CC BY
6
Prokeinova M., Hangacova N.
12.00.03 Гражданское право; предпринимательское право;
семейное право; международное частное право
Civil law; Business law; Family law; Private international law
DOI: 10.33693/2223-0092-2020-10-2-95-102
Money laundering from the point
of view of the Slovak and Russian legislation
M. Prokeinovaa ©, N. Hangacovab ©
Comenius University in Bratislava, Bratislava, Slovakia
a E-mail: [email protected] ь E-mail: [email protected]
Abstract. The article analyzes strategy regarding anti-money laundering policy in the Slovak Republic and the Russian Federation. Article also emphasises fight against money-laundering at the international level. Money laundering is the process of concealing illegal origin of money and bringing appearance of legality to money deriving from criminal activities. States have eminent interest to prevent such activities from occurring. Article focuses on the Slovak legislation concerning anti-money laundering including criminal liability of legal entities. Law which would enact criminal liability of legal entities in the Russian Federation was not adopted yet. Authors came to conclusion that legal acts of the Slovak Republic and the Russian Federation are similar but in certain areas they differ. One significant difference has been observed by authors.
Keywords: money laundering, anti-money laundering policy, the Slovak Republic, the Russian Federation, criminal offence of money laundering, FATF
Acknowledgments. This work was supported by the Slovak Research and Development Agency under the contract No. APVV 15-0740.
FOR CITATION: Prokeinova M., Hangacova N. Money laundering from the point of view of the Slovak and Russian legislation. Sociopolitical Sciences. 2020. Vol. X. No. 2. Pp. 95-102. DOI: 10.33693/2223-0092-2020-10-2-95-102
V_J
DOI: 10.33693/2223-0092-2020-10-2-95-102
Отмывание денег с точки зрения словацкого и российского законодательства
М. Прокеинова'' ©, Н. Хангачоваь ©
Университет имени Коменского в Братиславе, г. Братислава, Словакия,
a E-mail: [email protected] b E-mail: [email protected]
Аннотация. В статье анализируется стратегия борьбы с отмыванием денег в Словацкой Республике и Российской Федерации. В статье также подчеркивается важность борьбы с отмыванием денег на международном уровне. Отмывание денег - это процесс сокрытия незаконного происхождения денег и придания видимости законности деньгам, полученным в результате преступной деятельности. Государства крайне заинтересованы в том, чтобы такая деятельность не происходила. Статья посвящена
ISSN 2223-0092 (print) Т. X. № 2. 2020 Социально-политические науки 95
ISSN 2310-7065 (online)
словацкому законодательству, касающемуся борьбе с отмыванием денег, включая уголовную ответственность юридических лиц. Закон, который вводил бы уголовную ответственность юридических лиц в Российской Федерации, еще не был принят. Авторы пришли к выводу, что правовые акты Словацкой Республики и Российской Федерации схожи, но в некоторых областях они различаются. Одно существенное различие было замечено авторами и проанализировано в настоящей статье.
Ключевые слова: отмывание денег, политика борьбы с отмыванием денег, Словацкая Республика, Российская Федерация, уголовное преступление отмывания денег, ФАТФ
Благодарности. Работа выполнена при поддержке Словацкого агентства исследований и разработок по контракту № APW 15-0740.
INTRODUCTION
The criminal offence of money laundering is also known under the term whitewashing.1 The denotation of the criminal offence of money laundering originates from the fact that proceeds from fraudulent and illegal activities or untaxed incomes can be integrated into economy using cash payments for goods and services. Afterwards proceeds are put into banks and then cleaned money is invested again.2 As was noted above, the term dirty money represents two types of money:
1) money deriving from activities which are contrary to laws or public morals;
2) money coming from legal activities, but these earnings were not taxed.
In the first instance, money is mainly originating from theft, burglary, racketeering, drug trafficking, human trafficking, illicit arms trafficking, illegal games, prostitution, fraud, corruption, trafficking and illegal employment of people. In the other case dirty money originates from legal activities however tax was not paid from the earnings gained.
Payment with illegal money is in majority of cases made in cash, in order to prevent tracing the activities, which are in conflict with laws and morals. Main institutions used for money laundering are casinos, restaurants, currency exchange offices, etc. In practise shadow companies are also established and used. Their aim is to generate profit using
1 Whitewashing means to hide the true facts about a serious accident or illegal action; report or examination of events that hides the true facts about something, so that the person who is responsible will not be punished - definition from: Dictionary of Contemporary English - Logman. 3rd ed. Essex, 1995. P. 1634.
