“Repressive” Administrative Code
New edition of the Code of administrative offenses, submitted to the state Duma in the end of last year, scared the business. It was opposed by representing the interests of big business, the Russian Union of Industrialists and entrepreneurs (RSPP), the organization for the protection of small business “Support of Russia” and the Federal business Ombudsman Boris Titov.
The document is punitive in nature, it may worsen the business climate and the legal situation of entrepreneurs, the bill does not fully meet the orders of President Vladimir Putin about reduction of administrative burden on business, writes President of the RUIE Alexander Shokhin the head of the profile Committee of the state Duma United Russia Vladimir Pligin (a copy of the letter). At the same insists and the President of “OPORA Russia” Alexander Kalinin. The current version of the project is impossible to agree on is that it “is frankly punitive in nature and is not aimed at prevention of offences, and to replenish the budget at the expense of fines,” said Kalinin in a letter to the head of the Duma Committee on economic policy Anatoly Aksakov (has a copy). Earlier, similar objections in the state Duma sent a business-Ombudsman Boris Titov.
Acting Cao for more than 10 years, he was accepted in 2002, and during that time much has changed — there are new legal institutes, such as institutes of public procurement, the contract system, and legally institutionalized institutions in the sphere of state control (supervision), indicate the project was initiated by a group of MPs led Mr Pligin — in the explanatory Memorandum.
The draft administrative code introduced several new types of punishment: corrective labour, a ban on the use of the airlines ‘ services — for individuals and for legal entities — deprivation of a special permit (license) and even the liquidation of the company. If the company loses a license, you receive a new document may take up to 45 days — in fact, at this time, the business off from normal economic activity, and this can lead to the violation of the rights of contractors and the closure of the company, specifies Shokhin.
Liquidation of a legal entity as a punishment for a possible new administrative code with three offences — creating conditions for child trafficking or exploitation; the production, acquisition, storage, public display of materials with pornographic images of a minor and the financing of terrorism. In each of these cases, individuals simultaneously prosecuted, but the legal entity to attract you, the only way to eliminate it, explains co-author of the bill, Deputy Chairman of the Committee on constitutional legislation and state construction Dmitry Vyatkin.
In the future, the list of offenses that could lead to liquidation of a legal entity, can be extended, fears the President of the RSPP. For example, the company can be liquidated for operation without a license is not reissued including the fault of government agencies. And to restore the operation of such a company will not be able to cancel the liquidation is not stipulated by the law. The measure liquidation, it is possible to use in corrupt purposes and as a tool to put pressure on employers, adds Kalinin from “Support of Russia”.
If you accept the code of administrative offences in the current proposed form, then the penalties for companies would grow in tens times, for gross administrative offence, with 5-10 million to 60 million rubles Is the destruction or damage of objects of cultural heritage, financing of terrorism and legalization of income obtained by criminal means. And for individual entrepreneurs is the maximum size of an administrative fine, depending on category of offence will amount to 25 thousand, 100 thousand and 400 thousand rubles.
Too high penalties lead to the destabilization of economic activity and potential bankruptcy of companies that turns them into an instrument for suppressing economic independence and initiative, excessive restriction of freedom of entrepreneurship and property rights, according to the review of the RSPP.
These fines are unaffordable for small businesses, adds Kalinin. According to him, they run counter to the reform of control and Supervisory activity and implementation of a risk-based approach, in imposing sentence, the authors do not take into account the type of offender and the level of public harm.
Now can assign very large fines on tens of millions rubles, “we limited the top bar — now non-existent, and can assign 300 million”, says Dmitry Vyatkin. “Many of the compounds we plan to reduce sanctions, in particular, customs violations, for all participants in foreign trade is very serious. For the citizens set the maximum upper limit is 100 thousand rubles. (now in the code — 300 thousand rubles)”, — he said .
Control at any cost
This is not the first attempt of the authorities to introduce compulsory liquidation of companies. A year ago the Deputy head of the Duma Committee on legislation Alexander Remezkov (United Russia), implementing a long-standing idea of the Investigative Committee, introduced a bill on introduction of criminal liability of companies with the highest measure of punishment in the form of liquidation. But then he decided not to give.
The government have studied the prospects for attracting legal entities to responsibility, similar to criminal, reminds senior associate Herbert Smith Freehills Sergey Eremin. According to him, the sharp tightening of administrative penalties is to try to ensure severe punishment for stiffness similar criminal liability for companies without its introduction.
In practice, this will actually lead to the criminalization of separate offences, he explains: the fines will be up to the criminal level, there will be an opportunity to attract executives of companies to serious administrative responsibility.
High fines can have a negative impact on the overall economy, because many enterprises these amounts will be simply unfeasible, assumes a BGP Litigation lawyer Vladimir Klimenko. According to him, the increase of fines can lead to two opposite effects — how to discipline entrepreneurs, and to cause the growth of corruption.
The representative of the Ministry of economic development reported that feedback on the draft is not yet ready; the representative of the Ministry of justice said that while the Agency gathers feedback for the preparation of the government’s position. “In the text, no doubt, will be subject to edits, we try to meet the wishes, sensible criticisms will be taken into account as those now being considered in the Duma,” said Vyatkin. According to him, after receiving the reply of the government the bill will be forwarded for consideration in the first reading — this should happen in February. The deputies plan to adopt the document in this session.