In 2020, China’s Supreme People’s Prosecuting Institute (SPPI) launched their “non-prosecution for compliance” program to protect enterprises’ interests, rights, and to facilitate operations in accordance with the law.  Under this program, private businesses can be exempted from criminal liabilities for a number of minor crimes, as long as the business takes certain remedial measures and establish a compliance management system.

At present, compliance is only a discretionary consideration for conviction and sentencing. In the future, compliance will become a statutory consideration, according to a prosecutor of SPPI.

This presents a question, what is compliance and what does it mean to “establish a compliance management system”? Is there a standard that companies can follow? ISO 37301:2021 Compliance management systems — Requirements with guidance for use provides an answer. The ISO published the guide as a global certifiable standard for compliance management system on April 13, 2021. Dentons lawyers took the world’s first step in applying the ISO 37301 standard for use in the SPPI’s “non-prosecution for compliance” program.

Lead lawyers involved in the project include: Mr. Henry Chen (a senior partner of Dentons Shanghai Office; a drafter of ISO 37301), Ms. XUE Ping (a senior partner of Dentons Dalian Office) and Mr. XU Yongqian (a senior partner of Dentons Beijing Office).

This application of the ISO 37301 standard in the SPPI’s “non-prosecution for compliance project” is the first of its kind in China and the world.

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The author, Henry Chen, licensed to practice law in China and New York, is a senior partner at the Dentons office in Shanghai. Before joining Dentons, Henry was AP Compliance Director of Ford. Henry's practice areas include FCPA, anti-bribery and fraud investigations, cyber security and data governance, economic sanctions and trade controls, compliance management systems, corporate matters and dispute resolution. You can reach Henry by sending an email to henry.chen@dentons.cn. Henry is the author of the book Risk Management on Commercial Bribery in China and the book Compliance Risks of Enterprises in Globalization: Outbreak and Control. Henry Chen is available at Henry.chen@dentons.cn