Минимизация рисков уголовного преследования для иностранных инвесторов

23 июня 2020

Инвестирование в экономику другой страны всегда связано с рисками - как экономическими, так и правовыми.

Адвокаты бюро подготовили обзор самых распространенных рисков уголовного преследования, с которыми может столкнуться иностранный инвестор при реализации проектов в России.


Minimizing the risks of criminal prosecution

As the crisis intensifies in Russia, a significant increase is expected in the number of criminal cases involving allegations of abuse of office, embezzlement, corruption, criminal bankruptcies, tax and antitrust crimes.

For foreign companies, the risk is that if their Russian counterparties or business partners enter into corrupt, cartel or other illegal agreements with third parties, Russian investigators may also engage employees of Western companies as accomplices to crime.

Criminal prosecution may sometimes be based solely on the testimony of one person.

Generally speaking, the Russian law enforcement system has a pronounced rosecutorial bias.

Economic crimes:

1. Allegations of fraud, misappropriation, embezzlement and other economic crimes

Case law shows that in Russia criminal liability may be imposed for failure to fulfill contractual obligations. Criminal cases may be launched even on applications of minority shareholders.

If a criminal case is initiated, and suspects or accused persons appear in it, the Russian law enforcement system will seek to obtain a guilty verdict by any means possible.

One should also bear in mind that under certain circumstances, even tax offences may be qualified as embezzlement.

Case law also contains cases of criminal prosecution of persons who persistently evade repayment of accounts payable under the clauses providing for liability for fraud or misappropriation of funds.

To minimize these risks, we now recommend choosing counterparties even more carefully than ever and conducting comprehensive business crime due diligence before entering into a transaction.

The trend of recent years is to use criminal law as a leverage in corporate conflicts. The most notable example is the notorious case of Baring Vostok.

Unfortunately, some Russian business partners are accustomed to turn to investigating
authorities rather than courts when resolving disputes. Avoiding criminal consequences in such cases is possible by proper formalization of all legal relations and recording all negotiations.

Moreover, in many cases, it is recommended to provide for a convenient applicable law and place of dispute resolution at the initial stage of negotiations and transactions (e.g., London).

Experience has shown that it is better to have well-established, friendly relations with employees. In criminal cases, a great deal is proven through evidence. And in a complex situation, the outcome of a case may seriously depend on the testimony of any of the employees.


2. Accusations of corruption.

There is a risk of becoming an accomplice to crimes if Russian counterparts or business partners enter into corrupt relations.

According to the explanations of the Russian Supreme Court, not only direct transfer of valuables may be considered as mediation in crime, "but also other assistance in reaching or implementing an agreement between these parties to receive and give a bribe or an object of commercial bribery (for example, organizing a meeting with them, negotiating with them)".

Under Russian law, it is possible to be held criminally liable for a simple promise or offer of a bribe (commercial bribery).

Even if criminal proceedings are initiated against Russian contractors, law enforcement agencies can still control telephone conversations and correspondence (including through any messengers) of employees of foreign firms.

Despite the fact that Article 575 of the Civil Code of the Russian Federation does not prohibit the transfer of ordinary gifts to civil servants worth no more than 3,000 rubles, nevertheless, as explained by the Supreme Court of Russia, these provisions do not apply to criminal law.

We do not talk of bribery or commercial bribery if there was a provocation of giving or receiving illegal remuneration.

For a foreign company, the consequences of charging its employees for corruption crimes, apart from reputational costs, are huge fines (from 1 million to 100 million rubles and more), as well as failure to participate in government procurement.

The above mentioned risks can be mitigated by a system of qualitative anticorruption compliance in a company, analysis for criminal law risks when entering into transactions, criminal law due diligence of the company's business activities and concluded contracts.

3. Tax crimes charges.

It is known that in recent years judicial acts on tax cases are essentially printed in favor of state agencies.

Meanwhile, the payment of arrears, fines and penalties (which entails exemption from criminal liability on nonrehabilitation grounds) is not the only way to stop criminal prosecution.

The articles of the Russian criminal law are designed in such a way that non-payment of taxes (for any amount) does not necessarily constitute a criminal prosecution. This may occur even when all economic court cases have been lost.

At the same time, it should be noted that proposals of Russian business partners to transfer funds to the accounts of third parties may later be regarded as complicity in concealing the funds that should have been used to pay taxes (Article 1992 of the Russian Criminal Code).

4. Bankruptcy.

Due to the pandemic, the number of bankruptcy cases on the Russian market will multiply in the short-term.

It can be assumed that some business partners will purposefully increase debts, withdraw goods and/or property in behalf of third parties.

For example, if, at the request of a Russian counterparty, a foreign seller continues to deliver goods under the original contract to a different legal entity, such actions may be qualified not only as a bankruptcy offence but also as embezzlement.

In these situations, one cannot exclude attempts to involve employees of foreign companies as accomplices to the crime.

Conclusion: Due diligence should be conducted at all stages of the transaction, and particularly with respect to any changes in the terms of the contract.

5. Cartels.

Bringing to administrative responsibility under Article 14.32 of the Code of Administrative Offences of the Russian counterparty (distributor, dealer) for entering into a competition-restrictive agreement (cartel) may also entail criminal proceedings.

At the same time, law enforcement authorities may decide that employees of a foreign company are accomplices in violating antitrust laws because they assisted in committing crimes by providing information, advice, instructions, etc.

Cartel cases may also arise as a result of unfair actions of "grey" suppliers that do not have distribution contracts with an official representative of the manufacturer.

If the legislative initiatives of the Federal Antitrust Service on changing the criminal legislation (supported by the Government of the Russian Federation and are currently under consideration in the State Duma) are adopted, the number of criminal cases will increase a hundredfold.

Antitrust compliance can help avoid liability here.


In conclusion, it should be noted that very often it depends on the initial explanations or testimony of employees and managers of the company whether they will be held criminally liable or not.

Therefore, it is advisable to always be in the presence of a lawyer specializing in protection in criminal cases.

In this case, we recommend that you have contacts of several lawyers, because, firstly, calls for questioning are urgent, and the lawyer may be busy in other activities, secondly, the investigator may not allow one lawyer to represent the interests of different witnesses (if you call several employees), thirdly, it is always useful to get what the doctors call "a second opinion".

Checklist - assessment of a foreign company's activity with regard to emerging criminal law risks.

Criminal legal risks for a foreign company operating in Russia may arise in the following cases:

  • working with state authorities or organizations in which the state has a stake (even a small one);
  • participation in public procurement (for example, through distributors);
  • dealing with firms that have not passed the audit (e.g. registered to a nominee, under false documents, etc., shell companies);
  • optimization of the company's taxes, including through the use of foreign jurisdictions;
  • inspections and criminal cases against contractors may also lead to criminal prosecution (e.g. law enforcement may consider your firm's employees to be accomplices: joint  participants, aiders and abettors, organizers of a crime);
  • corporate conflicts (e.g., the Baring Vostok);
  • unlawful actions of employees of your firm (corruption, embezzlement, antitrust law violations, other unlawful actions);
  • the unlawful actions of competitors (including competitors of your distributors, dealers);
  • improper actions of former spouses, relatives;
  • unfair actions of disappointed customers;
  • the actions of disgruntled employees (for example, they may invent non-existent corruption violations, tax evasion, etc.);
  • relations with credit organizations (especially state ones);
  • work/transactions with companies that are in a pre-bankruptcy state;
  • failure to pay salaries to employees;
  • absence of an anticorruption and antitrust compliance system in the company.