"Mutual recognition of compliance" saves the lives of the companies involved

  Shenzhen procuratorial series of innovative measures to deepen corporate compliance reform

  ● In order to prevent the situation of "professional acceptance by laymen", Shenzhen Procuratorate has launched a combination of "procuratorial hearing + compliance construction" to ensure the quality and efficiency of compliance acceptance.

  ● Shenzhen procuratorate actively promotes "mutual recognition of compliance" and further strengthens the application of compliance inspection results to enhance compliance incentives and truly save the lives of companies involved in the case

  ● Shenzhen Procuratorate is the first to introduce regulations on strengthening integrity and self-discipline in handling corporate compliance cases to prevent possible integrity risks in the process of handling corporate compliance cases

  □ Our reporter Tang Rong

  □ Our correspondent Zhou Hongguo Li Zi

  How long does it take to go from a criminally involved company to a model company of integrity and compliance?

The answer from Company X, a leading enterprise in the domestic fruit industry, is: 1 year and 9 months.

  In December 2019, several executives of Company X were arrested and brought to justice for smuggling ordinary goods and evading taxes of more than 3.97 million yuan.

After the case was transferred for review and prosecution, the People's Procuratorate of Shenzhen City, Guangdong Province directed Company X to carry out a one-year corporate compliance rectification.

In the meantime, in view of the fact that Company X actively carried out corporate compliance rectification and established a relatively complete compliance management system, the procuratorate made relatively non-prosecution against Company X and the persons involved in the case.

  Since then, Shenzhen's procuratorial organs have seriously carried out third-party supervision and evaluation, strengthened communication and cooperation with Shenzhen Customs in terms of mutual recognition of compliance rectification results and lenient handling of compliance, and adopted a series of measures to ensure the effectiveness of corporate compliance. The operating income of 25% and the annual import volume of 60% increased year-on-year against the trend. In August 2021, it was rated as a "3A" credit enterprise in Bao'an District, Shenzhen, and in September of the same year, it was rated as a model enterprise of integrity and compliance.

  This is a microcosm of the Shenzhen procuratorate's in-depth promotion of corporate compliance reform.

  In March 2020, the Supreme People's Procuratorate selected 6 procuratorates across the country to launch enterprise compliance pilots, and Shenzhen Baoan District and Nanshan District Procuratorates were selected as the first batch of pilots.

A year later, the Supreme People's Procuratorate launched the second batch of pilot projects, and all 12 procuratorates of Shenzhen's two-level procuratorial organs were included in the scope of the pilot program.

  In the past two years, Shenzhen has continued to deepen reforms and strived to create a "Shenzhen sample" for corporate compliance reform.

By the end of 2021, the city's procuratorial organs have handled a total of 60 corporate compliance cases, accounting for 81.08% of the province's total corporate compliance cases and nearly 10% of the national corporate compliance cases.

  The urgent need for corporate compliance

  Focus on strengthening system design

  "Shenzhen's current local specialty is no longer lychees, but entrepreneurs." As of the end of 2021, there were 2.41 million enterprises in Shenzhen, a year-on-year increase of 6.5%, of which private enterprises accounted for more than 96%.

  Since 2018, the Shenzhen procuratorate has accepted, reviewed and prosecuted 3,247 corporate-related criminals and 156 criminal-related companies. The practical need for corporate compliance is very urgent.

  However, corporate compliance is an entirely new reform with no precedent to follow.

try what?

How to try?

  From setting up a pilot leading group for corporate compliance reform and its office to setting up a compliance working group for individual cases, from inviting experts to give lectures to holding seminars... After more than a year of exploration, the Shenzhen Procuratorate clearly proposed to "establish a special working organization, establish a A set of improving the working system, setting up a group of corporate compliance lecturers, handling a number of typical corporate compliance cases, and building a working mechanism covering the entire chain" "Five Ones" overall corporate compliance work ideas.

  At the same time, Shenzhen's procuratorial organs focus on strengthening system design to ensure that the pilot work has rules to follow and an orderly manner.

