Source: China Law Review
On the evening of January 15, 2023, the 35th lecture of "Weibo Law Lecture Hall" was successfully held in the cloud. This lecture invited Professor Che Hao, Distinguished Professor of the "Changjiang Scholars Award Program" of the Ministry of Education (2018) and Vice Dean of Peking University Law School. The theme of the lecture was "Critical Reflections on "Compliance Without Prosecution". The lecture was chaired by Professor Qin Qianhong of Wuhan University Law School, with Professor Long Zongzhi of Sichuan University Law School, Professor Xiong Qiuhong of China University of Political Science and Law, Professor Li Hong of Tsinghua University Law School, Professor Li Fenfei of Chinese Min University Law School, Professor Li Bencan of Shandong University Law School, and Director Zhu Mingyong of Beijing Jingmen Law Firm as panelists. Many scholars, students from inside and outside the university participated in and listened to this lecture. The lecture lasted about four hours and was watched by about 40,000 people online.
At the beginning of the lecture, Professor Qin Qianhong briefly introduced the guests and expressed his warm welcome and heartfelt thanks to them.
Professor Che Hao first expressed his gratitude to Professor Qin Qianhong and Professor He Ronggong for their invitation, and thanked the six participants who participated in the meeting. Then, Professor Che Hao talked about the starting point of this lecture, that is, in the context of actively advocating and promoting legislation in all aspects, he is worried about some unresolved problems in the reform of compliance and non-prosecution, and if the hasty legislation will cause irreversible damage to China's rule of law construction and economic development, he hopes to express his opinions at the stage of legislative theory, and promote academic progress and institutional reform through contention.
(1) Testing the reasonableness of the means of compliance and non-prosecution
Professor Che Hao first pointed out that the construction of corporate compliance in the usual sense is worth vigorously advocating, because the construction of compliance system helps enterprises improve their own governance structure, and reduce legal risks to a certain extent, which contains the effect of crime prevention. However, this effect cannot be exaggerated, because for a modern enterprise that grows up in a relatively mature market economy environment, rule of law environment, and a relatively complete governance structure, a sound compliance system can indeed form some criminal obstacles, but for a large number of Chinese private enterprises that deeply rely on the charismatic governance of entrepreneurs, sometimes no matter how perfect the compliance system is, it is difficult to stop the boss's willfulness. Therefore, corporate compliance construction is effective in crime prevention, but it should not be exaggerated.
Compliance and non-prosecution were originally two different things. Corporate compliance is a business model for modern enterprises to improve their governance structure and prevent and reduce various risks, and although compliance does not prosecute is conditional on compliance, it is ultimately an exercise of the state's criminal punishment power (public prosecution power). The association between compliance and non-prosecution is mainly manifested in two forms - past-oriented causal association (ex ante compliance) and future-oriented conditional association (ex post compliance).
The former means that because the enterprise has a compliance system before committing a crime, it can be exempted from prosecution or not convicted, and the existing compliance system is used as a cause of crime. The latter means that if an enterprise that has already committed a crime can meet the conditions for compliance construction during the inspection period, it can be exempted from prosecution after the inspection period, that is, the compliance to be done in the future is also regarded as a cause of crime. Whether it is pre-compliance or post-compliance, the vision of striving to build a correlation between the two concepts of compliance and non-prosecution is to encourage enterprises to establish compliance through the preferential treatment of non-prosecution, which is the purpose of reform and the first common direction to demonstrate the rationality of compliance non-prosecution, that is, the significance of compliance non-prosecution as a means. However, the reasonableness of the purpose of establishing corporate compliance does not directly justify the non-prosecution of compliance as an incentive, which requires independent proof.
Prior compliance does not help cut unit responsibility. One oft-cited compliance benefit is that it helps to accurately identify corporate crimes and can separate corporate and individual liability, but this is only a take-it-off view. Since 1997, the long-term development of criminal law provisions, judicial interpretations and criminal law theories has jointly formed a set of logic and experience in the determination of unit crimes, so even if enterprises do not have a compliance system, professional judicial personnel will not arbitrarily expand the identification of unit crimes, this reason is only a set of rhetorical statements for evidence determination.
On the other hand, even if an enterprise has a compliance system, it will not greatly reduce the difficulty for judicial personnel to identify corporate crimes. Whether there is compliance or not can not obscure the determination of simple cases, and for some complex issues, a compliance system alone is far from enough to solve the determination of corporate crimes, because it is entirely possible that the top leadership of the enterprise has actually bypassed or broken through the compliance process and committed illegal and criminal acts. Therefore, from the perspective of the judiciary, whether an enterprise has a compliance system is meaningful in the context of China's criminal law and existing mainstream theories, but its significance is limited.
Prior compliance does not motivate companies to engage in compliance. Some scholars advocate that compliance can be used to cut corporate responsibility, spare enterprises, punish individuals, and reshape the theory and practice of unit crime in Chinese criminal law. But for enterprises with different ownership types, the need for compliance and the incentive effect may be completely opposite. An important prerequisite for the U.S. criminal compliance system is the general separation of ownership and management rights, which is intended to clear corporate responsibilities on the grounds of compliance and preserve the owner's business at the expense of managers. The types of businesses in China are diverse. For some SOEs, if they can separate corporate responsibility and personal responsibility through a compliance system, and only pursue individuals without affecting the enterprise, it is the best outcome for SOEs, especially their legal departments.
