An administrative fine can be halved if it is paid within 20 days

Pepeliaev Group advises that Federal Law No. 187-FZ dated 23 June 2020 “On amending the Russian Code of Administrative Offences” has been adopted

The law adds part 1.3-1 to article 32.2 “Executing a resolution to impose an administrative fine”. The specified part provides that a fine should be halved if the person subject to administrative liability or any other individual or legal entity pays the amount in question within 20 (calendar) days from the date when the resolution to impose the administrative fine was issued.

If the judge, authority or officer who has issued the resolution grants a deferral or an instalment plan with regard to the execution of the resolution, the administrative fine should be paid in full.

The deadline for the payment of a reduced fine may be restored provided that the person subject to administrative liability submits a relevant motion in the event that a copy of the resolution sent via registered mail was received more than 20 days after the resolution had been issued.

This provision applies to administrative fines for a number of offences in such areas as: business activity, the activity of self-regulatory organisations and finance and the securities market, which are mostly examined by the Bank of Russia. Please find below a detailed list of such offences.

It is worth specifying that the 20-day period for paying a reduced fine starts from the day when the resolution to impose the administrative fine is issued, rather than from the date when it comes into force.

If a reduced fine has been paid, this does not rule out that the fine may be repaid in the event the resolution is subsequently cancelled (for instance, by a higher authority or court).

However, the right to pay the fine at a 50% discount does not apply if the fine has been reduced following the examination of an appeal. In other words, the results of the examination of an appeal matter in the event that a punishment is cancelled or the fine is reduced below the amount that has already been paid (Ruling No. 302-KG17-11016 of the Panel of Judges of the Russian Supreme Court dated 6 December 2017).

However, the law improves the position of a person who has committed an administrative offence and has retroactive effect: it applies to persons who have committed an administrative offence before such law came into force as well as to persons with regard to whom a resolution to impose an administrative punishment has not been executed (article 1.7(2) of the Code of Administrative Offences).

What to think about and what to do

If administrative liability is imposed for the below offences, as well as for any other offences, we recommend thoroughly developing a strategy for protecting your interests, including taking into account the possibility of the amount of the administrative fine being reduced.

Help from your adviser

Pepeliaev Group’s lawyers have significant experience of representing our clients in cases concerning the imposition of administrative liability both in courts and before administrative authorities, where we are ready to provide the full range of qualified legal support.

For information:

The offences for which fines may be paid at a 50% discount are set out in the following articles of the Code of Administrative Offences:

• 5.53 “Unlawful actions to obtain and/or distribute credit record information”,
• ü5.54 “Non-performance of the obligation to carry out an audit and/or to correct inaccurate information contained in the credit record (credit report)”,
• 5.55 “Failure to submit a credit report”,
• 13.25 “Violation of the statutory requirements for the storage of documents and information contained in information systems” (except for part 2, which provides for liability to be imposed on limited liability companies (companies with additional liability) or unitary enterprises for relevant violations),
• article 14.4.1(1) for accrediting technical inspection operators in violation of the statutory requirements in the area of technical inspection of transportation vehicles,
• 14.24 “Violation of legislation on organised bidding processes” (except for part 6, which provides for liability to be imposed on a party to a contract that was concluded other than in an organised bidding process, of the procedure and/or the timeframes for providing the information regarding such contract),
• articles 14.29 “Unlawful receipt or submission of a credit report”,
• 14.30 “Violation of the established procedure for collecting, storing, protecting and processing the data of which a credit record consists”,
• 14.36 “Non-submission or delayed submission of the documents concerning a dispute relating to establishing, managing or being a member of a legal entity”,
• 14.52 “Violation of disclosure obligations by a self-regulatory organisation” with regard to self-regulatory organisations in the area of financial markets (except for part 4, which provides for liability to be imposed on a self-regulatory organisation for violating the requirement that such organisation should have a website),
• 14.52.2 “Violation of the requirements of federal laws or the regulations of the Bank of Russia by self-regulatory organisations in the area of financial markets" (introduced by the same law),
• 15.17 “A bad-faith issuance of securities”,
• 15.18 “Unlawful transactions with issuable securities”,
• 15.19 “Violation of the statutory requirements concerning information being submitted and disclosed on financial markets”,
• 15.20 “Preventing the rights certified by securities from being exercised”,
• 15.21 “Unlawful use of insider information”,
• 15.22 “Violation of the procedure for keeping the register of securities owners”,
• 15.23.1 “Violation of the statutory requirements concerning the procedure for preparing for and holding general meetings of shareholders, members of limited liability companies (companies with additional liability) and owners of investment units of closed unit investment funds”,
• 15.24.1 “Unlawful provision or circulation of documents certifying monetary and other obligations”,
• 15.26 “Violation of the legislation concerning banks and banking activity”,
• 15.26.1 “Violation of Russian legislation on microfinance activities” (except for part 1, which provides for liability to be imposed on legal entities for unlawfully using the phrase “microfinance organisation” in their names),
• 15.26.2 “Violation by pawnshops of Russian legislation” ,
• 15.26.3 “Non-performance of the obligation to confirm and submit to a credit reporting agency the data contained in the main part of a credit record”,
• 15.26.4 “Non-performance or delayed performance of the obligation to transfer to credit record agencies the information on the execution of a court judgement to recover from the debtor the amounts of money resulting from the debtor’s non-performance of the obligation to pay for residential premises, utility services and communication services, by the sources of the credit record, i.e. the entities that hold such court judgements which have come into force and have not been executed within 10 days”,
• 15.26.5 “Non-performance or delayed performance of the obligation to submit the information on the repayment of loans to credit record agencies, by the sources of the credit record - entities acting as lenders under loan agreements (except for credit institutions, microfinance organisations and credit cooperatives)”,
• 15.28 “Violation of the rules for acquiring over 30% of shares of an open joint-stock company”,
• 15.29 “Violation of the requirements of Russian legislation concerning the activity of: professional securities market participants, a repository, clearing organisations, persons acting as central counterparties, joint-stock investment funds, non-governmental pension funds, managing companies of joint-stock investment funds, unit investment funds or non-governmental pension funds, specialised depositories of joint-stock investment funds, unit investment funds or non-governmental pension funds”,
• 15.30 “Market manipulation”,
• 15.31 “Unlawful use of the words ‘investment fund’ or derivative phrases”,
• 15.34.1 “Ungrounded refusal to conclude a public insurance contract or enforcing additional services when concluding a compulsory insurance contract”,
• 15.35 “Violation of the requirements of the legislation on preventing the unlawful use of insider information and market manipulation”,
• 15.36 “Non-performance by a payment system operator of the requirements of Russian legislation on the national payment system”,
• 15.38 “Violation of Russian legislation on credit cooperation and legislation on agricultural cooperation”,
• 15.39 “Violation of the requirements of Russian legislation with regard to: opening a bank account and a letter of credit with a credit institution, business entities and a federal unitary enterprise of strategic importance for Russia’s defence complex and safety concluding a bank deposit agreement, state-owned corporations, state-owned companies and public companies opening bank accounts and other accounts with credit institutions and concluding bank deposit contracts, and concluding deposit contracts with the Federal Treasury and state non-budgetary funds (territorial compulsory medical insurance funds)”.
• 15.40 “The performance by a competent bank of transactions that are prohibited by Russian legislation on a government defence order”,
• 15.40.1 “Non-performance by a competent bank of the obligations established by Russian legislation on government defence order in the event of a bank support being provided with regard to a supported transaction”,
• article 19.5(9) for delayed performance of a the Bank of Russia’s statutory instruction,
• 19.7.3 “Failure to provide information to the Bank of Russia”.