Author: Lawyer Jiang Xi, December 28, 2016

Abstract: After the restructuring of a certain bank in 2004, it was a state-owned holding or joint-stock company with the state as one of its shareholders. The conviction of economic crimes committed by senior management personnel using their positions depends on the main identity of the perpetrator. Starting from current criminal theory and judicial practice experience, this article discusses how to identify the nature of a certain bank and how to identify executives in state-owned holding and joint-stock companies who use their positions to commit economic crimes.

Keywords: state-owned company; Holding; Party Committee; delegate

1、 Basic Case and Debate

From 2007 to 2009, during his tenure as a senior executive of a second tier branch of a certain bank, Wang used his position to seek benefits for others and illegally received a total of 4 million RMB from others. The People's Procuratorate where the branch is located has filed a public prosecution against Wang for bribery. The first instance court held that the bank was originally a solely state-owned commercial bank and was a state-owned joint-stock commercial bank after September 14, 2004. The defendant Wang was a person who worked in a state-owned company before the restructuring of a certain bank. After the restructuring of the bank, the secondary branch of the bank was no longer a state-owned company under criminal law. Although Wang was no longer a person who worked in a state-owned company, he served as a senior executive of the secondary branch and was appointed by the party committee of a certain level branch of the bank. The nature of the position was to be appointed to engage in public affairs, It should be based on national staff. The defendant was sentenced to 15 years in prison for the crime of bribery. Wang appealed and believed that there were issues with the determination of the nature of the criminal subject by the prosecution authorities in this case, and that the prosecution should be initiated for the crime of bribery by non state officials. Because a certain bank is a state-owned capital holding company, and its appointment form is legal appointment, not other forms such as appointment, appointment, nomination, approval, etc., the so-called "first level branch party committee research decision" cannot indicate its nature of being appointed by state-owned capital to engage in public affairs. From the above, it can be seen that there are two main views on the nature of Wang's behavior: one view holds that Wang constitutes the crime of bribery; Another view is that Wang constitutes the crime of bribery for non state officials.

2、 Theoretical Development of this Case

From the situation of this case, the focus of the dispute lies in whether Wang, as a senior executive of a second level branch of a certain bank, belongs to the personnel appointed by state organs, state-owned companies, enterprises, and public institutions to engage in public service by non-state-owned companies, enterprises, public institutions, and social organizations as stipulated in Article 93 (2) of the Criminal Law. Therefore, the definition of national staff appointed to engage in public service has become a key issue.

（1） State owned companies and enterprises in the sense of criminal law

According to the Company Law and Criminal Law of our country, a state-owned company refers to a company whose property belongs entirely to the state, including a state-owned sole proprietorship limited liability company established solely by authorized investment institutions or authorized departments of the state; A limited liability company jointly established by 2-50 state-owned investment entities; And all assets established through sponsorship are state-owned joint stock limited companies. State owned enterprises refer to economic organizations whose assets belong to the state and are engaged in non corporate production, operation, or service activities. The so-called non-state-owned company refers to a company whose assets do not belong to or are not fully owned by the state, including private, wholly foreign-owned, Sino foreign cooperative, Sino foreign joint venture, limited liability company jointly established by state-owned and non-state-owned investment entities, or joint stock limited company established as the initiator. A limited liability company established through public offering, some of which are publicly offered to the public, is not a state-owned company. The so-called non-state-owned enterprises refer to economic organizations whose property does not belong to or is not entirely owned by the state and engaged in non corporate production, operation, or service activities.

