Commentary on Article 365 of the Criminal Code of the Republic of Kazakhstan. Obstruction of Lawful Entrepreneurial Activity
1. Restriction of the rights and legitimate interests of an individual entrepreneur or a commercial organization, regardless of its organizational and legal form or form of ownership, as well as restriction of their independence or other unlawful interference in the activities of an individual entrepreneur or a commercial organization, including through violation of the procedure for conducting inspections, unlawful refusal to issue or evasion of issuing a special permit (license) for carrying out certain activities, unlawful suspension of the activities of a business entity and (or) transactions on its bank account, forcible and unlawful involvement of a private business entity in charitable activities and other events, unlawful refusal to apply, obstruction of the application of, or unlawful failure to apply benefits and preferences, provided that these acts are committed by a person authorized to perform state functions, or a person equated thereto, or an official, using their official powers contrary to the interests of the service for the purpose of causing harm to other persons or organizations or obtaining benefits and advantages for themselves or other persons or organizations, if this has caused substantial harm to the rights and legitimate interests of citizens or organizations, or to the legally protected interests of society or the state, —
shall be punishable by a fine of up to three thousand monthly calculation indices, or corrective labor in the same amount, or 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, with confiscation of property and lifelong deprivation of the right to hold certain positions or engage in certain activities.
2. The same acts committed:
1) excluded by Law of the Republic of Kazakhstan No. 180-VI dated July 12, 2018;
2) by a group of persons upon prior conspiracy;
3) on a large scale;
4) by an employee of a law enforcement agency, —
shall be punishable by restriction of liberty for a period of up to six years or imprisonment for the same period, with confiscation of property and lifelong deprivation of the right to hold certain positions or engage in certain activities.
3. The acts provided for in Part One or Part Two of this Article, committed:
1) by a person holding a responsible public position;
2) on an especially large scale;
3) by a criminal group or in the interests of a criminal group;
4) in the performance of official duties established by the Law of the Republic of Kazakhstan “On Amnesty of 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,” using information obtained in the process of property legalization, —
shall be punishable by imprisonment for a period of up to eight years, with confiscation of property and lifelong deprivation of the right to hold certain positions or engage in certain activities.
4. The acts provided for in Part One, Two or Three of this Article, committed by a person holding a responsible public position in a law enforcement agency, or by a judge, —
shall be punishable by imprisonment for a period of six to ten years, with confiscation of property and lifelong deprivation of the right to hold certain positions or engage in certain activities.
Paragraph 4 of Article 26 of the Constitution of the Republic of Kazakhstan establishes that everyone has the right to freedom of entrepreneurial activity. The legal foundations and principles of entrepreneurial activity are regulated by the Civil Code, the Entrepreneurial Code and other legislative acts.
The public danger of the crime under consideration lies in the fact that its commission restricts the constitutional right of everyone to freedom of lawful entrepreneurial activity, thereby causing harm to the authority of the state and its economy as a whole.
According to paragraph 3 of Article 320 of the Entrepreneurial Code, obstruction of lawful entrepreneurial activity entails liability established by the laws of the Republic of Kazakhstan.
All losses incurred by a business entity as a result of obstruction of its lawful entrepreneurial activity shall be compensated in accordance with the civil legislation of the Republic of Kazakhstan (paragraph 4 of Article 320 of the Entrepreneurial Code).
Taking this into account, the legislator included the offence of obstructing lawful entrepreneurial activity in the list of corruption-related crimes (paragraph 29) of Article 3 of the Criminal Code).
The object of this crime is normal economic activity established by the laws of the Republic of Kazakhstan, its freedom, as well as the interests of public service.
The objective side of the crime under consideration consists of actions aimed at obstructing lawful entrepreneurial activity.
This Article identifies the main forms of obstruction of lawful entrepreneurial activity committed by the perpetrator through the use of their official position:
restriction of the rights and legitimate interests of an individual entrepreneur or a commercial organization, regardless of its organizational and legal form or form of ownership;
restriction of the independence of an individual entrepreneur or a commercial organization;
other unlawful interference in the activities of an individual entrepreneur or a commercial organization.
In accordance with paragraph 1 of Article 10 of the Civil Code, entrepreneurship is an independent initiative activity of citizens, kandases and legal entities aimed at generating net income through the use of property, production and sale of goods, performance of work and provision of services, based on the right of private ownership (private entrepreneurship) or on the right of economic management or operational management of a state enterprise (public entrepreneurship).
Restriction of the rights and legitimate interests of entrepreneurs may, for example, take the form of an unjustified rejection of a tender application submitted by an entrepreneur as part of participation in public procurement, granting certain commercial organizations advantages over other entrepreneurs, delaying the issuance of licenses and permits, etc.
Restriction of an entrepreneur's independence may be carried out by creating artificial barriers and prohibitions on conducting, for example, certain types of activities, producing particular goods, and so forth.
Other unlawful interference in an entrepreneur's activities may be expressed in conducting unlawful inspections of business entities, etc.
At the same time, all of the above actions may be committed through violation of the procedure for conducting inspections, unlawful refusal to issue or evasion of issuing a special permit (license) for carrying out certain activities, unlawful suspension of the activities of a business entity and (or) transactions on its bank account, forcible and unlawful involvement of a private business entity in charitable activities and other events, unlawful refusal to apply, failure to apply, or obstruction of the application of benefits and preferences.
The procedure for conducting inspections is regulated by Article 140 of the Entrepreneurial Code of the Republic of Kazakhstan.
Inspections are divided into: 1) inspections conducted under a special procedure based on risk assessment; 2) unscheduled inspections.