2 It is often said that the term money laundering was formed at the time of the famous American organized crime, which outset was mainly initiated by prohibition. Various ways were used to conceal the origin of large amount of money generated by illegal import and sale of alcohol and also from gambling; most of the games were illegal. The then gangsters faced the main problem, this money was in cash, often in bank notes and coins of small denominations, which was more of a burden, because if they were deposited into the bank, gangsters would be asked about their origin. To address such situation, two most commonly used forms of money laundering were created. One form were the slot machines and the second was the laundry business. It was the latter where the term money laundering comes from. According to Laciak What is money laundering? Silkscreen Consulting. Laciak O.: Pravna zodpovednosf pravnickych osob za legalizaciu prijmov z trestnej cinnosti. In: Trestna politi-ka statu a zodpovednosf pravnickych osob. Bratislava: Univerzita Komenskeho, Pravnicka fakulta, 2013. P. 110.
fictitious transactions which cover up the true origin of illegal money.
In the Slovak Republic, the criminal offence of money laundering is known as Legalisation of proceeds deriving from criminal activities. Criminal offence of Legalisation of proceeds deriving from criminal activities is enshrined in sections 233 and 234 of the Criminal code of the Slovak Republic. Criminal offence which is closely related to money laundering is the criminal offence of Sharing referred in sections 231 and 232 of the Criminal code of the Slovak Republic.
1. ANTI-MONEY LAUNDERING POLICY
AT THE INTERNATIONAL LEVEL
As it was indicated in the introduction, the term money laundering symbolizes endeavour to put illegal money to legal circulation, i.e. integrate them, in order to cover up their illegal origin. Money laundering may be divided into three phases. At the first stage, cash payment for supply of goods and services of illegal character is made. Subsequently, at the second stage, cash is put into banks in order to cover up origin source of money and to lose a track of this money. In the third phase, the integration of money takes place, granting fictions legitimacy to money which initially originated from illegal activities. Afterwards, the cleaned money is invested repeatedly in e.g. real estate business, charity activities or is used to set up new companies, however at this stage funds or property already seems to be legitimate.
Table 1. Three stages of money laundering
There is a need to effectively fight these practices. Fighting money laundering is complicated by many factors such as different approaches of individual states to the problematics of money laundering as well as different
Prokeinova M., Hangacova N.
processes of proving the origin of money. At the international level the organisation called the Financial Action Task Force (hereinafter referred to as FATF) operates. Its aim is to eliminate also money laundering, among others. The FATF is an intergovernmental organisation which sets standards in the area of anti-money laundering policy and terrorism financing. Its mandate was expanded in 2001 to include policy regarding fighting terrorism financing. This financial group was founded in Paris in 1989 on the initiative of the Group of Seven (herein referred to as G7) with the aim to create intergovernmental body which would focus on monitoring measures in fight against money laundering implemented by individual states. High representatives (presidents and premieres) of the Group of Seven and president of the European Commission have agreed on establishment of this reputable international global alignment of countries in the area of prevention of money laundering and terrorism financing. The agreement was made with respect to threat of misuse of bank system for the purpose of money laundering. The FATF currently includes 36-member states and 2 regional organisations.3' 4 The Financial Action Task Force meets few times a year for a purpose of drafting common legal policy in the area of anti-money laundering and terrorism financing with participation of legal and financial experts.5 Activities of the FATF focus on 3 main fields:6
1) monitoring the development of implementation of measures to prevent money laundering and terrorism financing in individual member states; in this process the FATF uses forms of self-evaluation (questionnaires) as well as the forms of mutual evaluation (expert missions and peer reviews);
2) assessing trends in the area of money laundering and terrorism financing, developing techniques, methods and countermeasures (so-called typologies); the results of these are projected into recommendations;
3) assisting with adoption and implementation of these recommendations to non-member states.
Since 1991 the Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering from 10.06.1991 is in force within the European Union. According to the Council Directive 91/308/EEC all Member States have to comply with this legislation in the area of fight against money laundering. The effects of adopting this directive are mainly reflected in obligations to identify the owner of the money, to report suspicious financial operations and at the same time to identify mandatory entities which have to comply with the notification obligation, such as banks, real estate agencies, casinos, etc. This directive was amended by the Directive 2001/97/EC of the European Parliament and of the Council on prevention of the use of the financial system for the purpose of money laundering on 4.12.2001. This directive set up stricter controls in the context of money laundering prevention in Member States of the European Union. The third directive, Directive 2005/60/EC of the European Parliament and of the Council on the prevention
3 Two regional organizations are European Commission and Cooperation Council for the Arab States of the Gulf.
4 Available on: http://www.fatf-gafi.org/about/membersandobservers/ (access date: 20.03.2019).
5 Available on: https://www.minv.sk/?fatf-1 (access date: 17.07.2018).
6 Available on: https://www.minv.sk/?fatf-1 (access date: 17.07.2018).
of the use of the financial system for the purpose of money laundering and terrorist financing evolved on the basis of the 40 FATF recommendations and was adopted on 26.10.2005. This directive introduced more comprehensible obligations for institutions regarding risk management systems and compliance with anti-money laundering laws.7 The forth directive of the European Union, Directive 2015/849 of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing from 20.05.2015, amending Regulation (EU) No. 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC deals with the threat of money laundering.
