Crimes in the Sphere of Business Activity Trends of Impact on Business in the Russian Federation

Journal of Environmental Treatment Techniques

2019, Volume 7, Issue 3, Pages: 531-536

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal web link: http://www.jett.dormaj.com

Crimes in the Sphere of Business Activity: Trends

of Impact on Business in the Russian Federation

Andrey V. Ragulin , Elena G. Bagreeva *, Salikh Kh. Shamsunov

Moscow University of the Ministry of Internal Affairs, Department of Criminal Law, Moscow, Russia. E-mail:

ragulin88@yandex.ru

The Financial University under the Government of the Russian Federation, Department of Legal Regulation of Economic

Operations, Moscow, Russia. E-mail: bagreg@yandex.ru

Federal Penal Administration Service Research Institute, The Center of Studying of Problems of Management and the Organization

Executions of Punishments in Criminally-Executive System, Moscow, Russia. E-mail: shamsunov46@mail.ru

Received: 01/07/2019

Accepted: 19/08/2019

Published: 20/08/2019

Abstract

Purpose: The article defines the main criminal risks associated with certain areas of business activity, discloses statistical

indicators characterizing the results of consideration of criminal cases of crimes in the field of business by the courts of the Russian

Federation, in particular for such crimes as illegal entrepreneurship, production, acquisition, storage, transportation or sale of goods

and products without labeling and (or) application of information provided for by the legislation of the Russian Federation, crimes in

the field of labor relations and crimes in the field of taxation, other crimes in certain areas of business activity. Methodology: The

methodological basis for the study of this problem were the results and methods of previous research, the definition of risks leading

to the initiation of criminal cases against entrepreneurs on the basis of the study of criminal case materials, content analysis of the

media, the identification of crimes for which the most frequently prosecuted managers and business owners, the analysis of statistical

data of the Judicial Department of the Supreme court of the Russian Federation on the results of criminal cases by the courts for

2015-2017. Result: Based on the results of Applications: The contents of this article will be useful for understanding the current state

of the problems of criminal and legal impact on the business in the Russian Federation, creation of the informational basis for the

prediction of entrepreneur’s criminal legal consequences of their actions, for carrying out scientific researches on problems of

criminal prosecution of entrepreneurs in the Russian Federation. Novelty/Originality: The originality of this study lies in the use of a

new methodological approach to the analysis of crime in the field of business activity and obtaining new conclusions on the problem

of criminal law impact on business in the Russian Federation.

Keywords: business, criminal law risks, criminal law impact, crimes in the sphere of economic activity, crimes in the sphere of

business activity.

We agree that entrepreneurship or business activity

Introduction

attracts the most creative, advanced, but also gambling and

adventurous part of citizens, because this sphere of human

activity is the most mobile, dynamic, when the result of

effective management can sometimes be seen immediately.

The Russian sphere of business activity, which changed

dramatically about thirty years ago, is in a constant

evolutionary process. On the one hand, there is an

improvement of the legal framework of the business sphere,

on the other - the socio-cultural norms of doing business are

being formed, the legal culture of participants in business

activity is being brought up.

The alarming situation with crime in this area has caused

a response of the state, aimed at strengthening, expanding

and improving the legal framework of the economy. The

presented analysis of the legislative framework and its

practical application give an objective picture of the

interaction between business and the state in the framework

of criminal law.

Describing the economic development of countries,

economists and sociologists, lawyers and political scientists

in recent years increasingly pay attention to the growth of

various kinds of illegal actions in this area.

According to the results of the global study of economic

crime conducted by PwC, which was attended by more than

7,000 respondents from 123 countries, including

representatives of 210 Russian companies, it can be stated

that, as well as worldwide, in Russia sharply increased

indicators in the field of economic crime. This large-scale

study, which lasts 20 years, is also devoted to the study of

respondents ' opinions on economic crimes, their causes,

methods of detection and prevention, as well as the

consequences of economic crimes. The Russian Federation

also participated in the study and 66% of Russian

respondents reported that they were victims of economic

crimes (20).

Journal of Environmental Treatment Techniques

2019, Volume 7, Issue 3, Pages: 531-536

Currently, the criminal legal impact in the most general

sense is a purposeful activity of the state, consisting in

coercive influence based on the criminal law by depriving or

restricting the rights and freedoms of a person who has

committed a socially dangerous (7,9,10).



carrying without a permit activities requiring a permit;

violation of special rules of business;

violation of a special regulatory procedure for the

handling of substances and objects.

