Commentary on Article 425 of the Criminal Code of the Republic of Kazakhstan. Unlawful Actions Involving Property Subject to Inventory, Seizure, or Confiscation

1. Misappropriation, alienation, concealment or unlawful transfer of property that has been inventoried, seized or made subject to a restriction on disposal, committed by the person entrusted with such property, as well as the performance by an employee of a credit institution of banking operations involving funds (deposits) that have been seized or in respect of which outgoing transactions have been suspended —

shall be punishable by a fine 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.

2. Concealment or misappropriation of property subject to confiscation pursuant to a court sentence or ruling, as well as any other evasion of the execution of a court sentence or ruling that has entered into legal force and provides for the confiscation of property —

shall be punishable by a fine of up to five thousand monthly calculation indices, or corrective labour in the same amount, or community service for a period of up to one thousand two hundred hours, or restriction of liberty for a period of up to five years, or imprisonment for the same period.

3. An act provided for in Part One of this Article, committed:

1. by a group of persons acting in prior conspiracy;
2. repeatedly, —

shall be punishable by a fine of up to three thousand monthly calculation indices, or corrective labour in the same amount, or community service for a period of up to one thousand hours, or restriction of liberty for a period of up to four years, or imprisonment for the same period, with confiscation of property and 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 Part One or Part Two of this Article, committed on a large scale, —

shall be punishable by restriction of liberty for a period of two to seven years or imprisonment for the same period, with confiscation of property.

5. Acts provided for in Part One, Two, Three or Four of this Article, if committed:

1. by a criminal group;
2. on an especially large scale, —

shall be punishable by imprisonment for a period of seven to twelve years, with confiscation of property.

The public danger of this crime lies in the fact that it obstructs the execution of a judicial act, counteracts or makes impossible compensation for property damage caused by a crime or other offence. Relations aimed at ensuring the implementation of a judicial act arise between the person to whom the property has been entrusted in connection with the imposition of seizure on it, or an employee of a credit institution, and state authorities. These relations are harmed as a result of the perpetrator's misappropriation, alienation, concealment or unlawful transfer of the property entrusted to them.

The object of the crime is public relations ensuring the normal functioning of bodies responsible for the execution of a judicial act in connection with the seizure of property or funds (deposits), or the confiscation of property.

The subject matter of the crime may include: 1) property subject to inventory; 2) property subject to seizure; 3) property in respect of which a restriction on disposal has been imposed; 4) funds (deposits) that have been seized or in respect of which outgoing transactions have been suspended.

Property is understood to include both movable property (jewellery, motor vehicles, belongings, securities, etc.) and immovable property (land plots, houses, enterprises, structures, buildings, etc.). Property subject to seizure is described in a protocol or in an inventory attached thereto, which lists and specifies the property, indicating the exact name, quantity and individual characteristics of the items. Such property is transferred for safekeeping to its owner or possessor, or to other persons, who are informed of their responsibility for preserving the property, and an appropriate entry to this effect is made in the protocol.

Funds are understood to include both cash and non-cash money in any currency.

The objective side of the crime provided for in Part 1 of Article 425 of the Criminal Code consists of the misappropriation, alienation, concealment or unlawful transfer of property that has been inventoried, seized or made subject to a restriction on disposal, committed by the person entrusted with such property, as well as the performance by an employee of a credit institution of banking operations involving funds (deposits) that have been seized or in respect of which outgoing transactions have been suspended.

Misappropriation should be understood as the expenditure of property by the person to whom it was entrusted for safekeeping. Alienation is a form of misappropriation consisting of the transfer of property to third parties (sale, transfer as collateral, exchange, donation, payment of a debt, etc.). Concealment means hiding property in a manner that makes its seizure more difficult. This may involve transferring the property to other persons for safekeeping, placing it in a hiding place, transporting it to another location, etc. Unlawful transfer of property means any transfer of property to third parties carried out without the consent of the pre-trial investigation authorities, the court, or other bodies or officials who imposed the seizure on that property.

According to Part 2 of Article 161 of the Criminal Procedure Code, seizure of property consists of a prohibition addressed to the owner or possessor of the property against disposing of, and, where necessary, using such property, or the seizure of the property and its transfer for safekeeping.

The use of the expression “property subject to inventory or seizure” in the disposition of the Article under consideration is not entirely appropriate from the standpoint of legislative drafting technique. Seizure of property is always accompanied by its description, which indicates that the terms are redundant. It would have been sufficient for this Article to refer only to the seizure of property. The content and procedure for imposing seizure on property are governed by Articles 160 and 161 of the Criminal Procedure Code.

