Cases
Hylands Successfully Handles the First Batch of Compliance Non-Prosecution Cases in Guangzhou
Recently, the People's Procuratorate of Guangzhou concluded the review of the first two cases in which the third-party supervision and assessment mechanism was applied. Zhengfu ZHU, Chuanming ZOU and the criminal defense team of Hylands were engaged to defend the Chairman of one of the enterprises involved in the case. Following the unremitting efforts of multiple parties, the enterprise involved in the case successfully passed the third-party inspection and assessment, and the procuratorial authorities finally made a decision not to prosecute the enterprise and the personnel involved in the case in accordance with the law.
The pilot compliance reform of enterprises involved in the case is a major institutional innovation for the procuratorial authorities to make full use of the advantages of procuratorial functions, actively integrate into social governance, promote compliance with the law, and serve the high-quality development of the economy and society. In April 2021, the Supreme People's Procuratorate incorporated Guangdong into Phase II of the pilot corporate compliance reform. In June 2021, the client was placed in criminal detention. The lawyer team, after meeting and learning from the enterprise involved in the case, also noticed that the Supreme People's Procuratorate, together with other eight departments such as the All-China Federation of Industry and Commerce, formulated and issued the Guidelines for Establishing Third-Party Supervision and Evaluation Mechanism for Compliance of Enterprises Involved in Cases (for Trial Implementation) (hereinafter referred to as the "Guidelines") on June 3, and keenly identified that the case complied with the requirements of pilot cases of current compliance reform. In accordance with the "Guidelines", the applicable objects of compliance non-prosecution include not only companies and enterprises involved in the cases, but also companies, business operators, managers, key core personnel and other individuals, and corporate compliance serves as an important reference for the decisions made by the procuratorate not to approve arrests, not to prosecute, and to change of compulsory measures. Upon analysis and judgment, the lawyer team believed that the change of compulsory measures to bail pending trial was not only in line with the law, but also was a specific embodiment of the spirit of the policy of protecting private entrepreneurs and the criminal justice policy of less arrest and prudent prosecution and detention. Furthermore, given that the enterprise concerned was a private enterprise of scientific and technological innovation, the destiny of the enterprise was closely linked to the fate of entrepreneurs, managers and technicians, and the change of compulsory measures for the executives concerned was conducive to the compliance and rectification of the enterprise, thereby achieving the purpose of making the enterprise "survive", "stay" and "operate well".
On this basis, the lawyer team first submitted a legal opinion of non-approval of arrest to the procuratorate, and the procuratorate held a hearing and made a decision of non-approval of arrest for the client in accordance with the law. Subsequently, the lawyer team proactively applied to the procuratorial authorities for the application of the pilot compliance of the enterprise involved in the case, and following the unremitting efforts of multiple parties, the enterprise involved in the case effectively performed compliance rectification and passed the third-party acceptance, and the procuratorial authorities finally announced the non-prosecution of the enterprise involved in the case as well as the personnel involved in the case, including the client concerned.
Compliance is the lifeline for the survival and development of enterprises as well as an important support for the benign and healthy development of the industry. Compliance non-prosecution, as a judicial initiative still in the exploratory stage of reform, is of great significance. On April 2, 2022, the Supreme People's Procuratorate, in conjunction with the All-China Federation of Industry and Commerce, specifically convened a meeting to officially announce that the pilot compliance reform of enterprises involved in the case was fully launched in the national procuratorial organs. The lawyers of Hylands will further actively participate in the reform efforts of the procuratorial authorities, provide a full range of professional legal services to promote the compliance and law-abiding operation of enterprises, optimize the rule of law and business environment, and contribute to the deeper development of corporate compliance reform.