Changes in the legislation concerning criminal liability of entrepreneurs

The Federal Law of 19.12.2016 №436-FL «On Amendment to Article 299 of the Criminal Code of the Russian Federation and Article 151 of the Criminal Procedure Code of the Russian Federation» was signed by the President of Russia.

The Law hardened liability of law enforcement authorities for groundless pursuit of entrepreneurs and compulsion to cease activities. According to the new edition of Article 299 of the Criminal Code of the RF functionaries in the law enforcement authorities can be subjected to criminal prosecution for illegal initiation of criminal cases that are related to their self-interest in termination of business activities of an entrepreneur. Such violation is punishable for functionaries by imprisonment from 5 to 10 years.

Criminal prosecution of known to be innocent is now punishable by imprisonment for up to 7 years. The same violation related to accusation of commission of serious and particularly serious crimes or causing large-scale damage or heavy consequences, - is punishable by imprisonment from 5 to 10 years.

Besides, damage is considered large-scale when it exceeds 1,5 mln RUB.

It is worth mentioning that the Plenum of the Supreme Court of Russia has earlier adopted a regulation protecting entrepreneurs from groundless pursuit.

In the Criminal Procedure Code of the RF there are provisions prohibiting arrest during investigation of entrepreneurs accused in economic crimes. This refers to articles of fraud, assumption or waste of monetary funds, infliction of damage by abuse of trust. Besides, arrest cannot be applied to entrepreneurs accused in illegal business and banking activities; legalization of monetary funds gained by illegal means; limitation of competition. The law enforcement practice showed that above mentioned provisions need to be clarified.

Decision of the Supreme Court explains that it is forbidden to arrest entrepreneurs, previously convicted for non-economic crimes, if an economic crime was committed for the first time.

The Supreme Court prohibited to initiate criminal cases against entrepreneurs under the article «Fraud» without complainant claim.

According to experts, all of the above mentioned changes will contribute to humanization of criminal legislation concerning entrepreneurs and help to provide a background for release of pressure on business and improvement of business climate in general.

Measures on legislation improvement, taken in recent years, deliver positive results in decrease in amount of groundlessly convicted citizens. Data from the General Prosecutor`s Office of the RF approve this. (Picture 1).