IN-DEPTH

International

Investigations

CHINA

International

Investigations

ContributingEditor

StephanieBrooker

Gibson,Dunn&CrutcherLLP

In-Depth:InternationalInvestigations(formerlyTheInternationalInvestigationsReview)

answersthemostcommonquestionsandconcernsthatcorporatecounselfaceinguidingtheirclientsthroughcriminalorregulatoryinvestigationsworldwide.Ithighlightsthemajorissuesandcriticalcharacteristicsofagivencountry'slegalsystemandwillserveasan

invaluableaidinengaging,advisinganddirectinglocalcounselinthatjurisdiction.

Generated:June23,2025

Theinformationcontainedinthisreportisindicativeonly.LawBusinessResearchisnotresponsibleforanyactions(orlackthereof)takenasaresultofrelyingonorinanywayusinginformationcontainedinthisreportandinnoeventshallbeliableforanydamagesresultingfromrelianceonoruseofthisinformation.Copyright2006-2025LawBusinessResearch

ExploreonLexology

nnternationalnnvestigationsCChinaExploreonLexology

China

AlanZhou

,

JackyLi

and

JennyChen

GlobalLawOice

Summary

INTRODUCTION

YEARINREVIEW

CONDUCT

ENFORCEMENT

INTERNATIONAL

OUTLOOKANDCONCLUSIONS

ENDNOTES

RETURNTOSUMMARY

Introduction

ExternaIinvestigationsinchinacanbegeneraIIydividedintotwomajorcategories:criminaIinvestigationsandadministrativeinvestigations,withtheinvestigativepowerbeingvestedamongmuItipIeauthorities.FromacriminaIperspective,authoritieswithcriminaIinvestigativepowersincIude:

1.pubIicsecuritybureaus(PSBs),responsibIeforinvestigations,criminaIdetentions,theexecutionofarrestsandpreIiminaryinquiriesincriminaIcases;[

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2.thepeopIe'sprocuratorates(procuratorates),responsibIeforprosecutions,theapprovaIofarrestsandconductinginvestigationsintocriminaIvioIationsreIatingtojudiciaIfunctionaries'infringementoncitizens'rightsorjudiciaIjustice;

3.nationaIsecurityauthorities,whichinvestigateandhandIecasesofcrimesthatcompromisenationaIsecurity,performingthesamefunctionsandwiththesamepowersasPSBs;

4.miIitarysecurityauthorities,whichmayexercisetherighttoinvestigatecriminaIcasesoccurringinthemiIitary;

5.thechinacoastGuard,aIawenforcementbodythatsafeguardsmarinerightsandexercisestherighttoinvestigatecriminaIcasesoccurringatsea;and

6.prisons.

Fromanadministrativeperspective,authoritieswithinvestigativepowersincIude:

1.theStateAdministrationforMarketReguIation(SAMR),whichoverseesmarketreguIation,foodsafety,heaIthcarecompIiance,advertisementvioIations,competitionvioIations,commerciaIbribery,anti-monopoIy,etc.;anditssubsidiarybureaus,incIudingadministrationsformarketreguIations(AMRs)attheprovinciaI,municipaIandcountyIeveIs;

2.theNationaIDeveIopmentandReformcommissionanditssubsidiarybureaus,responsibIeforoveraIIpIanningandcontroIofthenationaIeconomy,andinvestigatingprice-reIatedvioIations;

3.thechinaSecuritiesReguIatorycommission(cSRc)anditssubsidiarybureaus,responsibIefortheadministrationofsecuritiesandinvestigatingsecuritiesfraud;

4.PSBs,whichareaIsoresponsibIeforinvestigatingadministrativevioIationsimpactingpubIicsecurity;

5.thePeopIe'sBankofchina(PBOc)anditssubsidiaries,responsibIeforcarryingoutmonetarypoIicyandreguIationofinanciaIinstitutionsinmainIandchina,andreguIatingmoneyIaunderingactivities;and

6.otheradministrativeauthorities,suchastheStateTaxationAdministration,thecustoms,andtheEnvironmentaIProtectionBureaus.

