Now, not only property, but also money in bank accounts that doesn't match the official income of government workers can be turned into state revenue.
The law that was created and passed over almost three years was signed by President Vladimir Putin. It's not clear from the text of the proposal who will be checked by the Prosecutor General’s Office for the correspondence of savings and earnings. It seems the new rule will only apply to those under criminal prosecution, similar to the law from 2012 on confiscating property bought with unconfirmed income.
Right to check
On March 6, Russian President Vladimir Putin signed a law allowing funds from the bank accounts of government workers, the source of which they couldn't prove, to be turned into state revenue. All civil servants who need to report their income, and their families, are included in the new rule. The document changes the laws “On Combating Corruption” and “On Banks and Banking Activity”.
The Prosecutor General’s Office is responsible for inspecting government workers, while banks will have to provide information about accounts, deposits, and transactions of civil servants to Igor Krasnov and some of his subordinates. Inspections happen if the accounts of officials, their spouses, and minor children have an amount exceeding their official income for 3 years. It's not directly specified who will discover this in the law.
During the audit, the official will have the opportunity to prove the legality of the funds' origin. If the official's arguments are not convincing, prosecutors have the right to go to court to claim the funds with unproven legality for the state. The minimum recovery amount of unjustified income is 10 thousand rubles.
Long way
The deputies of the lower house of parliament, who usually pass laws very quickly, for some reason, did not hurry with this law. The government proposed the initiative to the State Duma in March 2021, and it was adopted almost a year later, on February 16, 2022.
The project was with the executive authorities for nearly two years – the Ministry of Justice announced its development in the summer of 2019. It was approved by the speaker of the State Duma Vyacheslav Volodin. He instructed the relevant committee of the lower house of parliament to consider it as a matter of priority in the spring of 2020. The initiative, developed in line with the National Anti-Corruption Plan for 2018-2020, received the right to apply during the implementation of the next National Plan for 2021-2024.
money is illegal
However, the absence of the mentioned law didn't stop prosecutors from seizing the funds of corrupt officials for the state. They needed a broader interpretation of the current legislation to collect real estate and vehicles acquired with doubtful income.
In October 2020, the Gagarinsky Court of Moscow agreed to take 32.5 billion rubles from former Minister for Open Government Mikhail Abyzov. The claims were made by the supervisory authority. The Prosecutor General’s Office found that in 2018, Abyzov, who was holding a government position at the time, made agreements to sell his shares and then move the profits to offshore companies. These actions were considered illegal business activities, and the resulting money was seen as illegal income.
They also succeeded in taking money from former Ministry of Internal Affairs colonel Dmitry Zakharchenko and his family, even though it wasn't in their accounts, but in cash. The Prosecutor General’s Office claim for about 9 billion rubles was approved by the Nikulinsky Court of Moscow in December 2017. Along with apartments and cars, 8.5 billion rubles found in the apartment of the sister of the former head of the “T” department of the GUEBiPK, were given to the state.
Cash, along with movable and immovable property, was part of the claim made by Igor Krasnov’s department against another billionaire security official – the former head of the 2nd department of the FSB of Russia, Kirill Cherkalin. The Golovinsky Court of Moscow agreed to take away apartments, country houses, land plots belonging to him and his relatives, as well as $ 72.75 million, € 8.5 million, £ 4 thousand and 810 million rubles in November 2019.
In 2016, the ex-governor of the Sakhalin Region Alexander Khoroshavin also lost a large sum. The City Court of Yuzhno-Sakhalinsk agreed to confiscate over 280 million rubles, $ 6 million, 388 thousand Swiss francs, € 727,570 and £ 217,700, along with apartments in Moscow, plots on Rublyovka, luxury cars, jewelry and watches. The total amount of nationalized property amounted to 1.1 billion rubles.
Criminal billions
In accordance with the laws in force since 2012, Prosecutor General Igor Krasnov regularly reports successes in seizing assets acquired through unlawful means. In the fall of 2020, he stated that over the eight years of applying this rule, property worth 34 billion rubles was confiscated from officials.
Then things started to accelerate. In 2020, according to the Prosecutor General, supervisors filed claims for 84 billion rubles as compensation for damage from corruption, with 74 billion related to assets whose acquisition officials couldn't confirm.
The final results of last year are not yet known, but in the fall, at the government hour in the State Duma, Prosecutor General Igor Krasnov mentioned the figure of 52 billion rubles. According to him, this is the total amount of 3,000 lawsuits for the seizure of funds from corrupt officials in the first three quarters of last year, and almost 35 billion of them account for the confiscation of property that officials acquired with unconfirmed income.
However, the vast majority of the confiscated billions is the property of civil servants, against whom criminal cases were initiated with corruption.
Thus, last year the lawsuit against ex-State Duma deputy Sergei Petrov and the car dealer Rolf founded by him became the largest. Initially, prosecutors made demands for 12.85 billion rubles, but then increased them to 19.4 billion rubles. According to the supervisory authority, Petrov, being a parliamentarian, allegedly continued to manage Rolf and receive income from his activities, although the company was formally registered with his son.
Also in 2021, the Basmanny District Court of Moscow satisfied the claim of the Prosecutor General’s Office to recover the property of the former senator Rauf Arashukov, his father Raul Arashukov and other members of their family in the amount of almost 1.5 billion rubles to the state. The supervision considered that the Arashukov clan did not have legal income for the purchase of 75 real estate objects, 14 motor vehicles and other luxury goods.
As for the billions in assets of acting officials, which were reported by investigative journalists, either no checks are carried out on them, or there are no reasons for prosecutorial response measures.