However, a large number of private enterprises in the mainland have not established a modern enterprise system, and their ownership and management rights are highly concentrated or the boundaries are blurred, and the criminalization of entrepreneurs will have a huge impact on the development of enterprises. Since many unit crimes have a higher threshold for criminalization than individual crimes, and the punishment is lighter, entrepreneurs will be more inclined to choose the latter between being recognized as an individual crime when promoting daily compliance construction and then involved in the case, and being identified as a unit crime when they are involved in the case when they are not compliant. Therefore, according to the view that prior compliance helps to cut corporate responsibility, there may be a reverse incentive for Chinese private enterprises not to engage in compliance at ordinary times.
Ex-post compliance also does not motivate companies to engage in compliance. The compliance non-prosecution led by the procuratorate is mainly post-event compliance, which means that the offending enterprise obtains the preferential treatment of non-prosecution by making compliance commitments and actively rectifying them. However, if post-compliance non-prosecution is promoted, combined with pre-compliance to help cut corporate responsibility, it may give rise to another more distorted negative incentive: lawyers will advise clients to register a company first, act in the name of the company, usually do not engage in compliance construction, and after the accident, they will first be found to be a unit crime due to non-compliance, and then apply for the preferential treatment of compliance non-prosecution. Obviously, when the enterprise has already constituted a crime, the procuratorate's recommendation that the enterprise engage in compliance in exchange for not prosecuting is an inevitable choice under the pressure of the enterprise to seek benefits and avoid harm, and this method is difficult to evaluate as a positive, positive and effective incentive means.
Therefore, whether it is pre-compliance or post-compliance, trying to promote the compliance construction of private enterprises by establishing an institutional means of compliance and non-prosecution may be unrealistic, and may even play a negative and negative reverse effect. There are doubts about the reasonableness of the means of compliance non-prosecution.
(2) Review the justification of the purpose of compliance and non-prosecution
In the literature or practice supporting the reform of compliance non-prosecution, there is another argumentation angle: the procuratorial authorities criminalize enterprises that have already constituted crimes in a conditional non-prosecution way, which can save and protect enterprises and give criminal enterprises a chance to rehabilitate. Through theoretical packaging and system operation, corporate compliance has become an intermediate bridge and excuse, in fact, the ultimate purpose is to save the enterprise and find a reason for the company's crime. However, there are at least three points to consider whether the purpose of saving a business can withstand the scrutiny of legitimacy.
First, the reasons for non-prosecution lack judicial expertise. At present, some cases in which enterprises do not prosecute compliance lack legal professional content in the reasoning part, and are basically policy discussions. For example, how much profit the enterprise creates, how much tax is paid, how many professional inventions it makes, how many people are employed, and so on. He then argues that the conviction of such an enterprise will lead to adverse consequences such as bankruptcy and employee unemployment, so the enterprise has the conditions to comply and not prosecute. However, the use of such reasoning on the major issue of conviction and disappointment that is in the perception of ordinary citizens makes people feel that the judiciary is not serious and is difficult to respect.
Second, compliance without prosecution does not necessarily violate the principle of legality of crime. With regard to the meaning of the first half of article 3 of the Criminal Law, the prevailing view is that even if the form meets the provisions of the article, it is still permissible to use various substantive and even super-statutory grounds to commit crimes, and as long as they are substantive and reasonable, the crime does not violate the principle of legality of crime. If compliance as a justification cause can eventually be successfully constructed by theory, then it is not appropriate to criticize compliance and non-prosecution from the perspective of the principle of criminality.
Third, compliance non-prosecution violates the principle of equality. In terms of the legitimacy of compliance non-prosecution, the most difficult barrier to overcome comes from the principle of equality in criminal law. Article 4 of the Criminal Code, which reaffirms the principle of constitutional equality in the Penal Code, includes both crimes committed by natural persons and corporate crimes, both ordinary individual crimes and entrepreneur crimes. From the perspective of ex post facto compliance, it is difficult to fully justify the differential treatment of enterprises and individuals for various reasons. Even within enterprises, at present, some conditions for judging whether or not to sue can be obtained based on indicators such as the size of the enterprise, the amount of tax paid, and the number of people are considered to be the second violation of the principle of equality. Therefore, compliance non-prosecution has a double violation of the principle of equality: the first inequality is between individual crime and corporate crime, and the second inequality is within the corporate crime camp.
Some views advocate that enterprises and entrepreneurs should be given a double non-prosecution, which is further from the principle of equality, and entrepreneurs cannot obtain preferential treatment for non-prosecution that is essentially different from ordinary citizens through the shell of enterprises. For the sake of employment, taxation and other considerations, the exoneration of enterprises or entrepreneurs that have committed crimes by complying with the law without prosecution is a policy argument for the collective benefit of social and economic development, while equality is a principled argument based on justice, morality and individual rights. Utilitarian policies to protect the development of enterprises are far from sufficient to justify differentiating factors that are exceptions to the principle of equality. When policy arguments conflict with principled arguments, principles must take precedence, and principles cannot be sacrificed for policy's sake.
Therefore, directly criminalizing a company that constitutes a crime in the name of compliance with the purpose of supporting economic development and protecting enterprises will lead to a fierce conflict with the principle of equality on the crucial issue of conviction, and the legitimacy of the purpose will be questioned.
