The authorities are ready to raise the damage threshold for economic crimes

A draft law has been submitted to the State Duma, which proposes to significantly increase the amount of large and especially large damage caused by economic crimes: this will make it possible to bring entrepreneurs and other entrepreneurs to criminal liability less often, and more mildly punish those already found guilty, the authors believe. The government generally supported the initiative, as did the Supreme Court. In “Business Russia” they believe that the systemic problems of law enforcement practice proposed by the deputies do not completely solve the variant.

A lot depends on what kind of material damage caused by this or that economic crime. If we are talking about non-payment of taxes, say, large damage is the basis for initiating a criminal case: everything that falls short of this bar is punished administratively. In addition, the severity of the punishment depends on the magnitude of the damage. The authors of the introduced bill, a group of deputies from the New People faction, led by its leader Alexei Nechaev, propose to increase the amount of damage or income received as a result of the crime.

In recent years, inflation has significantly depreciated the amounts now recorded in the Criminal Code, the explanatory note says, and the indexation of damage and the amount of criminal proceeds for some “economic” items was last carried out in 2011, for others – in 2015, for others – in 2016…

As a result, “the degree of public danger of a crime committed in the amount of 1 million rubles in 2022 significantly decreased compared to the same crime committed in 2011, and the punishment remained the same”, which violates the constitutional principle of fairness and proportionality of punishment to the degree of public danger, deputies say.

“Recent years have become a serious test of resilience” for businesses, they remind: “in addition to accumulated and unresolved systemic problems, entrepreneurs have faced the most difficult consequences of the widespread introduction of restrictive measures during the spread of a new coronavirus infection, as well as the introduction of unprecedented external economic sanctions.”

The essence of the proposals is as follows: taking into account the accumulated since the last indexation, to increase the amount of large and especially large damages in the chapter of the Criminal Code “Crimes in the sphere of economic activity”. Raise the bar common to many articles in this section by about a third: from the current 2.250 million of major damage to 3.5 million rubles, and from 9 million rubles of especially large damage to 13.5 million rubles. True, this general bar does not apply to more than 20 articles of the Criminal Code – they have their own thresholds, but the deputies propose to separately raise them for some reason only for six compositions.

For example, article 198 of the Criminal Code punishes individuals who evade paying taxes, fees, or insurance premiums: it is precisely under it that ordinary citizens are also held liable, who must submit a declaration, but did not submit it, or filled it out with deliberate errors, and as a result did not paid extra to the treasury for the last three financial years, and individual entrepreneurs. A large-scale crime here now is a debt of 2.7 million rubles for three financial years, and a crime on an especially large scale is a debt of 13.5 million rubles for three financial years – and for some reason the authors of the bill do not raise this threshold want…

Bills on amendments to the Criminal Code cannot be submitted to the State Duma without official feedback from the government and the Supreme Court. The Supreme Court in its letter was brief: “there are no comments or suggestions to the draft federal law.”

The government supported the initiative “subject to revision, taking into account the comments submitted.” A more than two-fold increase in the amount of damage under four articles of the Criminal Code, the recall says, “will remove a significant number of tax offenses from the scope of the criminal law, which requires appropriate justification.” Moreover, for two of these four articles, the damage thresholds were revised in 2016 (meaning Articles 199 and 199.1, on tax and duty evasion by an organization and failure to fulfill the duties of a tax agent): a large amount in them is now set at 15 million rubles, an especially large – 45 million rubles, the deputies want to raise the bar to 35 million rubles and 100 million rubles, respectively. And articles 199.3 and 199.4 (they punish for non-payment of large and especially large insurance premiums to off-budget funds) generally appeared in the Criminal Code only in 2017, “and there were no convicted persons under them, which is due, in particular, to high thresholds” the government believes.

And the review also says that in March 2022, a law was adopted that recognized as the reason for initiating a criminal case on tax crimes exclusively and only materials sent by the tax authorities, “which will significantly reduce the number of criminal cases initiated on tax crimes.” (How much to cut is not yet known.)

It is curious that the bill, judging by the explanatory note and the package of documents, was prepared in the New People faction in the spring of 2022. The Supreme Court sent its opinion in June 2022. And their own government – only on March 23, 2023. Meanwhile, last year, following the results of the St. Petersburg Economic Forum, President Putin instructed the government and the Supreme Court to “consider issues” by October 1, 2022 on increasing the thresholds for significant, large and especially large amounts of damage caused by economic crimes, including tax crimes. In August last year, I remember, the Ministry of Justice published a draft law, which provided for the indexation of the amount of significant, large and especially large damage in some economic articles of the Criminal Code by 35%. Where is this bill now? Not known. It is only known that he did not reach the Duma.

So, “New people” offer their own solution to the problem. How effective? Member of the General Council of Delovaya Rossiya, head of the Expert Center for Criminal Law Policy and Enforcement of Judicial Acts, Ekaterina Avdeeva believes that changing the parameters for determining large and special large damage is “one of the ways of decriminalization, which correlates with economic realities and inflation rates”, and therefore the initiative can be assessed “positively”. But, Ms. Avdeeva draws attention, the text of the bill “has not fully approached the solution of systemic problems of law enforcement practice.” In particular, the deputies do not mention the “rubber” article 159 of the Criminal Code of the Russian Federation (“Fraud”), and this is now a very important problem for business (the lion’s share of criminal cases against entrepreneurs are initiated on it), and here, according to her, just a “thoughtful review of the thresholds” is required.

In addition, Ms. Avdeeva recalls, from the point of view of “public danger and the preventive function of criminal law”, the proposal to increase the amount threshold for tax crimes for business by more than 2.3 times (Article 199 of the Criminal Code) does not look very logical, although it is tax crimes cause extreme damage to the interests of both the state and society. “The Criminal Code should be changed consistently, logically, taking into account related structures”, in a complex way, according to “Business Russia” …

The relevant Duma Committee on State Construction and Legislation has not yet studied the initiative in detail. The first deputy head of the committee, Irina Pankina (ER), told MK that “ideologically, the authors’ proposals fit into the general concept of humanizing the “economic” articles of the Criminal Code and mitigating liability for crimes in the field of economic activity.”

Since the threshold in economic cases is the starting point for initiating a criminal case, an increase in this amount is a kind of mitigation, she explained. “The need to reduce the criminal-legal burden on domestic business has been repeatedly emphasized by our president, in particular, in his recent address to the Federal Assembly,” Ms. Pankina said, recalling that the State Duma has already adopted or is considering several bills during this session, aimed at achieving this goal.