Measures on Compliance Establishment, Assessment, and Review for Enterprises Involved in Criminal Cases (Provisional)

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These Measures are drafted on in consideration of actual working conditions so as to thoroughly study Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement Xi Jinping thought on rule of law; to completely, accurately, and fully implement the new concept of development; to earnestly implement the "Guiding Opinions on the Establishment of a Third-Party Oversight and Assessment System for the Compliance of Enterprises Involved in Criminal Cases (Provisional) (hereinafter "the Guiding Opinions") and their detailed implementation rules issued by the Supreme People's Procuratorate, Ministry of Justice, Ministry of Finance, Ministry of Ecology and the Environment, State Council State-owned Assets Supervision and Administration Commission, State Administration of Taxation, State Administration for Market Regulation, All-China Federation of Industry and Commerce, and Council for the Promotion of International Trade; and to regulate the third-party oversight and assessment mechanism (hereinafter "the third-party mechanism).

Chapter I: General Provisions

Article 1: The establishment of compliance by enterprises involved in cases refers to the activities of enterprises involved in cases targetting compliance risks that are closely related to the suspected crimes, such as drafting special compliance rectification plans, improving enterprise governance structures, completing internal rules systems, and forming an effective compliance management system.

Compliance assessment for enterprises involved in cases refers to the activities of third-party oversight and assessment organizations (hereinafter third-party organizations) in learning about, appraisal, overseeing, and observing the efficacy of the compliance rectification plans and related compliance management systems of enterprises involved in cases.

Compliance review for enterprises involved in cases refers to the examination of the third-party organization's assessment process and conclusions by the people's procuratorate responsible for handling the case.

The people's procuratorate may conduct a review of the compliance plans and rectification reports submitted by small and micro-enterprises where the third-party mechanism was not initiated.

Article 2: Where assessment finds that enterprises involved in cases' compliance establishment meets the efficacy standards, the people's procuratorate may lawfully consider the assessment results in making a decision to not arrest, to modify compulsory measures, or not prosecute, in submitting a sentencing recommendation for a lenient punishment, or in submitting a procuratorate opinion on lenient punishment or sanctions to the competent organs.

Where the assessment finds that enterprises involved in cases' compliance establishment has not met the efficacy standards, or that assessment results were obtained through false and deceptive means, the people's procuratorate may lawfully make a decision to arrest or prosecute, submit a sentencing recommendation for heavier punishment, or submit a procuratorial opinion for heavier punishment or sanctions to the competent organs.

Chapter II: Compliance Establishment by Enterprises Involved in Cases

Article 3: Enterprises involved in cases shall fully stop all illegal conduct suspected of being a crime, return improper and unlawful gains, pay back taxes, late fees, and related fines, and fully cooperate with the relevant efforts of the competent organs, public security organs, procuratorates, and third-party organizations.

Article 4: The enterprises involved in cases shall normally form a leading group for compliance establishment, comprised of their actual controllers, principle responsible persons, directly responsible management, and so forth, and when necessary may recruit external professional bodies or personnel to participate or assist. On the foundation of a complete analysis and assessment of the enterprises' compliance risks, the leading group for compliance establishment shall consider the corresponding industry's guidance on compliance establishment, and research and draft a special compliance plan and internal rules system.

Article 5: The special compliance plan drafted by an enterprise involved in a case shall be able to effectively prevent further occurrence of the same or similar illegal or criminal conduct.

Article 6: The actual controllers and principle responsible persons for enterprises involved in cases shall make a compliance pledge in the special compliance plan, clearly announcing that compliance is a priority value of the enterprise and that a zero-tolerance attitude will be taken towards illegal conduct, to ensure that compliance is integrated into the enterprise's development goals, development strategy, and management system.

Article 7: Enterprises involved in cases shall set up compliance management bodies or personnel corresponding to the enterprise's type, scale, scope of operations, and industry traits.

The compliance management body or personnel may be ad hoc or stopgap, but the compliance management duties must be clear, specific, and able to be evaluated.

Article 8: Through means such as drafting compliance management codes and compensating for vulnerabilities in oversight and management, the enterprises involved in cases shall establish and complete institutional mechanisms for compliance management that focus on compliance risk prevention and control and the needs of the compliance management body in performing its duties.

The enterprise involved in a case's compliance management body and all levels of management organization shall all establish compliance goals based on their functional traits, and refine management measures.

The institutional mechanisms for compliance management shall ensure that the compliance management bodies or personnel perform their duties independently, and have the authority to fully express views and participate in decision-making for decisions involving major compliance risks.

Article 9: The enterprises involved in cases shall provide necessary human and material resources such as personnel, training, publicity, venues, equipment, and expenses to ensure the operation of the institutional mechanisms for compliance management.

