[Direct answer]In the Beijing area, there are both connections and clear differences between criminal risk inspections and corporate compliance reviews. Criminal risk inspections focus on identifying potential risks that enterprises and executives may face in relation to the crimes stipulated in the Criminal Law of the People's Republic of China, and they belong to preventive legal services. Corporate compliance reviews cover a wider scope, including the legality of the entire business process and encompassing multiple dimensions such as administrative, civil, and criminal matters. The two differ in terms of their objectives, initiation timing, work outcomes, and applicable targets. It is recommended that enterprises, based on the risk points in their own industries, commission professional lawyers to conduct special criminal risk inspections before making major decisions. For more details, please refer to the following link:Criminal defense and criminal case filing services.

1. Problem background and typical scenarios

As the level of legalization in corporate operations increases, more and more enterprises are beginning to pay attention to preemptive legal services. Typical scenarios include: enterprises planning to go public or raise funds hoping to identify potential criminal risks in tax evasion, bribery, and embezzlement in their past operations; rapidly expanding chain brands needing to screen risks in fundraising and contract fraud during franchising; and founders wanting to confirm whether their actions have exceeded legal boundaries before shareholder conflicts escalate. Many managers confuse criminal risk assessments with corporate compliance reviews, believing that completing compliance procedures is enough, only to realize later that the focus of the two is not the same after a criminal case is initiated. For daily legal affairs involving enterprises, they can be combined withBusiness and contract dispute services for enterprisesCoordination; for matters involving intellectual property and data compliance, you may refer to the relevant guidelines.Intellectual property protection and corporate legal services.

II. Key points of contention

The key differences between the two focus on four points. Firstly, the objectives are different: the criminal risk assessment only answers the question of "whether someone will be imprisoned and which actions might constitute a crime", while the compliance review also addresses issues such as "whether the business operations are legal and whether the processes are standardized". Secondly, the scope is different: the assessment focuses on criminal law evaluation, while compliance covers administrative supervision, industry standards, and civil breaches of contract. Thirdly, the triggering points are different: the assessment is often proactively carried out before major transactions, financing, or reports, while compliance is more often conducted on a daily basis or in response to regulatory pressure. Fourthly, the outcomes are different: the assessment produces a risk list and priority for rectification, while compliance results in institutional documents and process improvement plans. The controversy often lies in which one to prioritize when a company's budget is limited, which depends on the most urgent issues at the moment. For special investigations, reference can be made to the relevant guidelines.Special services and other case services.

III. Professional analysis by Henglue Law Firm

Henglue Law Firm has accumulated practical experience in identifying criminal risks through handling a large number of criminal cases, which is also the source of the methodology for criminal risk inspections. Taking a criminal case of intentional homicide with accompanying civil litigation represented by Attorney Liu Liqiang of our firm as an example: On June 16, 2024, after a dispute with Zhao Gang and others at a mixing station, the defendant, Zhang Daqiang, accelerated his car and rammed into the laboratory, causing Zhao Gang's death on the spot and injuries to Zhang Bin and Li Yuanzheng. The victim's wife entrusted Attorney Liu Liqiang of Beijing Henglue Law Firm to represent her in the accompanying civil litigation. Through in-depth review of the case files and focusing on the evidence, the attorney refuted the defendant's defense arguments regarding subjective intent, voluntary surrender, the victim's fault, and the nature of the crime, and advocated for a conviction of intentional homicide and a heavier punishment. The court ultimately adopted the attorney's opinion and sentenced Zhang Daqiang to death for intentional homicide. This case shows that the classification of criminal cases highly depends on the accurate grasp of subjective intent, the chain of evidence, and the boundaries of the crime, while criminal risk inspections move this litigation perspective forward to the enterprise operation stage to identify similar over-the-line behaviors in advance. This case was handled by Beijing Henglue Law Firm. 恒略律师在办理大量刑事案件中积累了识别刑事风险的实务经验，这也正是刑事风险体检的方法论来源。以本所刘立强律师代理的一起故意杀人罪刑事附带民事诉讼案为例：2024年6月16日，被告人张大强在拌合站与赵刚等人发生争执后，驾车加速撞击实验室，致赵刚当场死亡、张斌与李远征受伤。被害人赵刚之妻委托北京恒略律师事务所刘立强律师代理附带民事诉讼。律师通过深入阅卷、紧扣证据，驳斥了被告人关于主观故意、自首、被害人过错及罪名定性的辩解，主张认定为故意杀人罪并从重处罚。法院最终采纳律师意见，以故意杀人罪判处张大强死刑。该案说明，刑事案件的定性高度依赖主观故意、证据链条与罪名界限的精准把握，而刑事风险体检正是把这种办案视角前移到企业经营环节，提前识别类似越界行为。本案由北京恒略律师事务所Liu LiqiangAttorney (Practice Certificate No.: 11101200910454358, subject to the certificate issued by the judicial administrative organ) acting as an agent.