(III) The risk of alienation from compliance and non-prosecution: from protecting enterprises to coercing enterprises?
At present, the main propaganda caliber of the compliance non-prosecution reform is to protect enterprises, but if it is really fully promoted in the future, the biggest risk may be that it will become a blade of coercive enterprises at the grassroots level, especially coercive private enterprises.
Unlike the reform of leniency in pleading guilty and accepting punishment, the expansion of the power of the procuratorate in the compliance reform is an expansion of power in the absence of equal opponents, and the resistance it faces comes at most from some legal obstacles that can be solved by amending the law, rather than from a state organ with equal strength. The establishment of a third-party supervision and assessment mechanism for compliance of enterprises involved in the case can only be used as a reference for the procuratorate to handle cases in accordance with the law, and the final decision power remains with the procuratorate. In the whole process of compliance non-prosecution, there is no authority like the court that can deny sentencing recommendations and confront the procuratorate head-on, which means that the procuratorate's power operation in the field of compliance non-prosecution lacks real constraints.
In the normal litigation process, the procuratorate's prosecuted case is likely to be returned or directly acquitted by the court because the application of the crime is inaccurate, or the evidence is not sufficient, so a rational prosecutor will inevitably use the power to arrest and prosecution extremely prudently, even restrictively, so the court's restraint on the procuratorate's prosecutorial power actually effectively guarantees that citizens will not be arbitrarily put in the dangerous situation of detention and prosecution by public power.
If compliance non-prosecution is passed and prosecutors of all grassroots procuratorates across the country hold this power, then, even if the evidence of guilt has not yet reached a truly sufficient level, it may send a coercive signal to the unruly enterprise to admit guilt, requiring the enterprise to choose between cooperating in admitting guilt and enjoying the consequences of not prosecuting and refusing to admit guilt and being prosecuted. At this time, the power space of the procuratorate to prosecute or not will be unprecedentedly released, the court's restrictions on the right to prosecute will be dissolved invisibly, the procedural rights of enterprises will not be guaranteed, and the risk of unjust, false and wrong cases will be multiplied. As a result, the process of compliance and non-prosecution has formed a closed loop that cannot reach the court, in which it is ultimately up to the procurator handling the case whether a crime is constituted, whether it is transferred for prosecution, whether the evidence meets the standard, and whether it is convicted.
Therefore, even if the original intention and vision of the top design of the Supreme People's Procuratorate is to protect and save enterprises, the lack of restraint will inevitably lead to the consequences of abuse of power. Especially in the process of operating power at the grassroots level, the abused right not to prosecute is likely to become a weapon for coercion and inducement (not constituting a crime) enterprise to bow down and confess.
(4) Methodological reflection
1. Methodology of reform decision-making: how to avoid the deformation of the top-level design at the grassroots level?
Advancing judicial reforms such as corporate compliance in such a mega country must take into account the limitations of top-level design. The biggest risk of top-level design is not in the pilot stage of the system, but in the alienation of grassroots power that may occur in the long-term daily process after the system is determined. When designing at the top level, it is necessary to consider what he may do in the future after the legislation is passed, in the daily operation of the system, when the front-line judiciary has the flexible power to control the enterprise.
In the absence of other reciprocal power constraints, unilateral power expansion is bound to eventually have alienating consequences. Instead of first engaging in a top-level design plan, passing legislation, and then striving to overcome and prevent it through training and education, and unifying thinking, the risk of power alienation should be considered in the plan at the beginning of the design, as an important factor in judging whether the entire plan is feasible. Any reform can not deviate from the basic human nature of seeking benefits and avoiding harm, and the most effective means of restricting power is power checks and balances, and the restrictive relationship between public prosecution and law and the triangular structure of prosecution and defense trial are the power restraint mechanism designed by human beings through countless experiences and lessons. If the power to decide whether a company is convicted or not is handed over to the procuratorate through compliance and non-prosecution, cutting off the link of the court, it is tantamount to opening a cage that restricts power. At the same time, if the alienation after the expansion of the procuratorial power really appears, because the direction will be contrary to the original intention of protecting the enterprise, it will have more serious consequences than the alienation of power in other occasions.
2. Methodology of theoretical research: how to avoid the comparative law of the South Orange and North Orange Range?
The theoretical research of corporate compliance is the focus of academic circles now, and the efforts of scholars have indeed guided the judicial practice in the field of national compliance, enriched the research ecology, introduced a large number of foreign theoretical cases, and brought a lot of innovative sparks. Since compliance is an imported product, in the process of borrowing comparative law, the problem that needs to be avoided is not paying enough attention to the differences in the external environment of the system, and only extracting a certain part of the foreign system and theoretical system for my use. Systems and theories are inseparable from the entire system as the growth environment of theories, and apart from the original institutional environment, a system or theory may undergo alienation, and even the consequences of the South Orange and North Orange may occur.
The reason for rebutting the challenge cannot be based on the fact that other countries are also allowing compliance not to prosecute, because there are many major differences in the institutional context that carries the integrity of compliance operations. For example, the German criminal law does not stipulate the crime of legal persons at all, and it is necessary to invent special rule theories and systems to deal with the problem of corporate crime in practice, which is naturally different from the response method developed by unit crimes explicitly stipulated in the mainland. The United States is a relatively strict alternative liability or subrogation responsibility, and the process is to first leniently and then tighten, criminalize the subrogation responsibility of the enterprise first, and then criminalize the compliance plan, so as to achieve the rationality of the scope of the crackdown.