So the author believes that state-owned companies and enterprises refer to organizations established with the goal of achieving national interests, which are invested by the state and their property belongs to the state. Its scope is not difficult to define. That is, it must be a company or enterprise whose property fully belongs to the state, and a company or enterprise controlled or participated in by state-owned assets is not a state-owned company or enterprise in the sense of criminal law. The basis for making the above understanding is as follows:

1. Meet the requirements of the principle of legality for crimes and punishments. One of the contents of the principle of legality for crimes is to require legislation to have clarity. Article 93 of the Criminal Law of our country stipulates that the so-called state personnel refer to personnel engaged in public affairs in state organs. Personnel engaged in public service in state-owned companies, enterprises, public institutions, and people's organizations, as well as personnel appointed by state organs, state-owned companies, enterprises, and public institutions to engage in public service in non-state-owned companies, enterprises, and public institutions, as well as other personnel engaged in public service in accordance with the law, shall be considered as state employees. However, due to the uncertainty of the extension of "state-owned companies and enterprises" in the criminal law, the definition of state-owned companies and enterprises is also unclear, which is clearly not in line with the principle of legality for crimes and punishments. The shares of shareholders in state-owned holding companies and enterprises are subject to change. Shares that were originally state-owned shares may become state-owned companies or enterprises without holding shares due to the transfer of shares by the shareholders, or even become joint-stock companies or enterprises without state-owned shares. Whether state-owned shares are in a controlling position in companies or enterprises is always in an uncertain state. If the term "state-owned companies or enterprises" in the Criminal Law covers state-owned holding companies or enterprises, it will make the provisions of the Criminal Law regarding relevant personnel in "state-owned companies or enterprises" as the subject of crime in an uncertain state, which will make this legislation violate the requirement of clarity in the principle of legality for crimes and punishments.

2. The relevant judicial approval has limited the "state-owned companies and enterprises" in the Criminal Law to solely state-owned enterprises. In May 2001, the Supreme People's Court approved the issue of how to convict personnel engaged in management work in state-owned capital holding or participating joint-stock limited liability companies who illegally occupy the company's property by taking advantage of their positions Personnel engaged in management work in limited liability companies controlled or shared by state-owned capital, except for those appointed by state organs, state-owned companies, enterprises, and public institutions to engage in public affairs, are not state employees. Those who take advantage of their position and illegally occupy their own property, with a relatively large amount, shall be convicted and punished for the crime of embezzlement in accordance with the provisions of Article 271 (1) of the Criminal Law, Personnel engaged in management work in limited liability companies controlled or participated in by state-owned capital, except for those appointed by state organs, state-owned companies, enterprises, and public institutions to engage in public affairs, are not considered state employees. According to the provisions of Article 93 (2) of the Criminal Law, personnel engaged in public service in state-owned companies and enterprises are originally considered as state employees. Therefore, this "Approval" essentially excludes state-owned capital holding or participating joint-stock companies from "state-owned companies and enterprises".

3. From the current judicial practice, the view held by most courts is that state-owned companies and enterprises in the sense of criminal law are all owned by the state. For example, at the National Symposium on the Trial of Economic Crime Cases by Courts held in 2002, the vast majority of participants believed that "the provisions of the Criminal Law should refer to companies established in accordance with the Company Law and whose property fully belongs to the state. Stock companies controlled or participated in by state-owned capital are not state-owned companies.", The attending representatives unanimously agreed that "state-owned companies only refer to limited liability companies established by state-owned sole proprietorships or two or more state-owned investment entities, as well as other joint-stock companies with all their shares owned by the state

4. The fourth section of the new Company Law of 2006 has special provisions for solely state-owned companies. The second paragraph of Article 65 of this Law stipulates that "a solely state-owned company referred to in this Law refers to a limited liability company that is solely invested by the state and is authorized by the State Council or local people's government to perform the duties of a contributor by the state-owned asset supervision and management institution of the same level of people's government." This article also clarifies that the property of a state-owned company belongs entirely to the state, that is, to the whole people, and that a solely state-owned company is a joint stock limited liability company controlled or shared by the state Limited liability companies are clearly distinguished.

