Abstract: “Conviction but exemption from punishment” means that the perpetrator is only declared guilty, but not punished. The application of the conviction and exemption mechanism in our country needs to meet the conditions of “the circumstances of a person’s crime are minor and do not require sentencing for punishment”, that is, the social dangerousness and the personal dangerousness are equally important. However, the limitation of the double conditions and the fuzziness of the substantive standards lead to the chaotic reality of different standards for identifying the circumstances of serious harm caused by the criminal acts and different judgment results in practice. There is a relatively mature practice in the legislation and judicature of foreign countries to regard the circumstances that a wrongdoer faces serious harm that results from her wrongdoing (natural punishment) as the cause of punishment forgiveness. It has the legitimate basis of criminal policy and penalty theory to incorporate it into the mechanism of conviction but exemption from punishment. The localization of this system must be constructed from both substantiality and procedure dimension. Not only to limit the serious consequences of natural punishment in substance, and restrict its specific application through the double standard setting of punishment and limit in the entity method, but also to clarify the independent value of the discretionary non-prosecution based on the exemption from natural punishment and standardize the application conditions of discretionary non-prosecution with the public interest,so as to highlight the value of procedural decriminalization.