Criminal liability for corporate crimes in the People's Republic of China
The article discusses criminal liability for corporate crimes (crimes of organizations) in the People's Republic of China (PRC): options for fixing the norms on responsibility of organizations in a Special part of the Criminal Code of the People's Republic of China; distribution of articles providing for corporate crimes by chapters of the Criminal Code of the People's Republic of China; sanctions (punishments) provided for corporate crimes; deadlines limitation periods applicable to corporate crimes; criminal procedure procedure for bringing organizations to criminal responsibility; prospects for the development of Chinese legislation on criminal liability of organizations. Attention is drawn to the fact that along with criminal liability in China, there is also administrative liability of organizations.
Keywords: China, criminal law, corporate crimes, criminal liability of organizations, criminal penalties (sanctions).
This article continues the review of the legislation of the People's Republic of China (hereinafter referred to as the People's Republic of China, China) on criminal liability of legal entities (hereinafter referred to as organizations) started in previous issues of the Russian Investigator magazine <1>. Chinese legislation establishes the responsibility of organizations <2> for the commission of corporate crimes provided for in the Criminal Code of the People's Republic of China (hereinafter referred to as the Criminal Code of the People's Republic of China) of 1997 with subsequent amendments <3>.
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<1> Fedorov A.V. Criminal liability of legal entities - a new direction in the development of Chinese legislation // A Russian investigator. 2022. N 8. pp. 75-85. DOI: 10.18572/1812-3783-2022-08-75-85; Fedorov A.V. Corporate crime and its composition in Chinese criminal legislation // Russian investigator. 2022. N 9. pp. 73-80. DOI: 10.18572/1812-3783-2022-09-73-80.
<2> The peculiarity of Chinese criminal law is that it provides for criminal liability of organizations that are both legal entities and those that do not have the status of a legal entity. Thus, although many studies on the criminal liability of organizations in China refer to the criminal liability of legal entities, it should be borne in mind that they use the well-established concept of "criminal liability of legal entities" in its broad sense, covering the responsibility of organizations that are both legal entities and non-legal entities.
<3> The Criminal Code of China / Edited by A.I. Korobeev and A.I. Chuchaev; Trans. from kit. Huang Daoxiu. 2nd ed. Moscow, 2021.
1. Provisions of the Special Part of the Criminal Code of the People's Republic of China on corporate crimes (crimes of organizations).
Criminal liability of organizations for corporate crimes occurs only in cases where this is explicitly stated in the articles of the Special Part of the Criminal Code of the People's Republic of China.
At the same time, in a Special part of the Criminal Code of the People's Republic of China, two variants of the construction of norms on the responsibility of organizations for corporate crimes are used.
The first option is that the articles providing for responsibility for specific crimes do not specify that organizations may be criminally liable for their commission. At the same time, special articles are included in separate paragraphs of the chapters of the Special Part of the Criminal Code of the People's Republic of China, including a list of articles of the relevant paragraphs, for which crimes criminal liability of organizations is established. In total, there are 7 articles in the Special Part (art. 150, 200, 211, 220, 231, 346, 366 The Criminal Code of the People's Republic of China), containing lists of such crimes. For example, in art. 150 § 1 of the chapter "Crimes related to the violation of the economic order of the socialist market" of the Special part of the Criminal Code of the People's Republic of China states: "If the crimes provided for in Articles 140-148 of this paragraph are committed by an organization, then a fine is applied to the organization, and the head of the organization and other directly responsible persons are punished in accordance with by the specified articles".
The second option is to indicate in the article providing for responsibility for a certain crime that criminal punishment is applied to an organization for this crime (an article-by-article version of establishing the responsibility of organizations). For example, in Part 3 of Article 152 "Smuggling of pornographic objects; waste smuggling" states: "If the crime provided for in parts one or two of this article is committed by an organization, then a fine is applied to the organization, and the directly responsible heads of the organization and other directly responsible persons are punished in accordance with parts one and two of this article."
