The sub-forum on criminal compliance at the "2021 International Forum on Corporate Compliance" drew numerous attendees who joined the discussion as observers.

For businesses to achieve sustained and long-term success, they must adhere to lawful and trustworthy operations.

On July 15, the "2021 International Forum on Corporate Compliance," hosted by the China Council for the Promotion of International Trade, was held at the National People's Congress Conference Center. Over 400 representatives from various sectors gathered to discuss corporate compliance and explore best practices in this critical area.

Several National People's Congress deputies and members of the National Committee of the Chinese People's Political Consultative Conference, including Li Zongsheng, Huang Meimei, Caihua, Feng Fan, and Cao Yisun, were invited to attend the forum. Although they come from diverse regions and industries, they unanimously focused their attention on the conference’s sub-forum: the Corporate Criminal Compliance Exchange and Seminar.

Acting as the "wise and trusted advisor" for business growth, helping to address and heal companies' underlying "ailments."

"Enterprises, as the most critical market players, bear a vital mission in shaping the new development paradigm," said Gao Yan, President of the China Council for the Promotion of International Trade, during her speech. She noted that in recent years, with the gradual introduction of national policies and guiding documents aimed at incentivizing and promoting corporate compliance, the social environment for building compliant businesses has continued to improve. However, overall, corporate compliance management in China is still in its early stages. Key challenges ahead include effectively translating the nation’s compliance promotion policies into proactive, company-wide actions—and establishing a compliance management system that aligns with international standards while remaining distinctly tailored to China’s unique context.

How can the procuratorate provide precise and effective support for corporate compliance governance? The Party Group of the Supreme People’s Procuratorate deeply understands that private enterprises face immense challenges in starting up and enduring difficult growth. As a result, they place even greater emphasis on and cherish the protection afforded by the rule of law. The leadership has repeatedly stressed that procuratorial organs must uphold their critical responsibility to safeguard judicial fairness, making it their undeniable duty to foster an even better, rule-of-law-based business environment. At the same time, they have articulated a clear judicial policy: when handling cases involving private enterprises, prosecutors should, in accordance with the law, "refrain from arrests whenever possible, avoid prosecutions where feasible, and recommend suspended sentences instead of harsh prison terms whenever appropriate." Furthermore, the Supreme Procuratorate has vividly framed its role as the "responsible elder relative" who safeguards and supports private enterprises—offering guidance to ensure lawful operations while pursuing accountability for sustainable, healthy development.

Starting from March 2020, the Supreme People’s Procuratorate launched a pilot program at six grassroots procuratorates in Shanghai, Jiangsu, Shandong, and Guangdong, focusing on "reforming the mechanism for applying non-prosecution to corporate crimes." Under this initiative, while handling criminal cases involving enterprises, prosecutors—while legally deciding not to approve arrests or pursue prosecutions, or recommending lighter sentences under the plea-bargaining system—also encourage the companies involved to commit to compliance and actively implement corrective measures. This approach aims to foster compliant, law-abiding business practices, thereby preventing and reducing corporate offenses. During this year’s National People’s Congress and Chinese People’s Political Consultative Conference, Zhang Jun, Secretary of the Party Leadership Group and Procurator-General of the Supreme People’s Procuratorate, specifically reported on this initiative, sending a clear signal to all sectors of society that the procuratorial organs are taking proactive steps in promoting corporate compliance management through their prosecutorial duties. The effort has received strong endorsement from both National People’s Congress deputies and members of the CPPCC.

Feng Fan, Representative

"Non-compliance in corporate management not only leads to legal sanctions, regulatory penalties, significant financial losses, and damage to reputation—but it can also trigger a 'ripple effect,' potentially causing major corporations to collapse, local economies to suffer, and widespread job losses. This, in turn, inflicts irreversible harm on businesses and society as a whole," said Feng Fan, a deputy to the National People's Congress and vice president of the Jiangxi Provincial Lawyers Association, delivering a powerful statement at the forum.

In the view of Representative Feng Fan, corporate compliance is a crucial component in fostering economic growth and improving the business environment, with criminal compliance serving as the cornerstone of this framework. Once a company’s operations or employees become entangled in criminal activities, robust criminal compliance initiatives can effectively establish a "firewall" between the company and its staff, preventing individual misconduct from escalating into collective corporate offenses. After all, the most fundamental value of corporate criminal compliance lies in ensuring that "companies stay crime-free, leaders avoid imprisonment, businesses remain financially stable, employees retain their jobs, and the economy continues to thrive."

