Increasing Bans in Financial Services Field: An Objective Necessity or Criminalization Redundancy?

Consistent criminalization of illegal activities related to attracting funds from citizens, providing consumer loans, and repaying overdue debts of individuals within the framework of independent offenses of Articles 172.2, 171.5, and 172.4 of the Criminal Code actualizes the need to assess the adequacy of the measures chosen by the state to respond to the illegal actions of financial service providers. Using general (analysis and synthesis, dialectics) and specific scholar methods (systemic-structural, formal legal, and statistical) of research knowledge to identify the determinism of socially deviant behavior regulation within framework of special norms and to determine constructive features of the offenses covered by them, the author is skeptical about prospects for implementing the new norms and criticizes the use of criminal law reserves to regulate the relevant relations. The casuistic nature of a criminal act definition covered by Article 172. 2 excludes application of this norm to transforming pyramid schemes for attracting funds. By incorporating into design of the offense of Article 171.5 a prejudicial element, without considering factors that exclude application of Article 14.56 of the Code of Administrative Offenses, the legislator has blocked the implementation of the ban in the context of the prevalence of offenses. The introduction of the amendments proposed by the author to the content of Article 14.56 and the revision of the law enforcement approach to determining the moment of termination of an administrative offense and debt collection under loan agreements will ensure the inevitability of liability of usurers and deprive them of profit, creating conditions for the reduction of the corresponding shadow sector of the economy and without an imperative regulator. Defining the composition of Article 172.4 of the Criminal Code as objectively similar to the composition of extortion imputed to collectors acting outside contractual relations, the legislator has deviated from the sample norm in determining the methods and qualifying features, which will entail different legal assessments and punishability of objectively similar acts, and also excludes consistent consistency of the new ban in increased censure of professional participants in the financial market. Assessing the legislator’s decision to establish liability for illegal activity to recover overdue debt as criminally excessive and unreasonably penalized, the author predicts judicial de-penalization of the relevant actions.

criminal law, financial services, organization of raising funds, illegal providing consumer loans, illegal returning overdue debts of individuals, criminalization redundancy