2. FIGHT AGAINST MONEY LAUNDERING IN THE SLOVAK REPUBLIC
In the Slovak Republic the essential legislative framework regarding money laundering is Act No. 297/2008 Coll. on protection against legalisation of proceeds deriving from criminal activities and protection against terrorism financing as amended (hereinafter referred to as Anti-money laundering act) which transposed the Directive 2005/60/EC of the European Parliament and of the Council. The Anti-money laundering act deals with rights and obligations of legal entities and natural persons in prevention and detection of money laundering and terrorism financing (§ 1). The respective act also defines powers and obligations of the National Bank of the Slovak Republic in supervising the financial market in this area. The National Bank of the Slovak Republic actively cooperates with the Financial Police Intelligence Unit in enforcing the above-mentioned law. The Financial Police Intelligence Unit operates within the Ministry of Interior of the Slovak Republic.
The Anti-money laundering act provides for several administrative offences of legal entities and natural persons - entrepreneurs (§ 32-34) in case of violation of listed legal norms under the Anti-money laundering act. It is extremely important to pay special attention to protection against money laundering and terrorism financing because the flow of dirty money can not only hurt the stability of the Slovak financial sector but it can also endanger the European Single Market as well.8
The Anti-money laundering act sets in its § 2 paragraph 1 meaning of the term legalisation. This term shall be understood as intentional action which, for the purpose of this act, consists of:
a) change in nature of assets or transfer of property, knowing that this property derives from criminal activity or participation in criminal activity with the aim to conceal or cover up illicit origin of the assets or with the aim to assist to a person who is involved in committing such criminal activity to avoid legal consequences of his behaviour;
7 Laciak O. Právna zodpovednosf právnickych osób za legalizáciu prí-jmov z trestnej cinnosti. In: Trestná politika státu a zodpovednosf právnickych osób. Bratislava: Univerzita Komenského, Právnická fakulta, 2013. P. 111.
8 Available on: https://www.nbs.sk/sk/dohlad-nad-financnym-trhom/ dohlad/prevencia-legalizacie-prijmov-z-trestnej-cinnosti-a-financovania-terorizmu (access date: 17.07.2018).
b) conceal or cover up origin or nature of assets, placement or transfer of property, the right of ownership or any other right to property, knowing that this property derives from criminal activity or participation in criminal activity;
c) acquisition, possession, use and enjoyment of property, knowing that this property derives from criminal activity or participation in criminal activity;
d) participation in activities under points a) to c) including the form of association, assistance, instigation and guidance as well as attempting to do so.
In connection to anti-money laundering, it is necessary to refer to the Act No. 221/1994 Coll. on proof of origin of funds in privatisation as amended (hereinafter referred to as Act on proof of origin of funds in privatisation). The law consists of only seven sections; its text is very brief. The law lies down obligations of legal persons and natural persons to prove the origin of funds in privatization and at the same time regulates the process of proving the origin of these funds.
As the title of the article suggests, the Legalisation of proceeds deriving from criminal activities, i.e. criminal offence of money laundering is also regulated in Act No. 300/2005 Coll. Criminal code of the Slovak Republic as amended (hereinafter referred to as Slovak criminal code or SCC) with punitive consequences. The criminal offence of money laundering is incorporated among crimes against property which are set in IV chapter of the special part of the Slovak criminal code. The criminal offence of money laundering is divided into two sections, i.e. § 233 and 234 of the Slovak criminal code. Provision of § 233 SCC consists of one basic qualified fact of the crime and three special qualified facts of the crime. The basic qualified fact of this criminal offence is a misdemeanour,9 whereas second and third paragraphs are felonies and the fourth paragraph is qualified as particularly serious felony.10
Pursuant to § 233 paragraph 1 of the Slovak criminal code the criminal offence of Legalisation of proceeds deriving from criminal activities, i.e. money laundering may be committed by general subject, i.e. any person which is criminally liable.11 This person may commit
9 I.e. minor crime (see index No. 12).
10 The definition of misdemeanour is set out in § 10 of the Slovak criminal code. Misdemeanour is any criminal offence committed from negligence or intentional criminal offence, for which the Slovak criminal code provides, in its special part, penalty of imprisonment with upper threshold not exceeding five years. Offences committed from negligence are not subject to a limitation in terms of the penalty threshold.
The definition of felony is set out in § 11 of the Slovak criminal code. Felony is an intentional criminal offence, for which the Slovak criminal code provides, in its special part, penalty of imprisonment with upper threshold exceeding five years. Felony also occurs if basic qualified fact of criminal offence is a misdemeanour, but special qualified fact of this criminal offence - misdemeanour - committed intentionally has upper threshold of penalty of imprisonment exceeding five years.
The category of felony also includes a particularly serious felony, for which the Slovak criminal code act, in its special part, provides penalty of imprisonment with lower threshold of at least ten years.