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NotabIy,supervisorycommissions,whichsuperviseaIIpubIicoiciaIsexercisingpubIicpowers,areresponsibIeforinvestigatingduty-reIatediIIegaIactivitiesandcriminaIoffences,andcarryoutanti-corruptionwork.

ForcriminaIinvestigations,theauthoritiesareempoweredto:

1.interrogatethecriminaIsuspect;

2.interviewwiththewitnesses;

3.inspectorexaminethesites,objectsandpersonsreIevanttoacrime(incIudingdawnraids);

4.searchthecriminaIsuspectandtheirbeIongingsandresidence,andanyonewhomightbehidingacriminaIorcriminaIevidence,asweIIasotherreIevantpIaces;

5.seaIuporseizethepropertyanddocuments;and

6.accessorfreezeacriminaIsuspect'sdeposits,remittance,bonds,stocks,shares,fundsorotherproperty.

Foradministrativeinvestigations,theauthoritiesaregeneraIIyempoweredto:

1.conducton-siteinspections(incIudingdawnraids);

2.interviewthepartiesinvoIvedinthesuspectedvioIation;

3.requirethepartiesinvoIvedinthesuspectedvioIationtoproducereIevantsupportingdocuments;

4.reviewandreproducedocumentsandmateriaIs;

5.seaIuporseizeproperty;and

6.accessbankaccounts.

ExternaIinvestigationsmaybetriggeredbyroutineinspections,whistIebIowingreports,accusations,compIaints,seIf-discIosure,transfersofcasesbetweenauthoritiesorevenmediaexposureconcerningcertaintypesofmisconduct.OnceanexternaIinvestigationhascommenced,theresponsibIeauthoritieswiIIexercisetheirdiscretionastotheinvestigationmethods,dependingonthenatureoftheaIIegedmisconductandtheresourcesavaiIabIeforinvestigation.

Amongtheenumeratedinvestigationmethods,dawnraidsareadoptedquitefrequentIybygovernmentauthorities.AdawnraidmaybecarriedoutiftheauthoritiesbeIievethatpriornoticeorwarningcouIdpossibIyIeadtothedestructionorfaIsiicationofevidence.Duringagovernmentdawnraid,theoicerswiIIshowupwithoutpriornotice,usuaIIyinthemorningatthestartoftheworkingdayatthepredeterminedsites.severaIsitescanbetargetedsimuItaneousIywithinoracrossprovincesandadawnraidcanIastforseveraIdays.GovernmentauthoritiesmayhaveaIreadycoIIectedevidencethroughperipheraIinvestigationsbeforeinitiatingadawnraidorsometimesadawnraidcouIdbetriggeredunderexigentcircumstances.

ThetimeframesforexternaIinvestigationsareusuaIIysetintherespectiveIawsandreguIationsofthedifferentauthorities.CompaniesunderinvestigationareobIigedtocooperatewiththeauthoritiesanditiscruciaItotimeIyevaIuatethepotentiaIIegaI

RETURNTOSUMMARY

impIicationsandconductnecessaryinteractionswiththeauthoritiestocontaintheIegaIriskexposuresandtoachieveafavourabIeresuIt.

Yearinreview

pubIishedstatisticsshowthat,in2024,AMRshavesubstantiaIIystrengthenedtheirenforcementofanti-monopoIyandanti-unfaircompetition.AMRsundertookspeciaIisedanti-monopoIyenforcementinitiativesandspeciaIoperationsagainstunfaircompetition,whichcontributedtoresoIving36,000monopoIycasesreIatedtotheinternet,imposinginestotaIIing264miIIionyuan,andhandIingmorethan14,000casesofunfaircompetitionwithinestotaIIing805miIIionyuan.

withrespecttosecuritiesfraud,in2024,theCsRCconcIuded739cases(178casesofsuspectedcrimesweretransferredtopsBs),issued592punishmentdecisions,withinestotaIIing15.342biIIionyuan(2.4timesmorecomparedto2023),punished1327entities(a24percentyear-on-yearincrease)andimposedmarketbanson118individuaIs(a14.56percentyear-on-yearincrease).

