Criminal Procedure For Corporate Criminal Trials In China
🔹 1. Legal Framework for Corporate Criminal Liability in China
Corporate criminal liability in China is primarily governed by:
Criminal Law of the People’s Republic of China (PRC) — especially Articles 30 and 31.
Criminal Procedure Law of the PRC (CPL) — which details how investigations, prosecutions, and trials are conducted.
Relevant judicial interpretations from the Supreme People’s Court (SPC) and Supreme People’s Procuratorate (SPP).
⚖️ Key Provisions
Article 30 – Unit Crimes
A "unit" (单位) — meaning a company, enterprise, institution, or organization — can be held criminally liable if:
The offense was committed in the name of the unit;
It was committed for the benefit of the unit;
It was approved or acquiesced to by responsible persons within the unit.
Article 31 – Double Liability
When a unit commits a crime:
The unit itself shall be fined;
The responsible persons directly in charge and other directly responsible individuals shall be punished personally.
Thus, China’s system follows a dual-punishment model — punishing both the company and its managers.
🔹 2. Criminal Procedure for Corporate Trials
The Criminal Procedure Law (CPL) applies to unit crimes with some procedural distinctions.
1. Investigation Stage
Conducted by the Public Security Bureau (PSB) or Procuratorate.
Evidence includes:
Financial records
Internal communications
Testimonies of employees and management
The investigation targets both the company and its responsible individuals.
2. Prosecution Stage
The People’s Procuratorate decides whether to prosecute.
An indictment is filed against both the corporate entity and individuals.
Prosecutors must specify:
The unit’s role in the crime;
The scope of authority of each responsible individual;
The economic benefit gained by the unit.
3. Trial Stage
The People’s Court tries both the unit and individuals in a joint proceeding.
The company is represented by a legal representative or authorized agent.
Judgments are based on whether:
The act was done in the unit’s name;
It benefitted the unit;
It was authorized or tolerated by management.
4. Sentencing
Units are fined.
Individuals face imprisonment, criminal detention, or fines.
Courts consider:
The seriousness of the harm;
The amount of illegal gains;
Cooperation or remedial actions taken.
🔹 3. Key Case Examples (Detailed)
Below are five representative cases showing how Chinese courts handle corporate criminal trials.
🏢 Case 1: Sinopec Shengli Oilfield Service Company Environmental Pollution Case (2014)
Facts:
Sinopec’s subsidiary illegally discharged untreated chemical waste into a local river. The pollution caused ecological damage and public health risks.
Legal Issues:
Whether the pollution was committed “in the name and for the benefit” of the company.
Whether management was aware of the violations.
Judgment:
Court found the company guilty under Article 338 (crime of environmental pollution).
Evidence showed that executives instructed subordinates to save disposal costs.
Sentence:
Company fined RMB 20 million.
Two senior managers sentenced to 3 and 2 years’ imprisonment, respectively.
Significance:
This was one of the first major cases enforcing corporate responsibility under China’s environmental criminal provisions.
⚙️ Case 2: Shanghai Husi Food Co. (McDonald’s Supplier) – Food Safety Case (2016)
Facts:
The company was accused of selling expired meat products to fast-food chains including McDonald’s and KFC.
Legal Issues:
Whether the acts were done for the unit’s benefit.
Whether employees were following company policy.
Judgment:
Court ruled the company knowingly processed and sold expired meat.
The company was fined RMB 2.4 million.
The manager and quality control head received prison sentences of up to 5 years.
Significance:
Illustrates joint punishment: both the corporate entity and individuals held accountable for food safety crimes.
💰 Case 3: Bank of China Branch – Money Laundering Case (2018)
Facts:
A local branch of the Bank of China was used to launder funds through forged loan documentation and false accounts, facilitated by internal staff.
Legal Issues:
Whether the branch (as a corporate unit) bore independent criminal liability.
Whether the conduct was sanctioned by higher management.
Judgment:
The court held the branch liable because managers knew and allowed the illegal transactions.
Penalties:
Branch fined RMB 5 million.
Responsible officers sentenced to 4–6 years imprisonment.
Significance:
Reinforced that financial institutions can be prosecuted as “units” for systemic compliance failures.
🧾 Case 4: Jilin Chemical Industrial Co. – Tax Evasion Case (2012)
Facts:
The company falsified export invoices to obtain tax rebates.
Legal Issues:
Whether the scheme represented corporate will or rogue employee action.
Whether the company benefitted materially.
Judgment:
Court held that the scheme was approved by senior financial officers.
Company fined RMB 10 million.
CFO and accountant sentenced to 5 and 3 years, respectively.
Significance:
Clarified the boundary between individual misconduct and corporate crimes — if top management approves or knowingly ignores the conduct, the unit is criminally liable.
🧱 Case 5: Shenzhen Construction Group – Bribery Case (2019)
Facts:
To obtain government contracts, the company paid bribes through intermediaries to local officials.
Legal Issues:
Whether bribery was conducted “in the name of the unit.”
Whether corporate leaders authorized or tolerated the payments.
Judgment:
Court found corporate-level awareness of bribery.
Sentence:
Company fined RMB 15 million.
General manager sentenced to 7 years’ imprisonment.
Significance:
Established that commercial bribery is a unit crime when committed for business gain with managerial knowledge.
🔹 4. Key Procedural and Practical Takeaways
Dual Accountability: Both corporations and their executives face punishment.
Mens Rea (Intent): A corporate “intent” is derived from the acts and awareness of responsible individuals.
Evidence: Corporate documents, communications, and financial data play a central role.
Mitigation: Early cooperation, restitution, or compliance reforms can reduce penalties.
Judicial Trends: Courts are increasingly using corporate prosecution to enforce public welfare laws — environmental, tax, financial, and food safety regulations.
🔹 5. Summary Table
| Stage | Institution Involved | Key Focus | Outcome |
|---|---|---|---|
| Investigation | PSB / Procuratorate | Gathering financial, managerial, and documentary evidence | Case filing or dismissal |
| Prosecution | Procuratorate | Drafting indictment against unit + individuals | Indictment filed |
| Trial | People’s Court | Determining corporate and personal liability | Conviction, fine, imprisonment |
| Execution | Court + Enforcement Bureau | Collecting fines, supervising sentence | Case closure |
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