Commentary on Article 223 of the Criminal Code of the Republic of Kazakhstan. Unlawful Acquisition, Disclosure or Use of Information Constituting Commercial or Banking Secrets, Tax Secrets Obtained in the Course of Horizontal Monitoring, Microcredit Provision Secrets, Collection Agency Activity Secrets, as well as Information Related to the Legalization of Property
1. Collection of information constituting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets, collection agency activity secrets, as well as information related to the procedure for the legalization of property, by means of stealing documents, bribing or threatening persons possessing commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets, collection agency activity secrets, or their close relatives, intercepting information through communication channels, unlawfully accessing a computer system or network, using special technical equipment, as well as by any other unlawful means, for the purpose of disclosing or unlawfully using such information, —
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 involvement in 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.
2. Unlawful disclosure or use of information constituting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets, collection agency activity secrets, without the consent of their owner, by a person to whom such information was entrusted by virtue of their official position or work, committed out of mercenary or other personal interest and causing major damage, —
shall be punishable by a fine in an amount of up to three thousand monthly calculation indices, or corrective labour in the same amount, or involvement in community service for a period of up to eight hundred hours, or restriction of liberty for a period of up to three years, or imprisonment for the same period.
3. Unlawful disclosure or other unlawful use by officials of state bodies of information and data concerning transactions involving money and (or) other property received from financial monitoring entities, if this has resulted in a substantial violation of the rights and legitimate interests of citizens or organisations, or interests of society or the State protected by law, —
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 involvement in 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.
4. Unlawful disclosure or other unlawful use by officials of state bodies and employees of organisations of information and data concerning transactions involving money and (or) other property obtained by them in the performance of their official duties, as established by the Law of the Republic of Kazakhstan “On Amnesty for Citizens of the Republic of Kazakhstan, Kandases and Persons Holding a Residence Permit in the Republic of Kazakhstan in Connection with the Legalization of Their Property”, —
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 involvement in 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.
In the modern world, business information constitutes intangible property that can be sold, exchanged, licensed, unlawfully appropriated and devalued. Accordingly, the protection of such information is one of the most important rights of an individual, an organisation and the State.
The public danger of the unlawful acquisition, disclosure or use of information constituting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets, collection agency activity secrets, as well as information related to the legalization of property, lies in the fact that, by possessing such information, interested persons may commit any criminal offence against its holders (economic offences, offences against the person, offences against property, etc.), gain victory in economic competition, disclose important technological or production secrets and significantly reduce the competitiveness of enterprises, undermine the stability of credit institutions, etc.
The object of the crime under consideration is the procedure established by law that ensures the confidentiality of information constituting commercial, banking or tax secrets, microcredit provision secrets, collection agency activity secrets, as well as information related to the legalization of property.
The subject matter of the crime is information constituting commercial and banking secrets, tax secrets, microcredit provision secrets, collection agency activity secrets, as well as information related to the legalization of property.
A commercial secret is information that has actual or potential commercial value due to the fact that it is unknown to third parties, that there is no lawful free access to it, and that the holder of the information takes measures to protect its confidentiality (Article 126 of the Civil Code).
Pursuant to paragraph 5 of Article 10 of the Civil Code of the Republic of Kazakhstan, commercial (entrepreneurial) secrets are protected by law. The procedure for determining information constituting commercial secrets, the means of protecting such information, as well as the list of information that must not be included in commercial secrets are established by legislation.
Paragraph 1 of Article 28 of the Entrepreneurial Code states that the protection of commercial secrets consists in prohibiting the unlawful acquisition, dissemination or use of information constituting commercial secrets in accordance with this Code and the legislation of the Republic of Kazakhstan.
As a rule, the content and scope of information constituting commercial secrets are determined by the business entities themselves. This may include a company's financial or production plan, information concerning trade transactions, suppliers, consumers, etc. Such information includes technical, technological, organisational and other achievements protected by an organisation, which provide it with an advantage in competition. Commercial secrets should include information about methods of product manufacturing, technology, labour organisation, technical discoveries, the nature and purpose of research activities, etc.
