Commentary on Article 195. Causing Property Damage by Deception or Abuse of Trust of the Criminal Code of the Republic of Kazakhstan

1. Causing property damage to an owner or another possessor of property by deception or abuse of trust, in the absence of the elements of misappropriation, —

shall be punishable by a fine in an amount of up to one hundred and sixty monthly calculation indices, or corrective labour in the same amount, or community service for a period of up to one hundred and sixty hours, or arrest for a period of up to forty days.

2. The same act committed repeatedly —

shall be punishable by a fine in an amount of up to two hundred monthly calculation indices, or corrective labour in the same amount, or community service for a period of up to two hundred hours, or arrest for a period of up to fifty days.

3. Acts provided for in Parts One or Two of this Article, committed:

1) by a group of persons acting in prior conspiracy;

2) by a person using their official position;

3) through unlawful access to an information system or alteration of information transmitted via telecommunications networks, —

shall be punishable by a fine in an amount of up to two thousand monthly calculation indices, or corrective labour in the same amount, or community service for a period of up to six hundred hours, or restriction of liberty for a period of up to two years, or imprisonment for the same period, with deprivation of the right to hold certain positions or engage in certain activities for a period of up to three years or without such deprivation.

4. Acts provided for in Parts One, Two or Three of this Article, if they:

1) are committed by a criminal group;

2) cause substantial damage, —

shall be punishable by restriction of liberty for a period of up to five years or imprisonment for the same period, with or without confiscation of property, and with deprivation of the right to hold certain positions or engage in certain activities for a period of up to three years or without such deprivation.

The public danger of the criminal offence (Parts 1 and 2 constitute criminal misdemeanours, while Parts 3 and 4 constitute crimes) is expressed in the violation of social relations concerning property. This criminal offence violates these relations by causing property damage to the owner or another possessor of property, depriving them of material benefits that they should have received.

The object of the criminal offence under consideration is property relations.

From the objective perspective, the act in question consists of:

a set of actions (inaction) aimed at causing property damage through deception or abuse of trust, in the absence of the elements of misappropriation;

consequences in the form of property damage in the form of lost profit;

a causal relationship between the perpetrator's conduct and the lost profit.

The methods of committing the act constitute an essential element of this offence: the damage is caused through deception or abuse of trust. The meaning of these concepts is identical to that of the same concepts in fraud; therefore, they are not examined in detail.

The distinguishing feature of the acts in question is that the act under consideration does not constitute misappropriation, whereas fraud does. In misappropriation, the transfer of property from the lawful possession fund into unlawful possession is mandatory. Causing property damage through deception or abuse of trust in the absence of the elements of misappropriation occurs when the property has not yet entered the owner's fund but should have entered it; that is, when this act is committed, the lawful owner does not receive the material benefits that they should have received.

In fraud, another person's property is taken and/or converted through deception or abuse of trust. In the offence under analysis, the perpetrator, by exploiting relationships of trust or through deception, prevents the transfer of property to the owner. For example, the elements of the criminal offence provided for in Article 195 of the Criminal Code should be attributed to a person who uses a vehicle or other immovable property belonging to legal entities or other owners without paying for such use, or to a person who fails to pay for the performance of work or the provision of services in the field of household and other public services, and so forth.

Furthermore, in fraud, deception or abuse of trust is directed at the victim in order to induce a specific disposition of property on their part. In the present case, deception is rather a means of concealing the criminal offence and, in any event, should not cause the victim to dispose of their property. The perpetrator retains the property themselves. The victim does not transfer it because they do not possess it. Abuse of trust, in turn, is more similar to the misappropriation of another person's property, but it also differs in the nature of the proprietary legal relations and the subject matter. The retained property was not transferred to the perpetrator and was not owned by the victim. Taking these distinctions into account, deception or abuse of trust may be carried out through various actions or omissions.

In relation to causing property damage to an owner through deception or abuse of trust in the absence of the elements of misappropriation, such criminal offence compositions as unlawful obtaining of a loan or misuse of a budget loan (Article 219 of the Criminal Code), evasion of payment of customs duties, customs fees, taxes, special anti-dumping and countervailing duties (Article 236 of the Criminal Code), evasion by an individual of payment of taxes and/or other mandatory payments to the budget (Article 244 of the Criminal Code), and evasion by organisations of payment of taxes and/or other mandatory payments to the budget (Article 245 of the Criminal Code) constitute special criminal offence compositions.

The criminal offence is considered completed at the moment property damage is caused to the owner. In determining the nature of the damage caused, it is important to establish the moment from which the property enters the victim's fund. The correct determination of this moment is decisive for qualifying the act either as misappropriation, which constitutes the elements of misappropriation, or as conversion for one's own benefit of property that was not yet in the owner's fund but was subject to transfer into it, which constitutes the offence of causing property damage to an owner through deception or abuse of trust in the absence of the elements of misappropriation.

In this regard, it is of decisive importance to establish whether the perpetrator had certain authority to receive the property in question. If the property is transferred to a person who is not authorised to receive it but who, through deceptive actions, has presented themselves as such an authorised person, the property does not have time to become the property of the victim. Consequently, the actions of such a person do not constitute the misappropriation of funds from the relevant fund, but rather constitute causing property damage through deception in the absence of the elements of misappropriation.

Unlike misappropriation, property damage does not consist of a reduction in assets but in the failure to receive what is due, that is, in the form of lost profit.