Li Zongsheng representative

"The establishment of corporate compliance systems is not only a necessity for building a society governed by the rule of law, but also essential for continuously enhancing the effectiveness of social governance—and, at the same time, it aligns with the need to comprehensively, fully, and accurately implement high-quality development," said Li Zongsheng, a deputy to the National People's Congress and founding partner of Liaoning Anxing Law Firm.

Li Zongsheng, the representative, believes that the Supreme People's Procuratorate's pilot program on corporate compliance reform allows companies involved in legal issues to experience both the firmness and the compassion of the law—avoiding both indiscriminate arrests and careless releases. Instead, the initiative aims to assist, supervise, and encourage enterprises to turn over a new leaf, truly achieving the goal of institutionalizing "strict management" while preventing "overly lenient treatment" from being misused.

"This warm and thoughtful pilot reform initiative will undoubtedly encourage enterprises to operate in full compliance with the law, foster a continuously improving and more efficient rule-of-law society, and help businesses address the "ailments" encountered during their recovery and growth—ultimately revitalizing them with dynamic energy that benefits both the companies themselves, entrepreneurs, and broader societal needs," said Representative Li Zongsheng.

Talent represents

National People's Congress deputy and President of the Tianjin Lawyers Association, Caihua, stated that for judicial authorities—especially the procuratorates—exploring compliance systems for enterprises involved in legal cases reflects the criminal policy of combining leniency with strictness in the criminal justice field. It also represents the Supreme People's Procuratorate’s proactive response to the major strategic decisions aimed at ensuring "six stabilites" and "six guarantees," showcasing the procuratorates' forward-thinking, responsible approach, and their commitment to continuous innovation and progress in the context of a new era.

Focus on achieving "order" and "standardization" to enhance the institutionalized nature of third-party mechanisms.

In 2021, the pilot program for corporate compliance reform "gained momentum"—in March, the Supreme People's Procuratorate decided to expand the scope of the initiative, rolling out a one-year second-phase pilot program across 10 provinces and cities: Beijing, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Hubei, Hunan, and Guangdong. To date, the 10 provincial-level procuratorates have collectively selected and designated 27 municipal-level procuratorates and 165 grassroots-level procuratorates as pilot institutions to spearhead the reforms, with all related efforts steadily advancing.

Gao Jingfeng, Director of the Legal and Policy Research Office of the Supreme People's Procuratorate, stated at the forum that during the second phase of the corporate compliance reform pilot program, the Supreme Procuratorate has focused on achieving progress in "orderliness" and "standardization."

Gao Jingfeng, Director of the Legal Policy Research Office of the Supreme People's Procuratorate, delivered a special report to the National People's Congress deputies attending the forum on the implementation status of relevant proposals.

During the implementation of the second batch of pilot reforms, exploring the establishment of a third-party supervision and evaluation mechanism for corporate compliance tailored to China's unique characteristics is a key component of the corporate compliance pilot reform efforts—and also one of the central topics of focus at this forum.

Gao Jingfeng explained that, in response to issues identified during the initial pilot programs—specifically, the need for further standardization of corporate compliance supervision and assessment procedures, particularly the establishment and improvement of third-party oversight and evaluation mechanisms—the Supreme People's Procuratorate has taken the lead in collaborating with eight other departments: the Ministry of Justice, the Ministry of Finance, the Ministry of Ecology and Environment, the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Market Regulation, the All-China Federation of Industry and Commerce, and the China Council for the Promotion of International Trade. Together, these entities have jointly developed the "Guiding Opinions on Establishing a Third-Party Supervision and Evaluation Mechanism for Corporate Compliance in Cases Involving Enterprises (Trial)," which outlines the overall requirements and principles for implementing this mechanism. The document emphasizes that the establishment and operation of the third-party mechanism must adhere to the principles of legality and orderliness, openness and fairness, equal protection, and addressing both symptoms and root causes.

"The third-party mechanism plays a crucial role in safeguarding the neutrality, impartiality, integrity, and authority of the procuratorial organs. Not only does it mobilize professional and supervisory resources from various sectors to engage in corporate compliance efforts, but it also establishes a robust 'firewall' for the procuratorates. This is precisely why the Supreme People's Procuratorate has prioritized building the third-party mechanism as a cornerstone of its institutional reforms," analyzed Xie Pengcheng, Director of the Supreme People's Procuratorate’s Institute of Procuratorial Theory, who attended the forum.

