[Direct answer]In the Beijing area, to prevent criminal risks for executives, it is necessary to establish a three-tier system of "pre-compliance, on-site supervision, and post-response": First, improve corporate governance, and make collective decisions on major projects and avoid related-party transactions; Second, investigate high-incidence crimes such as embezzlement of duty, misappropriation of funds, and bribery of non-state employees; Third, keep records of contracts, finances, and approval processes throughout; Fourth, prepare crisis response plans and hire lawyers immediately after being investigated. According to Articles 163, 271, and 272 of the Criminal Law of the People's Republic of China, executives who embezzle or misappropriate company funds or accept kickbacks will be held criminally liable; after being detained by the police, the public security organ may apply for approval of arrest within a maximum of 30 days, plus a seven-day review period by the procuratorate, which is commonly referred to in the industry as the "golden 37-day period". For specific solutions, please refer to the following reference materials:Criminal defense and criminal case filing services.

I. Problem Background and Typical Scenarios

Corporate executives hold the power to make operational decisions and allocate funds, and criminal risks often arise incidentally during their daily business activities. Typical scenarios include: tacitly allowing subordinates to engage in commercial bribery to meet performance targets; mixing public and private accounts in related-party transactions; disguisedly accepting kickbacks under the guise of loans and consulting fees; turning a blind eye to financial fraud and false invoicing; and mixing personal debts with company funds. Many executives only realize that industry practices may have violated criminal law after being taken away for investigation. Among corporate executives involved in crimes, the most common types are embezzlement, misappropriation of funds, and bribery of non-state employees, often exposed through the lack of internal controls, reports and complaints, or financial audits. Relevant compliance efforts can be combined withIntellectual property protection and corporate legal servicesCoordinate and advance in an integrated manner.

II. Key points of dispute

The focus of the controversy in executive criminal cases lies in three aspects. Firstly, the nature of the behavior is either a civil dispute or a criminal offense: normal commercial discounts versus commercial bribery, fund lending versus embezzlement, and the boundary depends on subjective intent and evidence, with clear accounting records serving as a dividing line. Secondly, the distinction between individual behavior and corporate responsibility: whether the act is carried out in the name of the company and whether the benefits belong to the company directly affects the scope of conviction and accountability. Thirdly, the determination of the amount and circumstances: the amount involved in the case, whether the money is returned or compensated, and whether there is a voluntary surrender and confession directly determine the sentencing level. Criminal cases handled by Hengluo Lawyers show that many defendants do not commit crimes intentionally, but rather have an insufficient understanding of legal boundaries and formalities, with risks accumulating over time.

III. Professional analysis by Hengluo Lawyers

The criminal cases handled by Hengluo Lawyers show that criminal risks often do not come from deliberate premeditation, but from the negligence and blurred boundaries in daily management. In a case of intentional homicide handled by Hengluo Lawyers, the defendant drove his car into a laboratory due to a work-related argument, resulting in one death and two injuries. He was sentenced to death for intentional homicide. The uncontrollable emotions and lack of awareness of rules led to irreversible consequences in an instant, which reminds executives that they also need braking mechanisms in business decision-making and conflict management. Two other cases handled by Hengluo Lawyers are also instructive: C * was detained for criminally re-posting three obscene videos on a forum. After attorney Shang Jiangpeng proved that the number of videos did not reach the threshold for criminal prosecution, he was successfully released on bail; W *, who was employed by an overseas online gambling platform as a live streamer, was detained for operating a gambling house. After attorney Zhu Guiyin argued that she was an accomplice, ill, and posed a low social danger, she was successfully released on bail. Both cases involved ordinary employees who were caught up in criminal proceedings due to a lack of awareness of legal boundaries. For corporate executives, pre-compliance and system constraints are the key to preventing impulsive decisions from leading to legal troubles. 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.

IV. Practical suggestions and legal basis

The legal basis is Article 163 of the Criminal Law of the People's Republic of China (amended by the Amendment (XII) to the Criminal Law, which came into effect on March 1, 2024), Article 271 (embezzlement of public funds) and Article 272 (misappropriation of funds); Article 180 of the Company Law of the People's Republic of China (amended on December 29, 2023 and came into effect on July 1, 2024) (fiduciary duties of directors, supervisors and senior managers). Practical suggestions: First, conduct a special criminal compliance check for senior executives to sort out the four high-risk links of procurement, sales, investment and financing, and taxation; Second, improve the approval and avoidance mechanism, and implement hierarchical authorization for related-party transactions and large-scale fund payments; Third, keep records throughout the whole process, and file contracts, meeting minutes, and approval forms by dedicated personnel; Fourth, develop emergency plans. Once under investigation, hire a lawyer within 48 hours to avoid signing documents or making statements rashly. For issues involving corporate governance and contract risks, refer to the relevant provisions of the Company Law and the Criminal Law.Business and contract dispute resolution services for enterprisesSynchronized investigation and verification.