An entrepreneur, businessman, business manager, of

The aim of the study was to analyze the criminal law

risks for business activity and to assess the trends of criminal

law impact on business in 2015-2017, carried out in the

Russian Federation.

course, a creative person, but, unfortunately, his activities

often go beyond the law. As can be seen from the above table

1, the situation with illegal entrepreneurship has remained

"stably difficult" in recent years. One and a half hundred

people engaged in business, from leaders and creators

allowed themselves, ignoring the rules of law, to harm

society and the state. At the same time, the number of

persons for illegal business who received punishment in the

form of real imprisonment and the persons justified on the

rehabilitating bases decreased. However, this is only a

general article. A slightly different, more alarming trend is

noted by the results of the consideration of criminal cases on

the nuances of doing business under article 171.1 of the

Criminal Code (2019) the number of convicts by 2017 has

more than doubled! This group of crimes is characterized by

the following quantitative indicators. Pay attention to the fact

that only one in four lost his freedom because of the crime:

the court found it appropriate to punish the offenders to a fine

(in the amount of one hundred thousand to seven hundred

thousand rubles). This indicator should please taxpayers, at

whose expense convicts serve their sentences. One of the

"easy" and "obvious" ways of continuous enrichment of

heads of business structures, of course, are violations of the

rights of employees. The main criminal risks associated with

labor relations should include the following actions

committed by managers or business owners:

Literature Review

To present an objective picture of economic crime in our

country, it was necessary to establish a list of the main

criminal legal risks that lead to the initiation of criminal cases

against entrepreneurs. The task required the study of

materials of specific criminal cases, materials of judicial

practice, the results of previous researches of such scientists

as A. Yakovlev (2011), Al-Qayoudhi et al (2017), R.O.

Dolotov (2017), Jahan et al, (2016), P.V. Zhesterov (2016),

Mulyono et al., (2018), V.A. Kitsing (2018), Ameen et al,

(

2018), R.O. Logvinchuk (2018), N.Ah. Lopashenko (2006,

015), N. Pokryshkin (2016), V.D. Postanak (2019),

Haghshenas et al, (2015), A.V. Ragulin (2017), R.A. Sabitov

and E.Yu. Sabitova (2017), P.V. Esterow (2015), Abayeva,

G. (2018), Mendonça & Andrade, (2018), K. Titaev et al.

(

2017), P.S. Yani (2017), as well as media content analysis

1, 2, 3, 5, 6, 8, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 24, 25,

26 ,27).

Aware all the diversity, the whole palette of criminal acts

in the field of business, we have, however, identified the

elements of crimes, which are most often brought to criminal

responsibility managers and business owners, as well as paid

attention to the elements of crimes that for various reasons

have not been used in the practice of the preliminary

investigation and the court.

- incorrect unjustified refusal of employment;

- incorrect dismissal of employees;

- unpaid wages;

- violations of the requirements of regulations on labor

The reliability of the conclusions discussed in the article

is based on a detailed analysis of the statistical data presented

on the official website of the Judicial Department of the

Supreme Court of the Russian Federation, containing

information on the results of criminal cases by the courts for

protection.

As can be seen from the above data, the criminal acts of

managers or business owners in the field of labor relations

associated with the non-payment of monetary rewards,

unfortunately, are not reduced, and even tend to increase. At

the same time, this steady increase in the number of cases

under Art. 145.1 of the Criminal Code, sent to the court, are

terminated on non-rehabilitation grounds. And thus,

punishment in the form of real imprisonment under this

article is applied extremely seldom, it is possible to tell is not

applied at all.

2015-2017 (4,22,23).

Resault and Discussions

In this article we will focus only on the general problems

of doing business, overstepping the frameworks of the

criminal law.

The following deeds committed by the managers or

business owners should be associated with the main criminal-

legal risks in the certain areas of business activity:

Table 1: Illegal business: information on the results of criminal proceedings before the courts

Number

convicted under the main

article

Justified and

terminated by

rehabilitating grounds

Terminated by

Composition

crimes

Punishment in the form of

real imprisonment

not

rehabilitating grounds

015

2016

2017

2015

2016

2017

2015

2016

2017

2015

2016

2017

Article 171

Illegal

entrepreneurs

hip

160

146

Journal of Environmental Treatment Techniques

2019, Volume 7, Issue 3, Pages: 531-536

Table 2: Production, acquisition, storage, transportation or sale of goods and production without marking and (or) drawing of the

information provided by the legislation of the Russian Federation: data on results of consideration of criminal cases by courts

Number

Justified and

terminated by

rehabilitating grounds

Terminated by

not

rehabilitating grounds

convicted under the

main article

Punishment in the form

of real imprisonment

Composition

crimes

Article 171.1.

