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Thursday
Jun112015

Russia considers imposing criminal liability on legal entities

The lower house of Russia's national legislature -- the State Duma -- has been considering draft amendments to the law on the criminal liability of a legal entity.

The main purpose of the amendments is compliance the Russian Criminal Code with international treaties (e.g. international obligations of Russia on combating corruption).Several international treaties including the United National Conventions against Corruption determine that some sorts of legal entities behavior should be treated as crimes, which is already the case in the U.S. and UK.

The Russia amendments define an international co-operation of the Prosecutor General’s Office of Russia with counterparts from other countries on the issue of criminal liability of a legal entity, for instance, if a crime is committed by a Russian organization in a foreign state as well as if a crime is committed by a foreign organization in Russia.

Russia plans to criminalize a number of acts by a legal entity, such as private and public bribery, support for terrorism, illegal access to computer information, failure to comply with a court judgment, the organization of illegal migration, child pornography, and so on. The total number of corporate offenses is 38 and the list could change during the State Duma’s discussions.

The primary corporate punishment in the amendments is a fine up to RUB 30 millions (about $ 590,000). The fine could also be based on a percentage of the criminal revenue, as well as the revocation of business licenses or prohibition of commercial activities.

The draft amendment also has provisions for successor liability if a suspected legal entity is reorganized during criminal proceeding. In that case, the assignee (or successor) could be ordered to pay the fine if the assignee knew or should be known about the crime committed by the reorganized legal entity.

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Kristina Furlet serves as compliance specialist in a Russian subsidiary of a global provider of telecom services.

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