Criminal legal risk refers to the risk that an enterprise and its employees pose to their property rights and personal rights due to being suspected of committing a crime or becoming the object of a crime. Unlike civil and commercial risks, which only cause economic losses, criminal and legal risks can bring hardship to enterprise personnel in prison and also bring disaster to the enterprise. In recent years, more and more private enterprises or entrepreneurs have gone bankrupt or been imprisoned due to suspected criminal offenses. Therefore, criminal law is a "sword" hanging over enterprises and entrepreneurs. If enterprises and entrepreneurs are careless, they will encounter risks.

However, many enterprise leaders lack the awareness of criminal law prevention, and focus their energy and time on the management of the enterprise, focusing on its development and growth. They are able to recognize and avoid the civil and commercial legal risks generated by the enterprise's operation, but ignore the criminal legal risks that the enterprise and itself can face. Numerous cases have taught us that ignoring the prevention and control of criminal legal risks is an unbearable pain for enterprises and entrepreneurs. The criminal legal consequences are sufficient to cause an enterprise to collapse instantaneously and overturn the life of entrepreneurs in an instant. So, how to prevent criminal legal risks, and how to accurately respond to risks when they come, this article will focus on the significance and path of enterprise criminal legal risk prevention and control.

1、 The Harm of Criminal Legal Risks

The criminal procedure is dominated by the public power of the state. From the case filing by the investigation organ, both the suspect and the victim can only cooperate with the judicial organ. In civil proceedings, the parties can withdraw or settle, and they can choose to assert or waive their rights. In criminal proceedings, the scope for parties to withdraw or settle a case is very small, and legal conditions must be met. It is important to obtain the consent of the judicial authority. Therefore, the consequences of criminal legal risks are uncontrollable. The following author discusses the criminal legal risks from four aspects, which can also be said to be the four consequences presented with the advancement of criminal proceedings.

（1） Operational hindrance

The advancement of criminal proceedings is often accompanied by the use of coercive measures. For example, the criminal detention or arrest of suspect, the freezing of enterprise accounts, and the sealing up and seizure of property involved in the case are difficult to reverse once the decision is made. After personal freedom is restricted, communication and liaison with the outside world become extremely difficult, making it almost impossible to carry out production and business operations. The freezing of corporate accounts and the seizure or seizure of property restrict or deprive normal transactions, and it is also difficult to maintain the basic business activities of a company. Many enterprises are basically in a state of suspension or production after being taken compulsory measures due to suspected crimes. By the time the criminal proceedings are over, it will be extremely difficult to restore the prosperity that once existed.

（2） Impairment of goodwill

The formation of business reputation is a long process of accumulation, while its disappearance is an instantaneous matter. Criminal proceedings are public, and once a company is involved in a crime, it will soon be understood by all aspects of society, especially listed companies, which must disclose the litigation involved. Today, with the development of the Internet and self media, news can spread throughout the country in a few minutes. The more well-known enterprises are, the wider their dissemination is. After a company's involvement in a crime is publicly known, its operational ability, solvency, and viability will be questioned. Partners and customers often require early payment of debts or cancellation or interruption of cooperation. Moreover, the negative impact of criminal proceedings on enterprises can persist for a long time and cannot be easily eliminated. Goodwill is the lifeline of an enterprise, and once damaged, it will have a huge or even fatal impact on the enterprise. It is not uncommon for many enterprises to suffer goodwill damage due to an accidental event, resulting in inability to continue operations and bankruptcy. Even if the enterprise can survive, it will take a long time and great effort to rebuild its business reputation.

（3） Deprivation of personal and property rights

After a lengthy criminal prosecution, once convicted, corporate personnel will face severe penalties for their personal rights and corporate property rights. Enterprises will be fined, which will weaken their economic strength to a certain extent. Corporate personnel are deprived of their personal rights to varying degrees. Although the death penalty has been abolished for economic crimes, the maximum penalty is life imprisonment, and the starting penalty is usually fixed-term imprisonment of more than three years. For enterprise personnel, it is not only deprivation of personal freedom within a few years, but also a longer-term negative impact. According to the provisions of the "Company Law", enterprise personnel who have been sentenced to criminal penalties for economic crimes will be subject to certain restrictions in their future employment in the company. "If a person is sentenced to criminal punishment for corruption, bribery, misappropriation of property, misappropriation of property, or disruption of the socialist market economic order, and the term of execution has not exceeded five years, and he serves as the legal representative of a company or enterprise whose business license has been revoked or ordered to close down due to violation of the law, and is personally responsible, he shall not serve as a director, supervisor, or senior manager of the company for less than three years from the date of the revocation of the business license.".