The list of information constituting commercial secrets is also established by separate regulatory legal acts. Thus, Article 41 of the Law of the Republic of Kazakhstan dated 2 July 2003 “On the Securities Market” establishes a list of information constituting commercial secrets in the securities market. Article 12 of the Law of the Republic of Kazakhstan dated 28 February 2007 “On Accounting and Financial Reporting” establishes that the contents of primary documents and accounting registers constitute information constituting commercial secrets, access to which is granted only to persons who have the authorisation of the management or individual entrepreneur, as well as officials of state bodies in accordance with the laws of the Republic of Kazakhstan.
In accordance with Article 50 of the Law of the Republic of Kazakhstan dated 31 August 1995 “On Banks and Banking Activities in the Republic of Kazakhstan”, banking secrets include information about clients and correspondents of banks, their transactions and relations with banks connected with the receipt of banking services, including, without limitation: information about the existence, holders and numbers of bank accounts and correspondent accounts of banks, the balances and movement of money in those accounts and the accounts of the bank itself, restrictions imposed on the aforementioned accounts (decisions and (or) instructions of state bodies to suspend expenditure transactions, seizures, pledges), transactions of clients and correspondents and of the bank itself (except for the general terms and conditions for conducting banking operations), as well as information about the existence, owners, nature and value of clients' property held in the bank's safe-deposit boxes, cabinets and premises, information about loans received by clients (except for cases specified in this Article), and the conduct of payment transactions and (or) money transfers, including those carried out without opening a bank account. Information about loans issued by a bank undergoing liquidation does not constitute banking secrets.
In accordance with Article 30 of the Tax Code, tax secrets comprise any information about a taxpayer (tax agent) obtained by the tax authority, with the exception of information:
“1) concerning the amount of taxes and payments to the budget paid (transferred) by the taxpayer (tax agent), except for individuals;
concerning the amount of the refund to the taxpayer from the budget of the excess of the amount of value added tax attributable to offset over the amount of tax accrued;
concerning the amount of tax arrears of the taxpayer (tax agent);
concerning inactive taxpayers;
subject to placement in the database on the Internet resource of the authorised body in the case provided for by Article 19 of this Code;
concerning the submission by the taxpayer of a tax application for conducting a tax audit in connection with liquidation (termination of activities);
concerning the accrued amount of taxes and payments to the budget assessed to the taxpayer (tax agent), except for individuals;
concerning the accrued amount of property tax, land tax and vehicle tax for individuals;
concerning measures of liability applied in respect of a taxpayer (tax agent) who has violated the tax legislation of the Republic of Kazakhstan...” and other information listed in subparagraphs 10)-18) of paragraph 1 of Article 30 of the Tax Code of the Republic of Kazakhstan.
Paragraph 2 of Article 30 of the Tax Code of the Republic of Kazakhstan establishes that information about a taxpayer (tax agent) constituting tax secrets may not be provided by tax authorities to another person without the written permission of the taxpayer (tax agent), unless otherwise established by this Article.
Pursuant to paragraph 1 of Article 11 of the Law of the Republic of Kazakhstan dated 6 May 2017 “On Collection Agency Activities”, collection agency activity secrets include any information about the debtor, creditor, debt, third parties connected by obligations with the creditor within the framework of a bank loan agreement or a microcredit provision agreement, the terms of concluded debt collection agreements, and other information obtained and (or) compiled by a collection agency in the course of carrying out collection agency activities.
Microcredit provision secrets include information about borrowers, the amounts of microcredits, other terms of the microcredit provision agreement relating to the borrower, and the operations of a microfinance organisation (except for the rules for granting microcredits) (paragraph 1 of Article 21 of the Law of the Republic of Kazakhstan dated 26 November 2012 “On Microfinance Activities”).
Information concerning microcredit provision agreements concluded by a microfinance organisation undergoing liquidation does not constitute microcredit provision secrets.