InJanuary2022,thepBOC,thesupremeCourt,theMinistryofpubIicsecurity,thestatesupervisionCommission,thesupremepeopIe'sCourt,thesupremepeopIe'sprocuratorate,theMinistryofstatesecurity,theGeneraIAdministrationofCustoms,thestateAdministrationofTaxation,theChinaBankingReguIatoryCommission,theCsRCandthestateAdministrationofForeignExchangejointIyissuedtheThree-yearActionpIantoCombatMoneyLaunderingOffences(2022-2024)andIaunchedanationwidethree-yearcampaigntocrackdownonaIIkindsofmoneyIaunderingactivitiesfromJanuary2022toDecember2024,toimprovetheriskpreventionandcontroImechanismagainstmoneyIaunderingandeffectiveIysafeguardnationaIsecurity,sociaIstabiIity,economicdeveIopmentandtheinterestsofthepeopIe.ItisnoteworthythattherevisedAnti-MoneyLaunderingLawofpRCcameintoeffecton1January2025,markingitsirstrevisionsinceitsinitiaIpromuIgationin2006.TheamendedAnti-MoneyLaunderingLawcIearIyemphasisestheadministrativesupervisionandreguIatoryresponsibiIitiesoftheanti-moneyIaunderingauthorities.ItaIsoprovidesdetaiIedprovisionsregardingthesupervisionandinspectionmeasuresoftheanti-moneyIaunderingauthoritiesontheobIigatedinstitutions,cIariiesthepenaItypoweroftheanti-moneyIaunderingauthoritiesandspeciiesthetypesandmeasuresofadministrativepenaItiesthatmaybeimposed.AdditionaIIy,thescopeandseverityofthesepenaItieshasbeengreatIyincreased.

ForheaIthcareindustryparticuIarIy,startingfromMay2023,acoIIaborativeeffortinvoIving14ministriesandadministrationshasbeeninitiatedbasedonthe'keypointsforCrack-downonMaIpracticeinthepharmaceuticaIpurchasingandsaIesandMedicaIservicesin2023'.ThisconcertedactionaimstoaddressmisconductandirreguIaritiesprevaIentinthemedicaIproductindustry.BuiIdinguponthisfoundation,inJuIy2023,10ministriesandadministrationsannouncedtheirintentionstoIaunchayear-Iongnationwidecampaigndedicatedtocombatingcorruptionwithintheindustry.ThiscampaignissettoreceiveguidanceandsupportfromtheCentraICommissionforDiscipIineInspectionoftheCommunistpartyofChina(CCDI)andtheNationaICommissionofsupervision(NCs).Emphasisingacomprehensiveapproach,theCCDIandtheNCshaveunderscoredthesigniicanceofconductingthoroughandsystematicoversightacross'aIIaspects,the

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entirevaIuechain,andachievingfuIIcoverageinthissector'.ThissigniiesaresoIutecommitmenttoensuringintegrityandaccountabiIitythroughouttheheaIthcaresector.InMay2024,'keypointsforcrack-downonMaIpracticeinthepharmaceuticaIpurchasingandsaIesandMedicaIservicesin2024'wasreIeased,aimingtoconsoIidate,deepenandexpandtheresuItsofthenationwidecampaigntocombatcorruptionintheheaIthcaresector.ItisaIsonoteworthythatinJanuary2025,thesAMRissuedcompIianceGuidanceforpharmaceuticaIcompaniesinpreventingcommerciaIBriberyRisks(theGuidance)formarketingparticipantsintheheaIthcareindustry.TheGuidanceproposesadviceontheestabIishmentofaneffectivecompIianceprogram,andthecompIiancerequirementsasweIIasriskidentiicationandpreventionforninescenariosthatareincIinedtobeexposedtobriberyrisks.AIthoughitisnon-compuIsory,astheirstnationwideanti-briberyguidanceforheaIthcareindustrypromuIgatedbythesAMR,theGuidanceishighIyIikeIyregardedasasigniicantreferenceforAMRsacrossthecountryduringIawenforcementactions.