（4） Ending risk of the enterprise

Sun Xueguang once pointed out in his article "Analysis of the Life Cycle of Chinese Enterprises" that the average life cycle of Chinese enterprises is 6-7 years, while the life cycle of small and medium-sized enterprises and private enterprises is shorter, with an average of only 2.9 years. One important reason is that enterprises lack effective risk prevention and control, especially criminal risk prevention and control, leading to suspected criminal cases and facing terminal risks. Although the criminal law does not stipulate that enterprises suspected of committing crimes must have their business licenses revoked, in fact, it has seriously hindered the continued operation of enterprises, and even led to their inability to survive. In particular, if private enterprises do not have a sound modern management system and have a strong personal dependence on the person in charge of the enterprise, once the person in charge of the enterprise is sentenced to punishment, no one will continue to operate. Even if someone else is able to operate, the goodwill of the enterprise is destroyed and it is difficult to operate. Criminal proceedings often lead to the direct consequences of a company's capital chain breaking, the inability of its main business leaders to work, serious damage to goodwill, loss of markets and customers, and any one of these can bring about a company's terminal risk.

2、 Construction of a mechanism for preventing and controlling criminal legal risk

The author believes that the construction of a criminal legal risk prevention and control mechanism should have three elements: concept, person, and system. The concept refers to changing the previous thinking of not paying attention to criminal legal risks, and placing the prevention and control of criminal legal risks at the height of the survival of enterprises. "Person" refers to the need for professional personnel and specialized personnel to engage in the prevention and control of criminal legal risks.
The system is the main content that the author will focus on. System construction is the main means and approach to prevent risks. A perfect system is not affected by personnel turnover and can play a stable and sustainable role. From the perspective of the stages in which the system plays its role, the system construction can be divided into three aspects, namely, the beforehand prevention mechanism, the in-process handling mechanism, and the afterwards improvement mechanism.

（1） Prior prevention mechanism

The beforehand prevention mechanism is to take precautions and avoid the occurrence of criminal legal risks through a sound internal management system and risk prevention and early warning mechanism. By establishing a criminal law "firewall", we can prevent potential problems before they occur, keep legal risks out of the development of the enterprise, and enable the enterprise to achieve sustainable development. The establishment of an ex ante prevention mechanism should go through the following steps:

1. Find risk points and conduct a comprehensive physical examination for the enterprise. Due to different business scopes, business models, and management systems, enterprises have different risks, so no set of risk control systems is universally applicable. In order for the prevention mechanism to work, it is necessary to tailor it to suit the situation and first identify the potential risks in each link. Therefore, it is necessary to conduct a comprehensive analysis of the various systems and operating links of the enterprise, to identify potential vulnerabilities and risks, and lay a reliable foundation for establishing a targeted risk control system in the next step. There are usually several ways to find risk points: One is to review the responsibilities of various positions in an enterprise, especially those of senior executives. The main task is to find out whether there are unmonitored disconnection links in the conditions and procedures for exercising power, so as to prevent executives from acting arbitrarily. "For example, a shareholder and manager of an enterprise has embezzled tens of millions of dollars due to economic disputes with other shareholders, and other shareholders have to report the case and recover the funds through judicial authorities.". If the system is perfect, how can the shareholder use his power to put tens of millions into his own pocket? The second is to sort out the management system of the enterprise, including personnel management, financial management, and business management systems. Focus on finding out if there are illegal regulations and links that are not subject to supervision and restriction. For example, an accountant of a certain enterprise stealthily takes away several million yuan from the unit to speculate in the stock market. He originally wanted to make money and then turned it back. However, after a few months, he basically lost all his money and was unable to repay it. It was not until he surrendered that the unit discovered that millions had been misappropriated. It is the imperfect financial system that provides opportunities for accounting. The third is to collect and sort out the cases (including criminal and civil cases) that have been issued by the enterprise, summarize the characteristics, and find the risk points that are prone to occur in the enterprise. For example, in a famous milk enterprise, the milkman collected money from the ordering customer, but did not require the milkman to hand it in in in time. After accumulating about 60000 yuan of payment in his hand, a milkman became greedy and absconded with the money. If the milkman were required to pay the purchase price in a timely manner, the case might not have occurred.
2. Establish a risk prevention and control mechanism. Based on the aforementioned search for risk points and in accordance with existing legal provisions, modify the system with risks or establish a new prevention system. Some enterprise systems inherently contain illegal content, such as authorizing sales personnel to give proportional rebates to customers, and having a complete reimbursement process. This behavior is a typical corporate bribery crime; Some enterprise systems give too much power to some positions, lacking supervision and restriction, leaving hidden dangers for abuse of power; Some enterprises do not strictly supervise the financial system, creating space for some people to exploit loopholes; There are also significant omissions in the custody system of corporate property, allowing for theft or embezzlement, and so on.