11 Offender is criminally liable for criminal offence of Legalisation of proceeds deriving from criminal activities according to Slovak criminal code when he at the time of committing the offence did reach the age of fourteen (§ 22) and at the time of committing the offence was mentally fit to recognize illegality of his actions and control his actions (§ 23).
a crime by various modus operandi in an alternative form. The proceeds or thing acquired from criminal activity are either:
a) transferred to offender or another person, borrowed, transferred in bank or branch of a foreign bank, imported, exported, transported, relocated, rented or otherwise procured for offender or another person; or
b) possessed, stored, hid, used, consumed, destroyed, changed or damaged.
The qualified fact of the criminal offence requires intentional form of fault. However, the intend itself is not sufficient for criminal offence of money laundering to be committed. The criminal motive12 is also required. The criminal motive is expressed with words in intention. The offender has to fulfil the form of fault, i.e. the offender has to have in intention (criminal motive) to conceal existence of the proceeds or thing originating from criminal activity, cover up their origin in criminal activity, their determination or use to commit criminal offence, disrupt their confiscation for the purpose of criminal proceedings or their forfeiture or their seizure. The value of the thing or amount of proceeds gained is not determining.
Facts underlying use of higher criminal sanctions in alternative form are:13
• special intend (paragraph 2);
• gaining larger profit14 for offender or another person (paragraph 2);
• public agent commits a criminal offence referred to in paragraph 1 (paragraph 3);
• gaining substantial profit15 (paragraph 3);
• committing a criminal offence referred to in paragraph 1 in more serious way of conduct (paragraph 3);
• gaining large profit16 for offender or another person (paragraph 4);
• committing a criminal offence referred to in paragraph 1 in connection to things arising from the trade in narcotic, psychotropic, nuclear or high-risk chemicals, arms and human beings or committing other particularly serious felony (paragraph 4);
• committing a criminal offence referred to in paragraph 1 as a member of dangerous grouping (paragraph 4).
Provision of § 234 of the Slovak criminal code consists of one basic qualified fact of criminal offence which is a felony. In terms of this provision the respective criminal offence can be committed only by subject, to whom from his employment, profession, status or function the obligation to report facts suggesting that another person has committed criminal offence of Legalisation of proceeds deriving from criminal activities according to § 233 SCC arises; or who according to his employment, profession, status or function is obliged to report unusual business transaction. By failing to fulfil this obligation, the offender fulfils
12 The criminal motive is, in general, an optional feature of the subjective aspect of the offence (i.e. form of fault), but when it is directly expressed in the qualified fact of criminal offence it becomes a compulsory feature of the offence. Similarly, it is with the way of committing an offence that is linked to the objective aspect of the offence.
13 Terms which constitute facts underlying use of higher criminal sanctions are defined in V. chapter of the general part of the Slovak criminal code act.
14 Profit exceeding 2.660 EUR.
15 Profit exceeding 26.600 EUR.
16 Profit exceeding 133.000 EUR.
Prokeinova M., Hangacova N.
the basic qualified fact of the criminal offence according to § 234, paragraph 1 of the Slovak criminal code act (commits a crime). Section 234, paragraph 1 SCC represents an omissive criminal offence.
The unusual business transaction is defined in the Act on protection against legalisation of proceeds deriving from criminal activities and protection against terrorism financing in its § 4 paragraph 1 as the legal act or other act which suggests that its execution could result in legalisation of proceeds deriving from criminal activities or financing of terrorism. Subsequently, paragraph 2 demonstrates cases of unusual business transactions. Paragraph 2 does not represent an exhaustive list of unusual business trans -actions. Unusual business transaction is mainly business (in) which:
a) considering its complexity, unusually huge amount of financial resources or otherwise of its nature appears to significantly deviate from the normal context or nature of a particular type of business or business of a particular client;
b) considering its complexity, unusually huge amount of financial resources or otherwise of its nature has no obvious economic purpose or obvious legal purpose;
c) client refuses to identify or to provide the data necessary for execution of care by the obliged person according to § 10, 11 and 12 of the act;17
d) client refuses to provide information on the prepared business transaction, or attempts to provide as little information as possible, or provides such information which obliged person may only hardly verify or verify only with high costs;
e) client requests its execution on the basis of a project which raises doubts;
f) uses financial resources of a low denomination value in excessively high amounts;
g) with client in connection to whom it may be expected that in respect of his employment, status or another characteristic, he is not or cannot be the owner of the necessary financial resources;
h) the amount of financial resources available to the client is manifestly disproportionate to nature or extend of his business activity or to property declared by him;
i) there is a reasonable suspicion that funds or assets are to be used or were used to finance terrorism;
j) there is a reasonable suspicion that its ultimate benefit end-user is a person who, collects or provides funds or assets for the purpose of financing terrorism; k) is made from the state or to the state on the territory of which terrorist organisations operate, or which provide funding or other support to terrorist organisations;
l) there is a reasonable suspicion that the client or ultimate benefit end-user is a person subjected to international sanction under the special law, or person who may be in relation to that person; or m) there is a reasonable suspicion that its subject matter is or is to be a thing or service that may be related to thing or service which is subjected to an international sanction pursuant to special law.
