Commentary on Article 176. Unlawful Actions in Rehabilitation and Bankruptcy of the Code of the Republic of Kazakhstan on Administrative Offences
1. Concealment of property or property obligations, information about property, its value, location or other information concerning property, transfer of property into the possession of another person, alienation or destruction of property, as well as failure to submit, concealment, destruction or falsification of accounting and other records reflecting economic activities, and failure to take measures to restore such records, if these actions (inaction) are committed during rehabilitation or bankruptcy or in anticipation of bankruptcy and do not contain elements of a criminally punishable act, —
shall entail a fine of three hundred monthly calculation indices for small business entities, five hundred monthly calculation indices for medium-sized business entities, and one thousand monthly calculation indices for large business entities.
2. Unlawful satisfaction of the property claims of individual creditors by an official, the owner of the debtor’s property or an individual entrepreneur who is aware of their actual insolvency (bankruptcy), as well as by a person entrusted with the functions of managing the property and affairs of an insolvent debtor during bankruptcy proceedings or rehabilitation proceedings, knowingly to the detriment of other creditors, as well as acceptance of such satisfaction by a creditor who is aware that the insolvent debtor has granted that creditor preferential treatment to the detriment of other creditors, provided that these actions do not contain elements of a criminally punishable act, —
shall entail a fine of one hundred and fifty monthly calculation indices for an individual, three hundred and fifty monthly calculation indices for small business entities, six hundred monthly calculation indices for medium-sized business entities, and two thousand monthly calculation indices for large business entities.
The Article under consideration establishes administrative liability for unlawful actions during rehabilitation and bankruptcy.
According to subparagraph 27) of Article 1 of the Law of the Republic of Kazakhstan dated 7 March 2014 No. 176-V “On Rehabilitation and Bankruptcy,” a rehabilitation procedure is a procedure introduced by a court under which reorganisation, organisational and economic, managerial, investment, technical, financial and economic, legal and other measures not contrary to the legislation of the Republic of Kazakhstan are applied to an insolvent debtor, with the aim of restoring the debtor’s solvency and preventing its liquidation.
According to subparagraph 6) of Article 1 of the aforementioned Law, bankruptcy is the insolvency of a debtor recognised by a court decision, which constitutes grounds for the debtor’s liquidation.
A person who has committed an offence may be held administratively liable under the Article under consideration only if the person’s actions do not contain elements of the relevant criminally punishable act. Otherwise, offenders — individuals or officials of a legal entity — are subject to criminal liability for unlawful actions during rehabilitation and bankruptcy in accordance with the provisions of the Criminal Code. In this regard, the actions of a person during rehabilitation and bankruptcy must initially be examined by law enforcement authorities to determine whether they contain elements of a criminal offence and whether there are grounds for bringing the person who committed it to criminal liability.
The generic object of the offences provided for in Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences is the procedure for conducting entrepreneurial activities in the Republic of Kazakhstan, established by the legislation of the Republic of Kazakhstan and protected by the State.
The direct object of the offences provided for in Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences is the procedure for conducting rehabilitation and bankruptcy proceedings involving business entities, as established by the legislation of the Republic of Kazakhstan.
The subjects of the offences provided for in Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences are individuals and legal entities that are business entities undergoing rehabilitation or bankruptcy proceedings, in a state of actual insolvency (bankruptcy), or in anticipation of bankruptcy.
The subjective element of the unlawful acts provided for in Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences, in the case of individual offenders (including officials of legal entities and individual entrepreneurs), is characterised by guilt in the form of intent or negligence. A person’s guilt is determined by their mental attitude towards the unlawful acts committed and their harmful consequences.
The subjective element of offences committed by legal entities is not subject to determination because the legislative requirement to establish guilt as a condition for imposing administrative liability applies only to individuals. Under the legislation of the Republic of Kazakhstan on administrative liability, legal entities incur administrative liability solely on the basis of the fact that they have committed an unlawful act or omission for which the Code provides for administrative liability, without taking into account the guilt of the officials of the legal entity who committed the act.
The elements of the administrative offences provided for in Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences are material in nature. In order to impose administrative liability for committing these offences, it is necessary to establish the fact that the offender caused material damage to the State, an organisation or a citizen as a result of the unlawful transfer of property into another person’s possession, concealment, alienation or destruction of property or documents, as well as as a result of the unlawful satisfaction of the property claims of individual creditors.
Where material damage is caused as a result of an offence, the interested person whose rights and interests have been violated may claim full compensation for such damage, since bringing the offender to administrative liability under the Article under consideration does not release that person from the obligation to remedy the violations committed and compensate for the damage caused.
Officials of the state revenue authorities are authorised to draw up reports on administrative offences provided for in the Article under consideration.
Part 1 of the Article under consideration establishes administrative liability for concealing property or property obligations, information about property, its value, location or other information concerning property, transferring property into the possession of another person, alienating or destroying property, as well as failing to submit, concealing, destroying or falsifying accounting and other records reflecting economic activities, and failing to take measures to restore such records, where these actions (inaction) are committed during rehabilitation or bankruptcy or in anticipation of bankruptcy.