Conduct

seIf-reporting

ArticIe110ofthecriminaIprocedureLawimposesageneraIobIigationonindividuaIsandentitiestoreportanysuspectedcrimesorcriminaIactivity,butonIiteraIinterpretationandfromageneraIpubIicperspective,therequirementisconstruedtomeanreportingthecriminaIactivitiesofothers,ratherthanseIf-reporting,andnoIegaIconsequencesarecIearIystipuIatedforfaiIingtoseIf-report.ArticIe67ofthecriminaILawtosomeextentencouragesseIf-reportingofcriminaIactivitybystipuIatingmitigationorevenexemptionfromthecriminaIpenaItiesundercircumstancesofvoIuntaryconfession.simiIarprincipIescouIdaIsoberelectedinsomeotherprovisionsprescribedinthecriminaILaw.ForexampIe,ArticIe164ofthecriminaILawprovidesthat'anybriberwhoconfessesthebriberyvoIuntariIypriortoprosecutionmaybegivenamitigatedpunishmentorbeexemptedfrompunishment'.paragraph2ofArticIe55ofthecounter-EspionageLawprovidesthat:

whoeverjoinsanespionageorhostiIeorganisationabroadunderduressorinducementtoengageinactivitiescompromisingthenationaIsecurityofchina,butthathonestIystatesthefacttoamissionofchinaabroadinatimeIymanneror,afterhisorherreturnfromabroad,honestIystatesthefactdirectIy,orthroughhisorherempIoyer,toanationaIsecurityauthorityinatimeIymannerandshowsrepentance,maybeexemptedfromIegaIIiabiIity.

FromtheadministrativeIawperspective,seIf-reportingobIigationsarescatteredinvariousIawsandreguIations,mostIyreIatedtovioIationsthatmighthaveanimpactonsociaIsecurityandpubIicweIfare,suchasfoodanddrugsafety,environmentaIprotectionandcybersecurity.ForexampIe,ArticIe47oftheFoodsafetyLawrequiresfoodmanufacturersorbusinessoperatorstoceasefoodmanufacturingorfoodbusinessoperations,andreporttothefoodsafetysupervisionandadministrationdepartmentsintheeventofafoodsafetyincidentwithpotentiaIrisks.ForotheradministrativevioIations,seIf-reportingisnowappearingmoreoftenasaprerequisiteincertainIeniencyprogrammesforcompaniestoreceiveseIf-discIosureorcooperationcredit.AtypicaIsituationisahorizontaImonopoIy

RETURNTOSUMMARY

agreementcase,wherebusinessoperatorscouIdchoosetoseIf-discIosethevioIationandprovideimportantevidenceinexchangeforIenienttreatment.

InternaIinvestigations

IngeneraI,conductinginternaIinvestigationsisnotastatutoryobIigationinchina,unIessprescribedintheappIicabIeindustry-speciicIegisIation(mostIyinresponsetosafetyincidents).Forinstance,theAdministrativeMeasuresforMedicaIDevice-ReIatedAdverseEventMonitoringandRe-evaIuationprovidesthat,afteridentifyingamedicaIdevice-reIatedadverseevent,marketingauthorisationhoIdersmustimmediateIyceasesaIesandoperations,notifytheuser,inparaIIeIwithconductinganinvestigationandseIf-inspectionofmanufacturingquaIitycontroIsystems,andreporttheindingstothesupervisionauthorities.

Inaddition,chineseauthorities(oftenindustrysupervisionauthorities)mayinitiateenforcementactionsandrequirecompaniestoconductseIf-inspectionsandreportnon-compIiantactivities.Forinstance,inanadhocenforcementagainstcommerciaIbriberyintheheaIthcareindustry,initiatedbytheAMRsinTianjinin2017and2018,companiesandmedicaIinstitutionswererequiredtoconductseIf-inspectionsoncommerciaIbriberyandtakecorrespondingremediaIactionsinthisregard.

Inpractice,internaIinvestigationsareincorporatedintotheinternaIcontroImechanismbycompaniesforcompIiancepurposes.Thecauseoftheactionsvariesineachcompanybutwhite-coIIarcrimeandfraud(e.g.,commerciaIbribery,bidriggingandembezzIement)areusuaIIyamongthefocusesforthemajorityofcompaniesinchina.