At the time of the adoption of the new version of the Criminal Code of the People's Republic of China in 1997, there were 92 articles in the Special Part of the Criminal Code providing for crimes for which criminal liability of organizations was established <4>.
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<4> Criminal Code of the People's Republic of China / Ed. and with a preface by A.I. Korobeev; Translated from the kit by D.V. Vichikov. Vladivostok, 1999.
Currently, 118 articles of the Special Part of the Criminal Code of China provide for crimes for which the responsibility of organizations is established <5>. How these articles are distributed by chapters of the Criminal Code of China can be seen from the table below.
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<5> The Criminal Code of China / Edited by A.I. Korobeev and A.I. Chuchaev; Trans. from kit. Huang Daoxiu. 2nd ed. Moscow, 2021.
Table. A special part of the Criminal Code of China, providing for crimes for which the responsibility of organizations is established.
Chapter of the Special Part of the Criminal Code of China Number of articles providing for crimes for which the responsibility of organizations is established Articles of the Criminal Code of China providing for crimes for which
the responsibility of organizations is established
Chapter 1. Crimes against State security (Articles 102 - 113) there are no such articles
Chapter 2. Crimes against public safety (Articles 114 - 139-1) 4 articles 120-1, 125, 126 and 128 of the Criminal Code
Chapter 3. Crimes related to the violation of the economic order of the socialist market (Articles 140-231) 67 articles of the article 140, 141, 142, 142-1, 143, 144, 145, 146, 147, 148, 151, 152, 153, 158, 159, 160, 161,162-1, 164, 169-1, 174, 175, 175-1, 176, 177, 178, 179, 180, 181, 182, 185-1, 186, 187, 188, 189, 190, 191, 192, 194, 195, 201, 203, 204, 205, 206, 207, 208, 209, 210-1, 213, 214, 215, 216, 217, 218, 219, 221, 222, 223, 224, 224-1, 225, 226, 227, 228, 229 and 230 CC
Chapter 4. Crimes against the person and the democratic rights of citizens (Articles 232 - 262-2) 3 articles 244, 253-1 and 260-1 of the Criminal Code
Chapter 5. Crimes against property (Articles 263-276-1) 1 article Article 276-1 of the Criminal Code
Chapter 6. Crimes against the order of government and public order (Articles 277-367) 36 articles of the article 281, 283, 285, 286, 286-1, 287-1, 287-2, 288, 307-1, 308-1, 312, 313, 319, 325, 326, 327, 330, 332, 334, 337, 338, 339, 340, 341, 342, 342-1, 343, 344, 344-1, 345, 347, 350, 355, 363, 364, and 365 CC
Chapter 7. Crimes against the interests of national defense (Articles 368-381) 3 articles 370, 375 and 380 of the Criminal Code
Chapter 8. Corruption and bribery (Articles 382-396) 4 articles 387, 390-1, 391 and 393 of the Criminal Code
Chapter 9. Official crimes (Articles 397-419) there are no such articles
Chapter 10. Crimes of military personnel against military duty (Articles 420 - 451) there are no such articles
TOTAL: 118 articles of the Criminal Code of China
If at the time of the adoption of the new version of the Criminal Code of the People's Republic of China in 1997, the article-by-article version of establishing criminal liability was less common (43 out of 92 articles), at the moment it prevails (68 out of 118 articles).
As can be seen from the table above, most corporate crimes relate to crimes related to the violation of the economic order of the socialist market (67 articles of Chapter 3 of the Criminal Code of the People's Republic of China), and crimes against the order of government and public order (36 articles of Chapter 6 of the Criminal Code of the People's Republic of China), a total of 103 articles out of 118, which is 87%.
A number of studies substantiate that all crimes provided for by the Special Part of the Criminal Code of the People's Republic of China can be divided into two groups: 1) crimes, the subjects of which can only be individuals (single-subject crimes); and 2) crimes, the subjects of which are individuals and, under certain conditions, organizations (corporate or two-subject crimes).
