Nezavisimaya Gazeta
New Crimes Added to Russian Criminal Code
The Supreme Court yesterday approved amendments to the criminal legislation to formalize some types of crime in separate articles, in particular loan, social benefit and insurance frauds, embezzlement of investors’ funds and counterfeit credit card fraud, as well as phishing, an e-mail fraud scam designed to get unsuspecting users to reveal sensitive information such as passwords and pin codes.
The document, part of Dmitry Medvedev’s policy of liberalizing the Criminal Code, is to be forwarded to the lower house of parliament in the near future.
The Supreme Court paid particular attention to Article 159 on fraud.
Previous rounds of humanizing the criminal legislation reduced the prison terms stipulated in this article and introduced fines and compulsory labor as alternatives. It was later decided that more should be done to diversify the punishments for different crimes. Supreme Court Judge Nikolai Timoshin said that Article 159 had been taken almost unchanged from the Soviet-era Criminal Code and hence often disregards modern types of legal relations, is interpreted too broadly or does not ensure adequate protection of civil rights.
Unlike other crimes, there are many different types of fraud. Approximately 25,000 people are sentenced under this article every year, but not all of them fairly since the current definition of fraud as an attempt to defraud people or entities of their property through deception or breach of trust has become obsolete. It can be used against businesses, where there is a risk of failure to fulfill one’s obligations, or against victims of market deceptions. The Supreme Court has decided to add modern types of fraud to the code.
One of them is loan fraud, when a borrower steals money from a bank by providing false information. Timoshin said that loan fraud accounts for approximately 10 percent of all fraud cases. Social benefit fraud is even more widespread: these cases constitute nearly 13 percent of all fraud crimes.
The use of fake credit cards and trying to cheat lending establishments are a more sophisticated crime, alongside insurance scams. The Criminal Code will have new articles on investment fraud and computer crimes, primarily phishing.
Timoshin said off the record that the amendments had been drafted after a thorough analysis of judicial practice, which revealed difficulties in applying Article 159 in the courts. This is why six more fraud articles will be added to the Code, all of them stipulating a fine of up to 120,000 rubles ($4,100), 12-24 months of correctional/compulsory labor, or 24 months in prison for non-aggravated crimes. Punishment for aggravated crimes is up to 10 years in prison plus a fine of one million rubles ($34,000).
Interestingly, the Supreme Court has not proposed a separate article on housing fraud but has amended Article 159. It now says that the loss of housing shall be considered an aggravating circumstance involving serious damage. Real estate-related crimes are punishable by up to 10 years in prison.
Rossiiskaya Gazeta
Russians Borrow Nearly $200 Million as Credit Boom Takes Hold
More and more Russians believe now is the perfect time to take out a bank loan. They have borrowed 5.6 billion rubles ($190mn). Banks are doing their best to encourage this trend.
The volume of consumer loans extended by Russian banks grew 38.9 percent year on year in March, almost reaching the pre-crisis “overheated” growth rate. According to surveys, 26 percent of Russians believe this is the best time to borrow, up from 18 percent a year ago, while the number of those who disagree has fallen from 70 percent to 56 percent.
The websites of banks are full of ads offering targeted consumer loans for every purpose, from buying furniture to anti-aging treatments to getting a pet. However, analysts warn of the risks of borrowing.
Surprisingly, these trends come at a time when interest rates are going up, said financial analyst Yelena Matrosova. Sberbank recently increased its interest rates on unsecured loans to 18-22 percent. Other banks have even higher rates, so loans are costly affairs, especially given that inflation is relatively low, she said.
You can take out a loan of 100,000 rubles ($3,400) at 20-22 percent for a year for a major purchase. But it is better not to borrow at higher rates. Also it is preferable to take loans out in rubles while the national currency is appreciating, said Alexander Murychev from the Russian Union of Industrialists and Entrepreneurs.
