Criminal Legal Risks in Enterprise Operations and Prevention Guide

Criminal risks in enterprise operations not only result in corporate fines but may also subject legal representatives and executives to criminal liability, requiring enterprises to attach great importance.

1. Common Economic Crime Types

Common criminal offenses in enterprise operations: falsely issuing special VAT invoices (most common, filing threshold RMB 50,000 in falsely issued tax amount), tax evasion (evading tax of RMB 50,000+ and 10%+ of tax payable), contract fraud (illegal possession as purpose, defrauding counterparty property during contract signing/performance),occupational embezzlement (company personnel illegally occupying unit property using positionfacilitate, filing threshold RMB 60,000), misappropriation of funds, bribery of non-state personnel, trade secret infringement, refusing to pay labor remuneration, environmental pollution.

2. False Invoice Risk

Falsely issuing special VAT invoices is the highest-incidence corporate criminal offense. Forms: falsely issuing for others, for oneself, having others issue for oneself, introducing others to falsely issue. Common misconceptions: "with real transactions it's not false issuance" (invoice-goods separation, product name changes, amount discrepancies may still constitute false issuance); "accepting false invoices and just reversing input VAT is fine" (criminal liability may still be pursued). Enterprises should strictly verify invoice sources to ensure invoice, goods, and payment consistency.

3. Executive Personal Criminal Risk

Legal representatives, actual controllers, and finance heads are high-risk groups for corporate criminal liability. For unit crimes, the unit is fined, and directly responsible supervisors and other directly responsible persons are sentenced. Common personal crimes: bribery / bribery of non-state personnel, misappropriation of funds, embezzlement, illegal disclosure of important information, insider trading. Executives are advised to develop criminal compliance awareness and conduct legal risk assessments for major decisions.

4. Criminal Compliance and Risk Prevention

Preventive measures: establish enterprise criminal compliance system (including anti-commercial bribery, anti-money laundering, tax compliance, data compliance, etc.); regularly conduct criminal legal risk training; establish internal reporting and investigation mechanisms; conduct criminal legal risk assessments for major business decisions; engage professional criminal lawyers promptly upon criminal investigation. Since 2020, procuratorates have implemented enterprise compliance reform, allowing eligible involved enterprises to obtain lenient treatment through compliance rectification.