  In July 2021, the Shenzhen Municipal Procuratorate issued the "Implementation Measures for Corporate Compliance Work (Trial)".

In August of the same year, together with the Municipal Bureau of Justice, the Municipal Federation of Industry and Commerce and other 8 units, the Shenzhen Enterprise Compliance Third-Party Supervision Mechanism Management Committee was jointly established, and the management committee and the third-party supervisory management interim regulations and other supporting documents were signed to supervise the third-party. The normative, neutral and professional operation of the evaluation mechanism provides institutional guarantees.

  In December 2021, Shenzhen has established a directory database of third-party supervisors composed of 30 professional institutions. The third-party mechanism has now entered into substantive operation, and is committed to the "second half article" of corporate compliance.

  In practice, to a certain extent, there is the dual dilemma of limited selection of cases by the grass-roots procuratorate and insufficient energy in the case of the municipal procuratorate.

  In the above-mentioned case of smuggling ordinary goods by Company X, the Shenzhen Procuratorate entrusted the People's Procuratorate of Bao'an District to conduct a return visit to the companies involved in the case, and then the Bao'an District Compliance Committee established a third-party supervision and evaluation team to evaluate, accept and return to Company X's compliance rectification. visit.

  In the process of promoting reform, how to prevent "compliance and corruption" has always been the focus of social attention.

To this end, the Shenzhen Municipal Procuratorate first issued the "Regulations on Strengthening Integrity and Self-discipline in Handling Corporate Compliance Cases" to strengthen prosecutors' awareness of integrity, self-discipline and impartial law enforcement, and prevent possible integrity risks in the process of handling corporate compliance cases.

  Hearing and acceptance of compliance results

  Mutual recognition of compliance inspection results

  Some of the companies involved are high-tech companies with strong professionalism. How to ensure compliance and rectification?

How to effectively connect and recognize corporate compliance results in subsequent administrative processing to help corporate development... Facing the difficulties encountered in the reform, Shenzhen Procuratorate broke the situation by deepening the reform.

  In order to prevent the occurrence of "experts accepting experts", the Shenzhen Procuratorate launched a combination of "procuratorial hearing + compliance construction" to ensure the quality and efficiency of the compliance acceptance link by borrowing wisdom from experts.

  On July 2, 2021, the Shenzhen Procuratorate held a "public hearing on the acceptance of corporate compliance construction" for the first time in the city regarding a smuggling case of express delivery companies in the cross-border e-commerce field, using public hearings to test the results of compliance construction.

10 representatives of the Shenzhen Municipal People's Congress were invited to observe, and the social response was good.

  On September 23 of the same year, the Shenzhen Municipal Procuratorate held an expert review meeting on “Corporate Compliance Construction” for the first time, to conduct an expert review of the corporate compliance plan of a listed company involved in the case, and to make scientific decisions for promoting compliance in major cases in accordance with the law.

  "In judicial practice, enterprises after compliance rectification are still faced with administrative penalties such as high fines and lower credit ratings, which are likely to lead to bankruptcy risks. Therefore, consideration should be given to connecting and recognizing the compliance achievements of enterprises in subsequent administrative processing, so as to truly save the company's life," said Dai Bing, deputy director of the Legal Affairs Department of Shenzhen Customs Anti-smuggling Bureau.

  The Shenzhen procuratorate actively promotes "mutual recognition of compliance" and further strengthens the application of compliance inspection results to enhance compliance incentives.

After the procuratorial organ makes a decision not to prosecute because the enterprise involved in the case has carried out compliance construction, if the administrative law enforcement organ still needs to impose an administrative penalty on the enterprise involved in the case, the procuratorial organ may submit an opinion on leniency to the administrative law enforcement organ, and report the enterprise’s compliance plan, Simultaneous transfer of compliance inspection reports, etc.

Similarly, for the enterprises involved in the case that have made compliance commitments and carried out compliance rectification during the case-handling stage of the administrative organs and public security organs, the procuratorial organs can also confirm the compliance procedures that have been carried out.