Which of the crimes are corporate (two-subject) are indicated in the articles of the Special Part of the Criminal Code of the People's Republic of China.
At the same time, the concepts of "subject of crime" and "subject of criminal responsibility" differ in Chinese legislation. It should be borne in mind that the subject of a crime does not always become the subject of criminal liability. In this regard, when committing a corporate crime (which includes two subjects of the crime), as noted by Professor He Binsong, there may be two punishable entities (individuals and an organization) or one punishable entity (an individual) <6>.
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<6> For more information, see: The doctrine of the composition of a crime in the criminal law of Russia and China: comparative legal research / Edited by V.S. Komissarov, A.I. Korobeev, He Binsun. St. Petersburg, 2009. p. 274.
At the same time, according to Jiang Huilin, in all cases, the criminal liability of organizations implies the responsibility of individuals responsible for the commission of relevant crimes <7>.
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<7> Jiang Huilin. Criminal legislation of China on the responsibility of legal entities for corruption and terrorism // Interaction of international and comparative criminal law / Scientific ed. N.F. Kuznetsova, V.S. Komissarov. M., 2009. p. 253.
However, in Chinese judicial practice, there are cases that do not correspond to the two above points of view, when organizations are criminally liable without bringing an individual to criminal responsibility. For example, in 2003, the first People's Court of the middle instance of Beijing admitted that the Beijing Kuanda medical company had committed tax evasion, and the legal representative of the company, Wang Lulin, was acquitted, since it was not proven that he had committed falsifications, forgery, concealment, unauthorized destruction of accounting books, settlement documents or other actions that constitute the objective side of tax evasion <8>.
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<8> Pan Dongmei. Theory of criminal liability of legal entities in the People's Republic of China // Criminal Law. 2009. N 2. P. 34.
A number of Chinese scientists use a different classification of corporate crimes based on the provisions of the articles of the Special Part of the Criminal Code of the People's Republic of China.
Thus, Professor Pan Dongmei identifies the following groups (forms) of corporate crimes <9>:
1) a purely corporate crime, the subject of which is recognized only as an organization, but not an individual. For example, in her opinion, these are crimes provided for in Article 387 "Taking a bribe by an organization" and Article 393 "Giving a bribe by an organization" of the Criminal Code of the People's Republic of China. Individuals are subjects of independent crimes under Articles 385 "Taking a bribe" and Article 389 "Giving a bribe" of the Criminal Code of the People's Republic of China.
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<9> For this classification, see: Pan Dongmei. Corporate crime in Chinese criminal law // Lex russica. 2015. N 7 (volume CIV). pp. 65-66.
As Pan Dongmei points out, the subjects of crimes under Articles 387 and 393 of the Criminal Code of the People's Republic of China are legal entities, and the subjects of responsibility for their commission are legal entities and individuals (directly responsible heads of organizations and other directly responsible persons).
As an example of a purely corporate crime, she cites art. 327 of the Criminal Code of the People's Republic of China "Illegal sale or unauthorized donation of collectible cultural monuments", according to which "if, in violation of the legal provisions on the protection of cultural values, state museums, libraries or other organizations have sold or unauthorized donation to non-governmental organizations or individuals of collectible cultural monuments under state protection, a fine is applied to the organization, and directly responsible managers of the organization and other directly responsible persons - shall be punished by imprisonment for a term of up to three years or arrest";
2) a mixed corporate crime, the subjects of which are recognized as both an organization and an individual. Most of the corporate crimes belong to this group. Pan Dongmei divides mixed corporate crimes into two types based on the legislative technique used to classify crimes as corporate: 1) when one article after the disposition specifies sanctions for individuals, and then for an organization, and 2) when a separate article in a paragraph of the chapter provides for the responsibility of organizations for committing crimes established by the articles of this paragraph listed in it.
The practice of bringing organizations to criminal responsibility is being successfully formed in China.