A system without potential risks should have the following characteristics: first, the provisions of the system itself should be legal and compliant, not only in accordance with the law, but also in accordance with policies, regulations of the competent department, and regulations within the party. For example, the property and personnel rights of state-owned enterprises are different from those of private enterprises, and their exercise should be subject to more restrictions and procedures. Secondly, all powers should be subject to supervision and restriction, and the possibility of abuse of powers that are not subject to supervision and restriction is great. Montesquieu once said, "All powerful people love to abuse their power until there are restrictions." Thirdly, major foreign investment and trading activities should be subject to criminal compliance review. Generally, significant investments and transactions by companies are subject to legal compliance reviews, but they are reviewed from the perspective of civil law and economic law, and rarely from the perspective of criminal law. However, it is necessary to conduct a criminal compliance review. For example, if a unit's fund-raising behavior fails to grasp the boundaries, it may be suspected of illegally absorbing public deposits, and if a unit's loan behavior is suspected of fraud, loan fraud, or usury.

The system construction should also include regular legal training and publicity, as well as criminal law training and publicity for all employees. On the one hand, it is necessary to understand basic and common crimes and their causes, and accurately grasp the boundaries between crime and non crime in the daily business process of enterprises. Some enterprises do not know much about criminal law and always feel that they are far away from crime. In fact, if they are careless, they will violate the criminal law. For example, if an employee of an enterprise disputes with the company due to their bonus, the employee becomes angry and moves away the company's computers and other properties, and is charged with theft by the company. On the other hand, it is a warning education that constantly reminds employees of self discipline, curbing greed, and staying away from crime through real cases around them.

3. Check the implementation. The most important vitality of a system lies not in its formulation but in its implementation. Therefore, after formulating the system, it should not become a mere scrap of paper and be shelved, but should be regularly checked for implementation. Through inspection, problems found in the implementation process are resolved or revised in a timely manner. Generally speaking, wherever there is supervision and restriction, it will definitely increase procedural costs and reduce efficiency. More importantly, it restricts the discretionary power of the power subject, and therefore will be actively resisted and passively avoided by the power subject. There are also concerns that enterprises are the main operating entities and need to quickly respond to market changes and make timely decisions. Excessive supervision of power will bind the main body of power, affect its decision-making efficiency and leadership, and thus affect the operational ability of enterprises. The author believes that such concerns are unnecessary, and the supervision and restriction of power are mostly procedural, which is to provide one more demonstration and one more check for the exercise of power, to avoid arbitrary and hasty power, and ultimately, it is up to the power subject to make decisions. Therefore, it is necessary to have specialized personnel inspect the process of exercising power and the implementation of the system, and immediately correct any abuse of authority or omission of supervision and restriction procedures. It is necessary to strengthen the seriousness and standardization of the system, and no one can escape the constraints of the system.

（2） In-process resolution mechanism

When legal risks arise and the specific harm results have not yet arrived, active cooperation should be provided, accurate responses should be made, and appropriate handling should be conducted to strive for the minimum damage results. At this point, we must seize the opportunity to take countermeasures as early as possible. Timely disposal may eliminate risks, but it may also reduce risks, or at least shift from passivity to initiative. Risk response mainly includes the following steps:
1. Investigate and understand, and identify risk categories. When criminal risks arise, professional advice must be sought. Generally, immediate action is required under these circumstances: being questioned or filed for investigation by judicial, supervisory, or tax authorities regarding a specific matter; Units or individuals are reported or accused; Significant losses occur to the property of the unit; The cooperative unit or individual is criminally filed for business related to the unit. There are various situations, and as long as one is aware of the uncontrollable criminal risks, one must immediately seek professional assistance.

