Implications of Foreign Corporate Criminal Compliance Non-Prosecution Systems for the Establishment of an Effective Corporate Compliance Conditional Non-Prosecution System in China

DOI

10.2991/aebmr.k.220603.113How to use a DOI?

Keywords

corporate compliance; conditional non-prosecution system; the effectiveness of the compliance program

Abstract

Corporate compliance literally means being in compliance with the law, and it is essentially a corporate governance issue. The meaning of corporate compliance is to use an effective compliance program to avoid corporate criminal liability, which is a set of compliance risk prevention and control-oriented corporate governance system established by the enterprise to effectively prevent, identify and respond to the possible compliance risks. The pilot work of China’s corporate compliance reform has achieved phased results. However, it also reveals many problems in the construction of corporate compliance incentives and the failure to establish criteria for judging the effectiveness of corporate compliance programs. The biggest obstacle for Chinese enterprises in establishing an effective compliance mechanism is that the compliance incentive mechanism is not legally established. The compliance program’s effectiveness is difficult to be guaranteed. In Western countries, corporate compliance is a form of corporate governance and a way of corporate self-improvement that can be legally incentivized. At the same time, foreign countries have not only clearly defined the status and role of compliance programs in holding organizations criminally liable but also clearly and effectively explained the substantive conditions and specific requirements of effective compliance programs at the legislative level. This paper will use comparative analysis and case study methods. The case of Nestle illustrates the importance of establishing a corporate compliance non-prosecution system. An effective compliance system can be a legal way for companies to avoid criminal liability. Thus, this paper proposes a path to establishing an effective compliance program in China by analysing the legislation and experience of foreign systems in terms of three elements including the effectiveness of compliance program design, the effectiveness of compliance program implementation, and the effectiveness of compliance program results.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Xiaofan Meng
PY  - 2022
DA  - 2022/07/01
TI  - Implications of Foreign Corporate Criminal Compliance Non-Prosecution Systems for the Establishment of an Effective Corporate Compliance Conditional Non-Prosecution System in China
BT  - Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)
PB  - Atlantis Press
SP  - 708
EP  - 714
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220603.113
DO  - 10.2991/aebmr.k.220603.113
ID  - Meng2022
ER  -