Criminal Liability for Unlawful Actions in Bankruptcy: the Current State, Problems and Methods of Resolution

Bankruptcy is a legally justified mechanism of a market economy and must comply with modern social realities. Despite the fact that the legal field in this area is well developed, the existing problems in implementing the provisions of the insolvency institution make it vulnerable and subject it to criminalization. The article describes the main problems that the law enforcer could find and ways to solve them in the Russian Federation. The Authors propose to define the presence of signs of bankruptcy as identical to the situation in which the crimes committed under Part 1 and Part 2 of Art. 195 of the Criminal Code of the Russian Federation – “if there are signs of bankruptcy”, that is, apply a literal interpretation, guided by the provisions of Art. 3 of the Bankruptcy Law. The legislator has created conditions restricting the application of Part 3 of Art. 195 of the Criminal Code of the Russian Federation, since it established that criminal liability can only arise in cases where the functions of the head of an organization are either assigned to an arbitration manager or to the head of the provisional administration of a credit organization. To resolve this problem, we believe that the legislator needs to state Part 3 of Art. 195 of the Criminal Code of the Russian Federation as amended, which takes into account the possibility for the law enforcer to involve the guilty person at all stages of the bankruptcy procedure. When assessing major damage, arbitration prejudice should be taken into account in the first place, in order to increase the preventive potential of this article, the Authors propose an exception to the category of “major damage” with the corresponding loss of force, Parts 1,2,4 of Art. 14.12 Code of Administrative Offences of the Russian Federation. Particular attention is paid to the issues of determining the subject composition of Art. 195 of the Criminal Code of the Russian Federation. Interpretation of Part 2 of Art. 195 of the Criminal Code of the Russian Federation allows us to conclude that the subject of this crime can also be a creditor who exhibits dishonest behavior, whose property claims are illegally satisfied to the detriment of other creditors. The article also deals with the legal technique of the offense under of Art. 195 of the Criminal Code of the Russian Federation, and a number of novel recommendations are proposed for improving this norm and the norms that bind the institution of bankruptcy, as well as for their application.