Without penalty or reproach: businesses will be relieved of punishment for their willingness to eliminate violations

A mechanism for removing administrative responsibility will appear in Russia. It will apply to persons who are ready to eliminate violations by agreement, in particular, with the Ministry of Internal Affairs or the prosecutor's office, and will affect various types of offenses. But the proceedings will not be terminated, but suspended for a certain period of time, which guarantees the fulfillment of promises. Experts called the possible amendments a step towards liberalizing legislation in the field of small and medium-sized businesses, as they give its participants the right to make mistakes. In addition, the changes will reduce the burden on the judicial system. About how the innovations will work and to whom they will apply, see the Izvestia article.

Who will be relieved of responsibility

A completely new mechanism for removing administrative responsibility may appear in Russia. This is an agreement that will be concluded by the person who committed the offense to eliminate it. It will be signed with an authorized body, such as the Ministry of Internal Affairs or the Prosecutor's Office. As Izvestia found out, the government gave a positive response to this bill, developed by a group of senators.

The initiative represents an important step towards modernizing approaches in the field of administrative responsibility, Artem Sheikin, one of the co-authors of the amendments, First Deputy Chairman of the Federation Council Committee on Constitutional Legislation and State Building, told Izvestia.

"The document is aimed at encouraging business entities to actively eliminate the identified violations and prevent them in the future," he said. — At the same time, the repressive burden on businesses and organizations will decrease.

The amendments will affect only those who will be ready to eliminate the violations committed, Vladimir Gruzdev, Chairman of the Board of the Russian Bar Association, told Izvestia.

"If the terms of the agreement are fulfilled, the person will be released from administrative responsibility," he said. — In case of conclusion of such an agreement, the proceedings on the case, as well as the limitation period for administrative liability, will be suspended.

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Thus, instead of paying fines and other sanctions that can lead to financial instability or even business stoppage, the organization gets a chance to fix the situation, save jobs and financial stability, Artem Sheikin added. And the suspension of the proceedings will help to establish a balance between encouraging the correction of violations and preventing evasion of responsibility.

"This approach contributes to the implementation of the principle of prevention in administrative law, makes regulation more flexible and result—oriented — the elimination of offenses themselves, and not just the imposition of punishment for their commission," the senator emphasized. — This is especially important for budget institutions, social facilities and backbone enterprises, where the payment of large fines can negatively affect the performance of basic functions and obligations to citizens.

According to Vladimir Gruzdev, in order to avoid possible abuse, the bill will limit the possibility of re—concluding such agreements when committing a similar offense.

Where the innovations will be applied

The amendments, for example, will be relevant if enterprises have violated environmental regulations, says Vladimir Kuznetsov, Vice President of the Association of Lawyers for Registration, Liquidation, Bankruptcy and Judicial Representation.

"This may be due, in particular, to outdated equipment and will come to light during the inspection," he told Izvestia. — And instead of imposing a fine, the company will be able to conclude an agreement with the supervisory authority, committing to modernize the equipment within a year. Then the proceedings will be suspended and the statute of limitations will be frozen.

As a result, after successful modernization, the case will be terminated, and the company will avoid penalties.

As another example of the possible application of the amendments, the expert cited violations in the field of consumer protection.

"For example, a retail chain may label a product improperly, and an inspection will reveal that this was caused by the lack of an automated accounting system," said Vladimir Kuznetsov. — Instead of a fine, the retail chain enters into an agreement with the supervisory authority, committing to implement such a system within six months. As a result of the successful implementation of the system, the case is terminated, which allows the network to avoid a fine and at the same time improve the quality of service.

The proposed changes have some similarities with existing mechanisms, but they still remain unique to domestic law, the lawyer emphasized.

"For example, the current Administrative Code allows you to replace an administrative penalty in the form of a fine with a warning for small and medium—sized businesses at the first violation, if it is not related to causing harm," the expert explained. — However, this does not imply an agreement or long-term commitment.

In addition, certain provisions of the law provide for the possibility of voluntary elimination of violations within the framework of administrative supervision, which may mitigate liability, but this mechanism does not provide for an agreement.

"In some industries, for example, in tax legislation, it is allowed to take into account mitigating circumstances, such as voluntary elimination of the consequences of a violation, but this is not always formalized as an agreement and does not in all cases guarantee exemption from liability," he said.

The proposed mechanism, according to the expert, is unique in that it introduces a formalized procedure with clear conditions, deadlines and consequences, which distinguishes it from existing analogues.

The draft law is not the first initiative to introduce agreements with a government agency instead of administrative responsibility, added Irina Kuznetsova, head of the audit and consulting company Justicom.

Last year, the Ministry of Justice made an almost similar proposal. It was intended to release not any violator from administrative responsibility, but only those who were convicted of misuse of insider information and market manipulation.

Izvestia sent a request to the Ministry of Justice with a request to inform at what stage the draft law is being prepared and when it will be considered.

What are the disadvantages of the amendments?

The bill will encourage people to eliminate violations, preventing possible consequences, which is consistent with the goals of administrative legislation, Vladimir Kuznetsov added.

"There is a potential reduction in the burden on business due to the possibility of avoiding fines or suspensions," the expert said. — The mechanism also allows government agencies to adapt response measures, taking into account the specifics of violations and the capabilities of the offender.

In general, according to Irina Kuznetsova, the amendments are a step towards liberalizing legislation in the field of small and medium—sized businesses, as they imply the right to make mistakes.

"This means that the funds that would have gone to the budget can be used to eliminate the consequences of illegal actions," she said. — Accordingly, the burden on the judicial system will decrease. The draft law is described as broadly as possible, that is, it is a framework document.

The provisions of the draft law can be applied to the ways in which businesses interact with as wide a range of government regulatory authorities as possible. Next, targeted changes should be made by each department, which will determine the procedural procedure.

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However, there are several potential disadvantages of the initiative, Vladimir Kuznetsov emphasized. Among them, he mentioned the lack of clear criteria for concluding agreements.

"This can lead to their use to evade responsibility, especially if the supervisory authorities act inconsistently," the lawyer said. — The draft law does not specify which violations are covered by the agreements, which can create difficulties in judicial practice and uneven application of norms.

The ban on concluding an agreement with a person who has not previously fulfilled a similar agreement may be too strict if the violation occurred for objective reasons, such as economic ones, the expert added.