Article 10: The enterprises involved in cases shall establish monitoring, reporting, investigation, and handling mechanisms to ensure the prompt discovery and monitoring of compliance risks, and to correct and address illegal conduct.

Article 11: The enterprises involved in cases shall establish performance assessment mechanisms for compliance, introducing compliance indicators to conduct evaluations of the enterprises' principle responsible persons, managers, and key technical personnel.

Article 12: The enterprises involved in cases shall establish mechanisms such as for ongoing rectification and periodic reporting, to ensure that the institutional mechanisms for compliance management are continuously adjusted and improved on the basis of the actual conditions of the enterprises' business development.

Chapter III: Compliance Assessment for Enterprises Involved in Cases

Article 13: Based on the circumstances and work needs of enterprises involved in cases, third-party organizations may draft specific, detailed, and workable compliance assessment work plans.

Article 14: Third-party organizations' assessment of the efficacy of enterprises involved in cases' special compliance and rectification plans and related compliance management systems are to primaraily include the following content:

(1) Effective recognition and control of the enterprise's compliance risks;

(2) Prompt handling of illegal conduct;

(3) The reasonable allocation of compliance management bodies or personnel;

(4) The establishment of institutional mechanisms for compliance management and sufficient safeguards for human and material resources;

(5) The regular operation of monitoring, reporting, investigation, and handling mechanisms, as well performance evaluation systems for compliance;

(6) The essential formation of mechanisms for ongoing rectification and a culture of compliance.

Article 15: With an emphasis on the enterprises involved in cases' rectification and control of compliance risks, and in consideration of the compliance assessment indicators for the specified industry, the third-party organizations are to draft compliance assessment indicators suited to the enterprises' actual conditions.

The assessment indicators may be weighted based on factors such as the enterprise type, scale, operational scope, and industry traits, as well as the suspected criminal activity, and the weighting of indicators for areas of compliance management such as key fields, weak links, and important positions may be appropriately increased.

Chapter IV: Compliance Review for Enterprises Involved in Cases

Article 16: After commissions on management of the third-party mechanism and people's procuratorates receive the written compliance monitoringreport from the third-party organization, they shall promptly conduct a review, emphasizing review of the following content:

(1) Whether the assessment plan formulated and implemented by the third-party organization is appropriate;

(2) Whether the assessment materials are complete, objective, and professional, and sufficient to support the conclusions in the monitoring report;

(3) Whether the third-party organization or its members had improper conduct that might impact the fair performance of duties, or are suspected of illegal or criminal conduct.

Where, after review by the commission for the management of the third-party mechanism and people's procuratorate, it is found that the third-party organization has completed its oversight and assessment work, the commission for the management of the third-party mechanism is to announce that the third-party organization is dispersed. The people's procuratorate may request that the third-party organization or its members explain the situation regarding difficult or key issues discovered in the review, and may also directly conduct an investigation and verification.

Article 17: The emphasis of the people's procuratorate review of the compliance plans and rectification reports submitted by small and micro-enterprises is to include content such as the fulfillment of compliance pledges, the implementation of the compliance plan, and the efficacy of the compliance rectification.

Article 18: Where the commission for the management of the third-party mechanism receives feedback or objections that the third-party organization or its members had improper conduct or are suspected of violations or crimes, or where the people's procuratorate receives collateral appeals or accusations on the matters above, they shall promptly report the circumstances to the other and consult to put forward a recommendation on handling it.

Article 19: Where after reviewing the compliance monitoring report or other materials, the commission for the management of the third-party mechanism or people's procuratorate discovers that the third-party organization or its members had conduct prohibited by the Guiding Opinions or their implementation guidelines sufficient to impact the truth or validity of the assessment outcomes, or investigates and verifies that this is the case after receiving feedback, objections, collateral appeals, or accusations, the commission for the management of the third-party mechanism shall newly organize a third-party organization to conduct an assessment.

Chapter V: Supplementary Provisions

Article 20: "Enterprises involved in a case" as used in these Measures refers to enterprises that are suspected of a crime by the unit or enterprises where the actual controller, managers, key technical personnel etc., are suspected of having committed a crime that is closely related to the production and business activities.

The people's procuratorate responsible for handling a case may put forward procuratorial suggestions for compliance rectification for enterprises with compliance risks related to the enterprise involved in the case or compliance risks exposed by similar cases.

Article 21: Enterprises involved in cases shall have full compliance as their goal and the special compliance plan as their focus, and incrementally establish additional special compliance plans as needed based on changes in factors such as their scale, scope of operations, and industry traits, to promote the realization of full compliance.

Article 22: The distinction between large, small, and micro-enterprises is to be implemented on the basis of relevant state standards.

Article 23: The national-level commission for the management of the third-party mechanism is responsible for the interpretation of these Measures. To take effect from the date of issue.

 

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