[Direct answer]In the Beijing area, corporate criminal compliance refers to the institutional system and special rectification mechanism established by enterprises to identify, prevent, and respond to criminal legal risks. According to the provisions on leniency for plea bargaining in the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018) and the relevant rules of the Guidelines for Establishing a Third-Party Supervision and Evaluation Mechanism for Compliance of Enterprises Involved in Criminal Cases (for Trial Implementation) issued on June 3, 2021, enterprises involved in criminal cases can apply for compliance rectification during the review and prosecution stage. If the rectification is evaluated as qualified by a third-party organization, they may seek non-prosecution or lenient treatment. Compliance includes both preventive measures in advance and special rectification after being involved in a criminal case. It is recommended that professional criminal lawyers assist in establishing rules and regulations. For more details, please refer to the following link:Criminal defense and criminal case filing services.

1. Problem background and typical scenarios

Corporate criminal risks permeate all aspects of business operations. Typical scenarios include: bribing or accepting bribes to secure orders; forging VAT invoices and evading taxes; illegal fundraising and illegally absorbing public deposits; infringing trade secrets and counterfeiting registered trademarks; as well as major liability accidents and environmental pollution. Many companies prioritize civil breach of contract over criminal red lines, only realizing the risks when their executives are investigated by the police. In recent years, compliance reforms for companies involved in criminal cases have given enterprises the opportunity to exchange rectification for leniency after being implicated in crimes, and have also forced them to prioritize compliance in daily management. For issues related to corporate governance, the following can be considered:Business and contract dispute services for enterprisesFor matters involving intellectual property, you may refer to the following for reference.Intellectual property protection and corporate legal services.

II. Key points of contention

There are three core disputes in corporate criminal compliance. Firstly, can compliance replace criminal liability? Compliance rectification is a mitigating circumstance at the sentencing or prosecution level, and it does not eliminate the constitutive elements of corporate crime. Directly responsible individuals may still be held liable. Secondly, the effectiveness of the rectification: whether the system is truly established and implemented, rather than just a formality on paper, and evaluated by third-party organizations. Thirdly, the scope of application: not all crimes are subject to compliance. For those that seriously endanger public safety or involve high subjective malice on the part of the responsible persons, it is difficult to obtain leniency. In practice, courts and procuratorial organs pay great attention to the implementation and continuous execution of the system. The disputes also lie in the boundaries between compliance and normal operations. For labor employment risks involved in compliance, reference can be made to the relevant provisions.Labor arbitration and work-related injury compensation services.

III. Professional analysis by Henglue Lawyers

Based on our criminal defense practice, enterprises should not wait until something happens before talking about compliance. Take a criminal incident of intentional homicide with accompanying civil action represented by Attorney Liu Liqiang of our firm as an example: After a dispute at a concrete mixing station, the defendant, Zhang Daqiang, accelerated his car and rammed into a laboratory, resulting in one death and two injuries. The wife of the victim, Zhao Gang, entrusted a lawyer to represent her in the accompanying civil action. The lawyer carefully reviewed the case file and refuted the defendant's claims regarding subjective intent, voluntary surrender, the victim's fault, and the nature of the crime one by one, arguing that the defendant should be convicted of intentional homicide and given a heavier punishment. The court accepted the lawyer's opinion and sentenced Zhang Daqiang to death for intentional homicide, and supported the request for compensation in the accompanying civil action. This case 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. Although this case is a personal criminal defense case, it reveals the extreme consequences of criminal risks: once individuals or enterprises violate criminal laws, the cost will be extremely high. For this reason, enterprises should take proactive measures to prevent risks through compliance, and replace ex post fire-fighting with systems and training.

IV. Practical suggestions and legal basis

The core basis is Article 30 and Article 31 (unit crimes and their punishments) of the Criminal Law of the People's Republic of China (amended and implemented on March 1, 2021); Article 15 (leniency for plea bargaining) of the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018); and the Guidelines on Establishing a Third-Party Supervision and Evaluation Mechanism for Compliance of Enterprises Involved in Criminal Cases (for Trial Implementation) (issued on June 3, 2021) regarding the rules for compliance applications, third-party evaluations, and lenient treatments. Practical suggestions: First, conduct a criminal risk check to identify high-risk areas such as bribery, taxation, intellectual property, and safety production; establish a compliance system and implement training, approval, and record-keeping; promptly entrust lawyers to apply for compliance rectification after being involved in a case, and cooperate with third-party supervision and evaluation; and evaluate the direct responsible persons and the unit's responsibilities separately. For cross-border operations, assistance can be sought from relevant institutions.Financial capital and cross-border services involving foreign countries.

