May Russia abandon prison sentences for economic criminals?

Maria Nikolova

While Russia’s Ministry of Finance is looking to penalize bitcoin transactions with prison sentences, a new project seeks to free offenders of economic laws from penal liability.

Russia is sometimes called the land of controversies, with the latest concerning the topic of crime and punishment. FinanceFeeds has recently reported on the progress of the plans by the Ministry of Finance to penalize individuals engaged in crypto-currencies issue and turnover with prison sentences. In the meantime, data from the Bank of Russia shows a drop in the amount of money lost to financial pyramids, after the country introduced heavy penalties for organizers of such fraudulent schemes.

In the face of these efforts, a new project has appeared. According to a report by the Russian newspaper “Izvestia”, the Center for Strategic Research (CSR), whose board is chaired by ex-finance minister Alexey Kudrin, has drafted a document that envisages the removal of penal liability for offenders of the country’s economic laws. Putting it otherwise, such offenses will fall outside of the scope of the Penal Code.

Under the project, by 2025, economic criminals will not face jail terms for their offences. Instead, they will have to pay a fine proportional to the size of the harm caused.

A possible rationale for such an approach is the assumption that a monetary crime implies a monetary penalty. Other reasons include the overflow of prisoners in Russia and the high costs associated with sustaining their life in prison.

Some note that Russian laws have to become more human. According to data from the CSR, for the period from August 1, 2014, to August 1, 2016, a total of 140 bills targeting changes to the penal law were submitted to the Duma – 88% of those proposed harsher penalties, whereas only 12% proposed relaxations of the norms.

The CSR project is not written in the form of a bill, but doing so will require only a week, according to experts.

In May 2016, the Russian penal code was toughened with regards to financial crime. As per the amendments, organization of a financial pyramid entails a prison sentence of up to 6 years and a fine of up to RUB 1.5 million. Further amendments to the code, proposed by the Ministry of Finance, treat the issue and turnover of crypto-currency as serious criminal offenses, which entail prison sentences of up to 7 years. We have yet to see how the different approaches to the Penal Code will settle.

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