Bryan Cave Leighton Paisner (Russia) LLP (formerly Goltsblat BLP in Russia) advises that, on 24 June 2019, draft No. 737962-7 of the Federal Law “On amendments to article 210 of the Criminal Code of the Russian Federation (Creation of or participation in a criminal association (criminal organisation)” was submitted to the State Duma.
The idea behind the draft law is for art. 210 of the Russian Criminal Code not to extend to the crimes referred to in articles 159–159.6 (fraud), 160 (misappropriation or embezzlement), 165 (infliction of property damage through deception or abuse of trust), 185–185.6 (abusive practices in the issue of securities and evasion of securities disclosure), 193 (failure to repatriate foreign currency from abroad), 193.1 (transfer of foreign or Russian currency to non-residents’ accounts using forged documents), as well as in articles 171–183 and 194–201 of the Code.
The amendments are designed to foster a favourable business and investment climate, reduce business risks and put additional safeguards in place for businessmen against unfounded criminal prosecution. They would also curb the long-standing and widely used practice of bringing groundless charges against such individuals on the basis of the cited article.
Law enforcement authorities, quite often without reason, hold businessmen criminally liable for setting up a criminal association (criminal organisation) in addition to white collar crimes. This is usually an attempt to get around the express ban imposed by part 1.1, art. 108 of the Criminal Procedure Code and take into custody a founding member, CEO or any other individual with management authority in an organisation that only formally meets the criminal association criteria, as its internal structure includes independent units or departments.
When such criminal cases hit the courtroom, however, the usual outcome is for such individuals to be acquitted or the criminal charges against them dropped.
We hope that, if these amendments to art. 210 of the Russian Criminal Code go through, closing the legal loopholes, law enforcement authorities will have to go strictly by the law.
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