The objective aspect of the act provided for in Part 1 of the Article under consideration includes actions involving the collection of information by means of stealing documents, bribing or threatening persons possessing commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets, collection agency activity secrets, or their close relatives, intercepting information through communication channels, unlawfully accessing a computer system or network, using special technical equipment, as well as by any other unlawful means, for the purpose of disclosing or unlawfully using such information.
Information may be collected by lawful and unlawful means.
In accordance with the Article under commentary, the collection of information constitutes the process of searching for, discovering or accumulating such information by a person who is not authorised to possess commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets, through unlawful means.
When collecting information by stealing documents, the perpetrator unlawfully and gratuitously removes tangible media containing information that does not belong to them (contracts, bank certificates and payment documents, consignment notes, tax declarations, etc.).
Theft may consist of larceny, robbery, an armed robbery attack, or taking possession of the aforementioned items through deception or abuse of trust.
Bribery involves inducing persons possessing commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets to disclose or transfer such information by offering or giving them money, other material valuables, or providing services of a property-related nature.
A threat means the use of violence, expressed in inflicting beatings or causing harm to health, both against persons possessing commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets, and against their close relatives.
In accordance with subparagraph 11) of Article 7 of the Criminal Procedure Code of the Republic of Kazakhstan, close relatives are recognised as parents, children, adoptive parents, adopted children, full and half brothers and sisters, grandfathers, grandmothers and grandchildren.
Other unlawful methods of collecting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets may include actions involving the use of documents containing such information without converting them into one's own property; the use of computer equipment or other technical means to obtain access to information of interest through unlawful means.
Information is considered to have been collected lawfully: 1) if it has been disclosed by its owner; 2) if free access to it is available; 3) if it has been obtained from its holder on the basis of a contract or another lawful ground.
By its legal construction, the corpus delicti is formal. At the same time, the crime should be considered completed from the moment the actions specified in the disposition of the Article are committed.
The subjective aspect of the crime is characterised by direct intent. The person is aware that they are collecting information constituting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets, by stealing documents, bribing or threatening persons possessing commercial or banking secrets or their close relatives, intercepting information through communication channels, unlawfully accessing a computer system or network, using special technical equipment, or by any other unlawful means; they foresee the possibility or inevitability of consequences arising as a result of their actions and desire those consequences to occur.
An obligatory element of the corpus delicti under consideration is the purpose of committing these actions, namely, disclosure of information constituting an entrepreneur's secret or unlawful use of such information.
The subject of the crime is a sane natural person who has attained the age of 16.
If the collection of information was accompanied by bribery of persons performing managerial functions in a commercial or other organisation, and (or) officials, liability should arise under the aggregate of crimes provided for in Part 1 of Article 223 and Articles 253 or 367 of the Criminal Code.
Part 2 of Article 223 of the Criminal Code provides for liability for the unlawful disclosure or use of information constituting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets, without the consent of their owner, by a person to whom such information was entrusted by virtue of their official position or work, committed out of mercenary or other personal interest and causing major damage.
Disclosure means the unlawful publicising of the information specified in the disposition of this Part, as a result of which it becomes known to at least one outside person, that is, a person who had no right to become acquainted with such information.
Unlawful use of information may be expressed in carrying out any transactions involving such information or otherwise purposefully transferring information to outside persons, which may cause damage to the interests of the owner of commercial or banking secrets.
By its legal construction, the corpus delicti is material. The crime is recognised as completed if, as a result of the disclosure or use of the specified information, major damage is caused to the owner of commercial or banking secrets. This may include substantial material losses incurred by a business entity in the course of competition, etc. Pursuant to subparagraph 38) of Article 3 of the Criminal Code, for the purposes of the crime under consideration, major damage means damage caused to a citizen in an amount exceeding two hundred times the monthly calculation index, or damage caused to an organisation or the State in an amount exceeding two thousand times the monthly calculation index.