According to Article 51 of the Law of the Republic of Kazakhstan dated 31 August 1995, “On Banks and Banking Activities in the Republic of Kazakhstan”, courts may impose seizure on money and other property of an individual or legal entity held in bank accounts on the basis of judicial acts, while bailiffs may do so on the basis of bailiffs' resolutions authorised by a prosecutor. Temporary restrictions on the disposal of property, as well as restrictions on transactions and other operations involving property, may be imposed on money and other property of an individual or legal entity held in bank accounts on the grounds and in accordance with the procedure provided for by the criminal procedure legislation of the Republic of Kazakhstan.

Banking operations involving funds (deposits) that have been seized or in respect of which outgoing transactions have been suspended, as a result of which the execution of a court decision becomes impossible or difficult, should include: withdrawal of a deposit, execution of settlements, transfer of funds to another current account, closure of a bank account, etc.

The commission of the crime under consideration through the misappropriation, alienation, concealment or unlawful transfer of seized property, or through the performance of banking operations involving funds (deposits) that have been seized or in respect of which outgoing transactions have been suspended, constitutes an offence with a formal composition. The crime is deemed completed at the moment any of the actions specified in the criminal law is committed.

The subjective side of the crime is characterised by direct intent. The perpetrator is aware of the socially dangerous nature of the misappropriation, alienation, concealment or unlawful transfer to third parties of property entrusted to them for safekeeping, foresees and desires the commission of such actions. The direct intent of an employee of a credit institution encompasses awareness of the public danger of transferring or otherwise moving funds subject to seizure or in respect of which outgoing transactions have been suspended, as well as foreseeing and desiring the performance of such banking operations.

The motives for the crime may vary and are irrelevant for the purposes of its legal classification.

The subject of the crime in question is an individual who has reached the age of 16 and to whom the property has been entrusted for safekeeping against a written receipt. The determining factor here is the procedural aspect — the official transfer of seized property to a person for safekeeping, documented in a protocol, and the warning given to that person about criminal liability under Article 425 of the Criminal Code.

The subject of the crime may also be an employee of a credit institution who performs banking operations involving funds (deposits) and who has been warned about the prohibition on conducting such operations with seized funds (deposits) or funds (deposits) in respect of which outgoing transactions have been suspended. Consequently, in order to establish the subject of the crime in this case, it is necessary to determine whether the performance of such banking operations fell within the scope of the employee's official duties. The head of a credit institution who instructs a subordinate employee to transfer funds from a client's seized account commits incitement to the performance by an employee of a credit institution of banking operations involving funds (deposits) that have been seized. At the same time, the head abuses official powers, which must be reflected in the legal classification of their actions under the aggregate of crimes provided for in Article 250 of the Criminal Code and Part 1 of Article 425 of the Criminal Code. If these actions are connected with unlawful remuneration, the actions of the head must additionally be classified as commercial bribery under Article 253 of the Criminal Code.

Part 2 of Article 425 of the Criminal Code provides for liability for concealing or misappropriating property subject to confiscation pursuant to a court sentence or ruling, as well as for any other evasion of the execution of a court sentence or ruling that has entered into legal force and provides for the confiscation of property.

The additional object, alongside the object of the crime provided for in Part 1 of the Article under consideration, consists of public relations concerning property ownership.

The subject matter of the crime under consideration is property to which confiscation applies. Such property includes any property in respect of which there is a court sentence or ruling. Such property may include property during the pre-trial investigation and after its completion (before the court sentence ordering the confiscation of property enters into legal force), as well as property in a civil case (if seizure has been imposed on the property to secure a claim).

In accordance with Part 1 of Article 118 of the Criminal Procedure Code, objects shall be recognised as physical evidence if there are grounds to believe that they served as an instrument or other means of committing a criminal offence, or retained or could have retained traces of a criminal offence, or were objects of a socially dangerous infringement, as well as money, valuables and other property obtained as a result of the commission of a criminal offence, or money, valuables, other property, objects and documents that may serve as means of detecting a criminal offence, establishing the factual circumstances of the case, identifying the guilty person, or disproving their guilt or mitigating their liability.

When a decision is made to terminate a criminal case or a sentence is delivered, in accordance with subparagraph 4) of Part 3 of Article 118 of the Criminal Procedure Code, money and other property obtained through criminal activity or acquired using funds obtained through criminal activity, except for property and income derived therefrom that are subject to return to their lawful owner, as well as items of illegal entrepreneurship and smuggling, shall, by court decision, be transferred to state revenue; the remaining items shall be returned to their lawful owners, and if the latter are not identified, they shall become state property. In the event of a dispute over ownership of these items, the dispute shall be resolved in accordance with civil procedure.

Property recognised as physical evidence and subsequently subject to confiscation shall be seized.