However, the crimes committed by units under the mainland's criminal law have narrowed the caliber very tightly from the very beginning, and if it were not for the will of the units reflected in the collective decision-making of the highest level of enterprises, it would not be possible to identify them as unit crimes. This identification method can not only receive the same wide and narrow effect, but also be easier to operate in practical identification. If the effect of a new plan is not much different from, or even slightly inferior to, the effect of existing theoretical and practical experience, advocating an amendment to the law solely to remove obstacles to corporate compliance reform, it is inevitable that it will be sufficient and the necessity is not convincing.
3. The legal profession: is it a blue ocean to boost revenues, or is it a precursor to the industry's self-destruction?
In the current pilot phase, lawyers are actively involved in reform, but in the long run, they may self-shrink the scope of the industry. If the compliance non-prosecution legislation is passed, the power to decide whether to prosecute or not is vested in the procuratorate, and the role that lawyers can play is very limited, and then they will gradually be marginalized from active participants in the pilot stage. Under the dual impetus of pleading guilty and accepting punishment and complying with non-prosecution, the criminal defense business of unit crimes will also gradually shrink. Such a prospect will also make it difficult to attract or even expel talented people away from the work of criminal lawyers, and will eventually lead to the shortcomings of a country's rule of law barrel, which is a potential harm to the rule of law that is alarming.
Finally, as a suggestion after criticism, Professor Che Hao believes that corporate compliance reform is of great significance, but it is not appropriate to form a closed loop of power at the stage of prosecution review. Ideally, either withdraw back to the administrative field, and for the general illegal acts of enterprises that do not constitute crimes, the administrative organ will carry out administrative compliance work (because major matters that do not involve conviction do not require judicial review), or move forward to the court stage, where the procuratorate can make sentencing recommendations on compliance issues on the basis of pleading guilty and accepting punishment, but cannot directly exercise the right not to prosecute. As for how the procuratorate plays its role at the trial stage, whether compliance can be lenient, to what extent, whether the sentence is light, mitigated, or suspended, or even not punished, this is a topic for further discussion in the future, and the priority is to get rid of the closed-loop trap of compliance and non-prosecution.
Professor Che Hao concluded by saying that it is the responsibility of scholars as judicial friends to criticize questions about judicial reform, rather than blindly supporting and praising them. If a reform has the risk of alienating the unchecked judicial power, even if it benefits the enterprises involved in the case in the short term, but in the long run there is a possibility of coercive enterprises that deviate from the original intention of the reform to protect the enterprises, and even lead to the deformation of the litigation structure, then this will inevitably have a far-reaching impact on the rule of law environment on which every legal person rests.
Professor Long Zongzhi of Sichuan University Law School, Professor Xiong Qiuhong of China University of Political Science and Law, Professor Li Hong of Tsinghua University Law School, Professor Li Fenfei of Chinese Min University Law School, Professor Li Bencan of Shandong University Law School, and Director Zhu Mingyong of Beijing Jingmen Law Firm spoke successively and shared their views around the lecture.
Professor Long Zongzhi believes that the construction of corporate compliance is conducive to creating a more favorable business environment for private enterprises, and at the same time is conducive to promoting the compliance operation of private enterprises. However, after studying and thinking about it recently and attending lectures, I feel that this issue is not simple and still needs further research. Professor Long Zongzhi agrees with some important views of Professor Che Hao, and has different opinions on some issues.
First, there is one issue to note when discussing this topic – for what type of compliance is not to be prosecuted. One is a limited, moderate and modest type, which is basically limited to the scope of relatively non-prosecution targets, and for minor crimes that can be prosecuted or not, a compliance investigation and compliance construction condition is added to the reason for the crime, so as not to shake the basic legal principles and norms. The other is more radical. It is proposed to break through the scope of relative non-prosecution and implement non-prosecution of serious criminal enterprises and even individuals on the grounds of compliance construction. Probably this is problematic. Discuss issues in a targeted manner.
Second, he discussed with Professor Che Hao what is the main issue of legitimacy in criminal law for committing crimes in the name of compliance. Professor Long Zongzhi believes that violating the principle of equality is only a manifestation of the problem, and the justification of not prosecuting on the grounds of compliance construction is insufficient, and the key is to break through the jurisprudence of criminal responsibility as the basis of modern criminal law theory, because the criminal law should investigate the illegal crimes that have been committed and the infringement of legal interests.
Third, three points of "critical reflection" are added: First, the question of the legality of impunity for serious crimes. From a substantive law point of view, for serious crimes or more serious crimes, whether the state can waive criminal liability on the grounds of compliance construction; From the perspective of the litigation system, whether public prosecution can break through the restrictions of legalism and expand the scope of application of the cheap prosecution doctrine, that is, break through the restriction of "no prosecution of minor crimes" and achieve non-prosecution of serious crimes or more serious crimes, Professor Long Zongzhi believes that this involves a breakthrough in some basic principles and norms of the criminal law system and the public prosecution system, impacting the principle of criminal legal system and the principle of equality in criminal law, and this breakthrough does not have sufficient legitimacy and realistic possibilities at present.
