[Direct answer]In the Beijing area, there is no statutory cycle for criminal risk physical examinations. In practice, it is recommended that enterprises conduct a comprehensive physical examination once a year, and add special physical examinations after the launch of new businesses, changes in senior management, mergers and acquisitions, adjustments in industry regulatory policies, or the occurrence of criminal risk events. For enterprises involving data, capital-intensive operations, or frequent litigation, the frequency can be shortened to once every six months. The significance of physical examinations lies in identifying high-frequency risk points such as embezzlement, misappropriation of funds, commercial bribery, and false invoicing in advance, and taking remedial measures before the occurrence of crimes. According to Articles 30 and 31 of the Criminal Law of the People's Republic of China, a unit committing a crime is subject to a dual punishment system, and the directly responsible person in charge also bears criminal responsibility. The "Central Enterprise Compliance Management Measures" (effective from October 1, 2022) establish the basic framework for compliance management responsibilities and operations. It is recommended to replace template applications with professional inspections. For customized solutions, please refer to the following link:Criminal defense and criminal case filing services.

1. Problem background and typical scenarios

The criminal risks in corporate operations are often underestimated. Typical scenarios include: mixing the company's assets with shareholders' personal assets and using the company's funds as "their own money"; offering bribes to secure orders in the procurement and sales process; purchasing tickets to offset debts to reduce costs; employees embezzling clients' funds by exploiting their authority; advertising and distribution models that border on false propaganda or pyramid schemes; and online businesses being involved in gambling and pornography without realizing it. These issues usually manifest as "irregular management", but once they are investigated, they may escalate into criminal cases, resulting in account freezes, executive detentions, and business disruptions. The value of risk assessments lies in identifying and rectifying problems at the early stage, rather than waiting for investigative authorities to take action before taking remedial measures.

II. Key points of dispute

Firstly, the boundary between civil disputes and criminal offenses: Operating losses and contract breaches fall under civil law, but if there is an intent to illegally possess assets or violate regulatory provisions, they may transform into criminal issues, which require professional personnel to judge based on the business model. Secondly, the division of corporate and individual responsibilities: Under the "double punishment" system, enterprises are fined, and the directly responsible supervisors and other directly responsible personnel are also sentenced to prison. The common misconception is that "the company's actions do not hold individuals accountable". Thirdly, the positioning of the physical examination conclusion: Lawyers point out that risk assessment does not equal an opinion of innocence. The physical examination is a management tool rather than a golden ticket for exemption from liability. Fourthly, the handling of historical legacy issues: Whether the acts that have occurred are still within the statute of limitations, and whether they can seek leniency through compensation and rectification, require case-by-case evaluation. The evaluation framework can be assisted by\nCriminal defense professional team.

III. Professional analysis by Hengluo Law Firm

Based on practical observations in handling criminal cases, corporate criminal risks often emerge in business and management details, rather than in institutional documents. Attorney Liu Liqiang of Hengluo Law Firm once represented a case of intentional homicide with accompanying civil litigation: On June 16, 2024, the defendant had a dispute with staff members over construction quality at a mixing station. After being persuaded to stop, he accelerated his car to ram into the laboratory, resulting in one death and two injuries. The court ultimately sentenced him to death for intentional homicide. For employers, the lack of employee conflict management, vehicle and drunk driving control, and on-site safety systems may lead to irreversible criminal consequences. 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. The other two cases handled by Hengluo Law Firm also illustrate the diversity of risk scenarios: In the case of spreading obscene materials handled by Attorney Shang Jiangpeng, the client was criminally detained simply for reposting three videos on a forum for forum points; this exposed the lack of education on employees' online behavior. In the case of operating a gambling house handled by Attorney Zhu Guiying, the client was employed as a chat streamer on an overseas online gambling platform, and was held criminally liable once the gambling interface was embedded into the live stream interface, reflecting the insufficient identification of the business nature during the recruitment and due diligence processes. The boundaries of employees' online behavior, the review of the business nature during the recruitment process, and the traceability of funds and approvals are all aspects that cannot be overlooked in the risk check.

IV. Practical suggestions and legal basis

The legal basis is Article 30 (Scope of Criminal Liability of Units), Article 31 (Punishment for Corporate Crimes), and Article 87 (Statute of Limitations) of the Criminal Law of the People's Republic of China (amended on March 14, 1997 and further amended by the Eleventh Amendment to the Criminal Law (effective on March 1, 2021) and the Twelfth Amendment to the Criminal Law (effective on March 1, 2024)); the provisions on the organizational system, systems, and operational mechanisms of compliance management in the "Measures for Compliance Management of Central Enterprises" (issued by the State-Owned Assets Supervision and Administration Commission of the State Council, effective from October 1, 2022); and the relevant mechanisms for corporate compliance reform initiated by the Supreme People's Procuratorate since 2020 and fully implemented in April 2022. Practical suggestions: - Conduct annual audits covering five major areas: finance, procurement and sales, personnel and employment, data compliance, and publicity and promotion. - Conduct special inspections before launching new businesses. - Establish systems for approving and leaving records, training records, and accountability records. - Under the guidance of lawyers, distinguish between administrative violations and criminal risks for historical issues and take immediate remedial measures where possible. - Customized solutions can be developed based on these recommendations.Criminal defense and criminal case filing services.