For example, in 2007, 757 cases of crimes of organizations were considered in all people's courts of China:
290 cases related to the fictitious issuance of special receipts for the payment of value added tax, on the basis of which export duties were refunded or taxes were reduced;
100 cases related to tax evasion;
110 cases related to the smuggling of ordinary goods;
30 cases related to fraudulent activity with contracts;
54 cases related to bribery by an organization;
173 cases of other crimes <10>.
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<10> The doctrine of the composition of a crime in the criminal law of Russia and China: comparative legal research / Edited by V.S. Komissarov, A.I. Korobeev, He Binsun. St. Petersburg, 2009. p. 518.
2. Criminal penalties for corporate crimes (sanctions for organizations).
The Criminal Code of the People's Republic of China provides that legal entities are punished with a fine for committing corporate crimes.
Article 31 of the Criminal Code of the People's Republic of China "The principle of sentencing for a crime committed by an organization" provides that a fine is imposed on an organization committing a crime, and direct managers and other directly responsible persons are criminally liable on a general basis (as the subjects of the crime are individuals).
As noted in the available literature, Article 31 of the Criminal Code of the People's Republic of China enshrines the so-called shuangchunxing, that is, the dual nature of criminal liability of organizations, which consists in the fact that, on the one hand, the organization directly guilty of committing a criminal offense is liable, and on the other - its leadership <11>.
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<11> Troshchinsky P.V. Legal responsibility in the law of the People's Republic of China. M., 2011. pp. 111 - 112.
In China, the maximum fine for organizations is not limited by law. Some Chinese scientists explain this by the fact that the application of a fine without a legal limitation of its size in relation to an organization provides a ratio of the size of the fine to the damage caused by the crime <12>. Only in art . 190 of the Criminal Code of the People's Republic of China (illegal transfer of currency abroad) provides that a company, enterprise or organization, in violation of Chinese law, illegally storing currency in accounts abroad or illegally transferring currency abroad, under aggravating circumstances, is punishable by a fine of up to five percent of the amount of funds illegally stored abroad or transferred abroad.
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<12> Korobeev A.I., Chanhai Lung. The composition of a crime in the doctrine of criminal law in China and Russia: a comparative study: Monograph. M., 2013. p. 120.
According to Article 32 of the Criminal Code of the People's Republic of China "Assigning the amount of a fine", a fine is imposed in a certain amount of money in accordance with the circumstances of the crime.
A number of studies have criticized the fact that Chinese law allows only one type of punishment to be applied to organizations - a fine. In many countries, unlike the PRC, a broader list of types of punishments is provided for legal entities, including, in addition to fines, such punishments as liquidation of a legal entity; suspension of the activities of a legal entity for a certain period; closure of divisions, representative offices and institutions of a legal entity for a certain period; a ban on conducting future activities in which a crime was committed or favorable conditions were created for its commission or concealment (this ban may be final or temporary); deprivation of the right to receive subsidies and assistance from the state, as well as the right to enter into contractual relations with the public sector (the right to conclude transactions in in the public sector) and enjoy tax benefits and incentives or benefits and incentives from the social insurance system for a certain period of time; and other types of penalties.
For example, Chinese researcher Ma Xin, noting the ineffectiveness of fines for environmental crimes, justifies the expediency of establishing such punishment for organizations as deprivation of the right to engage in certain activities. In particular, the scientist points out that for legal entities and other organizations, deprivation of the right to engage in specific activities for a certain period of time is usually associated with severe, often irreversible consequences and the effectiveness of such punishment is much stronger than a fine. The inclusion of such punishment in the Criminal Code of the People's Republic of China can become an effective measure in the fight against crimes, ensuring, in particular, the prevention of environmental harm <13>.
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<13> Ma Xin. Criminal liability for environmental crimes as a tool for preventing environmental harm in China // Proceedings of the Institute of State and Law of the Russian Academy of Sciences. 2019. Vol. 14. N 3. P. 212.
