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RESOLUTION OF THE PLENUM OF THE SUPREME COURT OF THE RUSSIAN FEDERATION

of November 18, 2004 No. 23

About court practice on cases on illegal entrepreneurship

(as amended on 07-07-2015)

For the purpose of ensuring the correct application of the legislation on criminal liability for crimes in the field of economic activity, the stipulated in Article 171 Criminal Code of the Russian Federation, and in connection with the questions Plenum of the Supreme Court of the Russian Federation which arose in court practice decides to make to courts the following explanations:

1. According to part 1 of article 34 of the Constitution of the Russian Federation everyone has the right to free use of the capabilities and property for the entrepreneurial and other not prohibited by the law economic activity.

In case of the solution of question of availability in actions of person of signs of actus reus, the stipulated in Article 171 Criminal Code of the Russian Federation, courts should find out whether there correspond these actions to the signs of the business activity directed to systematic profit earning from use of property, sales of goods, performance of works or rendering services specified in Item 1 of article 2 Civil Code of the Russian Federation which is performed independently on the risk by person registered in the procedure established by the law as the individual entrepreneur.

According to article 23 Civil Code of the Russian Federation the citizen has the right to be engaged in business activity without formation of legal entity from the moment of state registration as the individual entrepreneur, and the head of peasant farm - from the moment of state registration of peasant farm. The legal entity is subject to state registration (articles 49 and 51 Civil Codes of the Russian Federation).

Courts should mean that there is no structure of the specified crime when person registered as the individual entrepreneur performs the business activity which is not prohibited by the law, having special permission (license) for implementation of specific type of activity if receipt of the license for this purpose is required, and complies with licensed requirements and conditions.

2. When person which is not registered as the individual entrepreneur acquired premises or other real estate for personal needs or inherited it or according to the gift agreement, but due to the lack of need for use of this property temporarily leased it or for rent and as a result of such civil transaction gained income (including in large or especially large size), the deeds do not attract with it criminal liability for illegal entrepreneurship. If the specified person evades paying taxes or charges from the gained income, its actions in the presence to that the bases contain actus reus signs, the stipulated in Article 198 Criminal Code of the Russian Federation.

3. Implementation of business activity without registration will take place only when in the unified state register for legal entities and the unified state register for individual entrepreneurs there is no record about creation of such legal entity or acquisition of the status of the individual entrepreneur by physical person or record about liquidation of the legal entity or the termination of activities of physical person as the individual entrepreneur contains.

With abuse of regulations of registration it is necessary to understand conducting such activities by the subject of entrepreneurship who obviously knew as implementation of business activity that in case of registration the violations giving the grounds for recognition of registration invalid were allowed (for example, documents, and also the supplied or other information necessary for registration were not submitted in full, or it was made contrary to the available prohibitions).

Under submission to the body performing state registration of legal entities and individual entrepreneurs, the documents containing obviously false data it is necessary to understand submission of the documents containing such obviously false or distorted information which entailed unreasonable registration of the subject of business activity.

4. In case of the solution of question of availability in actions of person of signs of implementation of business activity without special permission (license) in cases when such permission is obligatory, courts should recognize that separate types of activity which list is determined by the Federal Law can be performed only based on special permission (license). The right to perform activities on which occupation receipt of special permission (license) is necessary arises from the moment of receipt of permission (license) or in the time specified in it and stops after the term of its action (if other is not provided), and also in cases of suspension or cancellation of permission (license) (Item 3 of article 49 Civil Code of the Russian Federation).

5. Actions of person practising private medicine or private pharmaceutical activities without the corresponding special permission (license) if they entailed on imprudence damnification to health or the death of the person, should be qualified by the corresponding part of article 235 Criminal Code of the Russian Federation.

In that case when implementation of private medical practice or private pharmaceutical activities without the corresponding special permission (license) did not entail the effects specified in article 235 Criminal Code of the Russian Federation, but at the same time major damage was caused to citizens, to the organizations or the state or the income in the large size or in especially large size is taken, actions of person should be qualified by the corresponding part of article 171 Criminal Code of the Russian Federation.

6. If the legal entity having special legal capacity for implementation only of certain types of activity (for example, bank, insurance, auditor), is engaged also in other types of activity in which it according to constituent documents and the available license has no right to be engaged, then such actions integrated to illegal implementation of other types of activity shall be considered as illegal business activity without registration or illegal business activity without special permission (license) in cases when such permission is obligatory.

8. Courts should mean that when the subject of the Russian Federation adopted regulatory legal act on the questions following from the relations connected with licensing of separate types of activity in defiance of the competence or with violation of the Federal Law or when such legal regulation belongs to joint maintaining the Russian Federation and subjects of the Russian Federation (article 76 of the Constitution of the Russian Federation), the Federal Law is applied.

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