Several Provisions on the Public Security Organs' Handling of Cases Involving Economic Crimes (the “New Provisions”) jointly issued by SPP and MPS, have been implemented from Jan. 1 2018

In 2006, MPS has issued “Several Provisions on the Public Security Organs’ Handling of Cases Involving Economic Crimes” (the “Original Provisions”), which was the main guidance on the jurisdiction, filing and withdrawing a case, compulsory measures, cooperation in case handling and so on. However, with the development of internet, new-type economic crimes became more and more, such as the cross-regional, cross-sectoral, and group crimes, in addition, the cooperation between public security organs and procuratorates shall be improved. In Nov. 2017, MPS and SPP jointly issued the “New Provisions”. Here are some highlights related to business operations.

1. In the general provisions, the “New Provisions” has added the protection for private entrepreneurs and core research staffs.

Article 5 prescribes that the public security organs shall pay attention to the methods of handling cases, be careful in selecting the timing and methods of handling cases, and pay attention to ensuring the smooth operation of the normal production and business. In addition, paragraph 2 of Article 18 prescribes that the public security organs shall investigate after filing a case, but normally, the organs shall not impose compulsory measures to restrict the freedom of individuals and the private properties. In view of these, it is predictable that the organs would be more conservative and cautious on the custody of those private entrepreneurs or core research staffs who might be suspected of committing economic crimes.

2. In the jurisdiction, the “New Provisions” has added the provisions concerning the jurisdiction over those economic crimes, in which the suspected crime subject is a unit, or a non-state functionary takes advantage of his position.

(1) The Original Provisions has not stipulated the jurisdiction over the economic crimes, in which the suspected crime subject is a unit. The New Provisions has stipulated that if a unit is suspected to commit an economic crime, then it shall be subject to the jurisdiction of the public security organ at the locality of the crime or the domicile of the unit. Normally, the domicile of the unit shall refer to its registration address, in practice, if the registration address is different from its principal place of business, then the domicile shall refer to its principal place of business.

(2) For the crimes of acceptance of bribes, embezzlement, misappropriation of funds by a non-state functionary, in the past, the victim could only report the cases to the public security organ at the locality of the crime or the domicile of the criminal suspect. In practice, where the domicile of the unit, the locality of the crime or the residence of the criminal suspect are different, then the relevant public security organs might pass the buck to each other. The New Provisions has prescribed where a non-state functionary takes advantage of his position to commit an economic crime, then it shall be subject to the jurisdiction of the public security organ at the domicile of the unit of the criminal suspect. Where it is more proper to put the case under the jurisdiction of the public organ in the place of the locality of the crime or the residence of the criminal suspect, the said public security organ may exercise jurisdiction. This article has set force the principle on jurisdiction, and the victim could report to the specific public security organ.

3. For the investigation and evidence collection, the New Provisions has added an article on regulating the evidence collected in a criminal case to be used in a civil case. Paragraph 2 of the Article 35 states that it is prohibited to collect any evidence which is irrelevant to the economic crime, the public security organ shall not abuse the investigation methods to collect evidence for any civil cases. If any units would encounter such situation, this article could be used to defend to those evidence collected by the aforesaid methods.

In addition, the New Provision has also prescribed some articles on the equal protection of property rights, the jurisdiction on internet crimes, the time limit for the revocation of a case and the termination of an investigation, and so on.