3. Special confiscation.
Special confiscation is defined in Article 64 of the Criminal Code of the People's Republic of China, which provides that all property illegally acquired by a criminal is subject to seizure or it must be directed to compensation for damage; the legitimate property of the victim must be returned to him in a timely manner; prohibited goods and property belonging to the person who committed the crime must be confiscated. All confiscated property and monetary fines are sent to the treasury of the State; it is prohibited to use them for other purposes and to dispose of them arbitrarily.
This article is included in the paragraph "Sentencing" of Chapter 4 "Application of punishment" of the Criminal Code of the People's Republic of China. In the theory of Chinese criminal law, there are two main points of view on the nature of special confiscation. Some experts attribute it to types of additional punishment, others to non-punitive coercive measures that are not related to criminal penalties <14>.
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<14> For more information, see: Korobeev A.I., Averyanova Yu.V. Special confiscation of property in the criminal law of Russia and China: comparative research // Asia-Pacific region: economics, politics, law. 2015. Vol. 17. N 4. pp. 93-94.
As noted in the available studies, confiscation of property of organizations (legal entities) is quite common in judicial practice. For example, the Qizhou company, which provided pornographic films registered on its website, was sentenced on the basis of paragraphs 1 of Articles 363, 366 and 367 of the Criminal Code of the People's Republic of China to a fine of 1 million yuan, and all illegally acquired property, as well as instruments of crime, were confiscated <15>.
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<15> Ibid., p. 97.
4. Limitation periods for bringing organizations to criminal responsibility for corporate crimes.
The Criminal Code of the People's Republic of China establishes that the statute of limitations for criminal liability for any, including corporate, crimes is calculated from the date of commission of the crime <16>. At the same time, uniform limitation periods have been established for individuals and organizations.
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<16> Article 89 of the Criminal Code of the People's Republic of China provides that when committing ongoing or continuing crimes, the statute of limitations for criminal prosecution is calculated from the date of the end of criminal acts. If a person has committed a new crime during the statute of limitations for criminal prosecution, then the statute of limitations for criminal prosecution for the previous crime is calculated from the date of commission of the new crime.
According to Article 87 "Limitation periods for criminal prosecution" of the Criminal Code of the People's Republic of China, a person (an individual or an organization) cannot be held criminally liable if the following terms have expired since the date of commission of the crime:
1) five years from the date of the commission of a crime for which the law provides for a maximum penalty of imprisonment for a period of less than five years;
2) ten years from the date of commission of the crime, for which the law provides for a maximum penalty of imprisonment for a period of five years or more, but less than ten years;
3) fifteen years from the date of the commission of the crime, for which the law provides for a maximum penalty of imprisonment for a period of ten years or more;
4) twenty years from the date of the commission of a crime for which the law provides for a maximum penalty of life imprisonment or the death penalty. If, after twenty years, the need for criminal prosecution is recognized, then this is allowed with the approval of the Supreme People's Prosecutor's Office.
5. Criminal and administrative liability of organizations.
Russian studies often indicate that in those countries where there is administrative liability of legal entities for offenses, criminal liability is not established for them. This is not always the case, and one example of this is China.
The current Chinese legislation provides for not only criminal, but also civil and administrative liability of individuals and organizations. The latter is reflected in the criminal legislation.
Thus, Article 37 "Measures of influence outside criminal punishment" of the Criminal Code of the People's Republic of China provides that "persons who have committed minor crimes for which there is no need to apply punishment may be released from criminal punishment, but taking into account the specific circumstances of the case, such persons may be publicly censured or they may be obliged to repent in writing, apologize, to compensate for the damage, or an administrative penalty or punishment may be imposed on them by the competent administrative authority."
About 90 laws form the modern administrative law of China (including the Law of the People's Republic of China on Administrative Penalties of 1996, the Law of the People's Republic of China on Penalties for Violation of Public Order of 2005, the Law of the People's Republic of China on Administrative Coercion) and a number of other acts <17>. At the same time, as noted in the available studies, the administrative responsibility of organizations has become widespread in China <18>.
