10 sentences on restriction of competition issued in Russia since 2020

Article 178 of the Criminal Code of the Russian Federation on restriction of competition ceases to be a “dead norm” in Russia, Artem Chekotkov, partner of the ICA Knyazev and Partners, believes. On the conferences “Kommersant” “Criminal and subsidiary liability of owners and management: results of the year 2022” he said that in 2015-2019 not a single sentence was passed under this article. Since 2020, ten sentences have already been handed down, one of them is acquittal.

“Practice on the 178th is poor. 10 sentences have been handed down in Russia so far. One is justifiable. … The very fact of the contradiction between these positions, the presence of a sufficiently justified and correct pro-defence position leads to the fact that in 2020, 2021, the first half of 2022, 11 people were convicted, 10 sentences were handed down. Until that time, since 2015, there were no decisions at all,” said Mr. Chekotkov.

“No matter how difficult it is to qualify actions on the 178th, from the point of view of an entrepreneur, in my opinion, it is better to remain within the framework of this charge than within the framework of a fraud charge, because there is more room for maneuver, there are opportunities for protection,” added the lawyer.

The expert noted that law enforcement agencies are much more likely to refer to 159 Art. of the Criminal Code of the Russian Federation on fraud, since in this case they do not need to prove the complex elements established in the charge of restricting competition. In addition, Article 178 provides for “entrepreneurial benefits”, unlike Article 159, as well as less severe punishment.

As an example, Mr. Chekotkov cited accusations in relation to Alexander Vakulin, which in the media was called the case of the largest bribe in the Ministry of Defense. According to him, the FAS often transfers materials to law enforcement agencies in order to initiate proceedings under Art. 178. of the Criminal Code of the Russian Federation, but “they gradually develop into the 159th, or into malfeasance.” In the case of Alexander Vakulin, a cartel was initially identified.

Leonid Uvarchev