Research On Third-Party Monitoring And Evaluation Mechanism For Compliance Of Enterprises Involved In The Case

The third-party supervision and assessment mechanism was incorporated into the compliance system of the enterprises involved in the case in 2021 as a powerful attempt by the Supreme People’s Procuratorate to implement the Central Government’s policy of protecting private enterprises and optimising the business environment,with the intention of urging the enterprises involved in the case to establish a complete compliance system and promoting the formation of a legal and compliant corporate culture in the enterprises involved in the case.However,although academics are optimistic about the restorative legal benefits of third-party supervision and assessment mechanisms,research at the level of institutional construction is still limited,the functions of the procuratorate and third-party supervision and assessment organisations have yet to be clarified,and third-party supervision and assessment mechanisms lack specific implementation rules.A preliminary study of the third-party supervision and evaluation mechanism is conducted through case studies and comparative research,focusing on a series of issues and making preliminary recommendations for the improvement of the third-party supervision and evaluation mechanism.The specific lines of the paper are as follows:First,the history of the transmutation of third-party monitoring and assessment mechanisms for compliance of the companies involved.In March 2020,the Supreme People’s Procuratorate launched the first batch of compliance reform pilots for case-involved enterprises,in which the procuratorial authorities explored four representative compliance inspection models: independent supervisor,procuratorial authorities,administrative authorities and third-party supervision team.In April 2022,the Supreme People’s Procuratorate launched a nationwide compliance reform pilot for enterprises involved in cases,and the third-party supervision and assessment mechanism was adopted by the Supreme People’s Procuratorate on a large scale as it could share the pressure of the procuratorial authorities in handling cases and compensate for the shortcomings of the dual model of "prosecution and enterprise".Second,the current status of the operation of the third-party supervision and assessment mechanism for compliance by the enterprises involved in the case.The activation of the third-party supervision and assessment mechanism requires the procuratorial authorities,the management committee of the third-party supervision and assessment mechanism,the third-party supervision and assessment organisation and the enterprises involved in the case to perform their corresponding duties and cooperate with each other in accordance with the supervision and assessment procedures stipulated in the Guidance.In a comprehensive analysis of the second to fourth batches of 16 typical guidance cases published by the Supreme People’s Procuratorate,88% of the enterprises involved were private enterprises,94% of the typical guidance cases applied the third-party supervision and assessment mechanism,and all of the enterprises involved received a decision not to prosecute or to mitigate or reduce the punishment.The pilot authorities have explored innovative measures such as off-site supervision,"flying supervision" and simple compliance,and have also made strong attempts to apply the third-party supervision and assessment mechanism to Chineseforeign joint ventures and wholly foreign-funded enterprises.Third,the practical dilemma of the third-party monitoring and assessment mechanism for compliance of case-involved enterprises.The current Criminal Procedure Law has not been amended to address the third-party supervision and assessment mechanism for case-related corporate compliance,and therefore the third-party supervision and assessment mechanism lacks key entry conditions and targeted compliance standards.The third-party supervision and assessment mechanism is used as a general compliance inspection model in the reform of case-involved enterprises’ compliance.3,577 cases of third-party supervision and assessment mechanism were applied in 2022,accounting for 69.5% of all cases of caseinvolved enterprises’ compliance,and the construction cost of the third-party supervision and assessment mechanism,which is often hundreds of thousands of dollars,is unaffordable for case-involved enterprises,and the excessive application of the third-party supervision and assessment mechanism tends to result in The excessive application of third-party supervision and assessment mechanisms is likely to result in "paper compliance" and increase the burden on society.The poor connection between the "criminal and the executive" will also result in administrative penalties,which will make the enterprises involved in the case bear the construction costs of the third-party supervision and assessment mechanism and administrative penalties,and some enterprises are forced to abandon their compliance plans because they cannot bear both penalties,which is obviously contrary to the original purpose of the compliance system of the enterprises involved in the case.The fact that some of the pilot areas’ procuratorial authorities do not know how to use or dare not use the third-party supervision and assessment mechanism,the unclear functions of the thirdparty supervision and assessment organisers,and the absence of a recusal system may lead to public doubts about fairness.Finally,it is proposed to improve the third-party supervision and assessment mechanism for compliance by enterprises involved in cases.The third-party supervision and assessment mechanism for compliance by enterprises involved in cases should be incorporated into the Criminal Procedure Law;the third-party supervision and assessment mechanism can be initiated by the procuratorial authorities ex office or by the enterprises involved in cases upon application;the period of investigation of the third-party supervision and assessment mechanism should be set at one to three years,with the specific period to be decided by the procuratorial authorities according to the nature and complexity of the cases;the economic nature,necessity and public interest should be included in the third-party supervision and assessment mechanism.The pre-requisites for starting the mechanism.Deepen the "criminal-executive" interface,the procuratorial authorities and administrative organs to establish a joint meeting of compliance,including administrative organs and other organizations to participate in consultations;explore the diversified ways to bear the cost of supervision,"the enterprises involved in the case to pay for themselves + financial security" approach more in line with China’s national conditions.For simple cases and small-scale enterprises,the procuratorial authorities will supervise the cases themselves and use them as a general compliance supervision model,while the third-party supervision and assessment mechanism will be built as a special supervision method,and the compliance cases involving enterprises will be streamed in a simple and complicated manner.At the same time,the independence of the third-party supervision and assessment organisation is enhanced,the leading role of the procuratorial authorities in the third-party supervision and assessment mechanism is strengthened,the effectiveness of the procuratorial authorities in assessing the third-party supervision and assessment mechanism is implemented,compliance risk management is strengthened and post-event supervision measures are improved.