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ACHIEVEMENT

Recently, the case of Xiaoxiu (pseudonym) suspected of illegal business operation undertaken by lawyer Zhao Yanguang of JAVY Law Firm finally obtained the decision of the procuratorate not to prosecute, and the party was exempted from criminal judgment.

01 Brief introduction to the case

   Xiaoxiu （from Hunan Province)established a Hong Kong limited company (referred to as the company) in Hong Kong to engage in foreign trade business in China. Ma X, Ha X and others who exchanged foreign exchange were contacted through the Internet. After full communication on the Internet, Ma X, Ha X and others remitted RMB to Xiaoxiu's domestic RMB bank card account with reference to the foreign exchange price on the day of the transaction. Xiaoxiu then remitted the foreign exchange to the overseas accounts designated by Ma X, Ha X and others through the company's account.

However, from September 2019 to May 2020, due to the suspected money laundering crime of Ma X and others' RMB source, the case-handling agency followed the clues and found Xiaoxiu, so they seized nearly 20 million yuan in his personal account and sealed up In May 2020, Xiaoxiu was arrested and brought to justice on suspicion of illegal business operations.       

02 Case handling process

1. Grasping the boundary between sin and non-sin

At the beginning of Zhao Yanguang's case, Xiaoxiu (pseudonym) has been released on bail pending trial. Through the communication with Xiaoxiu, Lawyer Zhao  keenly felt that Xiaoxiu's exchange of currency in this case did not constitute the alleged crime of illegal business operation, and suggested not to sign the "Confirmation of Guilty and Punishment". In the end, Xiaoxiu refused to sign. This laid a good foundation for the follow-up innocence defense work.

After the case arrived at the procuratorate, Lawyer Zhao seized the opportunity to get in touch with the chief prosecutor. During the first exchange, the sponsoring prosecutor said very firmly: There is nothing wrong with convicting the crime of illegal business operation in this case. Lawyer Zhao Yanguang should not consider the defense of innocence, try his best to obtain a lesser defense, and work hard from the sentence. Lawyer Zhao elaborated his defense opinions based on the case and relevant legal provisions, and then submitted a written defense opinion. The lead prosecutor said it would seriously consider the opinions of defense attorneys. During the second exchange, the chief prosecutor obviously had doubts about the alleged crimes in this case, and he took the initiative to suggest Xiaoxiu to rectify the company's operating system and put an end to the illegal act of exchanging foreign currency without permission.

It is worth noting that after accepting the entrustment, lawyer Zhao Yanguang proposed to Xiaoxiu to establish a legal and compliant exchange mechanism as soon as possible, and Xiaoxiu also set up a domestic foreign trade company at the first time, and reported to the foreign exchange management department. Apply for a foreign exchange quota. This has laid a good foundation for the handling of subsequent cases.

2. Determining whether the subject of the crime is accurate

After lawyer Zhao Yanguang had a preliminary understanding of the case, a key question had been circling in his mind: who is the subject of the foreign exchange in this case? Xiaoxiu or Hong Kong company?

Judging from the behavior process of this case, although the specific actor of the exchange is Xiaoxiu, as the legal representative of the company, Xiaoxiu's behavior can fully represent the company. From the perspective of the source of funds, all the foreign exchange spent by Xiaoxiu comes from the company rather than her personal account, and the RMB exchanged is also mainly used to pay the wages of the company's employees and the payment of the company's suppliers. Although Xiaoxiu’s personal domestic RMB account is used to collect all RMB, Xiaoxiu, as the legal representative of the company, uses her personal account to collect money on behalf of the company, although it violates our country’s accounting management system and accounting system, it does not constitute an illegal business crime. Therefore, based on the principle of humility and restraint in criminal law, lawyer Zhao Yangguang proposed the proposition that the subject of foreign exchange should be a company rather than a natural person like Xiaoxiu. He also emphasized that only on the premise that the company constitutes a crime by the unit, Xiaoxiu, as the legal representative of the unit, bears criminal responsibility.
3. Seizing the links that do not have profit-making purposes

The criminal intention of the crime of illegal business operation is to obtain profits from the illegal business operation. Without the purpose of profit, there is no criminal intention of illegal business operation. Without the criminal intention, the crime of illegal business operation should not be constituted.

Lawyer Zhao Yanguang determined that there was no common criminal intent between Xiaoxiu, Ma X and Ha X after carefully grinding the evidence and relevant legal regulations. Secondly, the purpose of Xiaoxiu's exchange of RMB is not for profit, but to facilitate business operations and help others. In fact, she only made a profit of 14,200 yuan from the exchange of more than 70 million yuan. He is engaged in foreign exchange black market transactions with Ma X and Ha X and other professionals. The profit margins are far from any comparable. In the end, the procuratorate believed that there was insufficient evidence to determine that Xiaoxiu was suspected of illegal business operations.

Case result:

Through the unremitting efforts of lawyer Zhao Yanguang, the hard work paid off. The procuratorial organ removed Xiaoxiu from the joint crime separately in October 2020. In November 2021, a local sub-branch of the State Administration of Foreign Exchange determined that Xiaoxiu’s behavior of selling foreign exchange to others was an act of privately buying and selling foreign exchange, and warned and imposed fines. Xiaoxiu did not file a reconsideration or appeal against the administrative organ's punishment and the procuratorial organ's decision.

Views on the case

Based on the current cognitive differences, whether a criminal suspect constitutes a crime is the first question for defense lawyers to consider. After a basic understanding of the case and the alleged crime, it is necessary to study from the perspective of crime composition whether the party's behavior conforms to the crime composition of the alleged crime. Except for the obvious subject of the crime, the remaining subjective and objective elements, the object of the crime, the object of the crime, the purpose of the crime, etc., must be fully considered. As a defense lawyer, it is the basis for a good defense to understand the case to be defended, and it is also the basis for maximizing the interests of the client in a timely manner.

Although the court is a stage for lawyers, it is not a stage for lawyers to perform personal talents and gain fame and fortune, but a stage for clients to spend money to fight for their legal rights. Therefore, how to maximize the interests of clients is the ultimate goal of lawyers' defense.

For those who are found innocent, we, as lawyers, have to fight for reasons, and we should encourage and support the client not to admit guilt and accept punishment. For those who are determined to be guilty, they must be persuaded to plead guilty and accept punishment as much as possible, and strive for leniency. For innocent people, it is necessary to repeatedly communicate, exchange, explain, and strive for case investigators. For guilty people, help as much as possible to seek forgiveness, actively refund compensation, make up for faults, etc., so that the parties can get a crime equivalent to the punishment as much as possible. Psychologically this is an accepted result.