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The Ministry of Justice "devalued" economic crimes

The Ministry of Justice "devalued" economic crimes

Threshold values ​​of damage in the Criminal Code will be raised taking into account inflation
White House develops initiative removing part of the criminal risks from the business to reduce excessive pressure on it in the face of sanctions. On Thursday, the Ministry of Justice presented amendments to the criminal law on the complete decriminalization of certain elements of economic crimes.. Besides, taking into account inflation, the thresholds for determining the amount of damage to bring entrepreneurs to criminal liability are increased by one and a half times. Experts and business associations support the trend towards reducing the risks of criminal pressure on business, but consider the initiatives of the Ministry of Justice insufficient and insist on wider decriminalization.


The Ministry of Justice published on regulation.gov.ru a draft amendment to the criminal law, designed to improve the business climate in the face of sanctions and reduce the risks of unjustified prosecution of entrepreneurs. The agency proposes to abolish criminal punishment for doing business without registration (Art. 171 CC RF), for registration of knowingly illegal transactions with real estate (Art. 170 CC RF), for entering deliberately false information into the boundary or technical plan (Art. 170.2 CC RF), as well as for malicious evasion of disclosure of information about securities (Art. 185.1 CC RF).

The Ministry of Justice explains the decriminalization of these compounds by the fact, that no punishment in the form of imprisonment has been established for the commission of such acts or, in fact, it has not been imposed.

Reducing the risks of business prosecution is part of the plan to create “greater freedom to do business”, promised by the president at the first meeting with business after the start of the military operation in Ukraine. In March, a new stage of the capital amnesty was launched and the procedure for criminal prosecution of businesses for tax violations was complicated. Besides, the presidential administration initiated a collection of additional initiatives to reduce the pressure of the security forces on business.

Some of these proposals were also included in the project of the Ministry of Justice - we are talking about increasing the size of "significant", "large" and "especially large" damage or income received for the qualification of economic crimes. The Russian Union of Industrialists and Entrepreneurs proposed to increase the damage thresholds for such crimes by 50% — inflation since the last amendments to the code in 2016 amounted to almost 35%, but some experts insisted on a "dynamic" mechanism, able to adapt to market conditions without rigid fixation of thresholds. As a result, the project raises thresholds by one and a half times: for example, a particularly large amount of tax evasion by individuals will increase from 13,5 million to 20 mln rub. for three years, for companies with 45 million to 65 mln rub., failure to pay insurance premiums 9 million to 13 mln rub. for individuals and 30 million to 45 mln rub. for companies. In terms of currency violations, a particularly large amount will be deducted from the amount of uncredited or unreturned funds by more than 250 mln rub. against 150 mln rub. Thresholds will also rise for articles on fraud, circulation of goods without labeling and alcohol without a license.

The amendments of the Ministry of Justice did not cause much enthusiasm in the business and expert environment, because they only partially satisfy the request to reduce the risks of criminal prosecution.

"It is impossible not to support. But it's just not clear, why only these articles. In our opinion, decriminalization of minor crimes in the economic sphere should be much wider”,Boris Titov, Commissioner for the Protection of Entrepreneurs' Rights, commented on the amendments. The head of Opora Rossii Alexander Kalinin believes, that “the trend towards decriminalization is set, but the bill is not ambitious enough, taking into account presidential instructions. We hope, that it will be supplemented by the second reading". Among the necessary amendments, he calls decriminalization in the field of copyright and antitrust law., indexation of thresholds for bringing to responsibility for tax crimes (Art. 198 and st. 199 CC RF).

Ekaterina Avdeeva, Head of the Expert Center for Criminal Law Policy and Enforcement of Judicial Acts, agrees, that the measures represent the humanization of legislation, but reminds, that it must be balanced. “The procedure for dealing with criminal offenses and administrative violations has a number of serious differences. It will be necessary to pay attention to the responsibility of those persons, that create unfair competition for real business",the expert said.


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