[Direct answer]Criminal compliance non-prosecution refers to a system in which the involved enterprises voluntarily admit their guilt and accept punishment, commit to special compliance rectification, and, after being evaluated and deemed qualified by the procuratorial organs in conjunction with third-party supervision and evaluation mechanisms, the procuratorial organs make a non-prosecution decision or propose lenient sentencing recommendations in accordance with the law. Its legal basis is Article 177, Paragraph 2 of the Criminal Procedure Law of the People's Republic of China, which stipulates that if the circumstances of the crime are minor and no criminal punishment is necessary, non-prosecution may be applied, as well as the pilot project on compliance reform for involved enterprises led by the Supreme People's Procuratorate. It is mainly applicable to cases involving light crimes and enterprises with the willingness and ability to carry out rectification; passing the rectification evaluation is a procedural lenient treatment, which does not equal to an acquittal. After the enterprise is involved in a criminal case, it should hire a lawyer as soon as possible to assess the applicability of the system and initiate rectification, which can be done through the following steps:Criminal defense and legal services for criminal case filingAndBeijing Henglu Law FirmUnderstand the relevant services.

I. Problem Background and Typical Scenarios

Once a company is involved in criminal cases, the consequences are often beyond the case itself: the person in charge being detained leads to the suspension of operations, bank withdrawals of loans, restrictions on bidding and tendering, and employee loss. A minor criminal case may bring down a company that has been in operation for many years. Common corporate-related crimes include collusive bidding, false invoicing, commercial bribery, environmental pollution, and infringement of intellectual property rights. A significant portion of these crimes are relatively minor and related to operational model defects rather than profit-seeking malice. To avoid "bringing down a company with one case," the procuratorial organs have taken the lead in carrying out compliance reforms for companies involved in cases, providing a lenient treatment path for companies that sincerely rectify their mistakes. This is the origin of the criminal compliance non-prosecution system. Many company managers, when first encountering this system, want to know whether their own cases can apply to it, what they need to pay, what they can get, and what the relationship is between it and the lenient treatment of guilty plea and sentencing.

II. Key points of contention

  • Applicable objects and scope: The system is aimed at enterprises involved in the case. The handling of the directly responsible persons does not completely coincide with that of the enterprises. Whether it is applicable and how to apply it shall be decided by the procuratorial organ in light of the circumstances of the case.
  • Corrective measures and supervision and evaluation: Compliance rectification is not just a written commitment. It requires submitting a compliance plan and accepting inspections by third-party supervision and evaluation mechanisms. If the rectification fails to meet the required standards, any lenient arrangements may be rendered ineffective.
  • The trade-off between pleading not guilty and accepting guilt: Those who are truly innocent should insist on pleading not guilty. Giving up the right to defend oneself in exchange for a lenient procedural treatment may not be a rational choice. A decision should be made after evaluating the evidence.
  • Program timing: It is advisable to start communication as early as possible. The qualitative assessment and evidence collection during the investigation stage are prerequisites for obtaining a lenient punishment in the subsequent process.

III. Professional analysis by Henglue Law Firm

The underlying logic of this system is to prioritize lenient prosecution, cautious detention, and protection of market entities: for corporate-related cases with minor circumstances, where the suspect admits guilt and accepts punishment, and actively makes amends, we combine "punishing the crime" with "saving the enterprise". According to Article 177 Paragraph 2 of the Criminal Procedure Law of the People's Republic of China, if the circumstances of the crime are minor and no criminal punishment is necessary, a decision not to prosecute may be made. Based on Henglue Lawyer's experience in handling criminal cases, early qualitative evaluation is the prerequisite for designing a lenient path. The significance of determining the nature of the case is particularly evident in a major criminal case: Zhang * drove his car at high speed to hit a crowd due to a work dispute, resulting in the instant death of Zhao * and injuries to two others. There was intense controversy over whether his act constituted intentional homicide. Through a comprehensive review of the case file, the lawyer proved that his act was directed at specific targets and was intentional. The court ultimately convicted and sentenced him to death for intentional homicide. The same act, but different qualifications, leads to completely different procedures and consequences. The same applies to corporate-related cases: first determine whether the act constitutes a crime, what crime it constitutes, and the seriousness of the circumstances; then evaluate the combination of lenient factors such as admitting guilt and accepting punishment, returning the illicit gains and making amends; and finally implement it at the point of communication with the case-handling organ. Corporate-related cases are often intertwined with contracts and business models, and can be combined with other factors.Legal services for corporate commercial and contract disputesEvaluate them together.

IV. Practical suggestions and legal basis

At the legal basis level: Article 177, paragraph 2 of the Criminal Procedure Law of the People's Republic of China (amended in 2018) is the direct basis for relative non-prosecution; Article 15 stipulates that if a criminal suspect or defendant voluntarily confesses his/her own crimes truthfully, admits the alleged criminal facts, and is willing to accept punishment, he/she may be given lenient treatment according to law; Article 37 of the Criminal Law of the People's Republic of China stipulates that if the circumstances of the crime are minor and no criminal punishment is necessary, the criminal may be exempted from criminal punishment. The pilot reform of corporate compliance conducted by the Supreme People's Procuratorate together with relevant departments provides a mechanism framework for rectification inspection and third-party supervision and evaluation. At the practical advice level: After the enterprise is involved in a criminal case, it should hire a lawyer to evaluate as soon as possible and review the case file in accordance with the law from the prosecution stage; simultaneously sort out the system loopholes of the business links involved in the case; formulate a special compliance plan and implement it truly, covering approval processes, post separation, training and accountability; actively compensate for the losses of the victims to obtain their understanding. Establishing internal control systems such as prevention and control of commercial bribery, invoice management, and data compliance in daily operations is the most economical way to hedge against criminal risks, and it can be referred to for reference.Intellectual property protection and corporate legal services.

