Significant Changes in Criminal Investigation Procedural Rules

Amendment of the PRC Supervision Law

On 25 December 2024, the Standing Committee of the PRC National People’s Congress issued the amended version of the Supervision Law. The Supervision Law aims to strengthen oversight of public officials and combat corruption through a national supervision system and this amendment came into effect on 1 June 2025. It added provisions breaking through the restrictions on the dispatch of supervisory agencies or supervisors to vertically managed or dual-led units, thus resolving the “supervision blind spots” of the vertical management system to achieve full supervision that covers all aspects horizontally and vertically. The amendment also added provisions covering compulsory appearance, protective custody (seven plus three days), orders to await investigation, etc.

On top of all these amendments, the change to the detention period is the most notable and significant for future investigations.

Article 48 mandates the following:

“The detention period shall not exceed three months. Under particular circumstances, the period may be extended once for not more than three months. If a supervision authority at or below the provincial level extends the detention period, the extension shall be reported to the supervision authority at the next higher level for approval. If the supervision authority finds that it is inappropriate to take the detention measure or it is unnecessary to continue taking the detention measure, it shall promptly lift or change the detention measure to an order to await investigation.

Where the person under investigation for suspected crimes by state personnel may be sentenced to a fixed-term imprisonment of ten years or more, and the supervision authority still cannot conclude the investigation upon the expiration of the extension specified in the preceding paragraph, the period may be extended for another two months with the approval or by decision of the National Supervision Commission.

If a supervision authority at or above the provincial level finds in the course of its investigation that the person under investigation for suspected state personnel crimes has committed another major state personnel crime different from the crime for which he or she has been detained, or the same kind of major state personnel crime affecting the determination of criminal charges and sentencing range, with the approval or by decision of the National Supervision Commission, the detention period shall be recalculated from the date of discovery according to the provisions of paragraph 1 of this article. The detention period shall be recalculated only once.”

Based on the above new amendment, the detention period may last as long as 14 months. The advantages to the investigating authorities of prolonging the detention period need no explanation. It will give the supervision authority great latitude in investigating complex cases. Meanwhile, the strict extension approval procedures display the cautiousness in making the decision. Any extension above six months shall be decided by the National Supervision Commission. Other likely results of the amendment also cannot be neglected. First, the amendments will impact the psychological state of the detainees particularly because of their lack of access to external counsel throughout the whole course of the investigation by the supervision commission, and some will inevitably fall into the situation of the “prisoner’s dilemma”. This will in turn test the reliability of the detainees’ confessions obtained during the extension period and fuel further challenges to judgments made against this backdrop, which existed even before the law was amended. In addition, the negative impact to the stability of a company’s operations may be significant if the controller of the company is detained for such a long time. To take special caution before making such a decision is an entirely reasonable step under these circumstances.

No more “distant-water fishing”

Chinese companies have long been bothered and distressed by the far-reaching arms of the law enforcement authorities of other jurisdictions, particularly in criminal investigations by the police. Such conduct is widely referred to as “distant-water fishing”.

Apart from the Criminal Law, the Regulations on the Procedures for Handling Criminal Cases by Public Security Authorities by the Ministry of Public Security (the “Regulations”) is the most important legal source on jurisdiction with regard to criminal investigations.

Articles 15 and 16 of the Regulations provide that criminal cases shall be under the jurisdiction of the public security authority of the place of the crime, which includes the places where a criminal act occurred (eg, the preparatory/starting/transiting/ending place) and where the results of a crime were felt (eg, the places where the victim of the crime is infringed upon and where the criminal proceeds are obtained/hidden/transferred/used/sold), and may be under the jurisdiction of the public security authority of the place where the criminal suspect resides (ie, their registered and habitual residence) if it is more appropriate. If any law, judicial interpretation or other normative document makes any special provisions on the jurisdiction of criminal cases, such provisions shall prevail.

Article 17 of the Regulations further provides that where a crime is committed against or mainly through computer networks, the public security authority of the location of (i) the server used for the network service to carry out the criminal act, (ii) the network service provider, (iii) the network information system that has been infringed and its manager, and (iv) the network information system used by the criminal suspect or victim during the criminal process, in addition to the place where the victim was infringed upon and where the victim’s property was damaged, may have jurisdiction.

The direct result of applying the above jurisdictional provisions in reality is the police can carry out law enforcement activities whenever even a minimal nexus with their jurisdiction exists and regardless of where the suspect resides or or the most important part of a crime occurs. There is therefore a risk that police in less economically developed regions might take advantage of such provisions as the legal ground on which to pursue companies in more economically developed regions; motivated by the possible disgorging of illicit gains and the opportunity to impose hefty fines. For a long time, this practice has disrupted company operations, brought injustice and outraged both the the legal industry and the wider public in China.

