Recently, a legal team comprising attorneys Yan Huainan and Ye Jing from King&Capital Law Firm was retained by a state-owned enterprise in Beijing to successfully complete a specialized legal service project involving the inspection and evaluation of the client’s compliance management system. Spanning several months, the project involved a comprehensive “health check” of the client’s compliance management system through various methods, including on-site inspections and document reviews. The team issued a detailed inspection report and professional recommendations to help the enterprise strengthen its compliance defenses.
I. Compliance in State-Owned Enterprises: A Vital Cornerstone of Corporate Development
In recent years, with the deepening of SOE reforms and the continuous intensification of regulatory oversight, compliance management has become the lifeline of high-quality corporate development. The “Compliance Management Measures for Central Enterprises” issued by the State-owned Assets Supervision and Administration Commission (SASAC) explicitly stipulates that central enterprises must establish and improve compliance management systems and strengthen compliance risk prevention and control in key areas. For state-owned enterprises, compliance is not only an inevitable requirement for addressing external regulation but also an intrinsic need for enhancing internal governance capabilities, preventing major risks, and achieving sustainable development. A scientific and effective compliance management system can help enterprises promptly identify institutional loopholes, standardize business operations, and protect employee rights, thereby ensuring steady and sustainable progress in the face of intense market competition. Against this backdrop, an increasing number of SOEs are proactively benchmarking against world-class standards by engaging professional third-party firms to conduct compliance inspections, thereby “taking the pulse” of their compliance operations and fortifying their risk defenses.
II. Systematic Inspection:
Comprehensive Review of Compliance Management System Operations
This compliance inspection involved a systematic review of key aspects of the enterprise’s operations. Attorneys Yan Huainan and Ye Jing formed a project team, leveraging their professional experience in legal services for SOEs, discipline inspection and supervision, and the intersection of criminal and civil law, to develop an inspection plan covering five key areas.
The inspection first focused on compliance with laws, regulations, and industry rules. The team comprehensively reviewed the alignment of the company’s current regulations with intra-Party regulations, national laws, and industry regulatory requirements, verifying the consistency of internal rules with higher-level laws. Building on this foundation, they further conducted an assessment of internal management compliance, analyzing governance elements such as the fulfillment of leadership responsibilities, internal control mechanisms, risk management processes, and financial and tax compliance on a case-by-case basis. The project team also conducted on-site compliance inspections at the front lines of business operations. By reviewing project files, interviewing relevant personnel, and conducting spot checks on contract fulfillment, the team examined project design, execution, and supply chain management to verify the implementation of compliance requirements in business practices. Addressing digital risks in the company’s operations, the team also conducted specialized inspections on data privacy and information security, assessing cybersecurity capabilities and the compliance of data storage and transmission. Furthermore, this inspection included a dedicated criminal compliance module, focusing on identifying criminal risk areas—such as embezzlement and dereliction of duty by personnel of state-owned enterprises—that are common in such entities.
In terms of methodology, the legal team employed a comprehensive approach combining on-site inspections, document reviews, and risk assessments. They examined both the establishment of compliance systems and their actual implementation, ultimately producing inspection conclusions that were both comprehensive and focused on key areas.
Following a systematic review, the legal team issued the “Compliance Management System Inspection Report.” The report provided a comprehensive evaluation of the company’s current compliance status and identified areas for continuous improvement.
III. Client Value: Driving Deeper and More Substantive Compliance Management
This specialized legal service helped the company systematically assess the operational status of its compliance management system, providing a reference for the company’s next steps in deepening its compliance efforts. Relevant company officials noted that the professional advice provided by the King&Capital Law Firm team was both targeted and actionable, offering expert support for the company to improve internal controls and mitigate risks.
The legal team responsible for this project has provided legal services to numerous central and state-owned enterprises, covering areas such as compliance system development, risk assessment, specialized compliance inspections, and ongoing legal services, thereby accumulating extensive practical experience. Moving forward, the team will continue to specialize in the field of corporate compliance, assisting more enterprises in enhancing their governance standards and achieving sustainable development.
Translated with DeepL.com (free version)