The conduct of other types of inspections not established by the Code of the Republic of Kazakhstan “On Taxes and Other Mandatory Payments to the Budget” (the Tax Code) is prohibited, with the exception of inspections provided for by this Code of the Republic of Kazakhstan (Article 144 of the said Code).
According to Article 320 of the Entrepreneurial Code, obstruction of lawful entrepreneurial activity entails liability established by the laws of the Republic of Kazakhstan.
All losses incurred by a business entity as a result of obstruction of its lawful entrepreneurial activity shall be compensated in accordance with the civil legislation of the Republic of Kazakhstan.
By its legal structure, this offence is a material crime. In order for the crime to be recognized as completed, the consequences specified in the disposition must occur, namely, the causing of substantial harm to the rights and legitimate interests of citizens or organizations, or to the legally protected interests of society or the state.
For the purposes of this Article, substantial harm means violation of the constitutional rights and freedoms of individuals and citizens, the rights and legitimate interests of organizations, and the legally protected interests of society and the state; causing significant damage; the emergence of a difficult life situation for the victim; disruption of the normal operation of organizations or government bodies; and other consequences indicating the substantial nature of the harm caused.
The subjective side of the crime is characterized by direct intent. The perpetrator is aware that they are obstructing the lawful entrepreneurial activity of an individual entrepreneur or commercial organization, foresees the occurrence of unlawful consequences and desires their occurrence.
An obligatory element of the subjective side of this offence is a special purpose — causing harm to other persons or organizations or obtaining benefits and advantages for themselves or other persons. This means that the use by the perpetrator of their powers contrary to the interests of the service cannot, in itself, constitute a completed offence of obstructing lawful entrepreneurial activity if the guilty person does not pursue the above-mentioned purposes.
The concept of causing harm to other persons or organizations in relation to the crime under consideration is an evaluative category and is determined in each specific case depending on the circumstances of the case. At the same time, causing harm to other persons or organizations may be expressed both in causing property damage and in damaging business reputation.
Obtaining benefits and advantages should be understood as the acceptance by a person belonging to the category of criminal subjects of various services provided free of charge or services subject to payment, or the unlawful use of benefits granting preferential rights to property, construction and repair work, provision of health resort or tourist vouchers, travel tickets, provision of loans or credits on preferential terms, and so forth.
The motives for the crime may vary and do not affect its qualification.
The subject of the crime is special — only a person authorized to perform state functions, or a person equated thereto, or an official who uses their official position to obstruct lawful entrepreneurial activity (see the commentary to Article 361 of the Criminal Code).
Part 2 of Article 365 of the Criminal Code provides for qualifying circumstances involving the commission of the crime:
by a group of persons upon prior conspiracy;
on a large scale;
by an employee of a law enforcement agency.
To qualify a crime on the grounds of its commission by a group of persons upon prior conspiracy, it is necessary to establish the participation of two or more persons who had agreed in advance to jointly commit obstruction of lawful entrepreneurial activity.
For the purposes of subparagraph 3) of Part 2 of Article 365 of the Criminal Code, a large amount means damage caused to an individual in an amount exceeding two hundred monthly calculation indices, or damage caused to an organization or the state in an amount exceeding two thousand monthly calculation indices (paragraph 38) of Article 3 of the Criminal Code).
The concept of an employee of a law enforcement agency is provided in the commentary to Part 2-1 of Article 361 of the Criminal Code.
Part 3 of Article 365 of the Criminal Code provides for especially aggravated forms of obstruction of lawful entrepreneurial activity, namely, the commission of the crime:
by a person holding a responsible public position (paragraph 16) of Article 3 of the Criminal Code);
on an especially large scale;
by a criminal group or in the interests of a criminal group (paragraph 24) of Article 3 of the Criminal Code);
in the performance of official duties established by the Law of the Republic of Kazakhstan “On Amnesty of 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,” using information obtained in the process of property legalization.
The concept of a person holding a responsible public position is provided in the commentary to Article 361 of the Criminal Code.
For the purposes of this provision, an especially large amount means damage caused to an individual in an amount exceeding two thousand monthly calculation indices, or damage caused to an organization or the state in an amount exceeding ten thousand monthly calculation indices (paragraph 3) of Article 3 of the Criminal Code).
The concept of a criminal group is provided in paragraph 24) of Article 3 and Part 3 of Article 31 of the Criminal Code.
The concepts and characteristics of the aforementioned dangerous forms of complicity are regulated in detail in Article 3 of the Criminal Code of the Republic of Kazakhstan.
Obstruction of lawful entrepreneurial activity in the interests of a criminal group consists of committing the actions specified in Part 1 of Article 365 of the Criminal Code of the Republic of Kazakhstan for the purpose of satisfying the intentions and needs of a criminal group.
The qualifying circumstances provided for in subparagraph 4) of Part 3 of the Article under consideration are described in the commentary to subparagraph 2) of Part 4 of Article 361 of the Criminal Code.
Part 4 of the Article under consideration establishes criminal liability for acts provided for in Parts 1, 2 or 3 of Article 365 of the Criminal Code, committed by a person holding a responsible public position in a law enforcement agency or by a judge (see the commentary to subparagraph 4) of Part 4 of Article 361 of the Criminal Code).
The act provided for in Part 1 of Article 365 of the Criminal Code is classified as a crime of medium gravity.
The acts provided for in Parts 2, 3 and 4 of Article 365 of the Criminal Code are classified as serious crimes.
Commentary of 2021 to the Criminal Code of the Republic of Kazakhstan by Isidor Shamilovich Borchashvili, Honored 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, Honored Worker of the Ministry of Internal Affairs of the Republic of Kazakhstan.
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