Determining lost profit is also a complex issue that requires an analysis of civil-law relations. Resolving this issue involves: a) establishing whether lost profit exists and whether the person is genuinely entitled to compensation for it; b) calculating the amount of lost profit (Article 9 of the Civil Code of the Republic of Kazakhstan).

In accordance with Paragraph 4 of Article 9 of the Civil Code of the Republic of Kazakhstan, losses are understood to mean expenses incurred or to be incurred by a person whose rights have been violated, the loss of or damage to their property (actual damage), as well as income not received by that person which they would have received under ordinary conditions of civil circulation if their rights had not been violated (lost profit).

The concept of property damage is evaluative in nature, meaning that it depends to a considerable extent on the opinion of the victim or the law enforcement authority. At the same time, ascertaining the opinion of the injured party cannot be regarded as a mandatory requirement when establishing this element. Damage is a civil-law concept, and civil legislation does not indicate the subjective nature of this category. Whether damage has been caused does not depend on the injured party; the latter merely indicates their willingness to restore their rights by means of civil-law remedies. Therefore, a statement by the victim that they have no claims indicates the absence of a desire to exercise their claims by filing a civil lawsuit within the framework of the criminal case under investigation, but does not in any way prevent further investigation.

The occurrence of property damage to the owner or another possessor of property as a result of its improper use must be caused by the actions of the perpetrator. Cases in which property damage is caused by improper actions of the owner or another possessor associated with the ineffective or legally unlawful establishment of relationships of trust must be excluded. This may occur, for example, where instructions are given to sell goods at an inflated price and the seller retains their own remuneration in full, thereby reducing the profit of the owner of the property (the principal).

The deliberate creation by the perpetrator of conditions for causing property damage to the owner or another possessor must be regarded as preparation for causing property damage through deception or abuse of trust. In accordance with Part 2 of Article 24 of the Criminal Code, such preparation does not entail criminal liability, since the criminal offence under consideration does not belong to the category of serious or especially serious crimes, nor does it constitute a terrorist crime. In this case, only civil-law or disciplinary liability may arise.

The subjective element of the criminal offence is expressed in guilt in the form of direct intent and a mercenary purpose. The perpetrator is aware that their actions aimed at misleading the victim or establishing relationships of trust with them will result in preventing the transfer of property to the owner, and desires this outcome.

The following do not constitute a mercenary purpose: a) the use of property on the basis of actual authority but not in accordance with the established purposes, if this does not result in the enrichment of the person or third parties (misuse, for example, of budget funds); b) taking property for temporary use or taking property with an intentional delay in payment; c) the desire to frighten the owner or encourage them to exercise greater caution.

The subject is a general one: a physically sane individual who has reached the age of 16.

Repeated commission of the criminal offence under consideration constitutes a qualifying element (Part 2 of Article 195 of the Criminal Code).

Part 3 of Article 195 of the Criminal Code provides for more severe liability for acts stipulated in Parts One or Two of this Article when committed:

by a group of persons acting in prior conspiracy;

by a person using their official position;

through unlawful access to an information system or alteration of information transmitted via telecommunications networks.

The commission of the criminal offence under consideration by a criminal group or in cases where substantial damage is caused is classified under Part 4 of Article 195 of the Criminal Code.

The content of certain qualifying and particularly qualifying elements is not disclosed in relation to the offence under analysis, since these elements have already been examined in the criminal-law description of theft (see the commentary to Article 188 of the Criminal Code).

Causing property damage through deception or abuse of trust by a person using their official position (Subparagraph 2 of Part 3 of Article 195 of the Criminal Code) is similar to the misappropriation or embezzlement of entrusted property belonging to another person. The distinction is made on the basis of the subject matter of the criminal encroachment. Thus, if the perpetrator “steals” electrical energy, thermal energy, and the like, their actions cannot be classified as misappropriation at all due to the absence of an object of the criminal offence in the form of a tangible item of the material world.

In misappropriation or embezzlement, as in any other form of misappropriation, the principal damage caused by the perpetrator's actions likewise cannot be expressed in the form of lost profit.

The acts provided for in Parts 1 and 2 of Article 195 of the Criminal Code are classified as criminal misdemeanours.

The act provided for in Part 3 of Article 195 of the Criminal Code is classified as a minor crime.

The act provided for in Part 4 of Article 195 of the Criminal Code is classified as a crime of medium gravity.

Commentary of 2021 to the Criminal Code of the Republic of Kazakhstan by Isidor Shamilovich Borchashvili, Honoured Figure of Kazakhstan, Doctor of Law, Professor, Academician of the Kazakhstan National Academy of Natural Sciences, member of the Scientific Advisory Councils under the Constitutional Council of the Republic of Kazakhstan and the Supreme Court of the Republic of Kazakhstan, member of the working group on reform of the law enforcement system under the Security Council of the Republic of Kazakhstan, Honoured Employee of the Ministry of Internal Affairs of the Republic of Kazakhstan.

Constitution Law Code Regulatory Decree Order Decision Resolution Advocate Almaty Lawyer Legal Service Legal Consultation Civil Criminal Administrative Cases and Disputes Defence Arbitration Legal Company of Kazakhstan Law Office Court Cases Declaration Decree Order Resolution Decision Report Conclusion Application Conclusion Convention Contract Memorandum Methodology Rules Note Regulations Programme Charter Charter Article Commentary Resolution Regulation Protocol Draft Programme Regulations Messages