Boris Titov proposed to remove cartel agreements on commodity markets from the Criminal Code

Commissioner under the President of the Russian Federation for the Protection of the Rights of Entrepreneurs Boris Titov proposed to partially decriminalize Art. 178 of the Criminal Code of the Russian Federation (restriction of competition), removing from it cartel conspiracies in commodity markets. In his opinion, offenders who enter into such agreements should be punished not with criminal, but with economic sanctions.

“I would like to supplement the list with a topic that has not yet been touched upon. We propose to partially decriminalize Article 178 of the Criminal Code of the Russian Federation, namely, to separate cartels in commodity markets from bid rigging and to remove cartels in commodity markets from criminal liability, ”said Mr. Titov (quoted from RBC).

The Ombudsman said that cartels in commodity markets, unlike bid rigging, do not cause significant harm to the state, do not lead to the disruption of national projects, so the person who committed such an offense does not need to be isolated from society. Now violators who have entered into a cartel agreement face imprisonment of up to three years.

According to Mr. Titov, prices on commodity markets, with the exception of socially significant goods, are quite effectively regulated by the market itself, so criminal sanctions for this type of offense are excessive.

In addition, the Ombudsman believes, it is necessary to deal with the concept of income for the purposes of applying Art. 178 of the Criminal Code. “There is a practice in which the entire amount of the contract, that is, the proceeds from the sale of goods (works, services), is recognized as income. But at the same time, agreements are often concluded not by the manufacturer itself, but by its trading partner, dealer, distributor, whose income sometimes amounts to several percent of the contract value,” Mr. Titov noted.

The Ombudsman proposed to recognize as income in Art. 178 of the Criminal Code, excess income received by a person participating in the illegal actions provided for in this article, defined as the difference between the income that was received as a result of illegal actions and the income that would have been generated without taking into account the illegal actions provided for in this article. Relevant proposals were sent to the Supreme Court last year, Mr. Titov added.

March 9 Russian Union of Industrialists and Entrepreneurs (RSPP) introduced measures to reduce criminal and administrative pressure on business. The package was sent to the Ministry of Justice, the Prosecutor General’s Office, the Ministry of Internal Affairs, the State Duma and other business associations. The set of measures includes, in particular, the decriminalization of ten articles of the Criminal Code, including Art. 171 (illegal business, art. 193.1 (transfer of foreign currency or the currency of the Russian Federation to the accounts of non-residents under false documents), part 1 of article 251 (violation of emission rules), part 1 of article 159 (theft of another’s property by deception or breach of trust without causing significant damage), as well as Part 1 of Article 147 (illegal use of an invention, utility model).

The reduction of criminal pressure on business and the decriminalization of economic crimes were one of the points of the business support program after the start of the Russian military operation in Ukraine. February 21 Russian President Vladimir Putin offered to revise a number of norms of the Criminal Code of the Russian Federation on the economic components of crimes. He noted that the state should not allow permissiveness in this area, but “there is no need to go too far.”

Read more about the plans of the authorities to ease the criminal burden on business in the publication “Kommersant” “Preparing the economy for the release of steam”.

Erdni Kagaltynov