[Direct answer]Corporate criminal compliance and criminal defense are not the same thing: compliance is a proactive risk prevention project that identifies potential criminal risks in business models, transaction structures, internal control systems, and employee behavior, preventing problems before they lead to formal investigations; defense is a reactive remedial process that, after a company or its employees have been formally investigated and prosecuted, seeks to achieve outcomes such as case dismissal, non-prosecution, or lenient punishment by challenging evidence and legal interpretations. The two differ in their initiation timing, objectives, methods, and outcomes, yet they are interconnected—according to Article 13 of the Criminal Law of the People's Republic of China, acts with insignificant circumstances and minor harm are not considered crimes, and compliance rectification efforts can serve as a reference for obtaining lenient treatment in corporate compliance reforms. Companies should invest in compliance building during normal times and promptly engage professional lawyers once involved in litigation, starting with conducting a legal risk assessment.Criminal defense and legal services for criminal case filingUnderstand the relevant arrangements.

1. Problem background and typical scenarios

In recent years, corporate criminal risks have been concentrated in areas such as false invoicing and taxation, illegal fundraising and financing, commercial bribery, infringement of intellectual property rights, data and personal information, labor employment, and production safety. Many business owners confuse compliance with defense: some believe that signing a compliance consulting contract is enough, only to find out after an incident that the consultant doesn't appear in court to defend them; others think that hiring a defense lawyer completes compliance, leaving risk control loopholes intact, only to be involved in another case soon after; still others confuse "compliance checkups" with "innocence defense", purchasing the wrong services at the wrong time. The dividing line between the two types of needs is clear: conduct compliance before an incident occurs, and conduct defense after an incident. High-risk industries need to prepare for both in advance. Especially for enterprises in the financing expansion period, those relying on third-party channel rebates or data-driven enterprises are more exposed to criminal risks and need to deploy the two types of services in a phased manner.

II. Key points of contention

  • How to distinguish between corporate responsibility and individual responsibility: Identifying a corporate crime requires demonstrating the corporate will, acting in the corporate interest, and being driven by decision-making procedures. Crimes committed by individual employees without authorization may not necessarily result in corporate liability, but the company is often implicated in investigations. It is necessary to distinguish between the double punishment scope of fining the company and sentencing the responsible personnel according to Article 31 of the Criminal Law of the People's Republic of China.
  • Can compliance rectification lead to lenient treatment? Under the framework of the compliance reform for enterprises involved in cases promoted by the Supreme People's Procuratorate, for enterprises involved in cases that admit guilt and accept punishment, if they complete the compliance construction and pass the inspection and evaluation, they can strive for lenient treatment in the stages of approval of arrest and prosecution, and even apply for relative non-prosecution, but the prerequisite are that they make sincere rectifications and pass the evaluation, rather than just spending money to obtain documents.
  • The boundaries between compliance services and defense attorneys: The due diligence reports and rectification plans issued by compliance consultants cannot replace the defense attorneys' meetings, review of case files, and presentation of evidence and cross-examination in litigation; the two have different responsibilities and practice bases, and it's easy to fail on both sides if the two roles are confused in the client's commission.

III. Professional analysis by Henglue Lawyers

Henglue Lawyers typically distinguish two types of services from five perspectives: 1. **Timing**: Compliance starts before risks occur, while defense begins after case filing, summons, or enforcement measures. 2. **Goals**: Compliance aims to prevent issues, while defense strives for the best possible outcome in a case. 3. **Methods**: Compliance relies on systems, processes, training, and due diligence, while defense focuses on client meetings, reviewing case materials, presenting evidence and cross-examination, and procedural applications. 4. **Target audiences**: Compliance primarily serves enterprises and regulators, while defense targets case-handling authorities. 5. **Output formats**: Compliance delivers systems and reports, while defense provides litigation strategies and judicial rulings. The key connection between the two lies in the shared use of materials: Compliance systems, training records, and due diligence files established during normal operations can be used to mitigate corporate liability after a case arises, and also serve as evidence of remedial sincerity and plea attitude.