Second, the effectiveness of compliance rectification and compliance supervision measures is still in doubt. Under the pressure of prosecution, it is not too difficult to require enterprises to do compliance rectification, as long as the enterprise has the ability. However, is compliance rectification that effective? There are considerable uncertainties as to whether the compliance rectification standards are suitable for specific enterprises, whether the rectification supervision and evaluation can be implemented fairly and effectively, and whether the paper-based system can be effectively implemented in the enterprise. Judging from the actual situation of private enterprises, especially small and medium-sized private enterprises, we should not be too optimistic about the effectiveness of such rectification and reform.
Third, attention should be paid to the limited capacity of procuratorial organs. Compliance non-prosecution is led by the procuratorate, however, enterprise compliance construction is an important part of the construction of enterprise operation mechanism, which is professional and a systematic project, and the procuratorial authority may have the problem of limited resources and insufficient ability to lead compliance construction. In addition to the fact that the procuratorial organs do not have the power to investigate such cases and administrative punishments, which limits their operational resources, it is also because compliance construction involves the internal governance structure, rules and regulations, personnel management, etc., these compliance issues related to the operation and development of enterprises are grasped by the procuratorial organs engaged in criminal prosecution, including evaluation and supervision, there may be technical difficulties, and if the functions are excessively extended, the actual effect is worrying.
The Supreme People's Procuratorate, together with relevant departments, issued the Guiding Opinions on Establishing a Third-Party Supervision and Assessment Mechanism for Compliance of Enterprises Involved in Cases (for Trial Implementation), which, in addition to achieving neutrality in supervision and assessment, is conducive to avoiding excessive involvement and inadequacy of the procuratorate. But does this really work? Without special institutions and personnel, special responsibilities entrusted by law, and corresponding financial support, including the burden of compliance construction and regulatory assessment costs, it is difficult to guarantee the operational effectiveness of such third-party supervision and evaluation, and it is even more difficult to form an institutionalized long-term mechanism.
In summary, Professor Long Zongzhi's basic judgment is that under the circumstances of the current legal framework or slight modifications, it is of certain significance and has a certain realistic possibility to promote a gentle and moderate compliance non-prosecution. But major changes in this area may lack grounds and conditions.
Regarding the critical views put forward by Professor Che Hao, Professor Xiong Qiuhong responded that there are many clear opposing views on the substantive and procedural law aspects of the discussion on the non-prosecution of compliance by enterprises involved in the case, both within and outside the region. In the mainland, voices supporting the reform of non-prosecution of the companies involved in the case have dominated the mainstream media, and the voices of skepticism are relatively weak, but there are also private discussions expressing doubts among the silent majority in the academic community.
As far as criminal procedure jurisprudence is concerned, the main reasons why the voice of support occupies the mainstream are: first, it serves the overall situation of improving the business environment, protecting property rights, protecting private enterprises, and promoting social and economic development; Second, it is in line with the criminal justice policy of "less arrest, prudent prosecution and careful detention", reflecting "prudent prosecution" and the lenient treatment of enterprises and entrepreneurs involved in crimes; Third, it is consistent with the overall trend of criminal justice reform in recent years, especially the lenient system of guilty pleas, the attitude of the prosecuted person after the crime is an important reason for giving him lenient treatment, and the compliance of the enterprise involved in the case after the fact is a manifestation of repentance after the enterprise crime, and it can be given a lighter treatment for not prosecuting. It should be pointed out that non-prosecution in the Criminal Procedure Law includes statutory non-prosecution, discretionary non-prosecution, doubtful non-prosecution, conditional non-prosecution, special non-prosecution, etc., each of which has its own different conditions of application and cannot be generalized.
Extraterritorially, the United States, Britain, France, Canada, Australia, Singapore, etc. have adopted a corporate compliance non-prosecution system, and the initial motivation is that the traditional criminal justice system is difficult to be effective in prosecuting crimes committed by multinational companies, because "enterprises are too big to fail", and criminal sanctions against them will seriously impact the international and domestic markets. The corporate compliance non-prosecution system based on pragmatism has some supporters and some opponents.
The main reasons for support include: (1) the bankruptcy of the enterprise can be avoided; (2) Save litigation costs; (3) Promote internal reform of enterprises; (4) Encourage companies to self-report wrongdoing.
The main reasons for the objection include: (1) it may lead to improper punishment of the enterprise; (2) allowing enterprises to use deferred prosecution agreements to evade criminal liability; (3) The content of the deferred prosecution agreement lacks predictability, hinders the company's future planning, and violates the principle of fairness; (4) Whether the cost of rectification matches the benefit, and there is a lack of evidence. This is much the same as Professor Che Hao's skeptical view.
It should also be noted that the extraterritorial debate over corporate compliance non-prosecution has escalated to the debate over the transformation of criminal justice models. The traditional criminal justice model is constructed according to the principle of due process of law, and is a continuous process of investigation, prosecution, trial and enforcement. The triadic division of civil, administrative, and criminal procedures or the duality of civil and criminal procedures is a distinctive feature of the traditional model. Fair trial standards, including evidentiary standards, vary in procedures of different natures. The emergence of non-prosecution of enterprises involved in the case has led to the birth of a new model, which has created a new system for supervision, risk management and compulsory control of corporate crime for corporate crimes, forming a hybrid procedure, which introduces civil and administrative remedies to achieve criminal justice purposes, is a cost-effective regulatory tool, and is another way to "deliver justice".