  In the case of smuggling ordinary goods by Shenzhen X Company, the Shenzhen Procuratorate actively promoted "mutual recognition of compliance" after conducting third-party supervision and evaluation of the companies involved, and transferred the compliance inspection report to Shenzhen Customs as an important reference for the Customs to make handling decisions , demonstrating the procedural value of corporate compliance.

  On December 1, 2021, the Shenzhen Municipal Procuratorate and the Shenzhen Intermediate People's Court co-signed the "Implementation Opinions on Further Jointly Promoting the Punishment and Punishment System", confirming that the results of compliance construction can be considered by the court as a discretionary sentencing circumstance.

  At present, the experience and practice of "mutual recognition of compliance" by Shenzhen's procuratorial organs has been replicated and promoted throughout Guangdong Province.

  Establish an industry compliance mechanism

  Handling a case and standardizing a line

  How to focus on the internal governance of the enterprise to promote the optimization of the external business environment?

This is a question that Shenzhen's procuratorial organs have been thinking about in the promotion of reform.

  To this end, Shenzhen's procuratorial organs actively carry out industry compliance exploration, highlighting the promotion of industry compliance through individual compliance.

An industry compliance mechanism has been established in the system, that is, for compliance construction matters with industrial crime risks, after the procuratorial organ has carried out rectification and acceptance of the relevant enterprises, it can issue a procuratorial proposal to the relevant administrative authority and industry association, recommending that the administrative authority , Industry associations carry out inspections on companies of the same type, and make rectifications with reference to the rectification plans of the companies involved.

  In 2021, the Shenzhen Procuratorate will focus on the "Smuggling Cases of Express Enterprises in the Cross-Border E-commerce Field" and the "Series of Smuggling Cases in the Luohu Diamond Industry" to actively explore the "deep inspection model" of industry compliance.

  In the series of smuggling cases in the diamond industry in Luohu, considering that there are many diamond operators involved in the series, and most of them are self-employed, the criminal compliance of criminal enterprises is inefficient and the effect is difficult to guarantee. To guide the Shenzhen Gold and Jewelry Industry Association to carry out industry compliance construction for the Shenzhen diamond industry, and effectively regulate the order of the city's jewelry trading market.

  Therefore, Shenzhen Gold and Jewelry Industry Association specially presented a pennant to the Shenzhen Procuratorate of "doing practical things for the masses and sending warmth to the enterprise".

  The vivid corporate compliance cases have become the living materials for promoting corporate compliance construction, and have achieved a good demonstration effect of "handling a case, assisting a group of companies, and regulating an industry".

  Shenzhen's procuratorial organs have found in practice that it is the most economical and optimal governance method to allow enterprises to take the initiative to establish a compliance system before being involved in a case to prevent illegal and criminal acts.

  To this end, in July 2021, the Shenzhen Municipal Procuratorate established a corporate compliance lecturer group consisting of 55 front-line case-handling prosecutors, experts, scholars, and professional lawyers to go deep into science parks and enterprises to give lectures on corporate compliance topics. Well received by enterprises.

  According to statistics, of the 60 corporate compliance cases handled by the Shenzhen procuratorial organs, 50 will be handled in 2021, and the number of charges has increased from 7 in the first phase of the pilot to 26, and there are many types of cases and the scale of the companies involved. The large span and the diverse types of companies involved in the case effectively demonstrate the vitality of the system.

  "Corporate compliance reform is a major measure to benefit the enterprise and the people. In the next step, Shenzhen's procuratorate will continue to deepen the reform, and continue to promote the implementation of the central pilot demonstration blueprint in Shenzhen and in the procuratorial process with solid reform work results. The construction of Shenzhen's rule of law demonstration city provides a strong procuratorial guarantee and makes Shenzhen's contribution to the final incorporation of the pilot results of corporate compliance reform into national legislation." said Li Xiaodong, chief prosecutor of the Shenzhen Procuratorate.