17 Act No. 297/2008 Coll. on protection against legalisation of proceeds deriving from criminal activities and protection against terrorism financing as amended.
Section 234, paragraph 2 of the Slovak criminal code reflects to its paragraph 1, in a way that if the offender cannot make an announcement or notification referred in paragraph 1 without the risk of criminal prosecution of himself or close person,18 the act referred in paragraph 1 does not constitute a criminal offence.
The institute of effective regret according to section 85 of the Slovak criminal code is applicable to the criminal offence of Legalisation of proceeds deriving from criminal activities (§ 233 and 234 of the Slovak criminal code). As a consequence of application of effective regret, the crime ceases to exist if the offender voluntarily:
a) prevent or remedy the harmful consequence of the criminal offence; or
b) make an announcement regarding the criminal offence to the competent authorities at the time when the harmful consequence of the criminal offence could still be avoided.
We can conclude, that the Slovak criminal code and its provisions onLegalisationofproceedsderivingfromcriminal activities sufficiently reflects international law obligations of the Slovak Republic in the area of anti-money laundering policy. Slovak legislation also fulfils its preventive function with respect to particular administrative and criminal law tools and means of protection against this type of criminal activities. On the other hand, it is important and necessary for obliged persons and competent public authorities to adhere and respect individual provisions of legal acts.19
2.1. Money laundering in context of legal entities
In the Slovak Republic direct criminal liability of legal entities is a newly established institute due to the fact that Act No. 91/2016 Coll. on criminal liability of legal entities as amended (hereinafter referred as Act on criminal liability of legal entities) entered into force on 1.07.2016. Act on criminal liability of legal entities is a special law which is significantly interconnected with criminal codices (Slovak criminal code and Act No. 301/2005 Coll. on criminal procedure20). Section 1 of the Act on criminal liability of legal entities contains the subject matter of the act as well as set its connection to other laws. The second paragraph of section 1 reads: Unless otherwise provided in this Act, and where the nature of the matter does not exclude it, the Slovak criminal code and the Slovak criminal procedure code are applicable to criminal liability of legal entities, including penalties imposed on legal entities and criminal proceedings against legal entities. The above-mentioned provision means that criminal codices act subsidiary to Act on criminal liability of legal entities. Section 3 of this special law, i.e. Act on criminal liability of legal entities includes exhaustive number of criminal offences for perpetration of which legal persons may be held
18 For the purposes of the Slovak criminal code, the term close person stands for a relative in direct line, adopter, adoptive, sibling and husband; other persons in family or similar relationship are considered to be close persons only if the harm suffered by one of them, the other rightfully perceives as his own (§ 127, paragraph 4 of the Slovak criminal code).
19 The same opinion was presented in article written by Centes J., Tuchscher M.: Mimotrestna uprava ochrany pred legalizaciou prijmov z trestnej cinnosti a financovanim terorizmu. 2 part. Justicna Revue. 2009. Vol. 61. No. 3. P. 402.
20 Hereinafter referred as Slovak criminal procedure code.
liable. The criminal offence of Legalization of proceeds deriving from criminal activities according to § 233 and 234 of the Slovak criminal code is included in this exhaustive list of criminal offences. The definitions of criminal offences are set in the Slovak criminal code which act supplementary to Act on criminal liability of legal entities. Act on criminal liability of legal entities does not exclude the possibility to use effective regret in terms of criminal offence of Legalization of proceeds deriving from criminal activities. The conditions for application of effective regret regarding legal entities are determined in section 8 of the Act on criminal liability of legal entities. Section 85 of the Slovak criminal code will be used supplementarily.
In the Slovak Republic the institute of direct criminal liability of legal entities is not widely used in practice yet. Since its enforcement various criminal offences were added to the exhaustive list of criminal offences of legal entities. However, until today, we do not have any case in which legal entity would be found guilty and sentenced. We presume that the institute of direct criminal liability of legal entities needs more time to develop. If the Slovak Republic will follow the trends of the Czech Republic, the institute should be widely used within few years.
3. FIGHT AGAINST MONEY LAUNDERING IN THE RUSSIAN FEDERATION
Every developed country is doing its best to effectively fight money laundering. The Russian Federation is not an exception. Problematics of money laundering is regulated in Federal law on countering the legalization of illegal earnings (money laundering) and the financing of terrorism N 115 - FZ (hereinafter referred to as Federal law on fight against money laundering) from 7.09.2001, the updated version is in force since 30.06.2018.21 According to section 1 of the Federal law on fight against money laundering is its aim to protect the rights and legitimate interests of citizens, society and state. Its aim is also to create legal mechanism on fight against legalization of proceeds deriving from criminal activities and terrorism financing.