Professionals diagnose whether there are criminal legal risks, conduct a comprehensive investigation into whether the relevant activities of enterprises or natural persons involve crimes, and understand and analyze the details of these transactions and business activities. Through investigation and understanding, determine the legal nature of the act. If it is an ordinary civil legal relationship, it can be resolved through civil litigation; If faced with administrative penalties, it is necessary to actively respond to administrative penalties in accordance with the Administrative Penalty Law and relevant regulations and rules. If criminal law is involved, the nature and severity of each act should be clearly indicated in accordance with the legal provisions, as well as the possible consequences of these acts.

2. Adopt the optimal coping strategy. After clarifying the nature and type of risk, corresponding measures should be taken immediately. For the risk of an enterprise being infringed, such as being defrauded or stolen by a contract, it is necessary to assist and guide the enterprise and its legal representative in conducting criminal charges before filing a case, promote the investigation by the investigation authority, and cooperate with the work of the public security authority during the investigation process, as soon as possible, identify the suspect, seal up and seize the property involved, and recover economic losses. For the risk that an enterprise is suspected of committing a crime, specific remedial measures should be proposed to the extent permitted by law, either to change the nature of the behavior or to mitigate criminal liability. If it is suspected of tax evasion, it is necessary to immediately make up the tax; If it is suspected of loan fraud or loan fraud, it is necessary to immediately repay the loan; Suspected of contract fraud, immediately return the corresponding funds, pay off the corresponding debts, supplement the corresponding contracts, etc; If an enterprise personnel is suspected of committing crimes such as embezzlement, bribery, or offering bribes, they will immediately refund the stolen funds and voluntarily surrender to the police. In short, as long as the criminal risk comes, we should not sit idly by, but take the initiative and accurately respond, strive for innocence or leniency, and strive for the best interests of the enterprise and its personnel.

Participate in criminal proceedings with the assistance of professionals. If entering criminal proceedings, professional assistance is required. The criminal procedure involves three departments: the public prosecution law, the criminal procedure law, and numerous judicial interpretations. A case undergoes basic stages such as investigation, review, arrest, review, prosecution, and trial, as well as stages such as appeal or protest, reconsideration, review, and application for retrial. Both the entity and the procedure are relatively complex, and ordinary people are unfamiliar with them, Even some lawyers who are not specialized in criminal defense are not competent for this job. Therefore, after entering a lawsuit, it is necessary to have professional assistance to help the parties understand the constitutive requirements and evidentiary standards of the relevant charges, guide the parties to correctly exercise their litigation rights at each stage of the lawsuit, and enable the parties to defend themselves against the constitutive requirements of the crime. Both victims and suspect can be represented by professionals as litigation agents or defenders. Through careful analysis of the nature of the behavior, investigation and evidence collection, and effective communication with the judicial authorities, the interests of the parties can be fully protected from both substantive and procedural aspects to minimize damage.

（3） Improve the mechanism after the event

"It is not too late to mend the hatchet.". Every painful lesson can sum up useful experiences. After handling criminal legal risks, it is necessary to immediately summarize and reexamine them, find out the causes of the risks, and reconstruct a more rigorous system. If there are loopholes in the system that leave opportunities for crime, it indicates that the risk prevention and control mechanism in advance is not perfect enough, and there should be targeted amendments to the system to make up for mistakes. If the implementation of the system is not satisfactory, efforts should be made to strengthen daily supervision and implementation. "If it is due to a lack of familiarity with criminal law, it indicates that rule of law training and publicity are not enough. We should continue to strengthen training efforts, expand training coverage, and expand the depth of training.". If there is a problem with integrity, we should strengthen integrity education and keep the alarm bells ringing. If the crime is completely accidental or uncontrollable, it is also necessary to find inevitability from contingency and add diversified mechanisms to prevent and control risks beyond the conventional system.