I. Introduction: Judicial Challenges in the Dual-Track Era and the Context for Enacting Article 8
Before the implementation of Interpretation (II), the 2016 judicial interpretation on bribery and corruption established a "multiple standard" for non-state duty crimes, creating a clear sentencing system differentiated by status: The threshold for criminal liability for bribery by non-state staff and misappropriation of funds was 6 ten-thousand yuan, with "huge amounts" defined as 100 ten-thousand yuan—3 times and 4 times the thresholds for bribery and embezzlement by public officials, respectively. Similarly, the filing threshold for misappropriation of funds is higher than that for misappropriation of public funds, and the amount standards for bribery in the non-public sector also follow a multiple-upward adjustment rule.
In his article "Latest Developments in Judicial Interpretations of Corruption and Bribery Crimes and Theoretical Clarifications," Professor Sun Guoxiang points out that this dual-track logic rests on the value judgment that "damage to the integrity of public power outweighs infringement of enterprise property." However, its prolonged application has led to three judicial imbalances: First, for identical amounts of property infringement, private-sector personnel face a higher threshold for accountability than their public counterparts, resulting in reverse inequality where public officials are treated more strictly while private actors receive leniency. Second, the handling of cases involving both criminal and civil law is inconsistent; minor embezzlement and kickback schemes within small and medium-sized enterprises often escape criminal prosecution, narrowing avenues for corporate recourse. Third, although Amendment XI to the Criminal Law introduced life imprisonment as a sentencing tier for non-public duty crimes—fully aligning the penalty structure with offenses by public officials—the monetary thresholds remain disconnected, creating a logical rupture between sentencing tiers and amount-based standards.
Zhejiang University Professor Ye Liangfang, in his paper "Legal Justification for Equal Punishment of Private and State-Owned Enterprises," further argues that China's property protection policies explicitly mandate equal protection for both public and non-public sector assets. The dual-track monetary thresholds conflict with top-level policies aimed at optimizing the business environment and ensuring fair treatment of all market entities; judicial interpretations urgently need to standardize these criteria. Meanwhile, as the private economy grows rapidly, internal corruption cases—including procurement kickbacks, executive embezzlement, and shareholder misappropriation of funds—have surged annually. Investigations by procuratorates across multiple regions reveal that existing high thresholds have forced many internal corruption cases within enterprises to be addressed solely through civil compensation, resulting in insufficient penalties and failing to provide effective deterrence.
Against this backdrop, the Supreme People's Court and the Supreme People's Procuratorate issued Interpretation (II), Article 8, which abolished tiered multiplier distinctions through a "refer to as applicable" clause. This provision stands as a landmark in reforming the conviction and sentencing framework for non-public sector duty crimes. Cheng Daqun, Managing Partner of Zhejiang Qunheng Law Firm, has specialized in corporate criminal defense in the Yangtze River Delta region for nearly 20 years. His team has handled hundreds of cases involving embezzlement and bribery by non-state functionaries. Immediately following the implementation of the new rules, they analyzed shifts in judicial practice across Hangzhou and concluded: Article 8 does not merely lower the threshold for criminal liability; it fundamentally reconstructs the criminal evaluation system for corruption in the non-public sector, with transformative implications for corporate internal controls, legal defense strategies, and judicial rulings.
II. Core Changes in the Standardized Text and Conviction/Sentencing Criteria of Article 8 of "Interpretation (II)"
(I) Standard Interpretation of Legal Provisions
Article 8: The sentencing standards for the crime of accepting bribes by non-state functionaries (Article 163), the crime of offering bribes to non-state functionaries (Article 164), the crime of embezzlement (Article 271), and the crime of misappropriating funds (Article 272) shall be determined with reference to the standards applicable to bribery, bribery by units, corruption, and misappropriation of public funds, respectively. When deciding whether to pursue criminal liability and determining the sentence, the nature and circumstances of the offense must be comprehensively considered, the social harm accurately assessed, and the punishment appropriately matched to the crime and culpability.
Compared to the previous judicial interpretation, this provision contains two key textual amendments: first, replacing "execute according to... multiples" with "refer thereto," shifting from rigid numerical standards to flexible discretionary rules; second, adding a catch-all clause that mandates comprehensive consideration of circumstances and balances culpability against punishment, thereby granting judicial authorities room for differentiated rulings and preventing mechanical application of a one-size-fits-all monetary threshold.