Take a case involving an online platform handled by Henglue Law Firm as an example: Li * once worked as a chat streamer for an overseas online platform. The platform embedded gambling advertisements and recharge entry points into the live-stream interface. After the public security organ investigated the platform, Li * was criminally detained on suspicion of operating a gambling house. During the defense, Henglue Law Firm focused on his role in the joint crime and his subjective awareness, arguing that he only engaged in ordinary chat interactions and did not participate in the operation or profit-sharing. Ultimately, Li * was granted bail pending trial after 30 days of detention. This case highlights the value of proactive compliance: before cooperating with third-party platforms, embedding external functions, or accepting profit-sharing models, it is essential to conduct a round of criminal compliance reviews of the transaction counterparties and business models. Many cases of "passive involvement in criminal activities" could have been avoided in this way. Corporate-related crimes are often intertwined with contract signing and fund transfers, and the related transaction risks can be referenced for prevention.Business and contract dispute services for enterprises.

IV. Practical suggestions and legal basis

At the legal basis level: Article 13 of the Criminal Law of the People's Republic of China establishes the proviso rule that circumstances that are obviously minor and do not cause significant harm are not considered crimes, which is the benchmark for determining whether an act constitutes a crime; Article 31 stipulates that a unit crime shall be subject to a double punishment system, where the unit is fined and the directly responsible person in charge and other directly responsible personnel are sentenced to criminal punishment; Article 15 of the Criminal Procedure Law of the People's Republic of China clearly stipulates that if a criminal suspect or defendant voluntarily confesses his crime truthfully, admits the facts of the charge, and is willing to accept punishment, he may be given lenient treatment according to law; Article 177, paragraph 2 stipulates that if the circumstances of the crime are minor and the people's procuratorate does not need to impose a criminal punishment or exempt the defendant from punishment according to law, the people's procuratorate may make a decision not to prosecute, which is the main exit for seeking a non-criminal outcome through compliance rectification. At the practical advice level: Enterprises are advised to conduct an annual criminal compliance check covering invoices and taxation, fundraising, commercial kickbacks, data compliance, and employment safety; verify the qualifications and business models of distributors, suppliers, and outsourcing platforms before cooperating with them; promptly investigate and fix evidence if any clues of employee involvement in criminal activities are found; and immediately entrust defense lawyers to intervene upon receiving a summons or a notice of assistance in investigation, and then evaluate and initiate compliance rectification simultaneously. For the management of data, personal information, and trade secrets, it can be combined with other measures.Intellectual property protection and corporate legal servicesArrange it all together.

5. Henglu Law Firm's Advice

Compliance and defense are not an either-or choice, but a sequential process: compliance prevents risks from arising, while defense limits losses within the scope of the case. Enterprises should neither blindly believe that "a contract guarantees safety" nor wait until a case breaks out to take emergency measures. After being involved in a case, it is particularly important to seize the golden period to meet with lawyers as soon as possible, document favorable facts, and assess the scope of compliance rectification. If you need to assess the criminal risks of your enterprise or are already facing a criminal case, it is recommended to seek professional assistance as soon as possible.Beijing Henglu Law FirmMake an appointment for an interview. This case is handled by Beijing Henglu Law FirmLiu LiqiangAttorney (Practice Certificate No.: 11101200910454358, subject to the certificate issued by the judicial administrative organ) acting as an agent.

Q1: What exactly does corporate criminal compliance service entail?