The objective element of the offence provided for in Part 1 of the Article under consideration is characterised by the commission of unlawful acts (or omissions, which must also be culpable in the case of individuals) expressed in:
- concealing property or property obligations;
- concealing information about property, its value, location or other information concerning property;
- transferring property into the possession of another person;
- alienating property;
- destroying property;
- failing to submit, concealing, destroying or falsifying accounting and other records reflecting economic activities;
- failing to take measures to restore accounting and other records reflecting economic activities.
An essential element of the objective side of the offence provided for in Part 1 of the Article under consideration is that the above actions (inaction) are committed during rehabilitation or bankruptcy or in anticipation of bankruptcy.
An administrative penalty in the form of a fine is established for committing the offence provided for in Part 1 of Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences.
The amount of the fine for committing the offence provided for in Part 1 of Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences varies depending on the category of business entity to which the offender belongs. Accordingly, before bringing a person to administrative liability, the authority responsible for doing so must first establish the person’s legal status and the category of business entity to which that person belongs.
Depending on the category of business entity to which the offender belongs, the fine amounts are as follows:
- for small business entities — 300 monthly calculation indices;
- for medium-sized business entities — 500 monthly calculation indices;
- for large business entities — 1,000 monthly calculation indices.
The amounts of the fines are fixed for offenders in each category and may not be changed by the authority imposing them.
Cases concerning administrative offences provided for in Part 1 of the Article under consideration are heard, and administrative penalties are imposed on offenders for committing them, by a court, pursuant to the direct provision to that effect in the relevant provision of the Code of the Republic of Kazakhstan on Administrative Offences.
Part 2 of the Article under consideration establishes administrative liability for the unlawful satisfaction of the property claims of individual creditors by an official, the owner of the debtor’s property or an individual entrepreneur who is aware of their actual insolvency (bankruptcy), as well as by a person entrusted with the functions of managing the property and affairs of an insolvent debtor during bankruptcy proceedings or rehabilitation proceedings, knowingly to the detriment of other creditors, as well as for the acceptance of such satisfaction by a creditor who knew in advance that the insolvent debtor had granted that creditor preferential treatment to the detriment of other creditors.
The subjects of the offence provided for in Part 2 of the Article under consideration are:
- an official, the owner of the debtor’s property or an individual entrepreneur who is aware of the debtor’s actual insolvency (bankruptcy), before the introduction of rehabilitation proceedings or bankruptcy proceedings;
- a person entrusted with the functions of managing the property and affairs of an insolvent debtor, after the introduction of rehabilitation proceedings or bankruptcy proceedings;
- a creditor who has accepted satisfaction of their claims against an insolvent debtor and who previously knew that the debtor had granted that creditor preferential treatment to the detriment of other creditors.
The objective element of the offence provided for in Part 2 of the Article under consideration is characterised by the commission of unlawful acts (which must also be culpable in the case of individuals), expressed in the unlawful satisfaction of the property claims of individual creditors knowingly to the detriment of other creditors.
Creditors’ claims must be satisfied in accordance with the procedure established by the legislation of the Republic of Kazakhstan and, where rehabilitation proceedings or bankruptcy proceedings have been introduced, also in accordance with the procedure and order of priority established by the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy. A violation of the specified procedure and order of priority in satisfying creditors’ claims infringes the rights of other creditors, including those whose claims rank ahead of the creditor whose claims have been satisfied. Accordingly, such satisfaction of creditors’ claims constitutes unlawful satisfaction carried out knowingly to the detriment of the interests of other creditors.
Furthermore, the objective element of the offence provided for in Part 2 of the Article under consideration also encompasses unlawful actions by a creditor in accepting preferential satisfaction of their claims against an insolvent debtor over those of other creditors and to their detriment, provided that, at the time the property was transferred to them, the creditor knew that the insolvent debtor had granted them preferential treatment to the detriment of other creditors.
An administrative penalty in the form of a fine is established for committing the offence provided for in Part 2 of Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences.
The amount of the fine for committing the offence provided for in Part 2 of Article 176 of the Code of the Republic of Kazakhstan on Administrative Offences varies depending on the legal status of the offender and, if the offender is a business entity, also on the category of business entity to which the offender belongs. Accordingly, before bringing a person to administrative liability, the authority responsible for doing so must first establish the person’s legal status and the category of business entity to which that person belongs.
Depending on the offender’s legal status and the category of business entity to which the offender belongs, the fine amounts are as follows:
- for individuals — 150 monthly calculation indices;
- for small business entities — 350 monthly calculation indices;
- for medium-sized business entities — 600 monthly calculation indices;
- for large business entities — 2,000 monthly calculation indices.
The amounts of the fines are fixed for offenders in each category and may not be changed by the authority imposing them.