In summary, based on the facts of this case, a certain bank was originally a solely state-owned commercial bank, and at the same time, the bank established a joint stock limited company through the initiation of establishment. On September 14, 2004, the China Banking Regulatory Commission approved the restructuring of a certain bank and its establishment of a certain bank limited liability company through division in the "Reply of the China Banking Regulatory Commission on the Restructuring and Restructuring of a certain bank and the Establishment of a certain bank limited liability company". The establishment of a certain bank limited liability company is a state-owned capital holding company, with over 70% of its Chinese owned shares being publicly issued, and the company's equity contains foreign shares and public shares, A secondary branch of the bank is a branch of the bank, and its corporate nature is consistent with that of the head office. It is a state-owned capital holding company, not a solely state-owned company, and is no longer a state-owned company in the sense of criminal law, let alone a state organ, enterprise, or public institution. However, in current judicial practice, it is common to treat state-owned holding companies, joint-stock companies, and enterprises as state-owned companies, and to artificially expand the scope of criminal intervention and criminal crackdown, which violates the spirit of legal provisions and the principle of restraint in criminal law. [③]

（2） The issue of determining the nature of the "Party Committee's research decision of a certain level branch"

1. The author believes that the "Party Committee" is not an agency of a state organ in the sense of criminal law, let alone a state organ or public institution. Because the Party Committee was established in accordance with the Party Constitution of the CPC, which clearly stipulates that the activities of the Party should be subject to the law, and the corporate structure of a bank in China is an independent civil legal person established in accordance with the Company Law, the above two are clearly different and cannot be confused.

Firstly, the Party committee organs do not belong to the "state organs" in the sense of criminal law. The definition of the scope of state organs must be based on the clear provisions of the existing laws. According to the provisions on state organs in Chapter III of the Constitution, China's state organs should include power organs, administrative organs, judicial organs, procuratorial organs and military organs, and CPC has not been listed as state organs. Moreover, Article 5 of the Constitution stipulates that "all state organs and armed forces, political parties, social organizations, and public institutions must abide by the Constitution and the law. All acts that violate the Constitution and the law must be investigated "It can be seen that, although organizations at all levels of the CPC play a leading role in China's political, economic and social life from the perspective of China's political system and national conditions, in terms of its nature, it is still a political party rather than a state organ. In combination with the party's executive procedures, actual content and role, it is better not to regard organizations at all levels of the CPC as state organs referred to in Article 93 of the Criminal Law." [④] Secondly, the Party committee organization is not a dispatched agency of state organs. According to the Constitution and relevant laws and regulations, the dispatched offices of state organs in China refer to the institutions set up by functional departments such as departments, bureaus, and departments within a certain administrative area according to their respective administrative management needs, to manage a certain administrative matter. The most common ones are police stations established by public security organs, tax offices established by tax departments, and industrial and commercial offices established by industrial and commercial departments, This clearly does not include the ruling party committee organization.

Based on this case, the author believes that the "Party Committee of a certain level branch" is not a representative organ of the ruling party at all levels or dispatched by it. According to the CPC Constitution, CPC organizations are divided into central organizations, local organizations and grass-roots organizations. In order to carry out work, party committees at or above the county level have set up some working departments, such as the Organization Department, Propaganda Department, United Front Work Department, etc. Among them, the Communist Party's representative offices are only dispatched by the party's provincial and autonomous region committees within each county, autonomous county, and city. So the so-called party committees at all levels can only be independent organizational systems, such as the Central Political Bureau, Secretariat, Provincial Party Committee, Municipal Party Committee, County Party Committee, Township Party Committee, etc. Those party organizations that are affiliated with government agencies, organizations, enterprises, and public institutions should maintain consistency with the nature of their institutions and departments because their staffing is affiliated with their respective units and departments. Due to the non-state-owned nature of units, the state guides, supervises, and manages these units. The management here only regards these units as a social organization for management. Because the staff of the CPC organs in such non-state-owned units are only an organization of party members and cannot directly lead the unit, the staff of the CPC organs in non-state-owned units cannot be regarded as state staff. In this case, because a certain bank is a non-state-owned company, the "Party Committee of a certain level branch" is only equivalent to the "Party Committee" of a general limited liability company, belonging to the grassroots organization of the Party in non-public economic organizations. In summary, the research decisions made by the party committee of a certain level branch have the nature of mass autonomy and do not represent the will of the state or the ruling party. Moreover, after the shareholding reform of a certain bank, if personnel appointments and dismissals are decided through the party committee, it is obviously not compatible with standardized corporate governance, because the executives of a certain bank are no longer cadres and do not have the meaning of lifelong tenure.