From the subjective standpoint, the crime is committed with direct intent. The person is aware that they are unlawfully disclosing or using information entrusted to them by virtue of their official position or work, constituting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets, without the consent of their owner; they foresee the possibility or inevitability of consequences arising as a result of their actions and desire those consequences to occur. An obligatory condition for criminal liability under Part 2 of Article 223 of the Criminal Code is that the crime is committed out of mercenary or other personal interest. In this regard, mercenary interest is associated with the guilty person's desire to obtain material (property-related) benefits for themselves or other persons as a result of the actions being committed.
Other personal interest may be expressed in revenge, worsening the position of a competitor, etc.
According to Part 2 of this Article, the subject of the crime may be a person to whom information constituting commercial or banking secrets, tax secrets obtained in the course of horizontal monitoring, microcredit provision secrets or collection agency activity secrets has been entrusted by virtue of their official position or work.
Disclosure of information constituting commercial or banking secrets, tax secrets, microcredit provision secrets or commercial activity secrets by a person who became aware of such information accidentally or by mistake does not fall under the elements of Part 2 of the Article under commentary.
Officials who unlawfully disclosed the aforementioned information, which became known to them through their official duties, in exchange for a bribe are also subject to liability under Article 366 of the Criminal Code.
In accordance with Part 3 of Article 223 of the Criminal Code, unlawful disclosure or other unlawful use by officials of state bodies of information and data concerning transactions involving money and (or) other property received from financial monitoring entities shall constitute a crime if this has resulted in a substantial violation of the rights and legitimate interests of citizens or organisations, or interests of society or the State protected by law.
The subject matter of this crime is information and data concerning transactions involving money and (or) other property received from financial monitoring entities. Monitoring is a set of measures aimed at collecting and processing information and analysing the financial and economic condition of organisations for the purpose of ensuring the timely application of financial and economic recovery measures to them and protecting the interests of creditors. Pursuant to subparagraph 7) of Article 1 of the Law of the Republic of Kazakhstan dated 28 August 2009 “On Counteracting the Legalisation (Laundering) of Proceeds of Crime and the Financing of Terrorism”, financial monitoring is a set of measures for the collection, processing, analysis and use of information and data concerning transactions involving money and (or) other property, carried out by the authorised body and financial monitoring entities.
In accordance with paragraph 1 of Article 3 of the aforementioned Law, the following are classified as financial monitoring entities for the purposes of counteracting the legalisation (laundering) of proceeds of crime and the financing of terrorism:
banks, branches of non-resident banks of the Republic of Kazakhstan, organisations carrying out certain types of banking operations, with the exception of an operator or operational centre of the interbank money transfer system;
exchanges;
insurance (reinsurance) organisations, insurance brokers, mutual insurance societies, branches of insurance (reinsurance) organisations that are non-residents of the Republic of Kazakhstan, branches of insurance brokers that are non-residents of the Republic of Kazakhstan;
the Unified Accumulative Pension Fund and voluntary accumulative pension funds;
professional participants of the securities market, the central depository;
notaries performing notarial acts involving money and (or) other property;
advocates, legal consultants and other independent legal professionals — in cases where they participate in transactions involving money and (or) other property on behalf of or upon the instructions of a client in relation to the following activities:
purchase and sale of real estate;
management of money, securities or other property of a client;
management of bank accounts or securities accounts;
accumulation of funds for the establishment, provision, operation or management of a company;
establishment, purchase and sale, operation of a legal entity or management thereof;
accounting organisations and professional accountants carrying out entrepreneurial activities in the field of accounting, audit organisations;
organisers of gambling businesses and lotteries;
postal operators providing money transfer services;
organisations carrying out microfinance activities;
payment organisations;
individual entrepreneurs and legal entities carrying out leasing activities as lessors without a licence;
individual entrepreneurs and legal entities carrying out transactions involving precious metals and precious stones, and jewellery made from them;
individual entrepreneurs and legal entities providing intermediary services in transactions involving the purchase and sale of immovable property;
the Social Health Insurance Fund;
- participants of the Astana International Financial Centre carrying out certain types of activities within the territory of the Astana International Financial Centre (hereinafter referred to as the AIFC), as determined by the AIFC Committee on Financial Services Regulation in coordination with the authorised body in accordance with the recommendations of the Financial Action Task Force (FATF).