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<17> Comparative law: national Legal systems. Vol. 3: Legal systems of Asia / Edited by V.I. Lafitskiy. M., 2013. pp. 142 - 144.
<18> On the administrative responsibility of organizations in China, see: Troshchinsky P.V. Legal responsibility in the law of the People's Republic of China. M., 2011. pp. 168 - 181.
6. The criminal procedure procedure for bringing organizations to criminal responsibility.
Organizations are held accountable in accordance with the Criminal Procedure Code of the People's Republic of China (hereinafter referred to as the CPC of the People's Republic of China), adopted at the 2nd session of the National People's Congress of the fifth convocation on July 1, 1979 and in force as amended in 1996. <19> and 2012. <20> The CPC of the People's Republic of China does not contain any special provisions on the investigation and trial of cases of corporate crimes committed by an organization.
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<19> The text of the CPC of China (as amended at the 4th session of the NPC of the eighth convocation on March 17, 1996) translated into Russian, see: Modern legislation of the People's Republic of China: Collection of Normative Acts / Comp., ed. and preface: L.M. Gudoshnikov. M., 2004. p. 314 - 365.
<20> Amendments introduced by the 5th session of the eleventh National People's Congress on May 14, 2012, see: Lian Minyan. Improving China's criminal justice system // Bulletin of the Buryat State University. 2015. N 2(1). pp. 173-176.
7. Prospects for the development of Chinese legislation on criminal liability of legal entities.
Concluding a brief analysis of the criminal responsibility of organizations, it should be noted that the formed institution of criminal responsibility of organizations reflects the political, social and economic realities of modern China, is an adequate reaction of the state to a situation when "the role of an individual as a criminal recedes into the background, while a legal entity is brought to the fore as a real criminal illegally receiving money or other benefits from criminal activity" <21>. But what meets the needs of society today may not fully meet them tomorrow. The world is changing, crime is changing.
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<21> Golovanova N.A. Trends in the development of the institute of criminal liability of legal entities abroad // Legal liability: modern challenges and solutions: Materials for the VIII Annual Scientific Readings in memory of Professor S.N. Bratusya. M., 2013. p. 153.
It seems that in order to more effectively counter crimes committed by organizations in the PRC, it is necessary to: increase the number of types of punishments applied to them; resolve the issue of the succession of criminal liability during the reorganization of organizations; expand the list of crimes for which an organization may be criminally punished; fix the circumstances mitigating and aggravating the responsibility of organizations. It is also necessary to include in the CPC of the People's Republic of China norms regulating the criminal procedure procedure for bringing organizations to criminal responsibility.
In addition, in a state that is a people's state, as reflected in its name, the laws should be understandable to the broad masses of the people. The available studies indicate the vagueness, inaccuracy, and lack of specificity of the formulations used in the current Chinese legislation, which affects the uniform, correct, accurate interpretation and application of the provisions contained therein <22>; many norms have a pronounced descriptive character, include a large number of evaluative features, generally differ in a high degree of casuistry, which causes certain difficulties even in the process of understanding their meaning, difficulties arise when applying such norms in practice <23>.
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<22> Luzyanin S.G., Troshchinsky P.V., Sukhodolov Ya.A. Features of the legal regulation of the fight against crime in China // All-Russian Journal of Criminology. 2016. Vol. 10. N 4. pp. 815 - 816.
<23> The Criminal Code of China / Edited by A.I. Korobeev and A.I. Chuchaev; Trans. from kit. Huang Daoxiu. 2nd ed. M., 2021. p. 20.
This implies the need to further improve Chinese legislation on criminal liability of organizations so that it does not require additional interpretation, excludes variability of decisions, and is understandable to both law enforcement officers and citizens of the People's Republic of China, as well as employees of foreign organizations working in China.