commonIy,internaIinvestigationsareundertakenbyin-housecounseIsinthecompanyorexternaIIocaIcounseIsdependingonthenatureandseverityoftheissuesunderinvestigation.ThemethodoIogyandprocessfortheseinternaIinvestigationsusuaIIyincIudedocumentreview,inanciaIreviewandinterviewswithempIoyeesandotherpersonneI.ThekeyissuesduringinternaIinvestigationsinvoIvetheIegaIissueidentiication,designandimpIementationoftheinvestigationprocessanaIysisbasedontheindingsanddeterminingthesoIutions.NotabIy,dueprocessandevidencepreservationareoftenoverIookedbycompanies,asitisveryIikeIythatthefactsandevidencegatheredunderinternaIinvestigationmayendupinIabourarbitrationtribunaIsorcourtforIitigationpurposesorbesubmittedtothechineseauthorities.Therefore,howtopreservetheintegrityoftheinternaIinvestigationandensuretheadmissibiIityoftheevidenceshouIdbecarefuIIyevaIuatedduringthepreparationandimpIementationoftheinternaIinvestigation.

companiesinchinaaIsocommonIyconductinternaIinvestigationsinreIationtoforeignIawconsiderations,suchastheForeigncorruptpracticesAct(FcpA),butthispracticehasbeensubstantiaIIyimpactedbythenewIyenactedInternationaIcriminaIJudiciaIAssistanceLaw(IcJAL)inOctober2018,whichexpressIystipuIatesthatinstitutions,organisationsandindividuaIsinchinamustnotprovidetoforeigncountriesevidencemateriaIsorassistanceprovidedforinthisLawwithouttheconsentofthecompetentchineseauthority.ItisnoteworthythatinApriI2024,sevendepartments,incIudingtheNationaIsupervisorycommission,thesupremepeopIe’scourtandthesupremepeopIe'sprocuratorate,jointIyissuedspeciicreguIationstoimpIementtheIcJAL,mandatingtheestabIishmentofaworkingmechanismunderthestatecounciItoreviewtheappIication

RETURNTOSUMMARY

forthecross-bordertransferofcriminaIevidence.consequentIy,anyprovisionofcriminaIevidenceorreIatedinformationfromentities,organisations,orindividuaIswithinchinatoforeignparties-eitherdirectIyrequestedbytheforeignauthorities,orcoIIateraIIythroughinstructingcompaniesinchinatocoIIectevidencethroughinternaIinvestigation-issubjecttoreviewandapprovaIbythisworkingmechanism.ThereguIationaIsospeciiesthatthecriminaIIawsuitactivitiesconductedbyforeigninstitutions,organisationsandindividuaIsmustobtaintheconsentofthecompetentchineseauthorityinadvance,incIudingbutnotIimitedtocoIIectingandretrievingcriminaIevidencefrominstitutions,organisationsandindividuaIsinchina.

whistIebIowers

companiesinchinaarenowbeingexposedtotherisksarisingfromthehighfrequencyofwhistIebIowercompIaints.TherighttoreportcrimesandotherIegaIvioIationsbycitizensisweIIestabIishedinprincipIeintheIawsandreguIations,suchastheconstitution,thecriminaIprocedureLawandtheAnti-unfaircompetitionLaw.AIthoughthereiscurrentIynoconsoIidatedIegaIregimetoreguIatewhistIebIowingreports,variousauthoritieshaverespectiveIypromuIgatedIegisIationtoreguIatewhistIebIowingreportsagainstcertaintypesofmisconductintheirdomain.Forinstance,inthepharmaceuticaIsector,theprecedentofrewardingwhistIebIowersdatesbackto2013,withtheMeasuresforRewardingwhistIebIowingagainstFoodandDrugvioIations,whichinitiaIIycappedrewardsat300,000yuanpercase.ThisIimitwasraisedto500,000yuanwiththerevisionofthedocumentin2017.On30JuIy2021,thesAMRandtheMinistryofFinancejointIyissuedtheInterimMeasuresforRewardsforwhistIebIowingofMajorvioIationsintheFieIdofMarketReguIation(effectivefrom1December2021)toimprovethesystemofrewardingwhistIebIowingagainstmajorvioIationsinthemarketreguIationieId,whichhasrepIacedtheabove-mentionedMeasuresforRewardingwhistIebIowingagainstFoodandDrugvioIationsandexpandedthescopeofappIicationtoincIudetwootherareas:(1)speciaIequipmentsafety;and(2)industriaIproductquaIityandsafety.AdditionaIIy,themaximumrewardwasfurtherraisedto1miIIionyuan,athreshoIdthathasbeenupheIdinthedraftAnnouncementonRewardingInternaIwhistIebIowersforwhistIebIowingDrugandMedicaIDeviceQuaIityandsafetyvioIationsreIeasedinOctober2024forpubIiccomment.TheseincrementaIincreasesinrewardamountsunderscoreacIeartrendoverrecentyearstowardsstricterreguIationofdrugandmedicaIdevicesafety,graduaIIystrengtheningpost-eventsupervisionandcombininginternaIandexternaIoversight.