The case concerning the administrative offence provided for in Part 2 of the Article under consideration is heard, and an administrative penalty is imposed on the offender for committing it, by a court, pursuant to the direct provision to that effect in the relevant provision of the Code of the Republic of Kazakhstan on Administrative Offences.
Scientific and Practical Commentary on the Code of the Republic of Kazakhstan on Administrative Offences (Article-by-Article Commentary), by the team of authors:
Bachurin Sergey Nikolaevich, Candidate of Legal Sciences, Associate Professor — Chapter 48 (co-authored with E.M. Khakimov);
Gabdualiyev Mereke Trekovich, Candidate of Legal Sciences — Chapters 11, 21, 22, 23;
Zhusipbekova Ainur Maratovna, Master of Laws — Chapter 13 (co-authored with A.V. Karpekin); Chapters 33 and 39 (co-authored with O.T. Seitjanov);
Karpekin Aleksandr Vladimirovich, Candidate of Legal Sciences, Associate Professor — Chapter 13 (co-authored with A.M. Zhusipbekova);
Korneychuk Sergey Vasilievich — Chapter 2; Chapter 6 (co-authored with O.T. Seitjanov and E.M. Khakimov); Chapter 8; Chapter 25 (co-authored with E.M. Khakimov); Articles 457–470, 488, 488-1, 491–506; Chapters 28, 30, 52;
Koryakin Ilya Petrovich, Doctor of Legal Sciences, Professor — Chapter 49;
Kysykova Gulnara Bauyrzhanovna, Candidate of Legal Sciences — Chapter 20;
Omarova Botagoz Akimgereevna — Chapter 17; Chapter 18 (co-authored with B.A. Parmankulova); Chapters 26 and 31; Chapter 32 (co-authored with B.A. Parmankulova);
Parmankulova Bayan Askhanbaevna — Chapter 18 (co-authored with B.A. Omarova); Chapter 19; Chapter 32 (co-authored with B.A. Omarova); Chapter 43 (co-authored with A.S. Tukiev);
Podoprigora Roman Anatolyevich, Doctor of Legal Sciences, Professor — Chapter 24, Articles 489, 489-1, 490;
Porokhov Evgeny Viktorovich, Doctor of Legal Sciences — Chapters 14, 15, 16, 29, Articles 471–475;
Seitjanov Olzhas Temirzhanovich, Candidate of Legal Sciences, Associate Professor — Chapter 4; Chapter 5 (co-authored with E.M. Khakimov); Chapter 6 (co-authored with S.V. Korneychuk and E.M. Khakimov); Chapters 9 and 10 (co-authored with B.E. Shaimerdenov and V.V. Filin); Chapter 33 (co-authored with A.M. Zhusipbekova); Chapter 36 (co-authored with B.E. Shaimerdenov); Chapter 39 (co-authored with A.M. Zhusipbekova);
Smyshlyaev Aleksandr Sergeevich, PhD — Chapters 38, 40, 42, 43-1 (co-authored with A.S. Tukiev); Chapter 44;
Tukiev Aslan Sultanovich, Candidate of Legal Sciences, Associate Professor — Chapters 1, 3, 35; Chapters 38, 40, 42 (co-authored with A.S. Smyshlyaev); Chapter 43 (co-authored with B.A. Parmankulova); Chapter 43-1 (co-authored with A.S. Smyshlyaev); Chapter 44-1 (co-authored with D.A. Shipp); Chapter 45; Chapter 46 (co-authored with D.A. Shipp); Chapter 47;
Filin Vladimir Vladimirovich, Candidate of Legal Sciences — Chapter 10 (co-authored with O.T. Seitjanov and B.E. Shaimerdenov);
Khakimov Erzhan Maratovich, Master of Laws — Chapter 5 (co-authored with O.T. Seitjanov); Chapter 6 (co-authored with O.T. Seitjanov and S.V. Korneychuk); Chapter 7; Chapter 25 (co-authored with S.V. Korneychuk); Chapters 34 and 41; Chapter 48 (co-authored with S.N. Bachurin); Chapter 53;
Shaimerdenov Bolat Erkenovich, Master of Laws — Chapter 10 (co-authored with O.T. Seitjanov and V.V. Filin); Chapter 12; Articles 476–487, 507–509; Chapter 36 (co-authored with O.T. Seitjanov); Chapters 37, 50, 51;
Shipp Denis Alekseevich — Chapters 44-1 and 46 (co-authored with A.S. Tukiev).
Date of amendment of the legal act: 01.01.2020Date of adoption of the legal act: 01.01.2020Place of adoption: 100050000000Authority that adopted the legal act: 103001000000Region of application: 100000000000Registration number of the regulatory legal act assigned by the rule-making authority: 5Status of the legal act: newArea of legal relations: 029000000000 / 028000000000 / 029002000000 / 028004000000 / 029001000000 / 026000000000 / 001000000000 / 001008000000 / 030000000000Form of the act: commentary / codeLegal force: 1900Language of the act: Russian
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