Translated material
Buy yourself freedom
Dmitry Medvedev approved a ban on arrests for certain economic crimes
Russian President Dmitry Medvedey yesterday signed a law on strengthening criminal legal protection of relations in the field of economic activity. In accordance with this law, law enforcement agencies will not be able to use arrests at the stage of investigation of a wide range of offenses in the economic sphere, and entrepreneurs suspected of them will have the opportunity to use not only money, but also real estate, shares and bills as collateral. Experts welcome the emergence of the law, but fear that its effect will be significantly offset by law enforcement practice.The head of state himself was the initiator of the amendments he signed yesterday to the Criminal Code, Criminal Procedure Code and a number of other laws. This bill of his was distinguished by its unique speed of passage through the legislative body: on March 1, 2010, it was submitted to the State Duma, on March 26, after returning to the second reading twice, it was finally adopted by it and approved by the Federation Council on March 31.
The new law for most articles of the Criminal Code (CC) has increased the level of classifying economic offenses as large and especially large, which, in fact, make it possible to bring entrepreneurs to criminal liability. At the same time, possible terms of imprisonment have been reduced by about a third.
Amendments to the Criminal Procedure Code (CPC) significantly expand the direct ban on the use of arrest as a preventive measure (Law No. 383-FZ), which appeared only in December last year. Now it is impossible to arrest suspects not only in tax fraud, but also in most other economic crimes - fraud, misappropriation and embezzlement, deception and breach of trust, illegal entrepreneurship, laundering of criminally obtained funds and property, violation of loan agreements, in restricting competition, in illegal use of a trademark, in obtaining and disclosing trade secrets, in abuse in the circulation of securities and in bankruptcy, in failure to return exported artistic values and financial assets to Russia, in violations in the circulation of precious metals and stones, in evading payment of customs duties.
Completely excluded from the Criminal Code, Art. 173 (false entrepreneurship), according to which they were held accountable for creating commercial structures solely for the purpose of obtaining loans or in order to avoid taxation. “Violation of licensing requirements and conditions” ceases to be a criminal offense under articles on illegal entrepreneurship and illegal banking activities.
Instead of arrests, it is planned to use bail instruments more widely. Moreover, the collateral at the stage of investigation and judicial proceedings can be not only cash, but also movable and immovable property, publicly traded shares and bonds. It has been established that the amount of the deposit cannot be less than 100 thousand rubles. for cases of minor and medium gravity and less than 500 thousand rubles. for serious and especially serious crimes. At the same time, those suspected of committing criminal offenses will not be able to leave the Russian Federation until a decision is made on the case and the court verdict comes into force.
Simultaneously with the liberalization of legislation regarding economic crimes, steps have been taken to tighten the responsibility of officials for creating unlawful administrative barriers to law-abiding business. From 200 thousand to 500 thousand rubles. fines have been increased for officials who, when registering companies and issuing licenses to them, interfere with the legitimate work of entrepreneurs by their actions. If court decisions are ignored or major damage is caused to the business, then the official faces up to three years in prison (until now it was up to two years). True, at the same time, the bar for major damage was raised from 250 thousand to 1.5 million rubles, and for especially large damage - from 1 million to 6 million rubles.
“These amendments are necessary so that those who impede the conduct of business activities remember that such an article exists,” says Anna Kulakova, head of the arbitration practice sector of the company MKPTSN. “After all, the article, in essence, was not working.”
At the same time, the expert fears that tougher penalties for creating unjustified administrative barriers will be used by officials of the Federal Tax Service to justify the free registration of shell companies. “Representatives of tax authorities in the courts state that they are not authorized to examine the authenticity of signatures on documents submitted for state registration and are not responsible for their content,” Ms. Kulakova points out and concludes: “The amendments are unlikely to help law-abiding taxpayers to get rid of unscrupulous contractors.”
In general, while positively assessing the amendments to criminal legislation concerning economic crimes initiated by President Dmitry Medvedev, lawyers interviewed by Vremya Novostey fear that everything planned could be broken by law enforcement practice. “As you know, in Russia the severity of laws is tempered by their non-compliance. I think that in this case we will have the opposite situation, when the softness of the law will be compensated for by non-enforcement,” suggests Oleg Kupalov, director of the Center for International Taxation of the AKG “Development of Business Systems”. “After all, the possibility of choosing a preventive measure in the form of bail, rather than detention, depends on the judge.” Therefore, the solution to the problem of humanizing punishments for economic crimes, according to Mr. Kupalov, “lies on a slightly different plane - in reforming both the judicial system and, above all, law enforcement agencies.”
The director of the Moscow office of Tax Consulting UK, Eduard Savulyak, considers rough edges in the application of new norms of criminal legislation to be almost inevitable. The most striking evidence of problems with the application of relatively liberal legislation in the economic sphere, according to the lawyer, is the position of the Prosecutor General's Office. She believes that the direct ban on initiating criminal cases for tax crimes without a preliminary decision from the tax authorities, introduced in December 2009 into the Law “On the Police,” does not apply to the police, who are given the appropriate powers by the Law “On Operational-Investigative Activities.” “In other words, the chances of a “nightmare” for the business remain in full force,” states Mr. Savulyak. Therefore, to improve our law enforcement practice, the expert considers it necessary “for all interested departments to understand all laws in the same way.”