Business news

MINSK, 23 November (BelTA) – Amendments to the Administrative Violations Code and the Code of Administrative Violations Procedure were given the first reading in the House of Representatives of the National Assembly of Belarus on 23 November, BelTA has learned.

Vadim Ipatov, Director of the National Center for Legislation and Legal Research, explained that the bill is supposed to liberalize the administrative responsibility for offenses in the course of doing business in addition to making the punishment commensurate with the nature of the wrongdoing and the degree of harm. “Stepping down the punishment is not the goal. Making punishments adequate to the offense is,” remarked the official.

In his words, while they were working on the bill, they clearly understood that the law has to ensure the economic security of the state and order in the private sector on the one hand. On the other hand, punitive actions should not bankrupt companies and restrain private initiative.

The size of fines for 45 administrative offences will be reduced. The application of administrative sanctions such as warnings instead of fines will be expanded. Warnings will be an option for 21 administrative offences. The changes were put together after analyzing the law enforcement practice. “The practice indicates that sanctions for a number of offenses are over the top and disallow making fair decisions taking into account all the conditions of the offence. The sanctions often put companies on the edge of bankruptcy,” explained Vadim Ipatov.

The bill will curtail the practice of property confiscation, which is widely used for now. According to Vadim Ipatov, illegal things — extremism materials, poor quality products, which can lead to diseases or poisoning, including products polluted with radiation, falsified alcohol, and so on — must be confiscated. At the same time the effective legislation allows confiscating any other kinds of merchandise relating to the administrative offense such as plant and equipment, household goods, clothes, food. “The approach cannot be justified from the legal point of view or the economic point of view in current conditions. If property confiscation results in bankruptcy, we fail to reach the main goal of administrative sanctions — prevention — because instead of adjusting the behavior of the commercial entity, we destroy it. From the economic point of view we lose a taxpayer and an employer,” said Vadim Ipatov.

Confiscating revenues generated by unlawful business practices is another problem. The effective legislation provides for confiscating the entire sum without taking into account all kinds of costs involved in earning the sum. As a result, the confiscated revenue can exceed the actual annual profit of the commercial entity, with revenue confiscation leading to bankruptcy. “Such tough sanctions are sometimes enforced for technical offenses,” noted the director of the National Center for Legislation and Legal Research.

The bill provides for replacing confiscation with fines for 14 kinds of administrative offenses. The size of the fine will represent a percentage of the cost of the infringing item. Mandatory confiscation will be enacted only by court for seven kinds of administrative offenses. Partial confiscation of the revenue instead of the entire sum will be stipulated for four kinds of administrative offenses.

The size of the fines will still discourage wrongful business practices as commercially unviable, noted the official.