5. Hengluo Law Firm's Reminder

The criminal risk checkup is not a face-saving project. It is recommended to grasp three key stages: conduct a comprehensive checkup once a year for routine business; carry out a special investigation within three months after the introduction of new business, new positions, or new regulatory policies; and immediately initiate an emergency assessment when signals such as being investigated, reported, or having account abnormalities emerge. Enterprises should keep the checkup reports and rectification records intact, which not only serves as a management record but may also be used as a mitigating factor in the compliance procedures of enterprises involved in cases. It is crucial to avoid simply modifying the online templates and submitting them as completed tasks—these templates do not understand your business flow, capital flow, or approval flow. Only customized investigations tailored to your business scenarios can be of practical significance. For those in need of a systematic assessment, please contact us for assistance.Beijing Henglu Law FirmA professional team of lawyers.

VI. Frequently Asked Questions

Q1: If the company is not involved in the case, is it necessary to conduct a criminal risk assessment?

It's necessary. Once criminal proceedings are initiated, companies face not only fines, but also account freezes, production stoppages, executive detentions, and the loss of business partners, which is far more costly than pre-emptive investigations. Article 31 of the Criminal Law implements a dual-punishment system, where directly responsible persons in charge of the unit's crimes are also sentenced to prison, and individuals cannot avoid punishment either. Most companies show warning signs before a crime occurs: financial confusion, uncontrolled approvals, and employees exceeding their authority, all of which can be identified through pre-emptive investigations. For shareholders, the cost of pre-emptive investigations is far lower than the cost of defense and operational losses after a crime occurs. It's better to take preventive measures in advance than to remedy the situation afterwards.

Q2: What materials do enterprises need to prepare for the criminal risk physical examination?

These typically include: a business license and company bylaws, a description of the governance structure and executive responsibilities; financial statements, audit reports, and major bank transaction records for the past three years; procurement and sales ledgers, large-scale contracts, and approval records; employee handbooks, reward and punishment records, and resignation records; explanations of data-related, promotional, and distribution business models; records of litigation and administrative penalties; and existing internal system documents. The more complete the information is, the more accurate the investigation will be. Lawyers will compare each item with the business flow, capital flow, and approval flow to identify execution-level risks such as "systems are written but not implemented" and "oral approvals without traceable records", rather than just making superficial changes to the text.

Q3: How much does it cost to conduct a criminal risk assessment?

At present, there is no government-set pricing standard. Law firms negotiate pricing based on the scale of the enterprise, the complexity of the business, and the scope of the investigation. Common pricing methods include charging by the project or by the workload, and the service scope, deliverables (physical examination reports, risk lists, and rectification suggestions), and the number of subsequent revisions are specified in the contract. It is recommended to clarify before signing the contract whether it includes executive interviews, system revisions, and employee training to avoid low-price entry and price increases during the process. Also, be cautious of "standardized physical examinations" with quotes that deviate significantly from the market level—the value of such template-based investigations is limited.

Q4: How long does it usually take from the release of the physical examination report to the completion of the rectification process?

The regular physical examination typically takes two to six weeks from receiving the materials to issuing the report, depending on the completeness of the materials and the arrangement of executive interviews. The implementation period of the rectification depends on the complexity of the problem: system revision and process launch usually take one to three months, while issues involving historical account clearance, tax rectification, or personnel handling may take longer. It is recommended that enterprises divide the rectification into three categories: "immediate rectification", "rectification within a specified timeframe", and "continuous monitoring". They should prioritize addressing the three high-risk areas of funds, seals, and approvals, and avoid pursuing a one-time solution that is just a formality.

Q5: How often should companies conduct physical examinations, and how can they maintain good health on a regular basis?

It is recommended to conduct a comprehensive physical examination once a year plus targeted special investigations triggered by specific events: new business launches, changes in equity or senior management, mergers and acquisitions, regulatory policy adjustments, or after employees are involved in legal cases or customer complaints. During routine maintenance, three key aspects should be emphasized: first, ensure that all financial transactions and approval processes are traceable, including large-scale payments, the use of official stamps, and contract approvals; second, conduct regular employee training and implement behavioral guidelines to clarify the boundaries of online behavior, business etiquette, and kickbacks; third, establish internal reporting and compliance accountability channels to handle issues in accordance with established procedures. The key to effective risk prevention lies in the implementation and documentation of these systems.

The above answer is based on the judicial practice in Beijing. The judicial interpretations 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, so as 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 a dispute arises, please consult a practicing lawyer in time.