Production,

acquisition, storage,

transportation or

sale of goods and

products without

marking and (or)

application of

245

544

132

information

provided by the

legislation of the

Russian Federation

Table 3: Crimes in the field of labor relations: information on the results of criminal cases by the courts

Number

convicted under the

main article

Justified and

terminated by

rehabilitating grounds

Terminated by

not

rehabilitating grounds

Composition

crimes

Punishment in the form of

real imprisonment

2015

2016 2017 2015

2016

2017

2015

2016

2017

2015 2016 2017

Article 143.

Violation of

labor

127

134

130

205

212

256

protection

requirements

Article 145.

Unjustified

refusal of

employment

or unjustified

dismissal of

a pregnant

woman or a

woman with

children

under the age

of three

Article

145.1. Non-

payment of

wages,

pensions,

scholarships,

allowances

and other

payments

146

225

272

195

291

693

Relatively stable situation with the number of crimes

classified under Art. 143 of the Criminal Code - violation of

labor protection requirements. However, even in this case,

managers or business owners "get away with it", because

under this article the punishment in the form of real

imprisonment is used very rarely: a high percentage of

termination of criminal cases on non-rehabilitating grounds.

If we consider article 145 of the Criminal Code, we

should agree with the practitioners and with their statement

about the almost "non-working" article: in a multimillion

country in recent years, a small number (less than 10) of

Journal of Environmental Treatment Techniques

2019, Volume 7, Issue 3, Pages: 531-536

criminal cases are sent to court annually, and the number of

convicts on it from 2015 to 2017 did not exceed 5 people.

indicators, it should be recognized that there is a tendency of

a slight decrease.

Thus,

analyzing the

employment

relationship

At the same time, the situation with the violation of

criminal law by individuals-entrepreneurs by 2017 has

deteriorated almost twice. The measure of criminal

punishment under Art. 198 of the Criminal code in the form

of real imprisonment was practically not applied and in fact

was and is a "frightening" limit of punishment. Practice today

is fairly focused on the payment of debt and a fairly large

amount of the fine (from one hundred thousand rubles and

above), as well as forced labor for up to a year. At the same

time, we note that every second case is terminated on non-

rehabilitation grounds.

According to Art. 199 of the Criminal Code of the

Russian Federation on non-payment of taxes by organizations

in places of imprisonment every tenth accused is serving a

sentence, a little more than a third of cases are terminated on

non-rehabilitating grounds. The percentage of acquittal and

termination of cases on rehabilitative grounds is high. It

should be noted that there is a tendency to reduce these

crimes themselves. Recently, entrepreneurs/business owners

still believe that the concealment of funds or property of the

organization or individual entrepreneur will go unnoticed,

and therefore, indulging their greed, go to the crime: in 2017,

a sharp increase in such acts was recorded.

manager/business owner" - "employee", which has grown

into a criminal law relationship, it should be recognized the

tendency to increase crimes in this area and a high percentage

of termination of criminal cases on non-rehabilitating

grounds, as well as the payment of large amounts of fines.

It should also to consider another area of business activity

taxation, where the main criminal risks should include the

commission of managers or business owners of the following

actions:



understatement of profit through the increase of

costs;

non-payment or incomplete payment of mandatory

payments to the budget;

organizational fragmentation of business;

unjustified application of tax benefits, preferential

tax rates;

settlements with contractors through other

organizations;



work with one-day firms;

entering of the imaginary and feigned transactions;

accounting irregularities.

As one can see, the field in the sphere of taxation of

business activity for the commission of criminal acts is

extensive. Analyzing the results of consideration of criminal

cases on this group of crimes, despite the high quantitative

Table 4: Crimes in the field of taxation: information on the results of criminal cases by the courts

Number

convicted under the

main article

Justified and

terminated by

rehabilitating

grounds

Terminated by

not

rehabilitating

grounds

Punishment in the

form of real

imprisonment

Composition

crimes

Article 198. Evasion of an

individual from payment of

taxes, fees and (or) an

individual - payer of insurance

premiums from payment of

insurance premiums

Article 199. Evasion of taxes,

fees payable by the

organization, and (or) insurance

premiums payable by the

organization - payer of

insurance premiums

Article 199.1. Failure to

perform the duties of a tax

agent

343

294

123

164

134

Article 199.2. Concealment of

funds or property of the

organization or individual

entrepreneur, at the expense of

which the collection of taxes,

fees, insurance premiums

should be made

112

123

Journal of Environmental Treatment Techniques

2019, Volume 7, Issue 3, Pages: 531-536

Table 5: Crimes in certain areas of business activity: information on the results of criminal cases by the courts

Justified and

terminated by

rehabilitating

grounds

Terminated by

not

rehabilitating

grounds

Number

convicted under

the main article

Punishment in the

form of real

imprisonment

Composition

crimes

Article 266. Substandard repair of

vehicles and release in operation with

technical malfunctions

Article 192. Violation of the rules of

delivery of precious metals and precious

stones to the state

Table 6: Results of consideration of criminal cases on crimes committed in the field of business