According to section 3 of the Federal law on fight against money laundering, the legalization of proceeds deriving from criminal activities (money laundering) is defined very briefly and concisely as accommodating legal form of possession, using or handling of funds or other assets gained as a consequence of crime perpetration.
Section 4 determines measures regarding fight against legalization of proceeds deriving from criminal activities and terrorism financing. These measures consist of:
• organization and execution of internal control;
• mandatory control;
• ban on informing clients and other persons on measures taken in fight against legalization of proceeds deriving from criminal activities and terrorism financing; with exception to inform clients on measures taken to freeze (block) funds or other assets as well as on declination to execute instructions of the client regarding execution of transactions, declination to make contract on bank
21 Available on: http://www.consultant.ru/document/cons_doc LAW_32834/ (access date: 20.07.2018).
account or contract on cancelation of bank account stating the reasons;
• other measures taken in accordance with other federal laws.
The Criminal code of the Russian Federation No. 63-FZ (hereinafter referred to as Russian criminal code or RCC) regulates the criminal offences related to money laundering in its special part in sections 174 and 174.1. Criminal offence of money laundering is incorporated in part VIII, chapter 22 of the Russian criminal code entitled as Crimes in the sphere of economic activity.
Criminal offence of the Legalisation (laundering) of funds and other property acquired by other persons illegally is enshrined in section 174 of the Russian criminal code. Similar criminal offence is regulated in section 231 of the Slovak criminal code, referred to as the criminal offence of Sharing. Qualified facts of both criminal offences:
1) legalisation (laundering) of funds and other property
acquired by other persons illegally;
2) sharing are very similar.
They have almost identical purpose as well as the object. The object of criminal offence set in section 174 of the Russian criminal code is any funds or other property knowingly acquired by other persons illegally. The purpose of this criminal activity is to bring appearance of legality to these funds or other property executing financial transactions or other transactions. Special qualified fact of the Legalisation (laundering) of funds and other property acquired by other persons illegally (§ 174, paragraph 2) requires accomplishment of financial transactions or other transactions with funds or other property knowingly acquired by other persons illegally in large amount, with the purpose to bring the appearance of legality to these funds or other property. Another special qualified fact of this criminal offence (§ 174, paragraph 3) requires accomplishment of transactions referred in section 174, paragraph 1 or 2 of the Russian criminal code with additional criterion:
• perpetration of the offence by a group of persons by prior collusion; or
• perpetration of the offence by a person using his/her official position.
The third special qualified fact (§ 174, paragraph 4) requires perpetration of criminal offence enshrined in section 174, paragraph 1 or 3 of the Russian criminal code by an organised group or in particularly large amount.
According to Russian criminal code the term large amount refers to transactions in an amount exceeding one million five hundred thousand roubles (1.500.000 RUB), i.e. approx. twenty thousand six hundred twenty euros (ap-prox. 20.620 EUR).22 According to Russian criminal code the term particularly large amount refers to amount exceeding six million roubles (6.000.000 RUB), i.e. approx. eighty-two thousand four hundred eighty-three euros (approx. 82.483 EUR).23
On the other hand, section 174.1 of the Russian criminal code refers to the criminal offence of the Legalisation (laundering) of funds or other property acquired by a person
22 Exchange rate according to Slovak National Bank applicable on 22.03.2019.
23 Exchange rate according to Slovak National Bank applicable
on 22.03.2019.
Prokeinova M., Hangacova N.
as a result of committing a crime. Perpetrators of this criminal offence execute financial transactions or other trans -actions with funds or other property acquired by them as a result of committing a criminal offence, in order to give appearance of legality to these funds or property.
In the past, according to section 174.1, paragraph 1 of the Russian criminal code effective until Federal law of the Russian Federation No. 134-FZ of 28.06.2013 on amendments to certain legislative acts of the Russian Federation aimed to counter illegal financial operations entered into force in 2013, the perpetrator had to execute financial or other transactions in large amount (at that time exceeding 6 million roubles (6.000.000 RUB) to be criminally liable.24 Likewise, section 174.1 of the Russian criminal code did contain certain exceptions. For example, if the perpetrator executed large-scale financial transactions or other transactions in monetary funds or other property acquired by him as a result of committing a crime expressly stated in section 174.1 of the Russian criminal code, i.e.:
• section 193: Non-return of funds in foreign currency from abroad;
• section 194: Evasion of customs payments collected from organisations or natural person;
• section 198: Evading payment of taxes and (or) fees by natural person;
• section 199: Evading payment of taxes and (or) fees collectible from organisations;
• section 199.1: Tax agent's failure to discharge his/her duties;
• section 199.2: Concealment of monetary funds or property of an organisation or individual businessman against which the recovery of taxes and (or) fees is levied
for the purpose of maintaining the appearance that the perpetrator rightfully possesses, uses and disposes these funds or other property, criminal offence of Legalisation (laundering) of monetary funds or other property acquired by a person as a result of committing a crime was not committed. Such an explicit exception, i.e. restriction of criminal liability had never been present in the Slovak criminal code. Nowadays, this list of exceptions is no more applicable. Section 174.1 of the Russian criminal code does not contain list of these exceptions since 2013.
