A draft law submitted for consideration to the State Duma—the lower chamber of the Russian parliament—would amend the Russian Criminal Code to make compliance with sanctions a criminal offense for directors and officers, punishable by severe penalties, including long-term imprisonment. If adopted, the law would significantly impact many individuals and businesses in Russia, and companies would need to adjust their strategies toward Russia accordingly.
Specifically, the draft law proposes to amend article 201 of the Russian Criminal Code. This article criminalizes an abuse of authority by persons performing managerial functions in a commercial or other type of organization if such person uses their authority contrary to the lawful interests of that organization and for the purpose of deriving unlawful benefits and advantages or to harm others, provided that such act has resulted in substantial damage to the rights and lawful interests of citizens or organizations or to the legally protected interests of Russian society or the state.
The draft proposes to amend this article to the effect that if the act is committed for the purpose of implementing a decision of a foreign state, union of foreign states, or international organization to introduce restrictive measures against the Russian Federation, such act must be punishable by:
Taking into consideration a guidance of the Russian Supreme Court, expressed in its Resolution No. 21, dated June 29, 2021, an individual can be prosecuted under article 201 of the Criminal Code if she or he:
If adopted, this law will grant authorities a broad discretion to prosecute both Russia’s own citizens as well as citizens of other countries. The Criminal Code applies to nationals of any state, whether Russia or another country, for offenses committed in Russia as well as for offenses committed outside Russia if such was directed against the interests of the Russian state or Russian nationals.
Given its sweeping nature and grave effects, the draft has been heavily criticized by prominent business associations, both international and Russian.
As of the date of this LawFlash, the draft has not been scheduled for hearing at the State Duma.
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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Ukraine Conflict Task Force
Giovanna M. Cinelli
Kenneth J. Nunnenkamp
Carl A. Valenstein
Jiazhen (Ivon) Guo
Katelyn M. Hilferty