Number

Justified and

terminated by

rehabilitating grounds

Terminated by

not

rehabilitating grounds

Punishment in the form of

real imprisonment

convicted under the main article

015

2016

22481

2017

22899

2015

2067

2016

2180

2017

2252

2015

118

2016

224

2017

169

2015

5223

2016

4203

2017

5975

22891

But in places of imprisonment there is practically no

criminals sentenced according to art. 199.2 of the Criminal

Code, because more than two-thirds of cases are terminated

on non-rehabilitating grounds. The pursuit of profit pushes

entrepreneurs/business owners to save on the repair costs of

various kinds of technical means of business by using

technically faulty equipment/vehicle, often leading to tragic

consequences.

in our country. We have not described the facts of fraud and

crimes related to assets, Bank fraud, raider attacks, etc. We

will analyze the results of criminal cases on crimes

committed in other areas of business in 2015-2017 in the

following material.

In addition, we note that in 2017, the legislator

introduced new crimes that can be attributed to crimes

committed in the field of business:

Insignificant and null indicators of results of

consideration of criminal cases in the courts for the offences

foreseen by art. 266 and art. 192 of the Criminal Code of the

Russian Federation (2019) give opportunity to attribute these

articles of the Special part of the Criminal Code as the so-

called “non-working” delicts. However, the absence of

convicts under these articles raises many questions (4). For

example, according to official statistics, the number of

accidents involving taxis due to their malfunction, has

increased recently by 5 times, often fatal. The analysis of the

results of consideration of criminal cases for all crimes

committed in the field of business in 2015-2017 gives

opportunity to affirm that:

- Article 171.3 Illegal production and (or) circulation of ethyl

alcohol, alcoholic and alcohol-containing products;

- Article 171.4 Illegal retail sale of alcoholic and alcohol-

containing food products;

- Article 199.3 Evasion of the policyholder - an individual

from payment of insurance premiums for compulsory social

insurance against industrial accidents and occupational

diseases to the state extra-budgetary Fund;

- Article 199.4 Evasion of the insured organization from

payment of insurance premiums for compulsory social

insurance against industrial accidents and occupational

diseases to the state extra-budgetary Fund;

- Article 200.4 Abuse in the procurement of goods, works

and services for state or municipal needs;

the number of persons convicted under the main article for

business crimes in 2015-2017 remains at approximately the

same level, but tends to increase;

- Article 200.5 Bribery of a contract service employee,

contract Manager, member of the procurement Commission.

Article 201.1 Abuse of authority in the performance of a

state defense order.

This expansion of the legal framework indicates the need

for the State to define a fairly rigid framework of business

activity, as socio-cultural norms of business do not cope with

the task of legitimate behavior of participants in business

relations.

the number of persons who are appointed punishment in the

form of real imprisonment in 2015-2017 remains at the same

level, it should be noted the tendency to growth;

the number of persons who have been acquitted or the

criminal proceedings were terminated on exonerating

grounds decreased significantly in the 2015-2017;

for the period under review, there has been a significant

increase in the number of persons for whom the criminal case

was dismissed on non-rehabilitative grounds at the trial stage.

However, now we can note the trend of a small increase

in abuses in the sphere of business activity.

And today part of articles of criminal law of Russia

should be considered as a norm of a limit of punishment

which can be applied; however penalties and compulsory

works give the chance to violators, remaining on freedom, to

comprehend the events not at the expense of taxpayers.

Conclusions

Of course, all these criminal acts considered by us take

place in business. However, we have analyzed only the most

common crimes committed by entrepreneurs/business owners

Journal of Environmental Treatment Techniques

2019, Volume 7, Issue 3, Pages: 531-536

It is safe to say that there are problems with the formation

of business ethics, moral principles and values of

entrepreneurs, the importance and value of partnerships in the

field of entrepreneurship. In addition, the results of the study

indicate a gradual increase in criminal law risks for managers

and business owners and the gradual strengthening of the

criminal law impact on business by the state.

19. Ragulin, A.V. Illegal persecution of business representatives in

modern Russia: causes, trends and prospects of counteraction.

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0. Russian economic crime survey 2018 (PWC). Study of

economic crime in Russia in 2018 (PwC). URL: www.pwc.ru.

1. Sabitov, R.A., and Sabitova, E.Yu. Responsibility for tax

offenses and crimes. Moscow: Yurlitinform. 2017.

2. Source of statistical data - the website of the juridical department

of the Supreme Court of the Russian Federation. 2018. URL:

http://www.cdep.ru

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