Committee Member Cao Yiqiu

Cao Yisun, a member of the National Committee of the Chinese People's Political Consultative Conference, professor at China University of Political Science and Law, and Dean of the Shiliang School of Law at Changzhou University, stated that the third-party mechanism vigorously promoted by the procuratorial authorities clearly outlines the key principles and priorities for advancing corporate compliance in China’s future. On one hand, corporate compliance is not solely the responsibility of the procuratorates—organizations involved in corporate management, such as the State-owned Assets Supervision and Administration Commission, the All-China Federation of Industry and Commerce, and industry associations, all share the mission of fostering and supporting corporate compliance. On the other hand, the practical implementation of corporate compliance urgently requires robust oversight and enforcement mechanisms to ensure its effectiveness.

"Systematic advancement of corporate compliance also requires greater attention to building the underlying foundational systems, particularly the evaluation criteria for assessing the effectiveness of corporate compliance. Overall, all sectors of the country have already recognized the importance of strengthening these foundational elements and enhancing their intrinsic quality—making the outlook extremely promising," said Committee Member Cao Yisun.

Li Zongsheng, representing the analysis, emphasized that establishing a third-party mechanism can effectively assess whether a company’s compliance system meets regulatory requirements and achieves neutrality and authority in enabling businesses to identify and rectify errors, ultimately fostering sustainable, healthy growth. By carefully designing the system and ensuring oversight from the procuratorial authorities, the initiative aims for tangible results—avoiding mere superficiality—and ensuring that criminal compliance frameworks go beyond being merely innovative or streamlined procedural tools. Instead, it seeks to create a legal system that seamlessly integrates procedural rigor with substantive fairness, harmonizing both form and content while aligning individual enterprise and entrepreneur effectiveness with broader societal benefits. Ultimately, this approach embodies a balanced approach of strict management combined with genuine care—a testament to society’s commitment to holding accountable those who have erred, yet providing them with opportunities for redemption and reinvention.

Representative Li Zongsheng also suggested accelerating the development of compliance assessment standards and implementation details for enterprise-related crimes, continuously enhancing the standardization, precision, and effectiveness of third-party mechanisms, and firmly preventing "compliance-driven corruption."

"As a member of the legal community, lawyers should boldly explore new avenues, foster positive interactions, and effectively serve as a bridge between judicial authorities and businesses. While helping to establish robust criminal compliance frameworks, they should also proactively cultivate efficient and high-quality dialogue models involving all three parties—judges, prosecutors, and enterprises—offering valuable insights to pave the way for an even more comprehensive criminal compliance system," said Caihua, representing the group.

"Stability and long-term success for businesses hinge on compliance—making it the very first button that must be fastened securely. Driving corporate compliance means aligning legal frameworks, international treaties, and societal norms with the organization’s internal governance practices, ensuring they all work in harmony. By rigorously upholding the rule of law, promoting ethical governance, strengthening self-regulation, enforcing regulatory standards, and continuously refining institutional mechanisms, we can leave no room for illegal, non-compliant, or unethical behavior in business operations," said Lu Yong, Vice Chairman of the All-China Federation of Industry and Commerce. As the department responsible for the daily operations of the Third-Party Mechanism Steering Committee, the ACFCI will deeply implement General Secretary Xi Jinping’s important directive—that "the rule of law is the best business environment"—as well as his earnest advice to "enhance corporate competitiveness within the bounds of legality and compliance." The ACFCI will fulfill its duties diligently, collaborate closely with partners like the China Council for the Promotion of International Trade, and work hand-in-hand under the strong support of the Supreme People’s Procuratorate to effectively advance corporate compliance initiatives and third-party oversight and evaluation efforts.

High-quality handling of proposal recommendations to strengthen the solid foundation of collaborative social governance

The reporter learned that during the fourth session of the 13th National People's Congress, deputies to the NPC submitted a total of 8,993 proposals. After carefully analyzing these proposals and widely soliciting opinions, the General Office of the NPC Standing Committee identified 22 key proposals for focused supervision and handling. Among them, the priority proposal titled "Ensuring Equal Protection for Private Enterprises and Promoting Compliance-Based Business Practices" is being led by the Supreme People's Procuratorate. 　　

This year at the Two Sessions, 76 National People's Congress deputies and 11 members of the National Committee of the Chinese People's Political Consultative Conference put forward proposals focusing on corporate compliance issues. From various angles, they called on the procuratorial organs to fulfill their duties according to the law, helping to establish and improve China's corporate compliance system. For instance, NPC deputies such as Feng Fan, Caihua, Li Zongsheng, and Huang Meimei all suggested that the procuratorates should expand the scope of their pilot programs for corporate compliance reform, exploring a conditional non-prosecution system for corporate crimes—and thereby injecting strong momentum into the development of corporate compliance initiatives. 　　