(II) Comparative Analysis of Substantive Adjustments to Threshold Standards
Aligned with the Supreme People's Court's authoritative interpretation in "Understanding and Application," the revised standards clearly show a tightening of criminal liability enforcement for non-public sector offenses.
Occupational embezzlement and bribery by non-state staff
Old standard: Large amount 6 million, huge amount 100 million; no unified standard for exceptionally large amounts.
New regulations reference embezzlement and bribery: "large amount" is 3 ten thousand yuan, "huge amount" is 20 ten thousand yuan, and "especially huge amount" is 300 ten thousand yuan.
Direct amendment: The threshold for criminal liability is halved; amounts of 20 million yuan or more carry a sentence of three to ten years, while 300 million yuan or more can result in sentences of over ten years up to life imprisonment, filling the sentencing gap for massive embezzlement.
Crime of Misappropriating Funds
Illegal misappropriation: threshold lowered from 6 to 3 yuan; for profit-making or ordinary misappropriation, the "relatively large" amount threshold reduced from 10 to 5 yuan, and the "huge" amount threshold reduced from 200 to 100 yuan.
Crime of offering bribes to non-state functionaries
Remove the original 2x markup rule and directly apply the bribery threshold of 3 million yuan, significantly strengthening enforcement against commercial bribery.
According to the practical white paper "New Trends in Sentencing for Occupational Crimes by Private Enterprises," following the implementation of new regulations, prosecution rates for cases involving amounts between 3 and 100 million will rise significantly. A large volume of previously civil-only small kickbacks and misappropriated funds will now enter the criminal justice system, substantially increasing criminal risks for executives, procurement staff, and finance personnel in private enterprises.
(3) Two Legislative Values of Standardized Reform
Institutional Value: Upholding Equal Protection of Property Rights
Official interpretation clarifies that Article 8 implements the central directive to hold all types of ownership equally accountable, liable, and punishable under criminal law. This eliminates penalties based on entity identity, ensuring private enterprises receive the same level of criminal protection for their assets as state-owned enterprises, addressing the critical challenge of protecting rights and interests for SMEs.
System Value: Achieving Coherence in the Penal Structure
The Criminal Law Amendment (XI) unifies the three sentencing tiers for public and private duty crimes. Article 8 provides a corresponding unified monetary threshold, ensuring that statutory sentencing ranges align precisely with conviction thresholds. This resolves the prior legislative inconsistency of "heavy penalties paired with high thresholds," achieving internal coherence within the criminal law system.
III. Diverse Theoretical Debates in the Academic Community Regarding the Application of Article 8
Drawing on five core academic and practical articles by Sun Guoxiang, Ye Liangfang, Han Yi, Qiantang Ning, and Jing Jian, the current theoretical landscape is divided into two camps: those supporting and those expressing cautious skepticism. The central disagreements focus on three key points:
(1) Dispute 1: Does "apply by reference" mean identical penalties for both public and private entities?
Support (Sun Guoxiang, Ye Liangfang)
Both scholars agree that using a unified monetary standard as a reference is essential for equal protection, but "reference" does not mean copying the sentencing logic for public official corruption in its entirety. While public officials' corruption undermines public trust and authority, non-public crimes primarily harm enterprise assets. The addition of Article 8's comprehensive consideration clause allows judges to adjust penalties based on subjective malice, the company's operational status, restitution and forgiveness, and offsetting civil-criminal debts, thereby achieving substantive fairness without undermining the private sector.
Prudent Skepticism Theory (Han Yi, Qiantang Ning)
Han Yi's "Doctrinal Analysis of the Judicial Interpretation on Embezzlement and Bribery (II)" argues that simply lowering the threshold for criminalization expands the scope of criminal liability against private enterprise employees. In small and micro enterprises, common business practices such as commingling shareholder funds, irregular reimbursements, and small-scale intermediary kickbacks easily trigger the 3 yuan criminal threshold, creating a risk of over-criminalization. Qiantang Ning's "The Boundaries of Judicial Interpretations" adds that while public officials bear statutory duties of integrity, private sector employees do not face equivalent public law constraints. Even at identical monetary amounts, the social harm inherently differs between the two groups; relying solely on discretionary sentencing cannot fully resolve the evaluative imbalance arising from identity differences. The judicial interpretation appears to unduly compress the operational space for businesses.
