Comment to Article 217. False bankruptcy of the Criminal Code of the Republic of Kazakhstan of the Criminal Code of the Republic of Kazakhstan

     A deliberately false announcement by the head or owner of a commercial organization, as well as by an individual entrepreneur, about his insolvency in order to mislead creditors in order to obtain a deferral or installment payment of payments due to creditors or a discount on debts, as well as for non-payment of debts if this act has caused major damage, —      

is punishable by a fine in the amount of five hundred to eight hundred monthly calculation indices or in the amount of the convicted person's salary or other income for a period of five to eight months, or by restriction of liberty for a term of up to one year, or by arrest for a term of up to four months, or by imprisonment for a term of up to one year with a fine of one hundred to two hundred monthly calculated indicators or in the amount of the convicted person's salary or other income for the period from one year to two months or without it.      

The public danger of crime is expressed in undermining the normal functioning of economic relations and causing enormous damage to the economy of our state.      

The object of this crime is public relations arising in connection with the bankruptcy procedure. An additional object is the property interests of creditors.      

The objective side of false bankruptcy is the deliberately false announcement by the head or owner of a commercial organization, as well as by an individual entrepreneur, of his insolvency in order to mislead creditors in order to obtain deferral or installment payments due to creditors or discounts from debts, as well as for non-payment of debts if this act has caused major damage.      

In accordance with paragraph 27 of Article 1 of the Law of the Republic of Kazakhstan "On Bankruptcy", false bankruptcy is recognized as a deliberately false application of the debtor to the court for bankruptcy recognition or the official declaration of bankruptcy by the debtor out of court under the control of creditors if he has the opportunity to satisfy creditors' claims in full.      

A crime is committed only through an action: a false declaration of insolvency, while in reality the debtor is fully capable of satisfying creditors' claims. The declaration of insolvency may follow before the creditors' claims are submitted to the debtor or after such claims are submitted.      

According to paragraph 2 of Article 5 of this Law, if the debtor's application for bankruptcy is filed in court or the debtor has officially declared bankruptcy out of court by agreement with creditors, if it is possible to satisfy creditors' claims in full, creditors have the right to demand compensation from the debtor for the losses caused by this.      

Under various circumstances (loss-making, unprofitability, merger with another company, etc.), it is often decided to liquidate the company as a legal entity. An enterprise that has begun to experience financial difficulties alienates the bulk of its assets (property) in favor of persons associated with common interests with the managers or owners (founders) of the debtor enterprise, which is declared bankrupt with the remaining assets, which are usually not liquidated and insufficient to settle accounts with creditors (tax authorities). At the same time, the bankruptcy procedure is used as a means of avoiding responsibility for abuses in the financial and economic activities of the debtor enterprise and declaring the insolvent debtor debt-free.      

The crime is considered over from the moment of causing major damage. Major damage in relation to the crime in question is understood to be the same damage as in the case of deliberate bankruptcy.      

The subject of a special crime is the head or owner of a commercial organization or an individual entrepreneur.      

The subjective side of the crime presupposes direct intent. The guilty person is aware that they are falsely declaring their insolvency, foresee the possibility or inevitability of causing major damage and wish to cause it. The purpose of the crime is to falsely declare one's insolvency, to obtain deferral or installment payments due to creditors or discounts on debts, as well as non—payment of debts.

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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