In order to stabilise the market, prevent the economy from sliding further downward and boost the confidence of private enterprises, in March 2025 the Ministry of Public Security issued the Regulations on the Jurisdiction of Cross-Provincial Criminal Cases Involving Enterprises of Public Security Authorities, in which the Ministry of Public Security narrowed down the jurisdiction to – largely – the key place where the crime occurred or the place where the suspect’s residence is registered. Where an enterprise from another province sets up a branch in this province, the public security authority at the location of the branch may have jurisdiction over such branch with respect to the crime committed by this branch. The new jurisdictional overhaul applies to companies being investigated and also applies to cases where the actual controller, legal representative or controlling shareholder of the enterprise, as well as directors, supervisors and senior management personnel, are being investigated due to their conduct of the company’s operations. The new regulation has strongly deterred and largely rectified the unjustified law enforcement actions that had been a problem for years and were driven by the hope of financial gain rather than criminal justice.

Strengthened Stance Against Crimes in Specific Fields

General introduction

Since 2024, a series of judicial interpretations have been jointly or separately issued by the Supreme People’s Court and the Supreme People’s Procuratorate and some other government authorities on punishing crimes related to, inter alia, stock markets, tax collection and money laundering. Certainly, anti-corruption is a never-ending topic for law enforcement authorities. These judicial interpretations include:

• Opinions on Several Issues Concerning the Handling of Securities and Futures Criminal and Illegal Cases; and
• Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Collection and Administration of Taxes; and
• Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Laundering.

Typical cases that have been publicised also cover similar crimes including cases concerning bid-rigging.

According to the report published by the Supreme People’s Court in July 2025 summarising trial data from the first half of that year, the total number of criminal cases adjudicated by courts at all levels dropped by 10.4%, and the number of people convicted dropped by 9.03% compared to the same period last year. On the other hand, criminal cases relating to the crime of disrupting the socialist market economic order have increased by 2.65%. The number of bid-rigging cases accepted by the court has increased by 30.44%. As discussed in the China Trends & Developments article in the 2024 edition of this guide, white-collar crimes are mostly reflected in the chapter of the Crime of Disrupting the Socialist Market Economic Order of the Criminal Law. Although there is no specific definition of “white-collar crime” in the law, the increased numbers can reasonably be thought to echo law enforcement trends in white-collar crimes.

Opinions on Several Issues Concerning the Handling of Securities and Futures Criminal and Illegal Cases

Following the interpretation in July 2019 setting out different thresholds for various crimes in the securities and futures market, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security and the China Securities Regulatory Commission jointly issued the Opinions on Several Issues Concerning the Handling of Securities and Futures Criminal and Illegal Cases (the “new interpretation”) in April 2024. The new interpretation enhances law enforcement in relation to securities and futures-related crimes by announcing a policy of zero-tolerance and enforcing severe punishment in accordance with the law.

Specifically: “Intensify investigation and punishment, adhere to the principle of referring all cases that should be referred, arresting those who should be arrested and prosecuting those who should be prosecuted, strictly control the application of probation, intensify the application and enforcement of monetary penalty, maximise the recovery of illicit gains and compensation for losses, and improve the whole-chain crackdown and all-round accountability system”.

As part of the law enforcement policy, “combining leniency with rigidity” is particularly stressed in the annual report of the Supreme People’s Procuratorate in March of 2025. “We should fully and accurately implement the criminal policy of leniency and severity in combination, being strict where appropriate and lenient where necessary, and imposing penalties commensurate with the crime”. Just one month after the release of the annual report, the policy of law enforcement in the securities and futures market already reflects this strict tone. The inevitable inference is that crimes in the securities and futures market, even after many years of joint efforts by different law enforcement authorities to cleanse the market and rectify irregular business behaviour and serious speculative conduct, remain rampant rather than controlled. The number of people prosecuted for crimes in the securities and futures market in 2023 was 346, while this number has more than doubled to 825 in 2024. Although the number for the first half of 2025 is not yet available, it would not be a surprise if it has continued to increase.