5. Henglu Law Firm's Reminder

Compliance-based non-prosecution is not about "buying peace with money", nor is it applicable to all cases. It is premised on genuine guilty pleas and verifiable rectifications. For cases where the defendant is truly innocent, insisting on defense is the right path; for cases involving relatively minor crimes, early assessment and initiation of rectification may help companies retain their business qualifications and secure personal freedom for those responsible. Regardless of the path taken, timing is crucial: qualitative assessments, evidence collection, and communication opportunities all occur in the early stages of the process. Late solutions often leave limited room for maneuver. If your company is facing criminal risks, it is recommended to engage professional lawyers for assessment as soon as possible. The typical case of the aforementioned qualitative dispute was handled by Beijing Henglu Law Firm.Liu LiqiangThe attorney (practice license number: 11101200910454358, subject to the document issued by the judicial administrative organ) acts as the agent.

Q1: What types of enterprises and cases can apply for compliance rectification?

Judging from the pilot practice, it is mainly applicable to enterprise-related cases involving suspected misdemeanors, where the enterprise admits guilt and is willing and capable of making corrections. Common types include collusive bidding, false invoicing, commercial bribery, environmental pollution, and infringement of intellectual property rights. Whether it is applicable shall be determined by the procuratorial organ after review, typically considering the seriousness of the crime, the size and survival value of the enterprise, the role of the directly responsible personnel, and whether they actively make up for the losses. If the case is still in the investigation stage, lawyers can first assess the qualitative risks and applicable scope, leaving preparation time for subsequent procedures; malicious individual crimes and situations where crime is a profession are not included in the leniency list.

Q2: Does compliance with the requirements for non-prosecution mean that the person is innocent?

This does not mean the same thing. Non-prosecution is a procedural handling by the procuratorial organ in accordance with the law, which means that the case will no longer enter the trial process and will not be convicted by the court, but it does not declare that the enterprise or individual is actually innocent. If the enterprise has not committed the alleged acts, it should insist on a defense of innocence rather than exchanging compliance rectification for procedural handling; if the acts do constitute a crime, compliance rectification and pleading guilty and accepting the punishment are practical paths to seeking lenient treatment. The choice between the two depends on the evidence and qualitative assessment. It is recommended to make decisions with the assistance of a lawyer to avoid giving up a potentially valid defense of innocence in pursuit of non-prosecution, nor should non-prosecution be misunderstood as a way to "whitewash" one's reputation.

Q3: How long does it usually take to complete compliance rectification?

In practice, the period of rectification and review is usually measured in months, typically ranging from six months to a year. The specific duration is determined by the procuratorial organs based on the case circumstances and third-party supervision and evaluation mechanisms. For major and complex cases, the duration may be adjusted. During the rectification period, the enterprise needs to submit a special compliance plan, implement rectification measures, submit regular reports, and accept inspection and evaluation. The content covers the establishment of systems in the areas involved in the case, approval processes, personnel training, and accountability for violations. For the enterprise's daily operations, rectification is both an obligation and an opportunity for internal control upgrades. It is recommended that lawyers and compliance consultants work together to ensure that the rectification results can withstand review and inspection and avoid being just a formality.

Q4: Can this also apply to individual business owners?

Yes, but the approach to handling the case is different. The core target of non-prosecution for compliance is the involved enterprises. For the directly responsible supervisors and other directly responsible personnel, the procuratorial organ usually takes into account the situation of compliance rectification and gives lenient treatment in terms of prosecution and sentencing recommendations according to law. For minor cases, a non-prosecution decision may also be made simultaneously. The personal handling of the responsible person also depends on his/her role in the crime, whether he/she returns the illicit proceeds and compensates for the losses, and whether he/she surrenders voluntarily and confesses his/her crimes. It should be noted that individuals who commit heinous crimes or use corporate shells to commit crimes are unlikely to receive lenient treatment. The specific situation of each case should be carefully evaluated by lawyers based on the evidence in the case, and it is not advisable to be overly optimistic.

Q5: After the decision not to prosecute is made, will the company still have a criminal record?

Not being prosecuted means that the case has not been tried in court or resulted in a conviction, and the enterprise or individual will not have a criminal record as a result. This is fundamentally different from being sentenced to punishment. However, there may still be subsequent impacts: the illegal proceeds will be recovered in accordance with the law, and the administrative violations may result in administrative penalties imposed by the competent authorities. In some industries, enterprises may be required to provide explanations during the qualification review for bidding and tendering. Enterprises should properly preserve the non-prosecution decision and rectification review materials to prove the outcome of the handling; at the same time, they should implement the compliance system formed through rectification on a long-term basis to prevent similar risks from recurring. This is the real value brought by the system.

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 limits.Criminal defense legal services·Attorney Liu Liqiang·Beijing Henglue Law Firm