Doubts about this new model include: (1) posing a double danger to the enterprises involved; (2) restricting its right to cross-examine the prosecution's evidence, resulting in unfairness to the party being sued; (3) procedural abuse weakens public confidence in judicial administration and judicial conduct; (4) there is no convincing evidence that legal sanctions have a deterrent effect on enterprises; (5) In the new mixed procedure, the civil-criminal binary is sharply opposed, undermining the criminal justice tradition centered on trial and due process.
It is foreseeable that with the practice exploration and system development of corporate compliance non-prosecution, relevant doubts and debates will continue. As for Professor Che Hao's concern about the risk of alienation from corporate compliance non-prosecution, it involves the control of prosecutors' discretion. The reform of compliance non-prosecution may lead to some drawbacks, but by designing specific standards and procedures, such as limiting the applicable object and scope of the compliance non-prosecution system and joining hearing procedures, etc., to avoid the arbitrary expansion and abuse of prosecutors' powers, and stabilize the discretion of prosecutors within a controllable range, it is sufficient to reduce the risk of power alienation.
Professor Li Hong believes that Professor Che Hao's views are very pertinent and deeply agrees, but he does not recognize Professor Che Hao's view on the grounds that some deficiencies of the pilot project of corporate compliance non-prosecution in the current judicial practice in mainland China comprehensively denies the corporate compliance non-prosecution system itself.
Professor Li Hong believes that: First of all, what Professor Che Hao is criticizing is not the compliance non-prosecution system in the true sense, but the compliance non-prosecution system that is being piloted in the mainland. Just as "you cannot say that there is a problem with the Buddhist scriptures themselves because they are read by crooked mouths and monks", we cannot negate the corporate compliance non-prosecution system itself on the grounds that some problems have occurred in the pilot reform of corporate compliance non-prosecution in practice;
Secondly, the problem of the non-prosecution system for corporate compliance pointed out by Professor Che Hao is precisely the defect of the principle of subrogation liability for unit crimes based on the intention and behavior of the constituent personnel of the unit in mainland judicial practice, and it is also the reason for the various problems in the pilot project of compliance non-prosecution of mainland enterprises.
Only by correctly and appropriately applying the theory of organizational criminal responsibility for crimes caused by the organization's own organizational structure, culture, policies and other institutional deficiencies can this problem be overcome;
Third, due to the existence of various complex factors, when the Supreme People's Procuratorate promotes the pilot work of non-prosecution of enterprise compliance, it mainly targets small and medium-sized enterprises mainly family enterprises, so that there is a widely questioned unfair phenomenon that "as long as a criminal enterprise reaches a compliance commitment with the procuratorate, it will let go of both the enterprise and the entrepreneur". But in fact, what really needs to comply with enterprises is modern large and medium-sized enterprises that separate the ownership and management rights of enterprises, rather than small and medium-sized enterprises with strong personal or family colors with a high concentration of ownership and management rights. This deviation from the applicable object is an important reason for people's misunderstanding of the corporate compliance non-prosecution system;
Finally, based on the typical cases published by the procuratorate, Professor Li Hong pointed out that in the context that the pilot system of enterprise compliance reform currently has no substantive legal basis, in order to achieve the effect of lenient treatment for enterprises implementing enterprise compliance reform, it can only be found in the relevant provisions of the current criminal law of the mainland for unit crimes.
The characteristics of the provisions on crimes committed by mainland units are that, in the criminal law of natural persons, they are stipulated in the form of crimes committed by the units themselves, and the "double punishment system" is implemented in terms of punishment. This characteristic is destined to determine that the current pilot project of corporate compliance reform in the mainland must be carried out within the framework of the existing basic principles and basic systems of criminal law, and must not be carried out without restraint from the specific provisions of the criminal law, starting from a utilitarian standpoint. Otherwise, it will not only lead the corporate compliance non-prosecution system that has just started in the mainland to go astray, but also lead people to misunderstand the corporate compliance non-prosecution system, making it impossible to implement it steadily and far-reaching.
From the perspective of the long-term development of enterprises, even small and medium-sized enterprises that are highly mixed with corporate property rights and individual property rights should not abuse the concept of corporate compliance and not prosecute, and grant them privileges in the form of a judicial system, so that they cannot carry out normal internal governance from the beginning.
Professor Li Fenfei's speech was entitled "The Legitimacy and Improvement of the Reform of "Compliance Without Prosecution". He pointed out that although the "compliance without prosecution" reform does have problems in operation, such as leniency in compliance, compliance rectification of small and micro enterprises, and a short compliance inspection period, based on the three-year pilot experience, it is also necessary and meaningful to conduct a systematic summary and even reflection, but believes that the reform has a legal basis and meets the actual needs of the mainland, and the practical effect is generally good, and the expected reform goal of "win-win, win-win and win-win" has basically been achieved.
Subsequently, Professor Li Fenfei responded to many questions about the legitimacy of reform based on the theory of self-responsibility for guilt, the theory of measuring public interest, the theory of effective governance of corporate crime, and the theory of precision justice. Professor Li Fenfei pointed out that enterprises are fictional collectives, and the principles of crime and correction methods are different from natural persons, and their behavior, will and responsibility cannot be determined in the way of natural persons. Unlike flesh-and-blood natural persons, the actions of an enterprise are carried out by many members, and even the strictest control measures are adopted, and the behavior of each member cannot be completely controlled. Therefore, the criminal liability of a company is essentially a compliance liability. The ultimate goal of criminal justice should be to promote enterprises to assume compliance responsibilities, urge them to correct hidden dangers of violations and crimes in their operation and management structures through compliance construction, and actively achieve the prevention of recidivism.
