Translator：Xiong Yajie

Criminal compliance is an important part of the construction of corporate compliance systems. On September 15, 2023, Landing Law Offices launched a special event on corporate compliance with LexisNexis, inviting more than 40 people from finance, automobiles, aviation, machinery manufacturing, science and technology innovation and other industries to focus on the compliance system construction, identification of commercial bribery, internal anti-fraud investigations, etc., systematically analyze the key points of corporate compliance, answer questions related to special practices, and help companies establish a criminal compliance system.

 01

Corporate compliance system construction and the cooperation and response of administrative enforcement

Lawyer Ou Zhang

Lawyer from Landing Law Offices

Legal Aid Lawyer of China Legal Aid Foundation

Lawyer Ou Zhang started from the case and vividly demonstrated the relationship between administrative enforcement and compliance. There are widespread corporate compliance points in administrative enforcement. After a company is punished, it is even more necessary to comply with the regulations in order to operate well in the future.

When an enterprise may be subject to administrative penalties, it should evaluate from three aspects: first, self-assess whether it constitutes an administrative violation based on its own actual situation; second, whether the consequences of administrative penalties can be tolerated; third, whether there is a criminal risk.

In the face of administrative penalties, the first response measure for enterprises is to cooperate with the requirements of enforcement departments, have a good attitude, and actively prepare evidence; secondly, while cooperating, they must also actively exercise their rights. For example, they can apply for a hearing if there is hearing procedures; thirdly, seek help from lawyers and predict possible consequences, find defense points and breakthrough points; finally, formulate response strategies based on specific situations.

 02​

Characteristics of Commercial Bribery and Judicial Identification Standards

Lawyer Ren Wang

Lawyer from Landing Law Offices

Member of Criminal Compliance Committee of Shanghai Bar Association

Lawyer Ren Wang explained the conceptual features and judicial identification standards of commercial bribery from the perspective of criminal law.

Commercial bribery mainly takes the form of rebates, that is, in the sale of goods or services, the seller returns the price paid by the buyer to the buyer or the buyer's agent. In practice, rebates are often similar to discounts and commissions.

In addition, lawyer Ren Wang also focused on explaining the five major misunderstandings about commercial bribery:

First, there is a misunderstanding that explicit acceptance and recording it in the financial accounts is not commercial bribery, and the essential basis for judging commercial bribery is whether it is truthfully recorded in the accounts. No matter what kind of behavior, as long as the purpose of such inducement is for a deal and affects other competitors' fair competition in terms of quality, price, service, etc., it constitutes commercial bribery.

Second, they mistakenly believe that non-profit institutions are not bribe-receiving entities. In trading activities, as long as the party receiving property can participate in market competition as a transaction party and can have an impact on the market, it can become the subject of commercial bribery.

Third, it is mistakenly believed that the objects of commercial bribery are limited to the counterparty of the transaction. The transaction counterparty of an operator can also be other relevant entities that can affect the transaction, such as evaluation agencies and other organizations and their staff.

Fourth, it is mistakenly believed that without “job status”, there is no “job convenience”. Close relatives and other closely related persons of state workers may also commit crimes.

Fifth, they mistakenly believe that commercial bribery means collecting money to do things. The crime of commercial bribery does not require the perpetrator to actually seek benefits for others, nor does it require the perpetrator to actually obtain the "bribe" at the time.

 03

Internal anti-fraud investigation, criminal prosecution and practical case sharing

Lawyer Lei Guo

Lawyer from Landing Law Offices

Member of Internal Control and Anti-Fraud Research Association of Shanghai Law Society

Lawyer Lei Guo first shared with everyone the corporate anti-fraud investigation. 

Anti-fraud refers to the behavior of deliberately deceiving and concealing facts or important information in order to obtain some unfair or illegal economic benefits. It involves bribery, misappropriation of company property, selling business secrets and taking advantage of one's authority to seek illegitimate benefits.

For enterprises, internal fraud may lead to direct economic losses, damage to public image and market reputation, and other consequences. Therefore, enterprise anti-fraud is of great significance. The establishment of an anti-fraud system is particularly important for large-scale domestic private enterprises, foreign-invested enterprises in China, and entrepreneurial enterprises in emerging domestic industries.

In addition, lawyer Lei Guo also shared tips on reporting economic crimes.

It is difficult to report an economic investigation case. The first thing is to clearly define the purpose of the accusation, accurately characterize it, make accurate accusations, and choose facts and charges that are easier to prove. If a group of people commits a crime, the most important suspect will be selected. Select at least two main criminal facts so that the success rate of reporting the crime will be increased. In addition, a third party is entrusted to conduct appraisal or accounting audit. When choosing the public security agency to report a crime to, company should choose a reporting place with a higher success rate based on the actual situation. After reporting a case, company must ask for a receipt of case acceptance. After the public security agency accepts the case, company must actively cooperate with the investigators. At the same time, criminal accusers and lawyers should also pay attention to self-protection and guard against their own risks.