniency. For more details, please refer to the following link:Criminal defense and criminal case filing services.

I. Problem Background and Typical Scenarios

The number of criminal investigations into enterprises involving commercial bribery, false invoicing, infringement of trade secrets, environmental pollution, and safety production has been increasing year by year, and these cases often implicate legal representatives, financial managers, and business managers. Typical scenarios include: companies tacitly allowing sales staff to bribe customers to meet sales targets; falsely issuing value-added tax invoices to reduce costs; and accepting kickbacks during the procurement process. Many enterprises mistakenly believe that compliance is just a way to pass inspections, and only regret it when they are formally investigated. Once criminal risks turn into actual imprisonment, not only will the enterprise suffer losses, but executives will also face personal freedom restrictions. Building a compliance system in advance and completing rectifications before the incident occurs is the most cost-effective way to prevent risks. Relevant corporate governance can be combined withBusiness and contract dispute resolution services for enterprisesEvaluate the transaction structure.

II. Key points of dispute

The practical disputes focus on: the boundaries between corporate crime and individual crime — whether it reflects the corporate will and benefits belong to the corporate; whether the compliance system can be used as a basis for exoneration or lenient sentencing; the initiation conditions and acceptance standards for the compliance rectification of the involved enterprises; and the identification of paper compliance and effective compliance. The judicial authorities pay more attention to whether the system is truly operational and whether specific illegal points have been identified and corrected during the compliance reform, rather than just piling up documents. For executives, the key dispute lies in whether individual responsibility can be cut off due to corporate compliance.

III. Professional analysis by Hengluo Law Firm

Based on our experience in handling criminal cases, criminal risks often stem from prioritizing business over compliance. Taking a typical case handled by Attorney Liu Liqiang as an example: The defendant drove a car and caused a collision that resulted in a death. Through in-depth review of the case file and strict adherence to evidence, the attorney refuted the defense arguments one by one regarding subjective intent, voluntary surrender, and the nature of the crime. Ultimately, the court sentenced the defendant to death for intentional homicide, highlighting the decisive impact of evidence and legal characterization on sentencing in major criminal cases. Although this was an individual crime, it still illustrates that the lack of risk awareness and legal boundaries can lead to extremely severe consequences. At the corporate level, Hengluo Law Firm typically conducts comprehensive risk assessments first to identify high-incidence crimes and vulnerable processes, and then designs systems and approval nodes based on these findings. This case was handled by Beijing Hengluo Law Firm.Liu LiqiangThe attorney (practice license number: 11101200910454358, subject to the document issued by the judicial administrative organ) acts as the agent. When enterprises are establishing a compliance system, they can also take advantage ofIntellectual property protection and corporate legal servicesImprove the daily compliance interface.

IV. Practical suggestions and legal basis

The legal basis includes Article 30 and Article 31 (unit crimes and their punishments) of the Criminal Law of the People's Republic of China (implemented on October 1, 1997 and amended several times); Article 15 (leniency for admitting guilt and pleading guilty) of the Criminal Procedure Law of the People's Republic of China (adopted in 1979 and amended in 1996, 2012, and 2018); and the requirements for compliance management organizations and systems in the "Measures for Compliance Management of Central Enterprises" (announced on August 23, 2022 and implemented on October 1, 2022). Practical suggestions: First, conduct a comprehensive assessment of industry-specific criminal risks to identify high-incidence crimes; Second, establish rigid systems such as hierarchical approval, avoidance of related-party transactions, and setting limits on gifts and hospitality; Third, appoint compliance officers and establish reporting channels, and conduct regular internal audits; Fourth, promptly rectify and consolidate evidence for exposed hidden risks; Fifth, when necessary, introduce third-party supervision and evaluation to strive for leniency in compliance. For risks related to labor employment, reference can be made to the relevant provisions.Labor arbitration and work-related injury compensation services.

5. Henglu Law Firm's Reminder

Compliance is not just a manual, but a continuously operating mechanism. Enterprises should avoid the passive situation of only becoming compliant after an incident occurs, and instead embed compliance into their business processes rather than just displaying it on the wall. For high-risk industries, it is recommended to conduct compliance checkups at least once a year and conduct special reviews before mergers and major transactions. Once receiving an investigation notice, do not destroy evidence or adopt a unified response without authorization. Instead, fix evidence immediately and consult lawyers to grasp the window period for plea bargaining and compliance rectification. Professional lawyers can help enterprises operate within legal boundaries and minimize criminal risks. For more key points, please refer to the following section.Criminal defense and criminal case filing services.

VI. Frequently Asked Questions

Q1: Can a company avoid criminal liability just by establishing a compliance system?

There is no guarantee of exemption from liability. The value of a compliance system lies in reducing risks and proving that the unit has fulfilled its management obligations, thereby striving to separate individual responsibility or obtain leniency in the determination of the unit's criminal responsibility. According to Article 31 of the Criminal Law and the spirit of compliance reform, an effectively functioning compliance system can be taken into account in sentencing and rectification, but it cannot make the fact of the crime that has occurred disappear. The system must be truly implemented and continuously operated. Compliance on paper will not be recognized.

Q2: What materials are needed to establish an enterprise criminal compliance system?

The core materials include: the enterprise's organizational structure and equity relationship diagram, a list of business processes and approval nodes, samples of contracts and financial vouchers from the past three years, records of past penalties or disputes, current regulations, employee codes of conduct, and training records. Based on these materials, lawyers conduct risk assessments to identify high-incidence crimes and vulnerabilities. The more complete the materials are, the more practical the compliance solutions will be, and the more convincing the subsequent rectification records will be.

Q3: How much does it cost to hire a lawyer to conduct criminal compliance rectification?

The fees vary depending on the size of the enterprise, the industry risk, and the depth of the rectification. They are usually charged on a project basis or according to the contract terms and workload, with no unified government pricing. The specific fees are subject to the contract. Compared with the costs of criminal defense, compensation, and operational damage after an incident, the cost-effectiveness of pre-compliance investment is extremely high. It is recommended to clarify the scope of services, stages, and fee caps with the law firm before entrusting them, to avoid secondary price negotiations due to unclear scope of services.

Q4: How long does it typically take to rectify corporate criminal compliance issues?

Depending on the complexity of the risks, it usually takes one to three months to set up a basic system for small and medium-sized enterprises. For those involving the compliance rectification of the involved enterprises and third-party supervision and evaluation, the whole process may take more than half a year. The compliance rectification needs to go through several stages, including risk diagnosis, system design, operational pilot, internal training, and acceptance evaluation, which cannot be achieved overnight. It is recommended to set aside sufficient time to avoid rushing the process for the sake of meeting deadlines and ending up with superficial results.

Q5: If a company identifies potential criminal risks, what should be the first step to address them?

There are four suggestions: First, immediately suspend the risky business and seal relevant contracts, accounts, and communication records, and prohibit their destruction or tampering; Second, conduct an internal preliminary verification to clarify the facts and the responsible persons; Third, as soon as possible, entrust professional lawyers to intervene and assess whether it constitutes a corporate crime and personal risk; Fourth, if a case has been filed, seize the opportunity for plea bargaining and compliance rectification to strive for lenient treatment. Throughout the process, attention should be paid to confidentiality and legal evidence collection.

The above Q&A is mainly based on judicial practices in the Beijing area. There may be differences in the adjudication standards across different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with evidence materials, to avoid missing the statutory time limit. →Criminal defense legal services·Beijing Hengluo 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.