Strategies for Reporting Criminal Cases as a Company
By Qiao Peng and Tony Xu
Where an enterprise has preliminarily obtained the clues of potential criminal cases through internal investigation, and the enterprise considers that the offender should be held criminally liable, it can report the case in accordance with the following strategies:
- Identify the Jurisdiction over the Reported Case
In accordance with the Provisions on the Procedures for Handling Criminal Cases by Public Security Authorities, “a criminal case shall be under the jurisdiction of the public security authority at the place where the crime is committed. If it is more appropriate for the public security authority at the place where the criminal suspect resides to exercise jurisdiction, the case may be under the jurisdiction of the public security authority at the place where the criminal suspect resides.”
In practice, we generally choose the company’s business location as the place where the crime is committed and the place with jurisdiction over the reported crime, for the enterprise’s convenience to cooperate with the public security authority in the later stage of the investigation as the person who reports the case. However, in case the local public security authority at the company’s business location deems that evidence is insufficient to file a case, the enterprise may choose to report the crime at the place where the criminal suspect resides. Similarly, the place where the criminal act occurs and the place where the criminal result occurs (including the place where the proceeds of crime are actually obtained, transferred, etc.), can be an alternative place with jurisdiction over the reported crime.
- Competent Authority
The Enterprise may choose to report to the local police station or economic criminal investigation detachment (considering that most of the cases reported by enterprises are economic crimes). In practice, the enterprise needs to prepare the following documents for filing the report:
- A case brief prepared by the enterprise
- Evidence materials obtained by the enterprise
- The letter of authorization issued by the enterprise, which grants the designated agent the power to submit relevant documents on its behalf
Upon acceptance of the case, the public security authority will prepare a case acceptance registration form and a receipt for receiving the case, and serve the receipt to the person who files the report.
The case will then enter the internal circulation of the public security department and be assigned to specific police officers. The police officers in charge will contact the person who files the report after receiving the case materials, and place the case on file for examination.
For the needs of the case handling processes of the public security authority, the police officers in charge will request the enterprise to send relevant persons with knowledge of the case to cooperate in making investigation transcripts. As lawyers cannot act on behalf of the enterprise for the investigation transcripts, the enterprise needs to identify the relevant persons with knowledge of the case at the beginning when it decides to report the case.
- Organization and Submission of Evidence
In addition to requesting the enterprise to send relevant persons with knowledge of the case to cooperate in making investigation transcripts, the police officers in charge will also start to review the evidence materials submitted when the case is reported and examine them from the following perspectives:
- the authenticity, legality and relevance of the evidence materials
- whether the criminal act has occurred
- where the criminal result has occurred
- the objective quantification of criminal proceeds, such as calculation of the value involved
The intervention of lawyers to provide assistance is required for the purpose of sorting relevant evidence, which will help the police officers in charge complete the description of the crime process, as well as effectively promote the progress of the investigation of the case upon the formation of a chain of evidence.
In the process of evidence sorting, if there is evidence obtained from the internal investigation by the enterprise in the early stage, such as the enterprise’s internal interview transcripts and on-site identification photos, it is necessary to remind the enterprise to strengthen the relevance of such evidence to the case. On-site identification photos should not only record the images of the identified site, but should be accompanied by a textual description of the conditions thereof. It is best to obtain the signature of the person involved in the case for confirmation, so that the identification photos can be effectively adopted by the public security authority.
For the calculation of the value involved in the case, the enterprise shall be cautious to determine a reasonable calculation method thereof through consultation with the public security authority, because the amount directly affects the differences between crime and non-crime, different crimes, and is even an important basis for the enterprise to claim for refund or compensation in the subsequent investigation process. For cases where the amount affects the range of criminal sentencing, if the value involved in the case is not accurately and reasonably calculated in the early stage of public security investigation, it will cause problems for the subsequent examination and prosecution, and the sentencing recommendation offered by the procuratorate. In the investigation stage, the public security authority only examine whether the amount is high enough to hold the offender criminally liable, that is, only consider whether the amount reaches the sentencing standards of the crime involved. The aggravated circumstances may be omitted if the amount is subsequently cumulatively calculated.
- Formal Notice of Case Filing
After the aforementioned process, if the public security authority believes that the evidence is true and the criminal act is considered to exist, rendering it necessary to hold the offender criminally liable, it will formally issue a Notice of Case Filing to the person who reports the case. At this point, the process of reporting a crime is completed. The subsequent investigation of the case and the compulsory measures against the relevant personnel will rely on the initiative of the public security authority, during which the enterprise, as the person who reports the case, shall provide cooperation as requested by the public security authority.
R&P China Lawyers is a full-service law firm with a strong compliance and investigations practice. The firm advises clients on employment compliance and supports the development of internal and external compliance systems. It also represents companies that are the target of a complaint or government investigation. For more about our practice, please email Ms. Peng Qiao ([email protected]) or your usual contact at R&P China Lawyers. R&P can also assist with general compliance matters.