The procedure for the seizure, registration, storage, transfer and destruction of physical evidence and documents in criminal cases by courts, prosecution authorities, criminal prosecution authorities and forensic examination authorities is established by the Government of the Republic of Kazakhstan (Part 4 of Article 118 of the Criminal Procedure Code).

At present, this matter is regulated by the Resolution of the Government of the Republic of Kazakhstan dated 9 December 2014, “On Approval of the Rules for the Seizure, Registration, Storage, Transfer and Destruction of Physical Evidence, Seized Documents, Money in National and Foreign Currency, Narcotic Drugs and Psychotropic Substances in Criminal Cases by Courts, Criminal Prosecution Authorities and Forensic Examination Authorities”.

The objective side of the crime provided for in Part 2 of Article 425 consists of the following actions: concealment or misappropriation, as well as any other evasion of the execution of a court sentence or ruling providing for the confiscation of property.

Concealment means any form of hiding property. Misappropriation means the unlawful separation and conversion of property for one's own benefit or for the benefit of third parties.

Other evasion of the execution of a court sentence or ruling that has entered into legal force and provides for the confiscation of property may consist of any actions aimed at obstructing such confiscation: alienation of property (sale, donation, exchange, transfer as collateral, etc.); submission of false information concerning the destruction of property as a result of a fire or theft of property subject to confiscation; donation of such property, etc.

The crime has a formal composition and is deemed completed from the moment of concealment or misappropriation of property subject to confiscation, or any other evasion of the execution of a court sentence or ruling that has entered into legal force and provides for such confiscation.

The subjective side of the crime is characterised by direct intent. The perpetrator is aware of the socially dangerous nature of concealing or misappropriating property subject to confiscation, or otherwise evading the execution of a court sentence or ruling that has entered into legal force and provides for the confiscation of property, and desires to commit these actions.

The subjects of the crime under consideration may be mentally competent individuals who have reached the age of 16 and to whom the property subject to confiscation has been entrusted for safekeeping against a written receipt. The person must be aware that a court sentence or ruling ordering the confiscation of property has been issued and has entered into legal force.

Part 3 of the provision under consideration establishes liability for an act provided for in Part 1 of Article 425 of the Criminal Code, committed: 1) by a group of persons acting in prior conspiracy; 2) repeatedly.

According to Part 2 of Article 31 of the Criminal Code, a criminal offence shall be recognised as committed by a group of persons acting in prior conspiracy if the persons participating in it had agreed in advance to commit the criminal offence jointly.

In accordance with Paragraph 3 of the Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated 21 June 2001, “On Certain Issues Concerning the Application by Courts of Legislation on Liability for Banditry and Other Criminal Offences Committed in Complicity”, when classifying the actions of perpetrators under the feature of a criminal offence committed by a “group of persons acting in prior conspiracy”, it is necessary to establish whether there was an agreement, expressed in any form, between two or more persons to commit a criminal offence, and whether these persons reached such an agreement before commencing actions directly aimed at committing the criminal offence, that is, before at least one perpetrator began to fulfil the objective elements of the criminal offence.

A criminal offence is also classified as having been committed by a “group of persons acting in prior conspiracy” in cases where the joint efforts of two or more persons have been combined to commit it, and the actions of each accomplice constitute a necessary condition for the actions of the other accomplices, in accordance with the prior distribution of roles, and are causally connected with the common criminal result arising from the activities of all accomplices. In such cases, the participation of two or more principal perpetrators is not mandatory; the participation of one principal perpetrator is sufficient, provided that other types of accomplices are present.

The concept and characteristics of repeated criminal offences are set out in the commentary to Article 12 of the Criminal Code.

Part 4 of the Article under consideration establishes liability for acts provided for in Parts 1 or 2 of Article 425 of the Criminal Code, committed on a large scale.

According to subparagraph 38) of Article 3 of the Criminal Code, a large scale under Article 425 of the Criminal Code means the amount of damage exceeding one thousand times the monthly calculation index.

Part 5 of the provision under consideration provides for the following particularly aggravating circumstances: 1) a criminal group; 2) an especially large scale.

The concept of a criminal group is set out in subparagraph 24) of Article 3 and Part 3 of Article 31 of the Criminal Code of the Republic of Kazakhstan.

According to subparagraph 3) of Article 3 of the Criminal Code, an especially large scale under Article 425 of the Criminal Code means the amount of damage exceeding four thousand times the monthly calculation index.

The act provided for in Part 1 of Article 425 of the Criminal Code is classified as a minor crime.

The acts provided for in Parts 2 and 3 of Article 425 of the Criminal Code are classified as crimes of medium gravity.

The acts provided for in Parts 4 and 5 of Article 425 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, 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.

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