Financial Crimes on the Rise in Russian Federation: A Guide to Key Offenses and Penalties
The Russian Federation has been grappling with a surge in financial crimes, ranging from corporate fraud to money laundering. In this guide, we take a closer look at some of the most common types of financial crimes in the country.
What is Corporate Fraud?
Corporate fraud refers to illegal acts committed by companies or individuals for personal gain, including embezzlement, misappropriation of funds, and falsification of financial records. Penalties for corporate fraud can be severe, with fines reaching up to 10 million rubles (approximately $150,000 USD) and imprisonment of up to five years.
What is Bribery and Corruption?
Bribery and corruption are rampant in the Russian Federation, with officials often demanding kickbacks or other forms of payment in exchange for favors. Individuals found guilty of bribery can face fines up to 1 million rubles (approximately $15,000 USD) and imprisonment of up to three years.
What is Insider Dealing and Market Abuse?
- Insider dealing occurs when individuals with access to confidential information trade on that information or tip off others to make profits.
- Market abuse refers to the manipulation of financial markets through illegal activities such as price-fixing or trading on non-public information. Penalties for insider dealing and market abuse can include fines up to 5 million rubles (approximately $75,000 USD) and imprisonment of up to five years.
What is Money Laundering?
Money laundering involves the concealment of the source of illegally obtained funds to make them appear legitimate. This crime is punishable by fines up to 10 million rubles (approximately $150,000 USD) and imprisonment of up to eight years.
What is Financial Record Keeping?
Companies in the Russian Federation are required to maintain accurate financial records, including accounts, invoices, and other documentation. Failure to do so can result in penalties, including fines up to 1 million rubles (approximately $15,000 USD).
What is Due Diligence?
Due diligence refers to the process of researching and verifying information about a company or individual before conducting business with them. Neglecting to perform due diligence can lead to legal consequences, including fines and imprisonment.
What is Corporate Liability?
Companies in the Russian Federation can be held liable for financial crimes committed by their employees or agents. This means that companies can face penalties even if they are not directly involved in the illegal activity.
What is Immunity and Leniency?
The Russian Federation offers immunity and leniency programs to encourage individuals to report financial crimes and cooperate with authorities. These programs can result in reduced penalties or even immunity from prosecution for those who come forward and provide valuable information.
What is Whistleblowing?
- Whistleblowers are individuals who report illegal activities, including financial crimes, to the authorities. In the Russian Federation, whistleblowers are protected by law and may be entitled to receive a reward for their information.
For more information on financial crimes in the Russian Federation, please visit our Financial Crime Country Q&A tool.