The corpus delicti provided for in Part 3 of Article 223 of the Criminal Code is material and is considered completed if the act has resulted in a substantial violation of the rights and legitimate interests of citizens or organisations, or interests of society or the State protected by law.
A substantial violation of the interests of citizens should be understood as a violation of human rights and freedoms guaranteed by the universally recognised principles and norms of international law and the Constitution of the Republic of Kazakhstan; the infliction of significant property and material damage upon them; violation of the right to respect for honour and dignity, the right to an effective remedy before a state body and compensation for damage caused by a crime, etc. Substantial violations of the rights and legitimate interests of organisations or interests of society or the State protected by law should include the infliction of significant moral and material damage; the degree of negative impact of the unlawful act on the normal operation of the organisation; the nature and amount of material damage incurred by it; the number of affected citizens, etc.
The subject of the crime provided for in Part 3 of the Article under commentary is an official (subparagraph 26) of Article 3 of the Criminal Code).
The corpus delicti of this crime (Part 3 of Article 223 of the Criminal Code) is similar to abuse of official powers, liability for which is provided for in Article 361 of the Criminal Code. In this case, there is competition between the general provision (Article 361) and the special provision (Part 3 of Article 223 of the Criminal Code); in this regard, pursuant to Part 3 of Article 13 of the Criminal Code, the special provision, namely Part 3 of Article 223 of the Criminal Code, shall apply.
The corpus delicti of the crime under consideration differs from Article 185 “Unlawful Collection, Dissemination or Disclosure of State Secrets” and Article 230 “Unlawful Actions in Relation to Insider Information”. The main difference lies in the subject matter of the criminal offence: under Article 185 of the Criminal Code, the subject matter of the crime is information or items containing state secrets; under Article 230 of the Criminal Code, it is information constituting commercial secrets in the securities market.
Part 4 of Article 223 of the Criminal Code provides for liability for the unlawful disclosure or other unlawful use by officials of state bodies and employees of organisations of information and data concerning transactions involving money and (or) other property obtained by them in the performance of their official duties, as established by the Law of the Republic of Kazakhstan “On Amnesty for Citizens of the Republic of Kazakhstan, Kandases and Persons Holding a Residence Permit in the Republic of Kazakhstan in Connection with the Legalization of Their Property”.
The subject matter of this crime is information and data concerning transactions involving money and (or) other property obtained by the aforementioned persons in the performance of their official duties, as established by the Law of the Republic of Kazakhstan “On Amnesty for Citizens of the Republic of Kazakhstan, Kandases and Persons Holding a Residence Permit in the Republic of Kazakhstan in Connection with the Legalization of Their Property”.
The concepts of unlawful disclosure and unlawful use of information and data have been considered above in relation to Part 2 of Article 223 of the Criminal Code. By its legal construction, the corpus delicti provided for in Part 4 of the Article under commentary is formal. The crime should be considered completed from the moment the aforementioned acts are committed, regardless of whether any socially dangerous consequences have occurred.
The subject of the crime under commentary may be a sane natural person who has attained the age of 16 and is an official of a state body or an employee of an organisation. The concept of an official is provided in the commentary to subparagraph 26) of Article 3 of the Criminal Code. An employee of an organisation should be understood as an employee of a state or non-state organisation, including a public organisation. Pursuant to subparagraph 43) of paragraph 1 of Article 1 of the Labour Code, an employee is a natural person who is in an employment relationship with an employer and directly performs work under an employment contract.
The acts provided for in Parts 1, 3 and 4 of Article 223 of the Criminal Code are classified as minor crimes.
The act provided for in Part 2 of Article 223 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 the 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.
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