Criminal offence referred in section 174.1, paragraph 2 of the Russian criminal code is committed when financial transactions or other transactions as referred in section 174.1, paragraph 1 RCC are executed in large amount. Another special qualified fact of this criminal offence (§ 174.1, paragraph 3) requires apart from conditions set in section 174.1, paragraph 1 or 2 RCC also:
• perpetration of the offence by a group of persons by prior collusion; or
• perpetration of the offence by a person using his/her official position.
The third special qualified fact (§ 174.1, paragraph 4) requires fulfilment of qualified facts set in § 174.1, paragraph 1 or 3 RCC and these had to be committed by an organised group of persons or in particularly large amount.
24 Since 2013 threshold for executing financial or other transactions in large amount is not applicable. Threshold regarding the value of transaction is not set in section 174.1, paragraph 1 of the Russian criminal code nowadays.
The basic qualified fact of the criminal offence of money laundering according to section 233 and section 234 of the Slovak criminal code, does not require any value of transaction or amount of gained profit for criminal liability. There is also no legal requirement for criminal liability regarding the value of transaction or amount of gained profit in basic qualified fact of section 231 of the Slovak criminal code. On the other hand, in special qualified fact of the criminal offence of money laundering according to section 233 SCC, the amount of gained benefit determines the imposition of heavier criminal sanctions. Section 233, paragraph 2 SCC requires obtaining profit from the criminal offence in the amount exceeding 2.660 EUR. Section 233, paragraph 3 SCC requires gaining profit from the criminal offence exceeding the amount of 26.600 EUR and section 233, paragraph 4 SCC requires profit exceeding 133.000 EUR.
Nowadays the Russian criminal code does not require any value of transaction for criminal liability neither in basic qualified fact of section 174 nor in basic qualified fact of section 174.1 RCC. The value of transaction plays its role when imposing heavier penalties. In the Russian Federation, heavier penalties are applicable after the transaction exceeds 1.500.000 RUB25 which is a really high threshold, mainly in comparison to the Slovak Republic legislation.
This fact could be understood as very soft tool encouraging the use of restorative justice in practice. It could also encourage application of ultima ratio principle, when criminal law represents the last instance to solve situations which are endangering or harming society values. The criminal law policy of individual states depends on its legitimate interests which need to be protected.
The Russian Federation is a traditional civil law country. Law enacting criminal liability of legal entities in not in force in the Russian Federation yet. However criminal liability of legal entities is widely debated in Russia, but the future of this institute is uncertain. Even though General Prosecutor's Office supports the introduction of corporate criminal liability, business community opposes it. The draft bill No. 750443-6 on the introduction of amendments to certain legislative acts of the Russian Federation in connection with the introduction of the institute of criminal responsibility of legal entities was withdrawn on 23.07.2018.26 Until now, only individuals are subject to criminal liability in the Russian Federation. In case employees of a legal entity or its directors commit a crime, natural persons can be prosecuted and punished, not the legal entity they form part of.
CONCLUSION
From the above-mentioned information, it is clear that states are doing their best to repress money laundering. Global organisations were set in order to fight money laundering. Policies of states are similar also due to the FATF recommendations. States are protecting society and states' earnings which they can receive from paid taxes. The anti-money laundering policy protects society from illegal businesses such as drug trafficking, human trafficking, illicit arms trafficking, illegal games, prostitution, fraud,
25 Referring to section 174, paragraph 2 and section 174.1, paragraph 2 of the Russian criminal code.
26 Available on: http://asozd2.duma.gov.ru/main.nsf/(Spravka)?Ope-nAgent&RN=750443-6" (access date: 20.09.2018).
corruption and illegal employment of people, because dirty money is in majority of cases originating from the above-named activities which harm public security, health, right to liberty, etc.
From the authors point of view the criminal codices of the Slovak Republic and the Russian Federation are in certain ways similar, but still there are some differences. The most significant difference identified by authors is the value of transactions required by section 174, paragraph 2 and 4 and section 174.1, paragraph 2 and 4 of the Russian criminal code. Similarities between the criminal codices are prevailing. Authors hold an opinion that this fact may be caused by international standards set in the area of anti-money laundering policy, namely the FATF recommendations.
Anti-money laundering act, Act on proof of origin of funds in privatisation, the Slovak criminal code as well as Act on criminal liability of legal entities reflect the Slovak legal framework concerning anti-money laundering strategy. Their provisions sufficiently regulate means, mechanisms and instruments of anti-money laundering policy. Slovak criminal code and Act on criminal liability of legal entities act as ultima ratio tools. In the Russian Federation the anti-money laundering strategy is regulated in the Federal law on fight against money laundering and the Russian criminal code.