IV. Practical suggestions and legal basis

When conducting criminal risk assessments and compliance reviews, you can refer to the general framework of unit crimes and the constitution of crimes in the Criminal Law of the People's Republic of China (adopted on July 1, 1979, amended on March 14, 1997, and implemented on October 1, 1997); the provisions on the fiduciary and diligent obligations of directors, supervisors, and senior executives in the Company Law of the People's Republic of China (amended on December 29, 2023 and implemented on July 1, 2024); and the requirements for the construction of compliance systems in the Central State-Owned Enterprises Compliance Management Measures and industry regulatory rules. Practical suggestions: First, lawyers should sort out the enterprise's equity, funds, and business models to identify high-risk areas; then distinguish between criminal red lines and administrative violations and issue rectification lists separately; and for the already exposed hidden dangers, take timely remedial measures and preserve evidence of compliance efforts. For enterprises that have long-term legal services, you can combine these with the above suggestions to provide comprehensive legal support.Intellectual property protection and corporate legal services.

5. Henglue Law Firm's Advice

Companies should not equate a compliance review with eliminating criminal risks. A compliance review addresses "process standardization", but it may not identify hidden criminal violations such as off-book funds, personal collections, and false transactions. It is recommended to conduct criminal risk assessments as a special measure when financing, restructuring, or reporting risks increase, forming a combination of "routine compliance and emergency risk assessments". The earlier the hidden risks identified in the risk assessment are addressed, the lower the probability of criminalization; once the case has entered the investigation stage, it is necessary to switch to criminal defense. If assistance is needed, professional lawyers should be consulted as soon as possible to develop a tiered legal risk prevention plan.

VI. Frequently Asked Questions

Q1: If an enterprise has undergone a compliance review, does that mean there will be no criminal risks anymore?

Not necessarily. Compliance review mainly ensures that business processes comply with administrative regulations and industry rules, with an emphasis on "legal compliance", and does not necessarily identify all criminal red lines. For example, actions such as off-book accounting, personal collection of revenue, and fictitious transactions may be overlooked in daily compliance but have already violated the criminal law's evaluation of tax evasion, embezzlement, or misappropriation of funds. Criminal risk checkups aim to identify criminal charges and specifically screen for behaviors that may lead to criminal prosecution. The two are complementary rather than substitutes. It is recommended that high-risk industries conduct regular specialized criminal checkups in addition to compliance, especially during financing, restructuring, or when internal reports increase.

Q2: To conduct a criminal risk check, what materials and evidence do enterprises need to prepare?

The core materials include: the company's articles of association, shareholders' agreements, and equity structure diagrams; financial statements, bank statements, and tax payment records for the past three years; major contracts, related-party transactions, and financial transfer vouchers; employment, social insurance, and labor dispatch documents; as well as past administrative penalties, litigation, and reporting situations. The organization of materials should focus on three points: "which businesses are most likely to cross the line—how funds flow—and who makes the decisions". The more complete the materials are, the more accurately lawyers can identify high-risk crimes and prioritize rectification. For materials that are temporarily unavailable, lawyers can first sort them out through interviews and then decide whether to collect evidence.

Q3: How much does it cost to hire a lawyer to conduct a criminal risk assessment or compliance review?

The fees depend on the size of the enterprise, the complexity of its operations, and the depth of the investigation. Generally, fees are charged on a project basis. The more sensitive the industry, the more entities involved, the longer the history, and the greater the workload, the higher the fees will be. The specific fees are subject to the contract terms and there is no unified government pricing. Compared with the cost of defense and compensation after a criminal case is filed, the investment in pre-emptive due diligence usually offers significant cost-effectiveness. It is recommended to clarify the scope of services, deliverables, and pricing standards with the law firm before entrusting them with the task. For those who only need a preliminary screening, opt for a lightweight solution. For enterprises planning to raise funds or facing potential reports, a comprehensive due diligence is recommended.

Q4: How long does it typically take to complete a comprehensive criminal risk assessment?

The cycle is related to the scope. For a preliminary screening of a single business line, a risk list can usually be produced within one to two weeks; for a comprehensive check covering the entire group and multiple entities, it requires retrieving a large amount of financial and contractual information, often taking one to two months. If major hidden risks are found during the check, additional interviews or third-party audits may be necessary, which will further extend the timeframe. Overall, the check is a one-time project rather than a long-term advisory service. Enterprises can set aside sufficient time for it before financing due diligence or restructuring. It is recommended to plan ahead to avoid starting the check at the last minute and failing to complete the process.

Q5: If a company suspects that it may face criminal risks, what should it do first?

It is recommended to follow four steps: First, immediately stop any potential illegal activities to avoid exacerbating potential risks and accumulating subjective malice; Second, sort out the ownership structure, financial transactions, and contractual relationships to initially identify high-risk areas, but do not destroy or tamper with evidence without authorization; Third, entrust professional lawyers to conduct a special audit in a confidential manner, and let the lawyers evaluate the risk level under the obligation of confidentiality; Fourth, conduct rectification based on the lawyer's assessment and take timely remedial measures for exposed problems, while preserving evidence of compliance efforts. It is crucial not to continue operations with a sense of complacency. The earlier professional intervention occurs, the lower the likelihood of criminal prosecution will be.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

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 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.