Interest rates on longer-term mortgages and car loans are quite reasonable, said Dmitry Miroshnichenko from the Higher School of Economics. The average mortgage interest rate has fallen to 12 percent from 13.3 percent at the beginning of last year.
Then again, it might make sense to borrow now because interest rates are unlikely to go down. They will probably go up as banks seek to improve their liquidity profiles while the government, in its determination to keep inflation in check, is reluctant to inject cash into the market, Matrosova predicts. On the other hand, competition between banks will keep rates down, Miroshnichenko argues. “They may even fall a little if capital inflow resumes,” he said.
“The demand for corporate loans is unlikely to grow, given the current economic uncertainty. So banks will mostly target individual customers,” Murychev said.
However, economic uncertainty may also affect individual borrowers. “Loans are liabilities shifted to the future. When there is no growth, one should think twice before borrowing,” Matrosova warns. Global economic problems and falling oil prices may affect the Russian economy. Salaries are unlikely to rise. “In these circumstances, one should save rather than borrow,” she concludes.
She recommends investing in ruble deposits or metal accounts; the stock market situation remains complicated for individual investors, she warns: after a 20% rise, a downward correction is highly probable.
In summary, people should borrow now if they need to, but not just to join the market-driven rush and definitely not to buy an expensive pedigree cat.
For reference: there are 297 billion rubles ($10.1bn) of debt arrears in Russia.
Moskovskiye Novosti
Tatar Interior Minister Leaves With Dignity
Tatar Interior Minister resigns in the wake of the “torture scandal.”
Tatar Interior Minister Lieutenant-General Asgat Safarov resigned yesterday after 14 years in office. He made it clear that he is taking moral responsibility for the actions of his subordinates who tortured and killed a detainee at a police station in Kazan.
The general’s resignation sets a precedent for Russian law enforcement officials, who have always tried to distance themselves from the transgressions of their subordinates. Mr. Safarov’s resignation may also be an attempt to spare Russian Interior Minister Rashid Nurgaliyev, as ongoing scandals involving police officers have created high public expectations for his sacking.
Asgat Safarov came under severe criticism immediately after the incident in the Dalny police station in Kazan, where a detainee Sergei Nazarov was tortured and killed by police officers. The investigation into the case unveiled a whole series of similar crimes committed by police officers in Kazan, which prompted human rights advocates to demand the general’s resignation.
Initially, however, the Russian Interior Ministry defended the high ranking official, citing the minister’s extensive experience and impressive track record. As a result, Safarov, who had said earlier that he was ready to suffer any punishment, was only reprimanded.
He then unleashed an active campaign to reform his agency by firing the officers involved in the crime, introducing the principle of “collective responsibility” for the misdeeds of individual officers, and installing video cameras in the interrogation rooms. If anything, this flurry of activity was meant to demonstrate that the minister had no intention of leaving his post.
However, Interfax reported yesterday that Safarov had submitted his resignation. This was later confirmed by the Tatar Interior Ministry website, which published the minister’s comments.
“Resigning immediately after the incident at the police station would have been tantamount to a betrayal of my colleagues, as they would have been left to deal with the aftermath of the scandal,” said the minister. He submitted his resignation after taking all necessary measures to prosecute the criminals and ensure that similar incidents would never happen again, Safarov explained.
A Russian Interior Ministry source told the MN that the minister’s resignation would be accepted.
Recently, cases of abuse and torture in police custody have been regularly reported in Russia. And the public is no longer willing to accept the explanations offered by the Interior Minister Nurgaliyev, who claims that problems in the police reflect the ills of Russian society at large.
Safarov’s resignation has been welcomed by human rights advocates, who praised the general for leaving with dignity as befits an officer.
Safarov’s resignation sets a precedent in modern Russian history. Previously, high ranking officials avoided sharing responsibility even for the most savage crimes of their subordinates. Following the police shooting in a Moscow supermarket in 2009 and a string of police crimes in the village of Kushchevskaya the relevant police heads were fired by presidential decree.
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