Address to First Deputy Chairman of the Government Mr. I. Shuvalov
Group of experts addressed to the First Deputy Chairman of the Government of Russian Federation Mr. I. Shuvalov with the letter and analytical note on the draft law "On amendments to the Criminal code of Russian Federation and separate legislative acts of Russian Federation"
Incoming number at the office of Chairman of Governmebt of Russian Federation
#2-85341 from September 24, 2011.
The documents are passed to the administrative department.
To Mr. I.I. Shuvalov
First Deputy Chairman
of Government of Russian Federation
Dear Igor Ivanovich!
Against the background of some improvement of business’ conditions in the country nevertheless there is an existing practice to use the criminal law in cases of economic orientation, which is characterized by the following sustainable features: the number of pre-investigation checks, criminal cases and cases referred to the Court is dramatically different, more than 90% of criminal cases against businessmen initiated on the initiative of law enforcement agencies without the victims' statements, in the absence of actual damages. The practice emerged to use part of the corrupt criminal justice system as a tool for weaning or destruction of business. Over the past 10 years, more than 15% of companies registered in the country undergone criminal repression. There are more than 100,000 persons convicted of economic crimes now in prison, according to experts.
The existence of such a devastating for country's economy practice is based on the fact that existing criminal legislation includes such components of crime in economic sphere that are unknown to developed legal systems, and also sets as part of the objective side of the crimes the reception of income being equated to wrong-doing. Sanctions of economic articles of the Criminal Code in some cases exceed the penalties for violent crimes (including murder).
The recent changes to the Criminal Code, unfortunately, have not led to real changes in the criminal prosecution of businessmen. The existing order remains extremely aggressive for entrepreneurs. Not believing in the change of criminal policy, a significant number of entrepreneurs export their capital and emigrate. According to opinion polls 17% of businessmen either left the country or have already made the decision to leave, another 32% of businessmen are considering to do so. They call the lack of legal protection, fear of losing liberty and property as the main reason of emigration of businessmen.
The practice of legislative work in the area of criminal law has repeatedly demonstrated it’s not just inefficiency, but anti-efficiency. Projects are prepared with little or no participation of renowned independent experts, only by inertia of the repression apparatus, with the submission of conclusions from the Supreme Court, Ministry of Justice, Ministry of Interior, the General Prosecutor's Office, Investigative Committee, the Federal Bureau of Security, with extremely limited capacity of the State Duma to amend the draft laws. As the simplest example of such anti-efficiency one can lead article 193 of the Criminal Code - "Non-return of funds in foreign currency from abroad." There already several years when legislation on currency regulation and control allows Russian residents to open and use foreign currency accounts abroad, but Art. 193 of the Criminal Code of Russian Federation was never canceled, despite the numerous proposals for its abolition.
The existing system of legislative work in the area of criminal law rejects proposals coming not from the system. As a result, the formation of criminal policy became subject of uncontrolled activity of few officials, who orient on administrational interests and focus mainly on problems of legal technique, because their status does not imply political responsibility for the decisions made or not made. As a result of this state of the lawmaking process the criminal policy in economic sphere is formed, in fact, not from the top, in the state and the public interest, but the below - under the influence of administrative interests and in favor of the corrupt part of the criminal justice system, committed to the redistribution of property.
The existing mechanism of legislative work in the area of criminal law does not allow a real difference in the criminal policy in economy sphere. Current condition of the state’s criminal policy in respect of the business, according to experts, is one of the major obstacles to successful economic development. Efficient economy is not possible in a situation where the businessman’s fear of losing his freedom and property is many times more than all the other business risks.
Recent legislative proposals in the Criminal Code submitted by the President to the State Duma show the state’s unwillingness to actually change the criminal policy towards entrepreneurs. These proposals are mostly limited to the introduction of a system of sanctions, which extends the court ability to impose penalty not in the form of imprisonment. However, the acts that are not recognized as crimes in the developed legal orders are not de-criminalized, getting income continues to be equated with the damage and carries criminal responsibility. One of the proposed novels foresees exempts businessmen from penalty of imprisonment in the case of payment of cash compensation of five times of the amount of income received. That not only violates the principles of criminal law and the international agreements where Russia is a participant, but, in fact, is the legitimization of the nut from prison, available only to those able to pay from 7.5 to 30 million rubles. Such legislative proposals make a severe blow to the credibility of the criminal law in the country which is already critically low (analytical note attached).
If one cannot quickly and comprehensively change the criminal policy in the economic sphere, at least, it is necessary to send a clear political signal that business community, public and politicians, including a number of deputies of the State Duma, took the initiative to hold an amnesty that would include an amnesty of businessmen. Such an amnesty does not require additional budgetary spending and could be the first step to change the state of criminal policy in the economic sphere. However, this initiative meets systemic resistance from the beneficiaries of the current practice of businessmen’ criminal prosecution.
Those effective solutions that you, as a leader of the Government, have been implemented to resolve problems encountered in legislative work, including the preparation of amendments to the Civil Code are well known in the professional circles. Experts value highly the work of the expert groups in the "Strategy 2020", which, in our opinion, could be complemented by an expert group to develop a new model of criminal policy in the economic sphere.
Therefor we demand you to take practical steps to establish an effective mechanism of the criminal policy formation, which could give a significantly positive impact on the economic situation of the country and its investment climate, strengthening the national policy of modernization by the appropriate legal institutions. It appears that an important part of such a mechanism would be a government commission responsible for the solution of tasks, including preparing conclusions on the draft laws, and the purpose of which would be the development of a rational and effective criminal policy and strategic goal - the development and acceptance of the new Criminal Code.
Grigoryev Leonid Markovich, Professor of Higher school of economics, deputy general manager, academic supervisor Federal State Establishment "Russian Energy Agency", the chief expert of NGO «Centre for Legal and Economic Studies".
Zhuikov Victor Martenianovich, Vice-Chairman of the Supreme Court of Russian Federation, retired, chief expert of NGO «Centre for Legal and Economic Studies", Doctor of Law.
Morshchakova Tamara Georgievna, Deputy Chairman of the Constitutional Court of Russian Federation, retired, member of the Presidential Council for Civil Society Development and Human Rights, Doctor of Law, Professor.
Novikova Elena Vladimirovna, academic supervisor of NGO «Centre for Legal and Economic Studies", Doctor of Law.
Radchenko Vladimir Ivanovich, First Deputy Chairman of the Supreme Court of Russian Federation, retired, chief expert of NGO «Centre for Legal and Economic Studies", Candidate of Law.
Rahmilovich Andrey Victorovich, expert of NGO «Centre for Legal and Economic Studies", partner of law firm "Padva & Partners"
Reznick Henry Markowich, member of the Public Chamber of Russian Federation, President of Moscow Bar, Candidate of Law.
Subbotin Mikhail Alexandrovich, a senior research fellow of Institute of International Economics and International Relations of Russian Academy of Science.
Yasin Yevgeny Grigorievich, scientific supervisor of Higher School of Economics, President of the "Liberal Mission" foundation, Doctor of Economics.
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