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Statements made by Alexey Dobrynin to the article ‘Beggary Instead of Prison.’ Profile, 3 December 2018

The state extends the list of articles of the Criminal Code under which it is not necessary to go to not-so-distant lands.

The president introduced a bill to the State Duma providing for a number of business concessions. It is proposed to amend the Criminal and Criminal Procedure Codes of the Russian Federation. Thus, the list of crimes is extended, which may be terminated in case of compensation for damage – to a citizen, company or state. Basically it will include minor crooks and embezzlers who have committed their first crime. Perpetrators of nonpayment of salaries, pensions or scholarships will also be able to pay off the victims. In addition, it will be prohibited to withdraw hard drives and documents from entrepreneurs without good reason.

In the business environment, the innovations are warmly welcomed anticipating amnesty, while experts speak of the inevitability of punishment and the need to strengthen the law with actually working enforcement mechanisms.

Discount for swindlers

The main innovation is that there will be more crimes, criminal cases for which can be discontinued if the damage caused is compensated. Currently, this is allowed, for a narrow segment of crimes though: doing business without registration, illegal transactions with precious metals, and market manipulation. Now this list will include minor crimes of credit fraud in the field of credit, upon receipt of payments or using electronic means of payment, as well as fraud in insurance, computer information, or involving deliberate failure to fulfill contractual obligations in business. You can also get away with paying damages for plagiarism, violation of inventive and patent rights, misappropriation or embezzlement of money, while causing damage by fraud or breach of trust. In addition, perpetrators of non-payment of salaries, pensions or scholarships will be exempted from criminal liability if they committed such a crime for the first time and fully repaid the debt and paid compensation to the victim.

Hypoexcitability

In addition, the president proposed to extend the list of crimes of the so-called private-public prosecution. These are those, with criminal case initiated only upon the application of the victim, but cannot be terminated after reconciliation of the parties or refusal of the application.

This category will include cases of crimes that affect only the interests of the victims, without causing harm to anyone else or the state in parallel. These are illegal obtaining of a loan and evasion from its repayment, evasion from disclosing information about securities, illegal use of means of individualization of goods, works and services, as well as abuse of authority in a commercial organization. Entrepreneurs suspected or accused of abuse of authority will also be not detained any longer – the bill establishes a direct ban for this.

In the opinion of Alexander Kalinin, the head of the Opora Rossii, this is an extremely important position, since it will reduce the risk of designer cases. ‘If earlier, in the event of a dispute between business entities, the case was initiated by the police without a statement from the injured party, now it will be prohibited. But it will still be necessary to close such cases, however taking into account the prosecutor office’s opinion, which means that it will not be possible to put pressure on the injured party,’ Kalinin stressed.

The expansion of the institute for the termination of criminal prosecution fits into a common criminal policy, says Yevgeny Rubinstein, an adviser to the Federal Bar Association. This institution is quite conservative, with the grounds formed in the Soviet era. At first, they were caused either by the impossibility of bringing the person to responsibility (the absence of corpus delicti in his actions, the absence of a crime event, etc.) or by post-criminal behavior of the person, such as, for example, active repentance.

To live easily

At the same time, the ban is lifted on imprisonment of suspects and accused of illegal organization and conduct of gambling. This is due to taking measures aimed at toughening the responsibility for the organization of gambling, says Alexey Dobrynin, the head of the criminal law practice of the Pen & Paper Attorneys-at-Law.

In July 2018, the article for organizing and conducting gambling in betting offices and betting shops outside the gambling zone without a license, as well as for systematically providing premises for the illegal organization and conduct of gambling was amended and criminalized. Apparently, the legislator decided to eliminate procedural restrictions on the use of preventive measures in the form of detention as part of strengthening control over organizers of gambling.

No information – no business

Another innovation deals with the prohibition within the investigation of unreasonable use of measures that could lead to the suspension of the legitimate activities of a company or an entrepreneur. Among other things, we are talking about seizure of electronic media.

However, exceptions are being established in parallel which allow the seizure. These are cases where such a medium is subject to forensic examination or a court decision, or if information belonging to another owner is stored on the hard disk, or it might be used to commit new crimes, or the copying may result in loss or alteration of data. The last point should be verified by an expert.

At the same time, a new procedure for the withdrawal of electronic media is being established. This can be done only with the participation of an expert. At the request, such an expert in the presence of attesting witnesses can copy information from the seized media for the legal owner. A copying is incorporated in the record. Also, the investigator can copy the data, and then the entire procedure should be detailed in the record, with the copies attached.

‘In the modern world, information is everything,’ says Alexey Mishin, the head of the Business Legal Support Center for the Moscow branch of Delovaya Rossia. – No information – no people, no business. And in situations where a person is merely suspected of having committed a crime, deprivation of the main tool can be identified with a death sentence by default.’ Clearly prescribed regulations for the investigating authorities are a guarantee of protection against possible illegal actions, he said.

