Comment to article 195. Malicious evasion from repayment of accounts payable of the Criminal Code of the Republic of Kazakhstan of the Criminal Code of the Republic of Kazakhstan

     Malicious evasion by the head of an organization or a citizen from paying off accounts payable on a large scale after the entry into force of the relevant judicial act, —      

is punishable by a fine in the amount of two hundred to five hundred monthly calculation indices or in the amount of the convicted person's salary or other income for a period of two to five months, or by arrest for a term of four to six months, or by correctional labor for a term of up to two years, or by imprisonment for the same term.      

Note. A large—scale debt is recognized as a citizen's debt in an amount exceeding five hundred monthly calculation indices, and an organization's debt in an amount exceeding two thousand five hundred monthly calculation indices.      

The public danger of an act provided for in this article is that as a result of its commission, the basic principles of credit relations (repayment, urgency, payment, security) are violated, and significant damage is caused to the credit policy of financial institutions.      

The object of malicious evasion from repayment of accounts payable should be understood as specific economic relations based on the principles of economic activity, which are subject to changes as a result of criminal encroachment provided for in art. 195 of the Criminal Code of the Republic of Kazakhstan. An additional object is the rights, freedoms and legitimate interests of a person and citizen or organizations.      

The subject of the crime in question is the amounts of funds that have not been repaid on bills and promissory notes, advances received from buyers and customers, tax arrears, dividends, as well as debts to major business and subsidiary partnerships, officials of the joint-stock company, rent payments, interest and other debts.      

The objective side of the crime under analysis is the malicious evasion of the head of an organization or a citizen from paying off accounts payable (through inaction) on a large scale, after the entry into force of the relevant judicial act.      

Accounts payable should be understood as current obligations to repay debts on bills and promissory notes, debts to officials of the joint-stock company, as well as to the main business and subsidiaries, lease payments and interest, and other debts within a certain period of time.      

Accounts payable are recorded for each creditor separately, and the aggregate indicators reflect the total amount of accounts payable. Accounts payable include indicators for the following items:     

- Suppliers and contractors;     

- bills of exchange payable;      

- debt owed to subsidiaries and affiliated companies;     

- debt owed to the organization's staff;      

- debt to the budget and social funds;      

- indebtedness to the participants (founders) for the payment of income (dividends);     

- other creditors.      

Accounts payable arise as a result of the borrower's failure to fulfill its obligations under the loan agreement (art.355 of the Civil Code of the Republic of Kazakhstan). Upon the occurrence of such circumstances, the lender has the right to apply a number of measures against the borrower, in particular, not to provide new loans, to foreclose on funds available in any borrower's accounts (if this is stipulated in the loan agreement), to file a claim with the court for declaring the insolvent borrower bankrupt, according to art. 36 of the Law of the Republic of Kazakhstan "On Banks and Banking Activities" dated August 31, 1995 (as amended and add.).     

Evasion from repayment of accounts payable may be expressed in an open refusal to repay accounts payable after the entry into force of the relevant judicial act or demonstrative disregard of the legitimate demands of bailiffs and creditors to repay debts after the entry into force of the judicial act. Evasion may also be expressed in hiding liquid or other property included in the authorized capital of the debtor, giving it as collateral, leasing it, colluding with employees of the financial service, or knowingly falsely declaring one's insolvency in order to avoid repayment of accounts payable, accompanied by the inclusion of knowingly false information about the state of the enterprise in accounting and reporting documents.-the debtor, when it is reliably known that the person is hiding from creditors and bailiffs, which indicates the deliberate avoidance of these actions.      

Malicious evasion from repayment of accounts payable should be understood as an open refusal to fulfill one's obligations arising from the terms of the loan agreement regarding the repayment of the loan amount or interest on it. This is a deliberate failure by the borrower to fulfill his obligation to repay existing debts to the lender, despite the fact that he has the opportunity to repay the debts.     

