Fine as an Alternative to Imprisonment

The President's proposal to mitigate punishments for small and moderate economic crimes will contribute to the more frequent use of fines as an alternative to imprisonment. This is in line with the recommendations of, for example, the United Nations Standard Minimum Rules for Non-Custodial Measures (The Tokyo Rules, 1990).

Sergei Kubantsev

Muranov, Chernyakov & Partners
+7 495 783-74-50

Domestic and foreign law enforcement practices provide ample evidence that competent application of such punishments can have serious preventative effect, while adverse financial consequences make committing such crimes worthless.

In general, fines are one of the most versatile of punishments. A fine may be applied as the main or additional punishment. The amount of a fine is determined by the court on the basis of the severity of the crime and the financial situation of the offender, his or her family members and future salary or other income. According to the Resolution of the Plenum of the Supreme Court #2 of January 11, 2007 “On the Practice of Criminal Punishments as Applied by Courts” by ‘other income’ is understood any taxable income. Therefore the amount of a fine usually depends on the social and economic position of the person to whom it is administered.

Fines have many advantages: the individualization of punishment and possibility of using incentives; small costs to society; reduction of the number of prisoners; first time offenders do not get in contact with hardened criminals; plus an additional source of income for the treasury.

The potential of fines as a punishment is far from being exhausted; there are efficient ways of using fines to fight crime so that the balance of humane principles and public safety can be found.

Part 2 of Article 46 of the Criminal Code defines the lower and upper limits which can be applied to fines. The amount of fixed penalty ranges from five thousand ($200) to 1 million ($40,000) roubles or can be related to salary or other income for the period from two weeks to five years or calculated in a multiple value of damage or the amount of bribe.

A fine of 500,000 roubles ($20,000) or salary or other income for a period exceeding three years may be imposed only for serious and especially serious crimes. This provision of the Criminal Code does not apply to bribes.

It seems that the above provisions can lead to the conclusion that further intervention in the Criminal Code is required in order to adjust the amount of any given fine. Otherwise you might have a situation where criminal damage of up to 10 million roubles is punishable by a fine of 500,000 roubles.

At present, the use of fines as a primary punishment is contained in Article 39 of Chapter 22 of the Special Section of the Criminal Code (economic crimes). Only two articles in this chapter do not state the use of fines a principal punishment but as an additional punishment.

Nevertheless, courts are very reluctant to apply fines as the only or primary form of punishment. In most cases, they are applied as an addition to imprisonment. This can be seen by the number of persons sentenced to paying a fine as compared to the total number of convictions.

Therefore, legal framework for the application of fines, instead of imprisonment for economic crimes does exist. What is needed is encouragement to courts to use fines as a primary punishment more often and some clarification on how the amount of fine should be determined.

Another important aspect should be noted. Fines are paid to the federal budget. Victims on the other hand, must go through civil action in order to receive compensation and the absolute majority of victims do not receive any compensation in practice. Payment is dragged out for years and represents a negligible amount as compared to the damage caused by the crime.

It is, therefore, advisable that a fine is paid after the offender has made all payments to the victim. This approach would facilitate the actual restoration of justice.

The President’s proposal to set fines of five times the amount of the damage, plus compensation to a victim, can become an unbearable burden for the person convicted. Punishment for crimes of small and medium severity will often become too harsh and even all the property of the offender could be insufficient to pay damages and fines. The approach may therefore generate homelessness, unemployment and anxiety which will cause new, more serious crimes.

There is another option. A part of the fine can be paid not to the federal budget but to a special fund from which the state would pay compensation to the victims. In this case a fine of five times the amount of damage caused by the crime will be more bearable.

Thus, the imposition of fines as punishment for crimes committed in the economic sphere seems a smart move because the person who committed criminal acts can compensate for harm while retaining his or her freedom and continuing his/her career. It would also help to preserve the income of the convicted person’s family and of the state.

Legislative approach to this type of punishment should be very balanced and take into account not only the reparation of harm to society as a whole but real compensation to a victim. That would mean a genuine restoration of justice.

Muranov, Chernyakov & Partners

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