2. Determination of the Nature of "Delegation to Engage in Official Business"

According to Article 93 of the Criminal Law, there are three types of personnel who are considered as state employees: firstly, personnel engaged in public service in state-owned companies, enterprises, public institutions, and people's organizations. 2、 Personnel appointed by state organs, state-owned companies, enterprises, and public institutions to engage in public affairs in non-state-owned units, enterprises, public institutions, and social organizations. 3、 Other personnel engaged in public affairs in accordance with the law. The definition of "appointment to engage in official duties" should be analyzed from two aspects:

(1) Definition of delegation

The author believes that the definition of delegation should include the following points: 1. The subject of delegation is specific. The appointed subject must be a state-owned unit, including state organs, state-owned units, state-owned companies, enterprises, and public institutions, and must be in the name of the unit rather than an individual. 2. The method of delegation is effective. Both the delegating party and the delegating party have expressed their consent and are generally confirmed in writing. 3. The content of the delegation is legal. The content of the delegation does not exceed the scope of the delegating party's authority, and if it exceeds the delegated authority, such delegation does not have legitimacy. 4. The subordinate nature of the delegation relationship forms an administrative subordinate relationship between the delegating party and the delegating party. The delegating party must accept the delegated leadership and supervision, and the administrative subordinate relationship between the leadership and the delegating party, as well as between the management and the delegating party, is not an equal delegation or agency relationship in civil law. 5. The specificity of the delegation purpose. The purpose of appointment is to enable the appointed person to engage in official activities, such as leadership and supervision, at the national unit designated by the appointed unit, rather than directly engaging in production, labor, service, and other activities. They generally have the responsibility of supervising and managing state-owned assets. In current practice, there are two situations where state-owned companies and enterprises appoint personnel to engage in public affairs to non-state-owned companies or enterprises: firstly, state-owned companies and enterprises are entrusted by non-state-owned companies and enterprises to appoint personnel to engage in public affairs in order to complete certain tasks; 2、 State owned companies and enterprises appoint personnel to engage in public affairs to other enterprises based on the exercise of the rights of investors.

In this case, the first instance court did not specify the specific appointing party and the appointed party in the determination of the identity of the criminal subject. Even if the unit appointed is a first level branch or its party committee of a certain bank according to the ideas of the first instance court, and the appointed unit is a second level branch of the bank, it cannot constitute a substantive appointment, because according to the previous paragraph, the appointed person can only accept the appointment of state-owned units such as state organs, state-owned companies, enterprises, and public institutions, and non-state-owned units cannot become the subject of the appointment, The first level branch or its party committee of a certain bank clearly does not belong to the above list.

(2) Definition of "Engaging in Public Service"

In Article 93 of the Criminal Law, the term "engaging in public service" refers to the management, organizational leadership, supervision, and other management activities carried out on behalf of the state in public affairs. The essence of public service activities is the exercise of state power, and its service objects are the state and society. It is an activity that handles the exercise of state power, including both human and material management. Its most fundamental characteristic is: firstly, national representativeness. This type of activity is a public affairs management activity that represents the country or government, rather than individual or group behavior of state administrative agencies. From the perspective of behavioral nature, engaging in public affairs is essentially a manifestation of state power or a manifestation of power derived from state power. 2、 Managerial. To manage public affairs, the objects of management can be both national affairs and social public affairs, and the scope of management involves politics, economy, culture, technology, military, health, sports, etc. Only by possessing both of the above characteristics can a behavior be recognized as engaging in public affairs.