Continuing crack-down on corruption

The anti-corruption storm in healthcare and other industries has not yet come to an end. The data disclosed in the annual report by the Supreme People’s Procuratorate is startling. In 2024, Supervision Commissions at various different levels have transferred 27,000 people for crimes by state personnel for prosecution, and among these, 24,000 people were prosecuted, a year-on-year increase of 37.8% and 34.9%, respectively. According to the report, 5,081 people from the finance, energy, pharmaceutical and infrastructure construction sectors were prosecuted. Singled-out numbers for the year of 2023 in financial and pharmaceutical industrial sectors were separately 348 and 580. The number of people prosecuted for bribe-giving rose to 3,068, an increase of 18.3% year-on-year. According to the Supreme People’s Court’s report, the courts have concluded the trial of 30,000 cases of corruption, bribery and other crimes by state personnel involving 33,000 people, marking a significant growth of 22.3%, and the number of concluded case trials on bribe-giving reflected a year-on-year increase of 18.6%. These increased numbers, especially when compared to the drop seen in figures relating to prosecuting and adjudicating other ordinary crimes, again strongly indicate the determination of the Chinese government to crack down on corruption and to foster a clean and upright atmosphere both in the governance of the state and the regulation of the market.

Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Collection and Administration of Taxes

Tax evasion is not a new issue. From 1992, the Supreme People’s Court has issued several judicial interpretations guiding the trials of tax-related crimes. However, they are no longer sufficient as the crimes themselves, the relevant criminal legislation and the disputes over the application of the law in this area have evolved. This new Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Collection and Administration of Taxes was published in 2024 and aims to tackle these new issues and to accelerate the creation of a market-oriented, law-based and internationalised business environment. From the technical perspective, it refines the rules (such as the identification of tax evasion methods), restricts the criminal circle of issuing false invoices, strengthens the dual punishment system for corporate crimes, balances the behaviours and incentives for market entities’ compliance rectification, and implements precise crackdowns on substantive harm.

The Supreme People’s Procuratorate’s report shows that around 23,000 people were prosecuted for crimes involving tax evasion and smuggling in 2024, while the number of people prosecuted in 2023 for crimes of jeopardising the administration of tax collection (eg, false VAT invoices and export tax rebate fraud) was 9,428 which is a 10.9% year-on-year increase compared to 2022. This partially explains why the new interpretation was issued. The increase of prosecution numbers may also be attributed to the construction of the fourth phase of the Golden Tax Project, which enhanced the tax inspection function, covering aspects such as intelligent analysis, early warning signs, and assessment of illegal trends. It is likely that the number of prosecutions and trials will continue to increase in 2025. This can be seen in the active involvement of tax authorities on different levels investigating tax-related matters when companies are investigated by competition authorities for commercial bribery. If any amount of money is ascertained by the competition authorities as a corruption cost, the tax authority may follow with more sanctions and may even refer the case to the relevant criminal investigation authority if the circumstances are serious since the booking of the corruption cost in the accounting ledgers is certainly understood as a way of evading tax.

Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Laundering

The crime of money laundering was first provided for in the Criminal Law in 1997. In 2006, a new crime, that of “covering up or concealing criminal gains or the proceeds of criminal gains”, was added into the law to plug the loopholes left by the crime of money laundering, which only covers the illicit gains out of seven specific types of crime. The new crime is intended to cover the illicit gains from all other crimes. After the Criminal Law was further amended in 2021, self-money laundering was incorporated into Article 191 in response to pressure from the Financial Action Task Force on Money Laundering’s assessment of China’s anti-money laundering efforts. From the development of the legislation on anti-money laundering, it can be clearly seen that the Chinese government has taken painstaking efforts to punish relevant crimes and maintain the financial administrative order.

The Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Launderingwas published in 2024. In addition to clarifying the standard to determine self-money laundering and third-party money laundering, it added the circumstance of money laundering through virtual currency trade, reflecting new developments in money laundering techniques. In China, criminals have used tools such as “Rewards in Live Streaming” and the “Paofen Platform”. Among all these money laundering tools, cryptocurrency is the most used way to “wash” illicit funds. According to the Supreme People’s Procuratorate’s annual reports, in 2023, 2,971 people were prosecuted for money laundering, which represents year-on-year growth of 14.9%, and this number has increased to 3,032 people in 2024. In both years’ reports, cryptocurrency is singled out as one of the most important tools in transferring illicit funds, and the growth in its use is one of the motivations behind the 2024 judicial interpretation.

China is a socialist market economy, a norm probably novel and even unknown to most Western readers. A more readily graspable concept that illustrates the nature of the Chinese economy is that China has 55,542,300 privately owned enterprises, amounting to 96.37% of all the enterprises operating in China up to the end of 2024. An economy with such a large percentage of privately owned enterprises, most of which are small and medium-sized, as well as one that lacks (or has historically lacked) a well-structured compliance policy and culture, will inevitably be troubled by white-collar crime and an ever-growing number of them. From the long-term perspective, dealing with white-collar crimes will never be an out-of-date topic and shall remain a strong responsibility of and severe task for the Chinese government.