Local prosecutors placing more emphasis on corporate compliance
Shanghai prosecutors have been exploring a better way to guide local companies to set up corporate compliance systems.
Corporate compliance broadly means adhering to rules and measures to ensure employees and businesses are in accordance with relevant laws, standards and policies, touching on many aspects such as data security and intelligence property rights (IPR).
"Corporate compliance can be goals that companies have set to comply with existing laws, policies, standards and requirements," said James Liu, a lawyer at AllBright Law Offices who is also a member of the Shanghai Internet and Information and Technology Research Committee of the Shanghai Bar Association. "It can also be defined as behaviors that companies incorporate to meet goals, such as establishing rules, setting up processes, adopting technology tools, training employees and adjusting organizations."
"Take data compliance as an example. If a goal is set, a company should set up a specialized department, employ professional personnel as well as special rules such as data classification, and categorize data according to its types and importance," Liu added
He said the focus on corporate compliance can be seen as the city's development level reaching new heights.
"Guiding enterprises to become more compliant benefits companies and reduces their risk of breaking laws," Liu said.
Yangpu District companies sign the written proposal for data compliance.
City's first data compliance guidance and first print enterprise IPR compliance guidance
The Yangpu People's Procuratorate, the district's industry and commerce authorities as well as the cyberspace administration jointly released the city's first guidance to regulate data redundancy at the end of January.
The scale of the soft digital economy in Yangpu District is more than 80 billion yuan (US$12.66 billion), and includes companies such as Bilibili, Meituan and ByteDance.
The data-redundancy guidance can help data companies create internal regulations to reduce the risk of data leaking and improve risk-prevention abilities.
The guidance includes 38 stipulations that help enterprises with data compliance in terms of setting compliance systems, risk identification and assessment.
The guidance includes useful information about laws such as the Personal Information Protection Law, Date Security Law and Cybersecurity Law that companies need to reference when they set up the mechanism.
District prosecutors also developed a digital platform to connect companies and help them evaluate risks and assess data security.
Promoting the implementation of corporate compliance procedures in Yangpu is a top priority for district prosecutors.
"When a risk occurs at a company that has a compliance system and is functioning normally, its likelihood of breaking the law will be lower than companies that don't have such a system in place," Liu said.
In addition to data compliance, prosecutors in the Pudong New Area released the compliance guidance to help printing companies adhere to regulations to protect IPR.
The Pudong People's Procuratorate opened an internal institution to deal with IPR-related cases in the Zhangjiang High-tech Park on February 28, a first in the city.
Guiding printing businesses on compliance was the institution's first task.
The guidance divides printing enterprises into three categories: publication printing, packaging and decoration printing, and other kinds of printing. It outlines key points about risk prevention and control in terms of IPR compliance.
"In recent years, there have been many cases of printing companies breaking IPR laws due to improper management," said Zhao Rui, the internal institution's chief prosecutor. "The guidance helps enterprises avoid IPR risks."
Introducing third-part personnel
Jing'an District prosecutors identified a company that ran afoul of the law because it did not have a functional compliance system.
The prosecutors made suggestions and introduced third-party supervision to help the company build their data and anti-corruption system, which enabled the company to do away with unnecessary human resources and reduce operating costs.
Last year, they invited people from local authorities, including administrative supervisors, accountants, lawyers, experts and scholars, to establish the city's first third-party professional directory database to provide guiding services to district companies.
Prosecutors in Minhang and Hongkou districts also introduced a third-party supervision system with personnel to help enterprises in those districts build compliance systems.
