Pudong creates third-party commission to monitor corporate compliance

The Pudong New Area has officially organized a third-party commission for supervising and evaluating the corporate compliance mechanism of enterprises in the free trade zone, the Pudong New Area's procurators said on Thursday.

Some normative documents, such as a working regulation, implementation measures and a personnel selecting method, were also released by commission members to establish a third-party mechanism.

A company is corporate compliant when it has processes, standards and procedures to ensure it is conducting business ethically and responsibly.

The Supreme People's Procuratorate launched a pilot program for reforming corporate compliance in March of 2020. Six primary-level procuratorates across the country, including Pudong's, were among the program's first batch.

The pilot program aims to improve the procedures for making decisions, not to approve arrests or prosecutions in accordance with the law or propose light suspended sentences based on the system of confessing guilt and punishment for companies involving in relevant crimes.

The third-party mechanism dictates that when the procuratorial organs handle corporate-related criminal cases, they can consult a third-party organization selected by the regional third-party mechanism management committee to meet the applicable requirements of the corporate compliance reform pilot program and determine if the companies are corporate compliant, the procurators said.

Based on characteristics of the region's free trade zone, the Pudong Procuratorate focuses on fields involving finance, intellectual property rights and personal information, as well as network data, production safety and other corporate-related cases in the reform pilot program.

The commission is comprised of 13 departments, including Pudong's procuratorate, state-owned assets supervision and administration, finance, the federation of industry and commerce, justice, taxation, market supervision, commerce and intellectual property authorities, and administrations of the Free Trade Zone, designed to help companies prevent crimes and reduce losses.

"Through the guidance on compliance plans and the supervision of the implementation of corporate compliance, we can help companies form feasible compliance management standards, build effective systems and make up loopholes for the system and management to achieve the effect of reducing and preventing crimes," said Zeng Guodong, secretary of the Pudong New Area's Procuratorate's Party Leadership Group.