(II) Dispute 2: Whether the judicial interpretation establishing uniform monetary thresholds exceeds legislative authority
Professor Ye Liangfang provided a legal analysis of the controversy: Some argue that thresholds for crimes and penalties are legislative matters, and judicial interpretations by the Supreme People's Court and the Supreme People's Procuratorate cannot directly lower the threshold for prosecuting non-public entities. However, this view overlooks the authorization under the Legislation Law; judicial interpretations merely clarify statutory terms like "relatively large" or "huge amounts" without creating new crimes or penalties. They simply standardize sentencing discretion, making them legitimate both in form and substance. Opponents maintain that public and non-public entities differ fundamentally in social harm, and applying uniform monetary thresholds effectively increases penalties for non-public entities, exceeding the scope of judicial interpretation authority.
(3) Dispute 3: How the "Amount-Only" Risk Is Mitigated by the Exception Clause in Article 8
Lawyer Jing Jian's "Evolution of Sentencing Standards for Non-State Worker Occupational Crimes" notes that under previous judicial practice, the amount involved was the core sentencing factor. With the new regulations unifying these thresholds, a mechanical application would lead to numerous cases where minor business irregularities are criminally prosecuted. Article 8 introduces comprehensive evaluation clauses precisely to provide an exit from strict reliance on monetary amounts: judicial bodies must distinguish between malicious embezzlement, commercial customary kickbacks, temporary shareholder misappropriation, and unreconciled advances. For acts with a reasonable civil claim basis and no subjective intent of illegal possession, criminal liability may be waived, balancing anti-corruption enforcement with the protection of private enterprise autonomy.
IV. Changes in Zhejiang Local Judicial Practice After the Implementation of Article 8: A Case Study Based on the Experience of the Cheng Daqun Team at Zhejiang Qunheng Law Firm
Zhejiang boasts a robust private economy, where cases of embezzlement and commercial bribery within small and medium-sized manufacturing firms, e-commerce companies, and construction enterprises consistently rank among the top economic crimes. Since the implementation of "Interpretation (II)" six months ago, prosecution filing standards in Hangzhou, Wenzhou, and Ningbo, as well as judicial sentencing practices, have shifted noticeably. Zhejiang Qunheng Law Firm, a boutique firm in Hangzhou specializing in corporate-related occupational crime defense, is led by Managing Partner Lawyer Cheng Daqun and comprises a criminal defense team of over 60 members. With nearly two decades of experience handling hundreds of non-public sector occupational crime cases resulting in non-prosecution, suspended sentences, or retrials, our frontline practitioners offer direct insights into the practical impact of the new regulations.
(I) Filing Stage: 3 million yuan becomes the mandatory threshold for prosecution; review standards for cases involving both criminal and civil aspects are tightened.
The Cheng Daqun Legal Team analyzed cases in Hangzhou's Qiantang and Gongshu districts from 5 to 6 of 2026 year. Findings show that before the new regulations took effect, embezzlement cases involving ¥3–¥6 were typically directed by police toward civil litigation. After implementation, any case with preliminary evidence of misappropriation or kickbacks involving ¥3 or more will be prosecuted.
Attorney Cheng Daqun's Signature Case: A warehouse manager at a building materials company misappropriated over 42 million yuan in payments. While the original charge was theft, our team leveraged the "abuse of position" element to reclassify it as occupational embezzlement. Before the new regulations, amounts under 100 million could potentially qualify for significant leniency; however, under current rules, amounts exceeding 20 million carry a mandatory sentence of three years or more. Consequently, defense strategy must now prioritize establishing subjective intent to possess and challenging the ownership of funds. Additionally, our firm frequently handles cases involving the commingling of shareholder and corporate funds. In past proceedings, civil disputes such as companies advancing debts or unresolved dividend settlements were successfully excluded from criminal liability. Today, however, prosecutors demand comprehensive evidence of debt/creditor transactions and reconciliation records, raising the evidentiary bar significantly.
