Local prosecutors put more emphasis on corporate compliance


Shanghai prosecutors explored a better way to help local businesses set up corporate compliance systems.

Corporate compliance broadly means adhering to rules and measures to ensure that employees and companies comply with relevant laws, standards and policies, touching on many aspects such as data security and property rights intelligence (DPI).

“Corporate compliance can be goals that companies have set for themselves to comply with existing laws, policies, standards and requirements,” said James Liu, attorney at AllBright Law Offices, who is also a member of the research committee on compliance. ‘Internet and Shanghai Information and Technology’ of the Shanghai Bar Association. “It can also be defined as behaviors that companies incorporate to achieve goals, such as setting rules, implementing processes, adopting technology tools, training employees, and adjusting organizations.”

“Take the example of data compliance. If a goal is set, a company needs to set up a specialized department, employ professional staff as well as special rules such as data classification, and categorize data according to their types and their importance,” Liu added.

He said the focus on business compliance can be seen as the city’s level of development reaching new heights.

“Helping businesses become more compliant benefits businesses and reduces their risk of breaking laws,” Liu said.

Local prosecutors put more emphasis on corporate compliance

Ti Gong

Yangpu District enterprises sign the written data compliance proposal.

The city’s first data compliance guidelines and print company’s first IPR compliance guidelines

In late January, the Yangpu People’s Procuratorate, district industry and commerce authorities and cyberspace administration jointly issued the city’s first guidelines to regulate data redundancy.

The scale of the soft digital economy in Yangpu district is over 80 billion yuan ($12.66 billion) and includes companies such as Bilibili, Meituan and ByteDance.

Data redundancy guidance can help data companies create internal regulations to reduce the risk of data leakage and improve risk prevention capabilities.

The guidelines include 38 stipulations that help companies meet data compliance in terms of setting up compliance systems, identifying and assessing risks.

The guide includes useful information on laws such as personal information protection law, data security law and cybersecurity law that companies should refer to when setting up the mechanism.

District attorneys have also developed a digital platform to connect businesses and help them assess risk and assess data security.

Promoting the implementation of corporate compliance procedures in Yangpu is a top priority for district attorneys.

“When a risk arises in a business that has a compliance system and is functioning normally, their likelihood of breaking the law will be lower than in businesses that do not have such a system in place,” said Liu.

In addition to data compliance, prosecutors in Pudong New Area have issued compliance guidelines to help printing companies comply with regulations to protect IPRs.

The Pudong People’s Procuratorate on Feb. 28 opened an internal institution to handle IPR cases in the Zhangjiang Hi-Tech Park, a first for the city.

Guiding print shops on compliance was the institution’s first task.

The guidelines divide printing companies into three categories: publication printing, packaging and decoration printing, and other types of printing. It presents the key points of risk prevention and control in terms of compliance with IPRs.

“In recent years, many printers have violated intellectual property rights laws due to mismanagement,” said Zhao Rui, chief prosecutor of the internal institution. “Advice helps businesses avoid IPR risks.”

Introducing third-party staff

Jing’an District prosecutors identified a company that broke the law because it did not have a functioning compliance system.

Prosecutors made suggestions and implemented third-party supervision to help the company build its data and anti-corruption system, which enabled the company to get rid of unnecessary human resources and reduce its operating costs.

Last year, they invited people from local authorities, including administrative supervisors, accountants, lawyers, experts and academics, to create the city’s first third-party business directory database to provide district business referral services.

Prosecutors in Minhang and Hongkou districts have also introduced a third-party supervision system with staff to help businesses in these districts set up compliance systems.