5. Henglu Law Firm's Reminder

Corporate criminal compliance is not a mere add-on, but rather the foundation of business operations. It is recommended to embed compliance into business processes rather than creating a separate system: set red lines and approval procedures for contract signing, payment, invoicing, and employee management; regularly conduct criminal risk training and keep records to ensure that the system is enforceable and verifiable. Once a crime is suspected, do not conceal or destroy evidence. It is essential to engage a lawyer as soon as possible to assess whether the company meets the conditions for compliance rectification and strive to initiate procedures during the review and prosecution stages. The key to compliance rectification lies in its authenticity and effectiveness. Paper documents cannot pass third-party assessments; it is crucial to demonstrate compliance through actual implementation traces.

VI. Frequently Asked Questions

Q1: If a company has implemented criminal compliance measures, does that mean it won't be held criminally liable?

No. Compliance is a mechanism for preventive measures and leniency after involvement in a case, but it does not eliminate the constituting elements of corporate crime. If the enterprise's behavior already meets the elements of a crime, it may still be prosecuted. However, by establishing and effectively implementing compliance and completing rectification, it may seek leniency in sentencing or prosecution, or even obtain a conditional non-prosecution for those who meet the conditions. Whether the directly responsible personnel should bear responsibility needs to be independently judged. Therefore, the value of compliance lies in reducing the probability of crime occurrence and obtaining lenient treatment, rather than a get-out-of-jail-free card. Enterprises cannot use compliance to cover up existing illegal and criminal activities.

Q2: What systems and materials do enterprises need to prepare for criminal compliance?

The basic systems include: anti-commercial bribery and gift-entertainment regulations; financial and invoice management, tax compliance measures; intellectual property protection and confidentiality systems; safety production and environmental protection responsibility lists; as well as compliance training, reporting, and accountability mechanisms. Supporting materials should include: system texts, release and training records, approval and stamping traces, internal audits, and rectification reports. For those applying for compliance rectification after being involved in cases, they also need to submit rectification plans, division of responsibilities, and commitments to cooperate with third-party assessments. The organization of materials should focus on the three points of "risk identification - system establishment - execution traceability", to prove that compliance is truly implemented rather than just a formality on paper.

Q3: How much does it cost to hire a lawyer for corporate criminal compliance?

The fees depend on the scope and depth of the services. For pre-compliance health checks and system establishment, they are usually charged on a project or hourly basis, depending on the scale of the enterprise and the industry risks; for special compliance rectification after being involved in legal cases, it requires covering the rectification plan, third-party evaluation cooperation, and possible defense. The workload is much greater, and the specific fees are subject to the contract. There is no unified standard. Compared with the reputation and operational costs of criminal accountability, compliance investments are usually cost-effective. It is recommended to clarify the service boundaries with the law firm before entrusting the work, distinguishing between daily consultancy and rectification after being involved in legal cases, to avoid budget overruns due to unclear scopes.

Q4: After a company is involved in a case, how long does it usually take to apply for criminal compliance rectification?

Compliance rectification is usually initiated during the review and prosecution stage by the procuratorial organs, with the duration determined by the case-handling organs based on the specific case. It typically lasts several months and requires completing system construction, implementation, and third-party supervision and evaluation. Only after passing the evaluation can the case proceed to the lenient treatment stage, which is generally longer than that of ordinary cases. If the enterprise cooperates actively and rectifies its issues thoroughly, the progress can be relatively controlled; however, those who merely go through the motions or repeatedly make corrections will face delays. Compared with direct sentencing, compliance provides a window for remediation, but the time cost is not low. It is recommended to hire a lawyer as soon as possible after being involved in the case, and to prepare a rectification plan before or after the case is transferred for prosecution, so as to avoid missing the opportunity to initiate the rectification process.

Q5: If a company wants to establish a criminal compliance system, what should be the first step to take?

It is recommended to follow four steps: First, conduct a criminal risk assessment to identify high-risk areas and historical vulnerabilities such as bribery, taxation, intellectual property, and workplace safety; Second, have professional criminal lawyers assist in drafting enforceable compliance systems and integrating them into contract signing, payment, invoicing, and employee hiring processes; Third, organize company-wide training sessions and maintain attendance, assessment, and audit records to ensure the system is effectively implemented; Fourth, establish reporting and accountability channels and conduct regular internal audits and updates. If the company is already involved in legal cases, it should immediately hire lawyers to assess whether it meets the requirements for compliance rectification and strive to initiate the rectification process during the investigation and prosecution stage in order to obtain lenient treatment. It is crucial not to retroactively fabricate documents, as the assessment will focus on actual implementation rather than paperwork compliance.

The above answer is based on the judicial practice in Beijing. 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 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 Henglue 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 a timely manner.