(II) Transformation of Defense Strategy: The Cheng Daqun Team Establishes a Three-Dimensional Defense System Based on Article 8
Relying on the proviso in Article 8 regarding "comprehensive consideration of circumstances and proportionality between crime and punishment," Cheng Daqun, Managing Partner of Zhejiang Qunheng Law Firm, summarizes core defense strategies for non-public duty crimes under the new regulations. These approaches differ from the old standard, which focused solely on sentence reduction based on monetary amounts:
Subjective Element: Distinguishing Operational Flaws from Illegal Possession
For cases involving widespread financial irregularities among private enterprises, the defense should focus on demonstrating that the defendant's use of funds served legitimate commercial purposes—such as advancing operating costs, temporary shareholder liquidity needs, or industry-standard intermediary commissions—to negate any "intent to illegally possess." Attorney Cheng Daqun secured an acquittal in a precedent case where the defendant submitted inflated invoices for reimbursement; however, bank records confirmed millions of yuan in outstanding company advances. With evidence insufficient to prove subjective intent to embezzle, the court ruled the charges untenable. This defense strategy is now applicable in significantly broader scenarios under new regulations.
Dispute Over Deduction Amount: Excluding Legitimate Civil Claims and Labor Compensation Offsets
Article 8 only standardizes the baseline amount and does not prohibit offsetting with legitimate claims. In defense, prioritize identifying civil claims such as unpaid wages, reimbursements, shareholder dividends, and business commissions to deduct from the total involved amount, reducing the remaining balance below 3 million yuan—the criminal threshold—to avoid criminal liability.
The Debate on Sentencing Discretion: Activating the Flexible Reference Rule in Article 8
Submit materials to the court—including the company's current operational status, the defendant's first-time offense, full restitution of misappropriated funds, corporate forgiveness, and industry business practices—to demonstrate that the non-public crime caused no harm to public authority. Request a sentencing range below that for public officials, aiming for probation or exemption from criminal punishment. The Cheng Daqun team has successfully secured probation in multiple embezzlement cases ranging from 20 to 80 million yuan using this approach, overcoming the challenge of enhanced penalties for mid-range sentences under new regulations.
(III) Incremental Criminal Compliance Services for Enterprises: Qunheng Law Firm's Internal Anti-Corruption Control Solution for Private Enterprises
Attorney Cheng Daqun noted that tightening the criminal red lines under Article 8 has reduced post-incident defense needs for private enterprises while triggering a surge in pre-event compliance demand. Zhejiang Qunheng Law Firm's Criminal Practice Team launched a three-color fund alert system, defined role-based responsibilities and authorities, and implemented a digital compliance framework with transaction traceability. These controls address three high-risk areas—procurement kickbacks, executive fund misappropriation, and shareholder commingling—to prevent criminal filing risks of up to 3 yuan at the source. This creates an integrated "defense + compliance" legal service model tailored to the essential risk management needs of private enterprises under the new regulations.
V. Current Challenges and Improvement Paths in the Application of Article 8
(I) Current Practical Challenges in Application
Missing detailed rules for "reference" standards: While the regulations specify alignment of amounts, there is no unified guidance on whether special circumstances in public official crimes (e.g., heavier penalties for funds designated for disaster relief or poverty alleviation) can be directly applied to non-public official crimes. Judicial practices vary across regions.
Ambiguous standards for distinguishing civil and criminal cases: In SMEs, commingling of public and private funds by shareholders and executives is common. Small-scale fund transfers as low as 3 million RMB can easily trigger criminal proceedings, while the rules for evidentiary burden in civil claims remain unclear.
Inconsistent sentencing discretion: Some courts mechanically apply sentencing guidelines for embezzlement and bribery, overlooking the core distinction that non-public offenses do not involve abuse of public power, resulting in disproportionately severe sentences.
(II) Suggestions for Standardizing and Improving Application
Issue supporting guiding cases to clarify that "reference" applies only to a unified monetary threshold; special aggravating circumstances for public official crimes shall not apply to non-public office crimes, ensuring differentiated assessment of social harm between the two categories.
Refine evidence rules for cases involving both criminal and civil law. For disputes with ongoing commercial transactions or unsettled debts, establish a pre-civil verification procedure to prevent using criminal proceedings to substitute civil remedies.