In Professor Li Fenfei's view, the "compliance crime" limited to enterprises not only does not violate the principle of equality, but is also more conducive to solving the hidden criminal dangers left over from the initial stage of the development of the mainland market economy and promoting the modernization and transformation of corporate governance. The reason for corporate crime is usually not a lack of understanding of the consequences of criminal punishment, but the existence of criminal genes in its organizational management structure, resulting in suspected unit crimes in production and business activities. The only type of punishment for enterprises in the mainland is fines, which has more than enough significance but insufficient preventive function. Even if the natural person who directly committed the crime has been sanctioned as the person responsible for the crime of the unit, and the enterprise has paid an economic price, if the management factors that lead to the crime within the enterprise are still there, there may be other personnel who commit similar acts, and the risk of recidivism is still high.
In contrast, "compliance rectification" has more advantages in preventing crimes committed by many units. On the one hand, it is necessary for enterprises to accept compliance inspections and establish effective compliance plans with high costs, which can replace the punishment function of fines to a certain extent; On the other hand, compliance rectification needs to be aimed at preventing the recurrence of the same or similar crimes, which can also make up for the lack of recidivism prevention function of fines.
Professor Li Fenfei believes that the reform experiment allows lenient treatment of entrepreneurs involved in crimes based on the compliance of the enterprises involved in the case, mainly because mainland enterprises have a high personal dependence on their operations, and protecting enterprises also requires the protection of "entrepreneurs". After all, the vast majority of enterprises involved in the mainland are small, medium and micro private enterprises, and the production and management of these enterprises basically rely on the personal coordination of "entrepreneurs", and if "entrepreneurs" are convicted and imprisoned, then the enterprises are likely to go bankrupt. Therefore, within the scope of minor crime cases, considering the business operation responsibilities shouldered by the "entrepreneur", and on the premise that the enterprise involved in the case achieves decriminalization through compliance rectification, making a decision not to prosecute the "entrepreneur" or putting forward a sentencing recommendation for a suspended sentence is in line with the actual needs of the mainland to protect private enterprises.
What's more, the number of unit crime cases in the mainland at this stage is small, and the scope of application of compliance inspection procedures is limited, but the number of individual crime cases of "entrepreneurs" is relatively large, and it usually reflects that there are major governance deficiencies and institutional loopholes in the daily operation and management activities of the unit, and enterprises should be promoted to carry out compliance rectification. At this time, it is necessary to encourage "entrepreneurs" to actively participate in promoting corporate compliance rectification with lenient penalties.
However, Professor Li Fenfei also pointed out that the compliance leniency system of the enterprises involved in the case is not yet perfect, and although the procuratorial organs have standardized the discretion of prosecutors through systems such as three-level approval, hearings, and third-party supervision in the reform exploration, there are still cases of alienation in practice. In this regard, we should continue to explore the top-level design of optimizing the reform and optimize the applicable conditions for compliance of the enterprises involved in the case. For example, the preconditions for initiating compliance inspections can be added, and cases in which "entrepreneurs" are for personal interests and whose behaviors are not highly related to corporate management loopholes can be excluded from the scope of reform, so as to prevent excessive protection of "entrepreneurs" and violate the principle of equality of all laws. In the future, when the legislation introduces the conditional non-prosecution mechanism for enterprises, the enterprise and the "entrepreneur" should be handled separately and prosecuted separately, and in those major unit crime cases, the enterprise achieves the crime through the compliance inspection procedure, and the "entrepreneur" still needs to be prosecuted, convicted and punished as the person responsible for the unit crime.
Professor Li Bencan generally has a positive attitude towards the views put forward by Professor Che Hao, but he has different views on the following two points:
First, whether it should be led by the procuratorate, different types of non-prosecution should be distinguished, rather than a blanket claim that compliance cannot be intervened by the procuratorate. According to Professor Li Bencan's investigation cases, many useful attempts have been formed in many places. For example, in some cases, the enterprise has a good internal control mechanism in advance, and in the cases involved, the relevant responsible persons have also fulfilled their duty of care, and for such cases, some procuratorial organs directly deal with them with statutory non-prosecution, and attach procuratorial suggestions to strengthen compliance governance. In other cases, additional prosecutorial recommendations were attached to the non-prosecution in doubt. These can provide some incentive for corporate compliance. For example, since the Criminal Procedure Law provides for discretionary non-prosecution, it is justified in itself that the procuratorate should take the lead in implementing compliance discretionary non-prosecution within the scope of misdemeanors. It was only in the handling of serious crime cases that Professor Li Bencan agreed with Professor Che Hao's proposition.