During the forum, Gao Jingfeng delivered a special report to the National People's Congress deputies attending the meeting on the implementation status of the relevant proposals. He emphasized that, in accordance with the requirements of the Party Leadership Group of the Supreme People's Procuratorate, the Legal and Policy Research Office has clearly recognized—when handling the deputies' suggestions and proposals—that this work is all about putting into practice the people-centered development philosophy and fulfilling the procuratorial organs' responsibility and commitment in advancing the comprehensive rule of law. By strengthening research efforts and fostering close communication with other collaborating and coordinating units, the office is ensuring that the deputies' recommendations and proposals are effectively translated into concrete actions. 　　

“The Supreme People’s Procuratorate is doing something both challenging and right.” “The procuratorate’s commitment to implementing the suggestions and proposals made by NPC deputies and CPPCC members clearly demonstrates their sense of responsibility and dedication…” Feng Fan, Caihua, Li Zongsheng, Huang Meimei, and four other National People’s Congress delegates unanimously expressed that they will provide strong support to the procuratorate in future pilot reform initiatives, working together to help businesses overcome their challenges and fostering high-quality enterprise development. 　　

Delegates attending the forum shared their suggestions and expectations regarding the current pilot efforts by procuratorial organs to implement corporate compliance reforms— 　　

"Representative Li Zongsheng expressed full expectations for the procuratorial organs' pilot work on corporate compliance reform, urging them to continue actively summarizing experiences, refining institutional designs, and swiftly elevating these efforts to the legal level. This would enable the establishment of corporate compliance systems to become a new prosecutorial function within the criminal litigation framework, fostering innovation and advancing the procuratorial system in the context of the new era—and ultimately highlighting the proactive role and contributions of the procuratorates in China's socialist modernization drive with Chinese characteristics."

Representative Huang Meimei

"Enterprise compliance reform pilots should adhere to a localized approach, continuously exploring new, flexible judicial models that benefit businesses," said Representative Huang Meimei. She noted that criminal compliance, as an emerging field, remains underexplored in legal theory research, leaving significant gaps in existing legislation. As a result, local procuratorates face numerous challenges when conducting pilot programs for legal supervision of corporate compliance. Therefore, relevant authorities should promptly introduce comprehensive laws and regulations that clearly define key aspects such as prosecutorial incentives for corporate compliance—like non-prosecution for compliant cases, deferred prosecution options, and the application of lighter sentences for offenses covered by compliance frameworks—as well as guidelines on penalties, compliance-related legal oversight procedures, and third-party monitoring and evaluation mechanisms. Such measures will provide robust legal support for corporate compliance initiatives, ultimately fostering the long-term development of this critical area." 　　

Representative Huang Meimei also emphasized that guiding enterprises to self-correct internally and encouraging administrative agencies to proactively fulfill their duties should be the focus of the procuratorate's efforts. Without intrinsic motivation from businesses—or if the procuratorate ends up playing a "one-man show"—it could hinder the long-term progress of reform. She suggested that the procuratorate should step up compliance education for businesses and strengthen collaboration and coordination with administrative bodies, thereby laying a solid foundation for collaborative governance across society. 　　

"During my duties, I've learned that private enterprises still harbor concerns about the fair implementation of certain policies and legal frameworks. To address this, I recommend streamlining the compliance systems and processes within businesses, while also designing transparent, publicly accessible procedures. This would make prosecutorial practices more open and accountable, ultimately enhancing enterprises' sense of trust and satisfaction," added Representative Huang Meimei. 　　

Feng Fan, the representative, suggested exploring and improving the corporate criminal compliance system from three key angles: strengthening publicity efforts to shift corporate awareness; differentiating between large and small enterprises while refining supporting measures for criminal incentives; and proactively moving the threshold for compliance application forward, enabling companies to benefit from criminal incentives at the earliest possible stage. 　　

Commissioner Cao Yisun suggested that procuratorial organs should, while firmly rooted in China's unique corporate compliance system, systematically summarize, analyze, and enhance current compliance practices—particularly by delving into the scientific essence of compliance and examining its integration into the country’s overarching institutional framework. For instance, they should explore how to provide enterprises with more robust, higher-quality, and effective institutional, legal, administrative, and even criminal incentives for compliance. Additionally, efforts should be made to ensure that corporate compliance becomes a regular, standardized practice—not only for businesses themselves but also for their managers and oversight bodies. Moreover, it is crucial to adopt a globally informed, in-depth, and systematic approach, carefully analyzing international trends, evolutionary patterns, key characteristics, and valuable lessons from global corporate compliance developments. This will help drive innovation and further refinement of China’s corporate compliance legal framework.

Source: Procuratorate Daily

Author: Xu Ridan