The Economic Amnesty Will Make a Difference for Ten Thousand People, At Best

Last week, Boris Titov, the ombudsmen for the protection of business people's rights, submitted to the State Duma his initiative to free more than 111,000 entrepreneurs convicted of economic crimes. He suggested that the implementation of the initiative should coincide with Entrepreneur's Day on 26 May.



If such an amnesty indeed takes place, this will be an important step forward on the way towards society's humanization. In this connection it must be noted that, in spite of the loud political cases that have caused public outrage, the overall number of people serving prison sentences or kept in places of preliminary detention has noticeably shrunk in recent years - by approximately 100 thousand, from more than 900 thousand to slightly above 800 thousand.


The essence of the problem is, however, that in existing legislation there is no special 'entrepreneurial' article. Most often, this is understood to be Article 159 'Fraud' of the RF Criminal Code, although fraud per se is also a real, very widespread crime that may have little to do with the so-called 'economic charges'.

So, how can a fraud - that is, an act deliberately committed with the intention to inflict damage for personal gain, - be actually distinguished from a plain miscalculation in the course of commercial operations (when somebody, say, got a loan for a commercial enterprise, spent it, and sustained a loss? This is by no means an easy question.


Thus, for example, in the framework of prevailing judicial practice fraud is usually interpreted as an act that has been committed repeatedly - that is, the 'fraud' article is not applied when somebody fails to repay a loan only once; but if such a failure has occurred three times, then a criminal case under this article can be opened. To a lesser degree, the same is true with regard to Article 160 ' Embezzlement or Peculation, and also Articles 198 ('Evasion of the Payment of Taxes and/or Duties by an Individual') and 199 ('Evasion of the Payment of Taxes and/or Duties by an Organization') of the RF Criminal Code.


Over recent years, legislation covering these issues has been somewhat softened. Thus, in particular, the fraud charges can now be brought against a person only if the victim has submitted a special application to this effect; and the punishment for a failure to pay taxes can be avoided if the relevant amount of the arrears claimed by tax authorities has been duly paid. A widespread form of repression against entrepreneurs allowed by Russian criminal law and courts of justice (which may also be applied against any citizen in general) is the conviction of one person on the basis of unsubstantiated claims made by another person. Very often, this is also common practice with regard to charges of major crimes such as murder, robbery, abduction, and so on.


Judging by the declarations made by officials, the authorities are not going to implement the initial idea of freeing more than 100,000 convicts (put forth by Boris Titov's Expert Council). It seems that the amnesty at best will cover 10,000 cases. And it is unlikely that all of them can unquestionably be placed in the category of entrepreneurs. Most often, an amnesty is applied on the basis of abstractly humanitarian principles - that is, to war and combat action veterans; expectant mothers and/or mothers of minor children; women over 50 years of age and men over 55 years of age; persons convicted for the first time and for a short term in prison (under 3 years); those who have already served more than half of their prison term, etc. If this is going to be the case, amnesty will not cover the most notorious cases of entrepreneur imprisonment because, under Russia's criminal law, they are serving huge prison terms (for example, under Articles 159 and 160 - up to 10 years of deprivation of freedom), while a murderer convicted under Article 109 of the RF Criminal Code ('Manslaughter') may altogether not be deprived of freedom, and his or her punishment may actually be reduced to 'community service'.


It would have been more correct to replace deprivation of freedom as a form of sanction for 'economic crimes' with fines and community services (in absence of property to be confiscated in lieu of payment for damages), and simultaneously to toughen and make more uniform the punishments for violent crimes. In fact, the existing huge disproportion between the forms of punishment imposed on entrepreneurs and the mass-scale 'mercy' towards murderers (like in the scandalous Rasul Mirzaev case) creates fertile grounds for corruption and is detrimental for Russia's business climate (while Russia is one order ahead of the European countries in terms of the number of murders per capita). Besides, it is necessary to eliminate, in principle, the possibility of bringing a citizen to criminal responsibility on the basis of another person's verbal statements alone, in the absence of any evidence.


S. V. Zhavoronkov - Candidate of Economic Sciences, Senior Researcher of the Center for Political Economy and Regional Development