A comprehensive criminal compliance service typically includes four components: First, a criminal risk assessment, which identifies potential criminal risks in business models, contract templates, capital flows, and rebate and reimbursement systems, such as false invoicing, kickbacks, illegal fundraising, and intellectual property infringement risks. Second, the design of a special compliance plan, which establishes approval processes, isolation mechanisms, and traceability rules around high-risk areas. Third, employee training and business conduct guidelines, which clarify red lines and accountability mechanisms. Fourth, third-party due diligence and crisis response plans, which verify the background and business models of distributors, suppliers, and cooperation platforms, and pre-set response processes in the event of investigations. The depth of the service should match the enterprise's scale and industry risks, and key industries should also regularly update their plans in response to regulatory developments.

Q2: If an employee commits a personal crime, will the company be held accountable?

It is necessary to distinguish the circumstances. The key to determining whether an entity has committed a crime lies in whether the act reflects the entity's will, serves the entity's interests, and is promoted through decision-making procedures. If employees commit crimes to complete the company's business, in accordance with the company's instructions or with the approval of the management, the entity may be prosecuted together. According to Article 31 of the Criminal Law of the People's Republic of China, the entity will be fined and the responsible personnel will be sentenced to criminal punishment. If employees commit crimes on their own for personal gain and unrelated to their duties, they generally do not constitute corporate crimes, but the company may still face investigations, reputational losses, and civil liabilities. After discovering clues, enterprises should promptly fix evidence and prove the decision-making chain. When necessary, lawyers should issue legal opinions to clarify the boundaries of corporate and individual responsibilities.

Q3: Can the compliance rectification of the involved enterprises really lead to non-prosecution?

There are institutional channels, but this is not an inevitable outcome. Under the framework of compliance reforms for enterprises involved in cases, the applicable objects typically need to meet conditions such as admitting guilt and accepting punishment, having the willingness and ability to rectify, etc. The procuratorial organ will consult with relevant departments to initiate third-party supervision and evaluation. After the enterprise completes the construction of the compliance plan and passes the evaluation according to its commitment, the procuratorial organ may, in accordance with Article 177, Paragraph 2 of the Criminal Procedure Law of the People's Republic of China, make a decision not to prosecute in cases of minor criminal circumstances, or recommend lenient sentencing in the sentencing process. Enterprises should be wary of the claims of intermediaries that they can "guarantee success": the rectification plan must target real risk points and involve real institutional and implementation costs. False rectification not only fails to win leniency, but may also worsen the evaluation.

Q4: After the company receives the notice to assist in the investigation, what should it do first?

First, hire a criminal defense lawyer immediately instead of responding on your own. After the lawyer gets involved, he or she can help determine the nature and risk level of the notice, sort out the business and personnel involved in the case, clarify which materials can be provided and which belong to trade secrets that need to be protected; at the same time, guide the company to seal the evidence involved in the case, suspend operations that may be construed as colluding to provide evidence or destroying evidence, and arrange for the interviewees to receive guidance but not to instigate concealment. Once the responses of the company and individuals get out of control, they often become unfavorable evidence for subsequent determination. Receiving a notice of filing a case, a summons, or a notice of seizure and detention all belong to the golden response period. The earlier the lawyer gets involved, the better the protection of procedural rights will be.

Q5: If we have hired a long-term legal advisor, do we still need to hire a defense lawyer when something happens?

It is necessary to distinguish the roles. Full-time legal advisors are skilled in contract review, labor employment, and daily compliance, but most of them do not have or focus on criminal defense experience. Criminal defense requires familiarity with the entire process of investigation, review of prosecution, trial, meeting with clients, reviewing case files, applying for bail, reviewing the necessity of detention, and sentencing defense skills. After a company is involved in a criminal case, it is advisable to have criminal defense lawyers lead the case response, with full-time advisors providing business and background support. The two should cooperate rather than replace each other. When signing a power of attorney, it is also necessary to clarify the stages of representation and authority to avoid the misunderstanding that the advisor's contract already covers criminal defense, resulting in no one appearing in court or meeting with clients at critical moments.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, to avoid missing the statutory time limit. →Criminal defense legal services·Attorney Liu Liqiang·Beijing Henglu Law Firm