New law amending criminal responsibility for illegal actions in bankruptcy (Art. 195 of the Russian Criminal Code) and for deliberate bankruptcy (Art. 196 of the Russian Criminal Code) entered into force on 12 July 2021.
The new law significantly toughens the responsibility and expands the circle of persons who can be held criminally liable for the said violations. Indeed, from now on criminal liability can be imposed on any persons controlling the debtor.
The concept of a controlling person is very broad and basically includes any person authorized to give obligatory instructions to the debtor and otherwise determine its actions within three years preceding or during the bankruptcy. Thus, not only the managers and shareholders of the bankrupt company but also beneficiaries, employees, representatives and formally non related parties may potentially qualify as controlling persons.
Arbitration managers and liquidators of debtors can also be held criminally liable in case of unlawful satisfaction of creditors' claims.
Controlling persons of the debtor who committed a crime for the first time can be exempted from liability in case they voluntarily disclose persons who benefited from the unlawful behavior of the debtor and provide information about the property and income of such persons, allowing to compensate for the damage caused by this crime.
NAZALI TAX & LEGAL