Liability for currency and tax crimes has been mitigated

29/05/2020
Liability for currency and tax crimes has been mitigated

On April 12, 2020 the Federal Law No. 73-FZ of April 1, 2020, which amended the Criminal Code with regard to currency and tax crimes, came into force.

Changes –regarding the liability for violation of currency legislation.

The following amendments have been made to Article 193 of the RF Tax Code:

  • A person may be held criminally liable for the violation of the requirement to repatriate[1] if he/she has already been held administratively liable for the offense provided for by the clause 193 of the Tax Code of the RF. 5.2. art. 12.25 CAO RF (violation of the requirement on repatriation).
  • The amount of money recognized as large (from 9 to 100 million rubles) and especially large (from 45 to 150 million rubles) for the size of the committed crime was changed. If the crime was committed in large size criminal proceedings may be applied against the person. If threshold is not exceeded the offence is not considered as crime.

Commentary

These changes in Article 193 of the Criminal Code of the Russian Federation are aimed at the decriminalization of those situations when the delay connected with nonrepatriation occurs not due to the fault of the Russian participants of the transaction, as well as when the offence concerns insignificant amounts. Now in case of such offence there is no risk of criminal liability for responsible officers of the company.

Changes in relation to liability for non-payment of taxes

The notes to Articles 198 to 199.1, 199.3 and 199.4 of the RF Criminal Code were clarified:

  • The definition of large and especially large amounts of unpaid taxes and other mandatory payments is now made in fixed amounts. I taxes unpaid in large and especially large amounts criminal proceedings may be applied against the responsible officer. If threshold is not exceeded the offence is not considered as crime. – A large amount of taxes, fees,  and social contributions are now considered to be the amount of taxes, fees, and social contributions exceeding the amount of fifteen million rubles for a period of three consecutive financial years, and a particularly large amount – the amount exceeding forty-five million rubles for a period of three consecutive financial years.

Commentary

Previously the amount of arrears which allowed the act to be considered as a crime was calculated as a share of the total amount of taxes to be paid by the organization. In the new version, the lower limit of large and especially large size is set only in the form of fixed amounts, which have not changed.

Amendment of Article 210 of the Criminal Code of the Russian Federation (organization of criminal association (participation in it).

Before the amendments were introduced, the actions of the management and employees of organizations could formally be considered as the actions of a criminal association in case of economic crimes committed by one of the employees of the organization.

Now in the note to the article 210 of the Criminal Code of the Russian Federation, there is added a provision according to which founders, participants, heads, members of governing bodies, and employees of an organization are not criminally liable for creation of a criminal association only due to the organizational and staff structure of the organization and in connection with its economic activity.

A Federal law No. 73 also provides for an exception: if an organization was knowingly established to commit grave or particularly grave crimes, additional qualification under article 210 of the Criminal Code is possible.

Commentary

In general, this development should be viewed positively as aimed at decriminalizing acts in the economic sphere. However, much will depend on how it is perceived in practice.

[1] Requirement to repatriate stipulates abidance of the three following requierments:
1) requirement about revenue receiving on the bank accounts in authorized bank.
2) requirement about obligatory return of advance payments if the counter party did not execute his obligations under contrackt regarding delivery of goods, work performance, services rendering.
3) requirement about return of amounts of loans given to non-residents.

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