news

original title: accelerating the governance of "front companies"

prosecutors from the yanqing district people's procuratorate of beijing discussed the case involving a criminal case involving a "front company".

"in order to increase the credibility and authority of the illegal sales of drugs, criminals registered 'front companies' (referring to the companies, enterprises and other market entities involved in the relevant cases that were established for the purpose of committing crimes, or whose main business activities after establishment are to commit crimes) with the words 'traditional chinese medicine hospital' in their names. they then used 'secret recipes handed down from ancestors' as a gimmick to sell drugs illegally, which is very misleading, seriously endangers the lives and health of the people, and disrupts the market order." song huigeng, a prosecutor at the yanqing district procuratorate of beijing, said recently when talking about a case of obstructing drug management handled by the procuratorate.

in recent years, some criminals have registered as fake market entities and established "front companies". some of these companies have become tools for loan intermediaries to illegally apply for business loans by fabricating business operations, and some have become "vests" to defraud government subsidies. in this case, the words "chinese medicine hospital" in the name of the registered company became a "natural advertisement" for the criminals to illegally sell drugs.

in november 2020, chen (deceased) registered beijing minxintang chinese medicine hospital in a certain place in beijing, and sold "xueshan zhuifeng powder (snow lotus)" and "xuelian zhuifeng powder" through wechat without obtaining drug approval certificates. after chen's death, his wife chen mouling continued to sell the above-mentioned illegal products, with sales reaching more than 400,000 yuan. after the incident, the beijing institute of drug control found that the products he sold contained chemical drug ingredients.

"after the case was transferred to the procuratorate, we found that the 'chinese medicine hospital' did not carry out any normal business activities at the place of registration except selling illegal products online." song huigeng told reporters that on september 27, 2023, after the procuratorate filed a public prosecution in accordance with the law, chen mouling was sentenced to one year and nine months in prison by the court for the crime of obstructing drug management. however, the case handling team found that the business registration information of the "front company" registered as "beijing minxintang chinese medicine hospital" still showed that it was in the survival stage, and there was a risk of being used again by other lawless elements to commit crimes. in response to the above situation, the procuratorate communicated and negotiated with the market supervision and management department in a timely manner, and transferred the administrative penalty clues on november 8, 2023. the market supervision and management department made a penalty decision to revoke the business license of the company involved on january 26 this year, and promptly cleaned up the illegal and irregular market entities.

the "beijing minxintang chinese medicine hospital" was cleared, but song huigeng's performance of duties did not stop there. because during the investigation, the relevant personnel confessed that they had handled the registration procedures through an intermediary, which was convenient and fast. so, do similar companies with false market entity registrations also exist? can the investigation team efficiently screen out clues of these abnormal companies and transfer them to the administrative authorities?

with these questions in mind, song huigeng thought of the big data legal supervision model for the supervision and governance of "front companies" that the beijing procuratorate is promoting and applying.

it turned out that the beijing procuratorate found in the course of handling cases that some lawless elements took advantage of policy convenience to register "front companies" for illegal and criminal activities, seriously disrupting the market economic order. however, due to the data barriers between administrative and judicial organs, the administrative departments did not have clues about the illegal behavior of market entities involved in criminal cases, resulting in some "front companies" not being listed as abnormal or cancelled in a timely manner, and even remaining in existence after the criminal case was concluded. at the same time, the administrative license qualifications of some companies involved in the case continued to be valid after their legal representatives and actual controllers were criminally punished. in order to help administrative organs to clean up and rectify illegal market entities in a timely and accurate manner under the background of market economic reform, the beijing procuratorate guided the dongcheng district procuratorate to design and build a big data legal supervision model for the supervision and governance of "front companies" and conduct similar case searches for decided cases. as of june this year, the city's procuratorates relied on this model to screen more than 1,000 supervision clues of abnormal market entities such as "front companies", and promoted the revocation of business licenses of more than 200 market entities in accordance with the law.

"with this model, the procuratorate can screen out criminal cases in its jurisdiction where companies were used to commit crimes from the data on the judgment documents network and the procuratorial business application system, and then extract company information from legal documents for comparison with the enterprise registration information and administrative license publicity information held by the administrative authorities, in order to screen out market entities that the administrative authorities have not promptly cleaned up and rectified." song huigeng said that the yanqing district procuratorate used the model to screen the companies with registered addresses and personnel related to the companies involved in the case, discovered clues to abnormal companies, and issued a notification letter to the market supervision department, prompting the yanqing district market supervision bureau to cancel the registration of three problem companies and include the three problem companies in the list of abnormal operations.

it is understood that not only the yanqing district procuratorate, but also many procuratorates have focused on the "small incision" of administrative penalty supervision of "front companies" since the promotion and application of the model in the beijing procuratorate, and strived to demonstrate the procuratorial responsibility under the background of market economic reform. the chaoyang district procuratorate has retrieved more than 7,500 related criminal cases since 2013, listed the details of suspected "front companies", and traced and verified them case by case. in practice, the model has been iteratively upgraded and extended to the supervision of market subject professional qualifications; the fengtai district procuratorate, in handling cases of assisting information network criminal activities, has strengthened the joint cooperation of the beijing-tianjin-hebei procuratorial system for "front companies" registered in other places, formed a joint force for combating and governing, and opened up the "last mile" of supervision and governance; the pinggu district procuratorate has conducted data comparison and collision and precise supervision on the situation of "multiple licenses at one address" (i.e., multiple business licenses exist at one registered address), and promoted the revocation of business licenses of 50 abnormal enterprises that meet the conditions for clearing and revoking accounts...

at present, the big data legal supervision model for the supervision and governance of "front companies" has gone beyond beijing and has been promoted and applied in more than 20 procuratorates in tianjin, shanxi, hubei, henan, sichuan, xinjiang and other places. (simple lu yang)

(prosecution daily)