5. Henglu Law Firm's Advice

The key to preventing criminal risks lies not in putting out fires after the fact, but in confining power within the framework of the system beforehand. Executives should keep in mind three bottom lines: not handling clients' and suppliers' money, not mixing public and private accounts, and not condoning data and financial fraud. Once they receive a notice of cooperation or are detained by the police, they should not try to smooth things over on their own or sign ambiguous documents. Instead, they should immediately hire professional criminal lawyers to apply for bail pending trial within the golden 37-day period after being detained by the police. For major and complex matters, they can seek assistance from professionals.Special services and other case servicesOrganize a special response team.

VI. Frequently Asked Questions

Q1: Even if executives establish a compliance system, will they still be held criminally liable?

Compliance cannot guarantee absolute exemption from liability, but it can significantly reduce risks and influence the nature of the case. If the behavior itself meets the constituting elements of Article 163 of the Criminal Law (Bribing Non-State Workers), Article 271 (Embezzlement of Public Funds), or Article 272 (Misappropriation of Funds), the person involved may still be held accountable; conversely, if the decision-making process is compliant, the benefits belong to the unit, and the accounts are clear, many operations can withstand investigation and trial scrutiny. The value of compliance lies in controlling behaviors at the source within the scope of civil breach of contract rather than criminal offenses, and providing complete evidence to self-vindicate in the event of an incident. The outcome of a case depends on facts and evidence, and no lawyer can make an absolute guarantee. The significance of prevention lies in minimizing the probability of risks.

Q2: For preventing criminal risks for executives, what evidence materials need to be preserved?

The core materials include: shareholders' meetings, board resolutions, and meeting minutes (to prove collective decision-making); contract approval forms and stamping records (to prove process compliance); financial vouchers and bank statements (to prove fund flow); related-party transaction disclosure and avoidance documents (to prove proper procedures); compliance system documents and training attendance records (to prove fulfillment of management responsibilities); and salary reimbursement vouchers (to prove clear separation between public and private funds). These materials can not only prove process compliance but also support the absence of illegal possession intentions in case of emergencies. It is recommended to keep them in dedicated files with electronic data backed up simultaneously, and to preserve them for no less than five years to avoid loss of records when personnel change and lack of evidence in critical moments.

Q3: How much does it usually cost to hire a lawyer for executive criminal compliance or defense?

The lawyer's fees are determined through consultation between the law firm and the client. Common methods include charging by case, charging according to the proportion of the subject matter, and charging by the hour, with no unified standard. Compliance examination-related services are usually priced as a package deal. It should be noted that according to the "Measures for the Administration of Lawyer's Service Fees" (issued in 2006), risk-based fees are prohibited in criminal litigation cases, and defense fees are generally agreed upon in stages during the investigation, review and prosecution, and trial stages. It is recommended to request the law firm to provide a detailed fee breakdown before entrusting the case, clarify whether it includes third-party costs such as travel and appraisal, and agree on the circumstances for refunds, to avoid accepting cases at low prices and increasing fees during the process.

Q4: After an executive is placed under investigation, how long does it typically take to reach a conclusion?

The timeframes vary depending on the stage of the case and the specific circumstances. After criminal detention, the public security organ may request the procuratorate to review and approve the arrest, with a maximum period of 30 days. The procuratorate shall make a decision within seven days, which is commonly referred to in the industry as the "golden 37 days". Subsequently, the investigation and detention period shall generally not exceed two months, and the period may be extended according to law for complex cases. The review and prosecution stage generally lasts one month, with two opportunities for review and prosecution, each lasting one month. First-instance public prosecution cases generally take two to three months. The entire process may last from a few months to over a year. Whether it is possible to secure bail during the golden period after being investigated directly affects the subsequent defense space, so it is necessary to engage a lawyer as soon as possible.

Q5: After executives detect criminal risks, what should they do first?

It is recommended to take four steps to deal with the situation: First, immediately seal and sort out the contracts, accounts, and approval records involved in the case, and fix the favorable evidence. Do not delete, tamper with, or retroactively sign any documents. Second, suspend relevant business operations to prevent the risk exposure from further expanding. Third, within 48 hours, hire a professional criminal lawyer to assess the nature of the actions and the risk of being charged, and coordinate the subsequent response strategies. Fourth, if you have received a request for assistance or been detained by the police, let the lawyer meet with you as soon as possible to understand the case and strive to obtain bail within the golden 37-day period. It is strictly prohibited to use connections to smooth things over, sign ambiguous documents, or coordinate testimonies to fabricate evidence. These actions may constitute new crimes in themselves.

The above answer is based on the judicial practice in the Beijing area. 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. →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 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.