New amounts of damage for economic crimes agreed upon
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The State Duma and the White House agreed on the parameters for increasing the thresholds for large and especially large damages for a number of economic crimes – yesterday the relevant Duma committee recommended the corresponding parliamentary bill for the second reading, taking into account the government’s comments. The new version provides for a much less radical increase in the amount of damages for tax crimes than was originally proposed. In addition, during the second reading, the list of economic articles of the Criminal Code (CC) for which damage thresholds will be increased is significantly expanded.
The State Duma Committee on State Construction and Legislation yesterday recommended for second reading a package of amendments to the bill on increasing the thresholds for large and especially large damages for the classification of economic crimes. This project was developed by deputies from the New People faction last spring (see Kommersant, April 4, 2023). It proposed increasing the thresholds for seven economic articles of the Criminal Code of the Russian Federation and was approved in the first reading in May 2023. As the first deputy chairman of the committee, Irina Pankina, explained, the deputies “worked closely with the government for almost a year, waiting for amendments that would be officially supported by the Cabinet of Ministers and relevant departments.”
As a result of this work, the draft changed significantly for the second reading. In particular, the provisions on increasing the threshold for tax crimes have been revised. Initially, it was proposed to consider the amount of 35 million rubles as a large amount in case of evasion by organizations from paying taxes, fees and insurance payments (as well as in case of failure to fulfill the duties of a tax agent). within three years in a row (now it is 15 million rubles), and for especially large ones – 100 million rubles. (RUB 45 million). The government believed that such a significant increase in the threshold would remove a significant number of tax offenses from the scope of the Criminal Code. The new version of the document suggests not an increase in amounts, but their indexation – to 18.75 million and 65.25 million rubles. respectively.
At the same time, during the second reading the list of crimes for which the amounts of damage are increased will be significantly expanded—the bill has been supplemented with some of the long-standing proposals of the Ministry of Justice (see “Kommersant” dated August 4, 2022). Among them: increasing the thresholds for major damage when evading customs duties – from 2 million to 3 million rubles, and for especially large ones – from 6 million to 9 million rubles. (for individual goods, the list of which will be determined by the government, the thresholds will remain the same).
When carrying out currency transactions to transfer funds to the accounts of non-residents using forged documents, it is proposed to consider 13.5 million rubles as a large amount. (now – 9 million rubles) of illegal transfers during the year, especially large ones – 65 million rubles. (RUB 45 million).
The amount of damage for qualifying fraud is also being revised. In cases where we are talking about deliberate failure to fulfill contractual obligations in the field of entrepreneurial activity, if their parties are companies or individual entrepreneurs (parts 5–7 of Article 159 of the Criminal Code of the Russian Federation), significant damage increases from 10 thousand immediately to 250 thousand rubles. , large – from 3 million to 4.5 million rubles, especially large – from 12 million to 18 million rubles. Thresholds for crimes such as misuse of insider information, abuses in the issuance of securities, and raising funds from citizens in violation of the requirements of the legislation on shared-equity construction are also indexed.
In addition, it is proposed to decriminalize one of the signs of illegal business activity, which involves conducting activities without permission or a license (Article 171 of the Criminal Code of the Russian Federation), namely, the connection of these actions with the receipt of income on a large and especially large scale. The second sign of a crime remains if it caused major damage to citizens, organizations or the state.
President of the Russian Chamber of Commerce and Industry Sergei Katyrin notes that the amendments “were considered by the business community at the stage of their discussion in the government and were generally supported – the increase in large and special large damages is a reaction to economic changes that take into account inflation.” The head of the expert center on criminal legal policy and the execution of judicial acts of Business Russia, Ekaterina Avdeeva, believes that the revised version of the bill “is much more consistent with the criteria for balancing private and public interests.” In particular, she considers it advisable to abandon the multiple increase in thresholds for tax crimes – “excessively high thresholds could remove too many violations from the scope of criminal punishment and would create an incentive to continue to evade taxes.”
According to the president of Opora Rossii, Alexander Kalinin, “I would like the thresholds to be higher, but taking into account previously taken liberalization measures, in particular the transfer of a number of tax crimes from the category of serious to the category of crimes of medium gravity, as well as changes involving the closure of the case when paying taxes, that’s normal.” Roman Bilyk, senior lawyer at the tax law practice of Melling, Voitishkin and Partners, believes that increasing the thresholds for tax crimes only compensates for inflation, but does not fully meet the expectations of business, especially large companies, for which the current thresholds, given the significant size of their deductions, are insignificant.
How experts evaluate amendments to the Criminal Code
With the adoption of the amendments, notes Ekaterina Avdeeva, head of the Expert Center for Criminal Law Policy and the Execution of Judicial Acts of Business Russia, the gap between the threshold values for tax crimes will increase depending on the form of doing business. Currently, for individual entrepreneurs, major damage amounts to 2.7 million rubles, which is 5.5 times less than for companies, and with the adoption of the bill, the gap will become more than sixfold. “It is more correct to adjust all threshold values evenly for all compounds – it is necessary to bring the thresholds under Art. 198 of the Criminal Code of the Russian Federation (“Evasion of taxes and fees by an individual”),” she says.
In the updated version of the bill, Ekaterina Avdeeva notes, there are also proposals that seem redundant, for example, the exclusion from the criteria of criminality of illegal business activities of connections with the extraction of income on a large scale. “This crime poses a threat to a level playing field and does not contribute to the whitewashing of business,” she believes.
Law firm Rustam Kurmaev and Partners lawyer Telman Oganesyan recalls that in 2022 it was proposed to exclude illegal entrepreneurship as a whole from the Criminal Code of the Russian Federation, and those who operate without registration and license should be prosecuted under other offenses. According to him, this can minimize the risk of excessive criminal prosecution of entrepreneurs. At the same time, the lawyer also sees the risks of an overly broad interpretation of the concept of damage for the purposes of Art. 171 of the Criminal Code of the Russian Federation (“Illegal entrepreneurship”_ and its substitution of the concept of income.
Ekaterina Avdeeva considers the change in the thresholds for large and especially large damages in the article on fraud to be an unresolved issue – they are increased only for parts 5–7 of Art. 159 of the Criminal Code of the Russian Federation, while most often entrepreneurs are prosecuted under parts 1–4, for which the threshold values have not changed since 2003. Note that for these parts, significant damage ranges from 5 thousand rubles, large damage – from 250 thousand rubles, especially large damage – from 1 million rubles. The proposed increase in thresholds under this article may be a positive and logical initiative, but it is unlikely to change law enforcement practice – under parts 5–7 of Art. 159 of the Criminal Code of the Russian Federation, a little more than 100 cases are initiated per year (while under Parts 3–4 of Article 159, several thousand entrepreneurs are involved per year, from which it is impossible to single out those whose cases are classified as entrepreneurial due to the peculiarities of statistical accounting).
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