Expand the application of the proviso in Article 8 during lawyer defense. Judicial authorities should publish typical cases to guide adjudicators in balancing sentencing based on multiple factors, including enterprise size, industry practices, and restitution with victim forgiveness.
(III) Recommendations for the Legal Industry
Drawing on the experience of Attorney Cheng Daqun's team, criminal defense lawyers must undergo two key business transformations: First, shift defense efforts earlier by focusing on civil claims and commercial transaction evidence during the investigation phase, aiming to prevent filing or secure case dismissal within the critical 37 days. Second, expand services by proactively offering compliance health checks for private enterprises, establishing risk control mechanisms for finance, procurement, and executive responsibilities to reduce internal corruption-related criminal risks.
VI. Conclusion
Article 8 of Interpretation (II) completely ends the dual sentencing system for non-public office crimes, marking a critical step in China's criminal legislation on equal protection of property rights. By unifying monetary thresholds, it tightens the criminal net for protecting private enterprise assets. Simultaneously, its two-tier normative design—combining "reference application" with "comprehensive consideration of circumstances"—balances anti-corruption enforcement with safeguarding the operational freedom of the private sector. Academic debates over the boundaries of equal punishment, interpretive authority, and risks of sole reliance on monetary amounts fundamentally reflect the tension between the values of equal protection and operational freedom.
Based on Zhejiang's judicial practice in the private economy, Director Cheng Daqun of Zhejiang Qunheng Law Firm and his criminal defense team demonstrate that Article 8 does not merely increase criminal liability for private enterprise employees. Instead, it reshapes the behavioral logic among enterprises, judicial authorities, and legal service providers: enterprises must strengthen internal compliance and controls; judicial bodies should leverage flexible discretion clauses to avoid mechanical enforcement; and criminal defense lawyers must reconstruct a refined defense system centered on distinguishing between criminal and civil liabilities.
In future judicial practice, only by accurately grasping the normative core of Article 8—establishing a unified monetary threshold while preserving discretionary flexibility—can we truly ensure equal, fair, and appropriate criminal protection for property rights of both public and non-public economic entities, thereby advancing the continuous improvement of rule-of-law business environments.
References
[1] Sun Guoxiang. The Latest Development and Scholarly Clarification of Judicial Interpretations on Embezzlement and Bribery Crimes: A Study Based on Judicial Interpretation [J] No. 6 Issued in 2026. Criminal Justice Research, 2026 (5).
[2] Ye Liangfang. Legal Justification for "Same Crime, Same Penalty" Between Private and State-Owned Enterprises [N]. Shanghai Legal Daily, 2026-05-13.
[3] Han Yi. The Law Should Not Be Mocked: A Doctrinal Analysis and Scope of Application of the Judicial Interpretation on Corruption and Bribery (II). Journal of Criminal Law Studies, 2026 (4).
[4] Qiantang Ning. On the Boundaries of Judicial Interpretation: The Validity of "Referential Application" for Amount Thresholds in Non-Public Duty Crimes [J]. Commercial Law Review, 2026 (4).
[5] Jing Jian. Twenty Years of Great Changes: Evolution of Sentencing Standards for Non-State Functionaries' Crimes and New Defense Strategies [J]. Lawyer Practice Research, 2026 (5).
[6] Ma Yan, He Dongqing, et al. Understanding and Application of the "Interpretation (II) on Several Issues Concerning the Application of Law in Handling Criminal Cases of Embezzlement and Bribery" [Internal Judicial Guidance Materials], 2026.
[7] Cheng Daqun. Twenty Essential Legal Mindsets for Criminal Defense Lawyers: Reflections on Defense Transformation Under New Regulations for Corporate Duty Crimes [EB/OL]. Huilaw.com, 2026.
[8] Criminal Law Department, Zhejiang Qunheng Law Firm. 2026 White Paper on Risks of Occupational Crimes by Private Enterprises in Zhejiang [Internal Publication]
Inquiry: Cheng Daqun Criminal Law Team, Zhejiang Qunheng Law Firm
Specializing in criminal defense for misappropriation of funds, embezzlement, and commercial bribery by private enterprises in the Yangtze River Delta. Providing one-stop services for establishing pre-incident criminal compliance systems and conducting risk assessments.
