BGP Litigation attorney Georgy Baganov speaks with about the problem with economic amnesties against the background of the mooted amnesty in 2017 for businesspeople convicted of or under investigation for fraud

"In practice, amnesties are characterized by an unintentional weakening of initiatives as they go from top to bottom along the long, complex bureaucratic chain. There is an inertness, a bias amongst those responsible for enforcement — their "historical" tendency towards the presumption of guilt, argues BGP Litigation attorney Georgy Baganov.

"The problem with Article 159 of the Russian Criminal Code is a thorny one. The article, "Fraud", is problematic due to its "flexibility": the wording is so expansive that even defaulting on a debt or breaching a duty to perform can be made to fit under it, says the lawyer. 

He notes that this is particularly relevant for businesspeople, who work at the junction between criminal and civil law. For example, if one looks at state procurements involving construction, a bureaucrat who has to implement an annual budget might agree with a construction contractor in December that the entire cost of a project will be paid in advance, even though construction is not yet complete. For the regulatory authorities the situation is clear: the signs set out in Article 159 are there, and the bounds of authority have been overstepped (the money has been paid despite the fact that construction is still in progress). 

"We are gradually seeing more common sense in the practice of applying the law. But the percentage of acquittals remains very low. Courts render guilty verdicts to businesspeople as a result of bias and narrow-mindedness", says Baganov. 

To avoid the amnesty from being merely a declaration, officers must be held strictly to account in terms of both material and disciplinary liability, he adds. "Today such liability does exist in theory, in the form of recourse and payment by negligent law enforcement officials of the cost of exoneration, but it doesn't work", says Baganov. 

He sees the reason for the problem being laziness, the lack of a "green light" from above, and corporate solidarity. The limitation period tends to expire before a Supreme Court judgment of acquittal or appropriate ECHR decision can be obtained and the respective payments made", summarizes Baganov. 

The full article (in Russian) is available here: "Оковы тяжкие".