Second, whether prior compliance can cut responsibility and whether it will motivate enterprises to comply is not the basis for criticizing the lack of rationality of the means of the compliance system. Professor Li Bencan believes that as long as the principle of responsibility is recognized, then it is necessary to understand unit responsibility from the perspective of organizational responsibility, that is, unit responsibility is the responsibility of the unit itself. In this theoretical system, corporate compliance is the core basis for judging its responsibility. In some cases, even if the employee commits a violation of the law, but the company has fulfilled the compliance obligation, then the unit does not need to be liable, but only the individual is liable. If the criminal justice of the unit can insist on this, then objectively it will also motivate enterprises to comply, but it is only a matter of degree. It can be seen that the prior compliance mechanism is closely related to the theory of organizational responsibility of the unit, and cutting responsibility and encouraging corporate compliance are only the reflection effects of the compliance system.
In addition to Professor Che Hao's explanation of specific problems, Professor Li Bencan also talked about three aspects:
First, in terms of value objectives, the compliance reform of the enterprises involved in the case cannot be overly tied to policy objectives such as private economic protection. In fact, the protection of the private economy is a systematic and complex social engineering, if it is overly tied to corporate compliance, it will make the compliance system bear an unbearable weight and deviate from the deep logic of the compliance system; Deviate from basic market logic. The practice of applying compliance on a large scale rather than non-prosecution or the academic proposition of applying the system in serious crime cases reflects the logic of overly tying compliance with private economic protection, and using compliance as a lifesaver for retaining enterprises. In compliance reform, some people believe that we must build our own century-old store through compliance reform.
However, whether an enterprise can survive is affected by a variety of factors, such as fierce competition, industrial transformation, state intervention, tax policies, and innovation ability. In fact, the elimination of enterprises that are difficult to adapt to the market competition environment through the bankruptcy system is itself the result of the survival of the fittest in the market. In this sense, the collapse of enterprises may mean the reallocation of resources and the optimization of the market structure.
Second, in terms of research methods, it is necessary to avoid simple take-it-or-the-box doctrine and pay attention to the method of criminal integration. As far as the former is concerned, the failure to prosecute serious crimes and separation litigation have a tendency to simplify complex issues. In the United Kingdom and the United States, it is true that the compliance non-prosecution system is widely applied in serious crime cases, and many companies involved have committed serious crimes many times, and ultimately have not prosecuted. However, this judicial scheme is closely related to the strong plea bargaining culture and litigation negotiation culture in Britain and the United States, and our country does not have this cultural background.
Although our criminal proceedings also reflect a certain degree of cheapness, on the whole, we still pursue prosecution and arrest when a crime is constructed. In such cases, it may not be appropriate to claim impunity for a felony. The same is true for separation litigation, in the United Kingdom and the United States, compliance cases are mainly large and medium-sized enterprises, while we are dealing with small and micro enterprises. In small and micro enterprises, people and enterprises are highly bound, and how to separate them is a big problem. In terms of research methods, the approach of criminal integration should be promoted. It is not difficult to see from the foreign compliance system and practice that the compliance system has very obvious characteristics of procedures and entity interaction. For us, too, many issues must be studied in the context of procedural and physical interactions. For example, secession litigation has been advocated by many scholars, but this should be premised on the revision of the substantive criminal law, and if article 31 of the mainland Criminal Law emphasizes the integrity of human and unit responsibilities, then secession litigation cannot become a basic handling rule.
Third, in the direction of research, we should not only see the benefits brought by the compliance system, but also the side that is not easy to find, only in this way can we achieve better reform results. In this regard, I personally believe that if compliance is widely applied and non-prosecution is widely applied, the effectiveness of legal norms will be significantly reduced, and even the unit crime system will be partially abolished; Failure to deal with serious offenders as they deserve can also have a demonstration effect and motivate other businesses to choose to break the law. These are all things we should pay attention to.
From the perspective of practical work, Director Zhu Mingyong pointed out: First, the discussion on compliance non-prosecution is itself a false proposition. Compliance means legal, if so, how to prosecute? Non-compliance means breaking the law, if so, why not prosecute? Once there is misuse or abuse in compliance non-prosecution, how to clarify its relationship with the crime of Article 399 of the Criminal Law; Second, for lawyers, Director Zhu Mingyong summarized the compliance non-prosecution business as the legal counsel work of divesting part of the daily litigation business, and its content was "old wine in new bottles"; Third, when carrying out pilot reforms, procuratorial organs should fully weigh the pilot targets to ensure that the pilot work is carried out in a fair and orderly manner; Finally, when carrying out and leading system reform, procuratorial organs should always uphold their original intention and clarify their own positioning.
Professor Qin Qianhong summarized the lecture and once again thanked the keynote speaker, Professor Che Hao, and the panelists for their participation and support. Professor Qin Qianhong pointed out that many guests talked about the legitimacy and scientificity of reform authorization, and the topic often talked about in the past was the overall design of reform, but the reform of corporate compliance and non-prosecution is strongly led by an institution, whether there is an overall design problem, there is completely room for discussion, this is a topic that can be infinitely extended, and there are many issues to discuss. At the same time, Professor Qin also believes that for many enterprises in China, enterprises and individuals are tied together and cannot be finely cut between enterprises and individuals, which is completely different from the enterprise system formed in the West since modern times. Then, Professor Qin also spoke highly of the theme of the lecture, believing that Professor Che Hao's independent voice adhered to the belief in the rule of law of legal personnel, showed a Chinese position and family and country feelings, and reflected the responsibility and courage of legal personnel.
Finally, all participants thanked each other in the cloud, and the lecture ended successfully in a warm atmosphere.