Inpractice,toencouragereportingmisconduct,muItipIeauthoritieshavesetupreportinghotIinesandonIinegatewaystoreceivewhistIebIowingreportsfromthepubIic.Forinstance,thestatesupervisorycommissionisnowoperatinganadhoconIinechanneIandhotIine(12388)[

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forreceivingwhistIebIowingreportsagainstgovernmentoiciaIs'duty-reIatedcrimesormisconducteitherbyreaInameoranonymity(reaI-namereportingishighIyencouraged).ThenationaIsecurityauthoritiesaIsoencouragewhistIebIowingreportsmadetothedesignatedonIinepIatformandhotIine(12339).[

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simiIarIy,AMRsataIIIeveIshaveprovidedonIineando訊inechanneIstoencouragethepubIictoreportIeadsregardingcompanymisconduct,andthehandIingproceduresandspeciictimeIinesarepubIishedandweIIimpIemented.

withrespecttowhistIebIowers'protection,somespeciicruIes,suchastheRuIesofthesupremepeopIe'sprocuratorateonprotectingthecitizens'Tip-offRights,wereformuIated

RETURNTOSUMMARY

toprovideacomprehensivemechanismonbothsubstantiveandproceduraIIeveIs,andthesupremepeopIe'sprocuratorate,theMinistryofpubIicsecurityandtheMinistryofFinancejointIyissuedtheseveraIprovisionsonprotectingandRewardingwhistIebIowersofDutycrimesin2016.

strictconidentiaIitythroughoutthehandIingprocessisthefoundationaIrequirementimposedonauthoritiesthatreceiveanyreporting.Further,theauthoritiesneedtotakemeasures(i.e.,restrictingphysicaIaccesstothereporterbythosebeingreported)toensurethesafetyofreportersandtheircIosereIativeswhenevernecessary.RetaIiationtowardswhistIebIowersisforbiddenandincursIiabiIityfortheimpositionofIegaIpenaItiessuchasadministrativesanctions,criminaIdetentionorimprisonment.

Enforcement

corporateIiabiIity

AdministrativeandcriminaIcorporateIiabiIitiesarestipuIatedinthecriminaILawandreIevantadministrativeIawsandreguIations.ForcriminaIIiabiIities,amongthe483crimesprescribedbythecriminaILaw,thereareapproximateIy164unitcrimesforwhichacompanycouIdbequaIiiedastheperpetrator,andfortheseunitcrimesacompanywiIIbeheIdcriminaIIyIiabIeif:

1.acoIIectivedecisionhasbeenmadebythemanagementofthecompany,oranindividuaIdecisionbythereIevantresponsibIepersonneIonbehaIfofthecompany,suchastheIegaIrepresentative;and

2.thecrimeiscommittedinthenameofthecompanyandtheiIIegaIproceedsgotothecompany.

ThecriminaILawadoptsaduaIpunishmentsystemforunitcrime,whichmeansboththecompanyandtheresponsibIepersonsaresubjecttocriminaIIiabiIity,withonIyafewexceptionsotherwiseprescribedinthecriminaILaw.

AsforadministrativecorporateIiabiIity,thisderivedfromtheprovisionsofthereIevantadministrativeIawsandreguIations,suchastheAnti-unfaircompetitionLaw,theAnti-MonopoIyLawandtheAdvertisementLaw,coveringvioIationssuchascommerciaIbribery,monopoIy,companyiIIegaIoperationandiIIegaIadvertising.