"Debt" refers to the principal amount of the debt (loan amount), interest for the use of the loan and the amount of overdue repayment of the loan (penalties in percentage terms).     

It should be noted that malice is evidenced by the long period of evasion of the debtor from repayment of accounts payable. The duration of this period begins from the moment the relevant court decision enters into force, provided that the debtor is aware of this. Otherwise, the term starts from the moment the debtor is notified. The length of time is determined by the specific circumstances.      

In a Regulatory resolution dated June 18, 2004, the Supreme Court of the Republic of Kazakhstan clarifies in paragraph 12 that criminal liability under Article 195 of the Criminal Code occurs in the case of malicious evasion from repayment of accounts payable after the entry into force of the relevant judicial act, when the amount of debt is large. In other cases, when the amount of accounts payable is not large, criminal liability for these actions occurs under art. 362 of the Criminal Code of the Republic of Kazakhstan. Malicious evasion from repayment of accounts payable can be committed in the form of deliberate concealment of funds, securities, collateral and other property that could be foreclosed on, their embezzlement and alienation in other ways, failure by the debtor without valid reasons for a long time to take measures to repay accounts payable if there is a real possibility of its full or partial repayments. When certain consequences occur, these actions of the perpetrators can be classified according to the totality of crimes: according to art. 195 and 216 or 217 of the Criminal Code of the Republic of Kazakhstan (intentional or false bankruptcy), or under articles of the criminal law providing for liability of officials or liability for causing property damage.     

According to the disposition of Article 195 of the Criminal Code, one of the conditions for criminal liability is failure to comply with the relevant court decision when the borrower has such an opportunity. The passive behavior of the perpetrator means that the method of committing this crime can be defined as the failure of the subject to perform actions that he was obliged and could have committed to prevent the development of certain phenomena and processes. In the field of bank lending, the nature and content of the relationship is clearly regulated by the loan agreement, in the field of administration of justice – by the executive documents of the judicial proceedings. The crime in question is considered to be ongoing, the beginning of its commission is conditioned by the entry into force of the relevant judicial act.     

For the existence of the corpus delicti of this crime, it is necessary that the accounts payable be on a large scale. The large amount of debt is determined in accordance with the note to art. 195 of the Criminal Code, based on the actually outstanding part of the loan at the time of establishing the fact of malicious evasion. Accounts payable on a large scale are the debts of a citizen in an amount exceeding five hundred monthly calculation indices, and of an organization in an amount exceeding two thousand five hundred monthly calculation indices established by the legislation of the Republic of Kazakhstan at the time of the commission of the crime. The law calls an obligatory sign of this crime the presence of a relevant judicial act that has entered into legal force.    

 The subject of a special crime is the head of a commercial and non—profit organization of any form of ownership, which is obliged to repay accounts payable, as well as persons acting as the head of the organization, if the latter's powers have been properly formalized. The subject of the crime may also be a citizen who is a debtor (necessarily engaged in entrepreneurial activity).      

On the subjective side, a crime is committed only with direct intent. The guilty person is aware that he is avoiding repayment of accounts payable after the entry into force of the relevant judicial act, anticipates the onset of consequences and desires their occurrence.     

The motive for malicious evasion is always self-serving. The goal is to avoid repayment of the loan.

Commentary from 2007 to the Criminal Code of the Republic of Kazakhstan from the Honored Worker of Kazakhstan, Doctor of Law, Professor, Academician of the Kazakhstan National Academy of Natural Sciences BORCHASHVILI I.Sh.                  

Date of amendment of the act:  08/02/2007 Date of adoption of the act:  08/02/2007 Place of acceptance:  NO Authority that adopted the act: 180000000000 Region of operation:  100000000000 NPA registration number assigned by the regulatory body:  167 Status of the act:  new Sphere of legal relations:  028000000000 Report form:  COMM Legal force:  1900 Language of the Act:  rus

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