For staff members in state-owned holding and participating companies like this case, they must be recognized as national staff members. In addition to being appointed by specific entities, they must also engage in public affairs in state-owned holding and participating companies. The defendant in this case, Wang, as a senior executive of a certain secondary branch, represents the interests of the branch and is responsible for the branch in accordance with the provisions of the Company Law. He cannot be appointed or appointed by a shareholder, including a state-owned unit. Therefore, his appointment is in accordance with the law and not in other forms such as appointment, nomination, approval, etc. The scope of the position held by Wang is also relatively broad, and his main responsibility is to handle the daily affairs of the company. The purpose of exercising management activities is not just for the interests of a certain shareholder. So the author believes that Wang's management behavior in this case does not have the characteristic of national power dispatch, and does not represent the exercise of supervision and management power by the state-owned investment sector. The management behavior it implements does not represent the will of state-owned units, nor is it responsible for state-owned units, and should not be considered as official behavior. Therefore, it should not be treated as a state employee solely using its power to accept property from others.

epilogue

In the current booming market economy, while protecting the state-owned economy, the state should provide equal protection to non-state-owned economies. State controlled or joint stock companies cannot be considered as state-owned companies. To determine the identity of "quasi state staff" in state-owned holding listed companies, it is necessary to possess the essence of "being appointed by state-owned units to engage in public affairs". In judicial practice, the meaning of appointment and engaging in public affairs should be strictly understood. Being appointed is a prerequisite for engaging in public affairs, and engaging in public affairs is the content of appointment. If appointed but not engaged in official business, or if engaged in company management work but not authorized by a state-owned unit, it cannot be considered as being appointed by a state-owned unit to engage in official business, nor can it be considered as a staff member of a state organ.

Reference:

1. Wang Zuofu: "Practical Research on the Specific Provisions of Criminal Law", published by China Fangzheng Publishing House in 2003.

2. Gao Mingxuan and Mark Chang, editor in chief: "Criminal Law", published by Higher Education Press/Peking University Press in 2004.

3. Zhao Bingzhi, editor in chief: "Case Study of the Chinese Criminal Code - Corruption, Bribery, and dereliction of duty crimes", published by Peking University Press in 2008.

4. Zhao Bingzhi, Yu Zhigang, Sun Qin: "On the Definition of the Scope of State Personnel", Legal Science, 1999, Issue 5.

5. Zhu Jianhua: "Analysis of State owned Companies and Enterprises in Criminal Law", Modern Law, Issue 4, 2004.

6. Liang Hongxing, Jiang Tao: "Criminal Law Analysis of the Nature of Political Parties and Political Consultative Conference Organs", Journal of Fuzhou Party School, Issue 3, 2003.

7. Li Yuxian and Wu Xiaopeng: "Judicial Determination of State Personnel in State Owned and Jointly Owned Companies", Journal of Time Law, 2009, Issue 1.

8. Wang Siwei: "Re understanding of" Appointed "National Staff", Journal of Changchun University, Issue 4, 2007.

Comment:

[①] "Accurately Understanding and Applying Criminal Laws to Punish Corruption, Bribery, and Job Reading Crimes - A Summary of Opinions on the Application of Laws in Handling Corruption, Bribery, and Job Reading Criminal Cases at the National Symposium on the Trial of Economic Crime Cases by Courts", published in the Criminal Trial Reference of the First and Second Divisions of the Supreme People's Court (Volume 4, 2002), Law Press, 2002 edition, page 214.

[②] "Legal Application Issues in Economic Crime Cases - Summary of the Symposium on Trial Work of Economic Crime Cases in Some Courts of China", published in "Criminal Trial Reference" (Volume 6, 2004) compiled by the First and Second Divisions of the Criminal Trial of the Supreme People's Court, published by Law Press in 2005, page 3.

[③] Jia Yu and Shu Honghong: "On the Recognition of" State owned Companies "and" Personnel Appointed to Engage in Public Service "in Criminal Law," Legal Review, 2002, Issue 3, p. 16.

[④] Gao Mingxuan, Mark Chang: "Exploration of Hot and Difficult Issues in Criminal Law", China People's Public Security University Press, 2002 edition, page 874.

[⑤] Li Xiaoming: "Re research on" State Personnel "in China's Criminal Law", People's Public Security University Press of China, 2002 edition, page 201.