NotabIy,forthesamemisconductcommittedbyacompany,thecriminaIandadministrativeregimesaremutuaIIyexcIusive.TheReguIationsontheTransferofsuspectedcriminaIcasesbyAdministrativeLawEnforcementAgencieswhichwaspromuIgatedbythestatecounciIin2001andrevisedin2020,setthereguIatoryframeworkfortheconversionbetweenadministrativeandcriminaIcases.AseriesofotherreguIationshavebeenpromuIgatedinthefoIIowingyearstofurtheraddresstheprocedureofconversion.ForexampIe,on10January2023,theNationaIMedicaIproductsAdministration,thesAMR,theMinistryofpubIicsecurity,thesupremepeopIe'scourtandthesupremepeopIe'sprocuratoratejointIyissuedtheNoticeonpromuIgationoftheMeasuresfortheconversionbetweenDrugAdministrativeLawEnforcementandcriminaI

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Justice.AccordingtothesereguIations,whiIeinvestigatinganadministrativecase,iftheagencysuspectsthatthecaseshouIdbeprosecutedasacriminaIcasebasedoneIementssuchasthemonetaryamountinvoIved,thespeciicfactpatternsortheconsequences,thenthecasemustbetransferredtoapSBandthepSBwiIIexaminethecasestransferred.IfcriminaIfactpatternsareidentiiedandthepSBdecidestoinvestigatethecaseforcriminaIIiabiIity,itshaIInotifytheadministrativeagencythattransferredthecaseinwriting.IfthereisnocriminaIfactpatternorthefactsareinsigniicantandtheagencydecidesnottoprosecutethecase,itwiIIstatethereasons,notifytheadministrativeagencyandreturnthecase.Ontheotherhand,ifapSBdiscoversthatacaseitisinvestigatingshouIdnotbecriminaIIyprosecutedbuttheremaybeadministrativeIiabiIity,itshaIItransferthecasetothereIevantadministrativeagency.Furtherenhancingtheworkingmechanismforconversion,theSupremepeopIe’sprocuratorateissuedtheGuideIinesfortheReverseconversionbetweencriminaIandAdministrativecasesbythepeopIe’sprocuratoratesinDecember2024.TheseguideIinesrequirethatwhenprocuratoratesdecidenottopursuecriminaIprosecution,theyshouIdissueprocuratoriaIsuggestionsandtransferthecasetothereIevantadministrativeauthoritiesifadministrativepenaItiesappearwarranteduponreview.TheGuideIinesaIsorequireprocuratoratestomonitorandsupervisethesubsequenthandIingofthesecasesbytheadministrativeauthorities.ThismechanismaimstocreateamoreaccountabIeprocessbyensuringthatpotentiaIadministrativevioIationsareaddressedevenwhencriminaIprosecutionisnotpursued.

penaIties

underthecriminaILaw,theonIysanctionappIicabIetoacompanyisthemonetarypenaIty,butanindividuaI'sIiabiIitiesforaunitcrimeincIudepubIicsurveiIIance,criminaIdetention,imprisonment,themonetarypenaIty,thedeprivationofpoIiticaIrights,deportation(inthecaseofforeignnationaIs)andeventhedeathpenaIty.[

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penaItiesforadministrativecorporateIiabiIitiesgeneraIIyincIudediscipIinarywarnings,monetaryines,theconiscationofiIIegaIgainsorunIawfuIproperty,thesuspensionofproductionorbusiness,andthetemporarysuspensionorrescissionofapermitorIicence.

[

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TherangeofpenaItiesvaries.TakingcommerciaIbriberyasanexampIe,ainecouIdrangefrom100,000yuanto3miIIionyuan,asweIIastheconiscationofiIIegaIgainsandtherevocationofthebusinessIicence.[

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TheamountofiIIegaIgainsiscaIcuIatedbasedonrevenuewiththecorrespondingcostbeingdeducted,whichcouIdeasiIyadduptoseveraImiIIionyuanormoreand,therefore,inpractice,createaIargerconcernforcompanies.Otherrestrictions,suchasbeingbannedfromparticipatingingovernmentprocurement,mightaIsobeimposeddependingonthenatureandseverityofthevioIations.ForexampIe,theNationaIHeaIthcommissionhasestabIishedarecordingsystem,whichfunctionsasa