REFERENCES
1. CoxD. Handbook of anti-money laundering. 1st ed. John Wiley & Sons, 2014. P. 727.
2. Centes J., Tuchscher M. Mimotrestna uprava ochrany pred le-galizaciou prijmov z trestnej Cinnosti a financovanim teror-izmu. 2 part. Justicna revue. 2009. Vol. 61. No. 3.
3. Laciak O. Pravna zodpovednost pravnickych osob za legalizaciu prijmov z trestnej Cinnosti. In: Trestna politika statu a zodpovednost pravnickych osob. Bratislava: Univerzita Komenskeho, Pravnicka fakulta, 2013. P. 110.
4. Parkman T. Mastering anti-money laundering and counter-terrorist financing: A compliance guide for practitioners. 1st ed. Pearson UK, 2012. P. 324.
5. Dictionary of contemporary english - Logman. 3rd ed. Essex, England, 1995.
LEGAL ACTS
1. Act No. 297/2008 Coll. on protection against legalisation of proceeds deriving from criminal activities and protection against terrorism financing as amended.
2. Act. No. 221/1994 Coll. on proof of origin of funds in privatisation as amended.
3. Act No. 300/2005 Coll. criminal code of the Slovak Republic as amended.
4. Act No. 91/2016 Coll. on criminal liability of legal entities as amended.
5. Council Directive 91/308/EEC of June 10, 1991 on prevention of the use of the financial system for the purpose of money laundering.
6. Directive 2001/97/EC of the European Parliament and of the Council of December 4, 2001 on prevention of the use of the financial system for the purpose of money laundering.
7. Directive 2005/60/EC of the European Parliament and of the Council of October 26, 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.
8. Directive 2015/849 of the European Parliament and of the Council of May 20, 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No. 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC.
9. Federal law of the Russian Federation on countering the legalization of illegal earnings (money laundering) and the financing of terrorism No. 115-FZ.
10. Federal law of the Russian Federation No. 134-FZ of June 28, 2013 on amendments to certain legislative acts of the Russian Federation aimed to counter illegal financial operations.
11. Criminal code of the Russian Federation No. 63-FZ.
INTERNET SOURCES
1. Ministry of Interior of the Slovak Republic. Financial Action Task Force. https://www.minv.sk/?fatf-1
2. National Bank of the Slovak Republic. Prevention of money laundering and terrorist financing. https://www.nbs.sk/sk/ dohlad-nad-financnym-trhom/dohlad/prevencia-legaliza-cie-prijmov-z-trestnej-cinnosti-a-financovania-terorizmu
3. Federal Law On Combating the Legalization (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism. http://www.consultant.ru/document/cons_doc_LAw_32834/
4. State Duma of the Federal Assembly of the Russian Federation, 2017. http://asozd2.duma.gov.ru/main.nsf/(Spravka)?Ope-nAgent&RN=750443-6
5. Financial Action Task Force, FATF Members and Observers. http://www.fatf-gafi.org/about/membersandobservers/
6. International Monetary Fund. Blow, Bling and Bucks: IMF Work Against Money Laundering and Terrorist Financing. June 2011. https://blogs.imf.org/2011/06/27/blow-bling-and-bucks-imf-work-against-money-laundering-and-terrorist-financing/
7. PricewaterhouseCoopers. Anti-money-laundering law is enacted in Russia. Tax and Legal Flash Report, Russia. Issue 24 (324). July 2013. https://www.pwc.ru/en/tax-consulting-services/ legislation/assets/tax-flash-report-issue-24-342-eng.pdf
Статья поступила в редакцию 20.03.2020, принята к публикации 17.04.2020 The article was received on 20.03.2020, accepted for publication 17.04.2020
СВЕДЕНИЯ ОБ АВТОРАХ
Прокеинова Маргита, доктор юридических наук, кандидат философских наук, профессор; доцент кафедры уголовного права, криминологии и криминалистики юридического факультета Университета имени Комен-ского в Братиславе. Братислава, Словакия. E-mail: [email protected]
Хангачова Наталья, доктор юридических наук, кандидат технических наук; аспирант кафедры уголовного права, криминологии и криминалистики юридического факультета Университета имени Коменского в Братиславе. Братислава, Словакия. E-mail: [email protected]
ABOUT THE AUTHORS
Margita Prokeinova, Doctor of Law, Candidate of Philosophy, Professor; associate professor of the Department of Criminal Law, Criminology and Criminalistics of the Faculty of Law, Comenius University in Bratislava. Bratislava, Slovakia. E-mail: [email protected]
Natalia Hangacova, Doctor of Law, Candidate of Engineering; internal PhD student of the Department of Criminal Law, Criminology and Criminalistics of the Faculty of Law, Comenius University in Bratislava. Bratislava, Slovakia. E-mail: [email protected]