We can say that the legislator has tightened the procedure for seizing electronic media during criminal proceedings, says Alexey Dobrynin. This is primarily due to the abuses committed by the investigative authorities in the seizure of relevant information, taking everything away indiscriminately. But despite legislative barriers, there is still room for abuse.

Business anticipates amnesty

The package of amendments will alter the approach to the administration of criminal legislation, which now seeks to the principle that sound like that: ‘Economic crime must entail economic punishment,’ stressed the public ombudsman for the protection of the rights of entrepreneurs from criminal prosecution, co-chairman of ‘Business Russia’ Andrey Nazarov. The degree of their public danger is incomparable with robbery or murder, therefore, it is more rational to impose a fine.

‘Permissibly, we will be able at last to reduce the number of criminal cases against entrepreneurs and ease the pressure on business. Now, about 240 thousand criminal cases are initiated on economic structures, 80% of them are fraud cases. Given that according to statistics, after a criminal case was initiated, 80% of entrepreneurs, completely or partially lose their business, the amendments will allow to leave a significant part of companies in business circulation,’ he explained.

Alexander Kalinin also called the bill very useful and long-awaited for small and medium businesses. He cited statistics showing that over the past four years, the increase in the number of convicts under economic articles has reached 66%. At the same time, more than 70% of cases are ‘derailed’ during the investigation, and only every fifth case reaches the verdict. The Criminal Code of the Russian Federation and the Criminal Procedure Code of the Russian Federation are the documents not to be altered very often, Kalinin noted.

The situation when lawmakers need to revise the ‘economic articles’ of the Criminal Code and the Criminal Procedure Code in terms of mitigating punishment is really overdue, says Alexey Mishin. These issues were repeatedly raised by the business community both for their personal safety and, indirectly, for the protection of their business activities. In his opinion, the amendments will carry a number of positive consequences, starting with an amnesty for a huge number of people convicted of economic crimes.

Inevitability of punishment is questionable

The proposed measures will probably have a positive impact on the integrity of carrying on business, Mishin believes. For example, at the stage of initiating criminal cases where the victims or applicants have their ‘economic interest’ and act, to put it mildly, in illegal ways, e. g. raiding, eliminating a competitor, etc.

In a situation where there is a crime in the actions of the offender, the ‘talion law’ is not entirely appropriate, since the sense of inevitability of punishment is lost. As a rule, a category of serious crimes is meant, and the decision on the choice of a measure of responsibility should be delegated to the court, the expert is convinced. ‘Even if the court selects a measure of responsibility in the form of reparation of damages, civil law restrictions related to criminal record, effective both prior to the cancellation, and for life, should be preserved, for example, the ability to hold certain positions in state institutions and be elected to state governing bodies,’ he explained.

The inevitability of punishment is a theoretical criminological principle developed within the framework of the concept of ‘combating crime’, and not a legislative goal, says Yevgeny Rubinstein. Today’s criminologists recognize that it is impossible to achieve the implementation of the principle of inevitability of punishment, just as it is impossible to ‘defeat’ crime. Therefore, the goal of controlling crime and preventing its growth has appeared. In turn, the purpose of punishment is private and general prevention of the commission of a crime by the convicted person and other persons in the future. In his opinion, in criminal proceedings, the protection of the rights and interests of victims is a task equivalent to protecting a person against unlawful or unjustified accusation.

Fighting bias

The initiative will positively affect the development of business and attracting investors only if a mechanism is specified that does not allow the law to be used as the investigator wishes, emphasizes the senior partner of the Margas law firm, Ekaterina Avdeeva.

The absence of a clear regulation will be a provocation for using this opportunity in the mercenary interests of decision makers. This happens now when applying Article 25 of the Criminal Procedure Code of the Russian Federation, when the termination of a case upon reconciliation with the victim is a right, and not the responsibility of the investigator.

‘The accusatory bias, which now prevails in the investigation of almost any wrongful act, must be eradicated. For example, there are often disputes in the arbitration proceeding in the cases of tax evasion, the amount of arrears disputed, and the same situation is also with fraud cases. But at the same time, a criminal case has already been initiated. Therefore, first of all, it is necessary to develop a competition mechanism in determining the final amount, which will become an alternative to criminal punishment,’ she said.

In addition, in the real world, attorneys regularly encounter violations during the perquisition, for example, the refusal to involve independent witnesses, wait for a lawyer, or the timing of the ruling on attaching the seized material as material evidence – sometimes seized documents and digital media may have an indefinite status for more than a year, but the investigator does not return them to their rightful owners. All this negates the guarantees secured in legislation, stresses Avdeeva. A similar situation occurs with the prohibition to detain an entrepreneur suspected or accused of fraud. The investigator can easily circumvent it, using seizure as one of the main methods of pressure.

Legislative initiative should be supplemented by procedural regulations that will help in law enforcement, the lawyer believes.

Aleksey Dobrynin, partner, head of the attorneys at law Pen & Paper criminal-legal practice