A number of amendments have been made to the provisions of the Code of Administrative Offences

In the context of the pandemic and different measures taken by the authorities, a number of amendments have been made to the provisions of the Code of Administrative Offences which significantly increase administrative sanctions for legal entities.

On 31 March 2020 the Russian State Duma passed in the third reading a draft law to amend the Code of Administrative Offences. This draft law among other things amends the grounds and extents of liability with respect to a number of offences. On the same date this draft law was approved by the Russian Federation Council. Two stages are left before the law will be enacted: it should be signed by the Russian President and published. In connection with the fact that the draft law provides for significant amendments with regard to liability for a violation of sanitary and epidemiological rules, and establishes liability for a violation of the rules for conduct in an emergency situation or in a threat of it occurring, it is important in your everyday operations to take into account the amendments that are being prepared.

Amendments have been made to article 6.3 of the Code of Administrative Offences for a violation of legislation concerning the sanitary and epidemiological welfare of the public.

In addition to the grounds previously established, liability is imposed in the following cases:

• a violation of legislation concerning the sanitary and epidemiological welfare of the public in the period of an emergency situation or during the threat of the spread of a disease that is dangerous for the public, or during quarantine;
• the failure to perform within the established deadline an instruction or request issued within the above periods by the body carrying out federal state sanitary and epidemiological supervision concerning the conduct of sanitary and epidemiological measures.

Please note that it is not clear what should be recognised as a threat of the spread of a disease that is dangerous to the public. We suggest that such disease should be included in the Russian Government's approved list of diseases that constitute a danger to the public[1].

The above list includes, in addition to the coronavirus infection (2019-nCoV), such diseases as, for instance, plague, anthrax, and cholera, the threat of whose spread is seen as extremely insignificant; the mere fact that a disease is included in such a list is not a sufficient ground for confirming that there is a threat of it spreading. The issue of whether there is a threat should be resolved individually in each specific case.

The liability for committing the office in question for legal entities may be imposed in two forms:

1. a fine from RUB 200,000 to RUB 500,000;
2. an administrative suspension of its activities for up to 90 days.

Similar forms of liability for individual entrepreneurs are established, but the amount of the fine in this case may vary from RUB 50,000 to RUB 100,000.

If the above actions have resulted in the causing of harm to the health of or in the death of a human being, if these actions do not contain the signs of a crime, liability for both legal entities and individual entrepreneurs will be imposed in the form of a fine in an amount from RUB 500,000 to RUB 1,000,000 or administrative suspension of activities for up to 90 days.

The Code of Administrative Offences will be supplemented by article 20.6¹, which establishes liability for the failure to comply with the rule of conduct in an emergency situation or a threat of it occurring.

The fine for a failure to comply with the rules of conduct when a high-alert regime is enacted in a region where there is a threat of an emergency situation occurring, or in the area of an emergency situation will be from RUB 100,000 to RUB 300,000 for legal entities (from RUB 30,000 to RUB 50,000 for individual entrepreneurs).

If as a result of the above actions harm was caused to the health or property of a human being, then if there are no signs of a crime, liability may be imposed on legal entities and individual entrepreneurs in the form of a fine in an amount from RUB 500,000 to RUB 1,000,000 or in the form of an administrative suspension of operations for up to 90 days.

Additions have been introduced to article 13.15 of the Code of Administrative Offences, which establishes liability for the abuse of the freedom of the media.

The additions relate to liability for the spreading of so-called ‘fake news’ which has already been established in the Code of Administrative Offences (article 13.15(9) and 13.15(10)). At the same time, first of all the amendments being introduced are connected with the need to exercise more stringent control over the distribution of information concerning the epidemiological situation and to provide for an increased amount of administrative fines.

Therefore, for the distribution in the guise of reliable communications in the media and over the internet of information known to be false about circumstances that pose a threat to the life or security of the public, about measures being taken to ensure the security of the public and territories, and about ways and methods of protection from the above circumstances, a fine up to RUB 1,000,00 with the subject matter of the administrative offence being confiscated is stipulated for legal entities.

If the dissemination of socially valuable information that was known to be false has entailed the death of a human being, harm being caused to human health or property, a mass violation of public order and other significant public security offences, the fine for a legal entity may amount to RUB 5,000,000 with the subject matter of the administrative offence being confiscated.

The Code of the Administrative Offences has also been supplemented with a ground for imposing liability for the repeated commission of an offence specified above.

Article 14.4² of the Code of Administrative Offences has been supplemented with regard to liability for a violation of the requirements of legislation concerning the establishment of maximum amounts for the wholesale and retail mark-ups on the wholesale prices established by the producer

Previously, maximum amounts of mark-ups were established only with regard to medicines included in the list of vital and essential medicines.

However article 60 of Federal Law No. 61-FZ dated 12 April 2010 “On the circulation of medicines” has been amended. Amendments came into force on 26 March 2020[2], according to which

• in an emergency situation;
• when there is a threat of a disease spreading that is dangerous for the public; and
• if within thirty calendar days from the date when the Government of the Russian Federation adopts a decision to conduct monitoring of retail prices for medicines not included in the list of vital and essential medicines in the constituent entities of the Russian Federation where the growth of prices for the specified medicines is identified as thirty percent and more.

The Russian Government has the right to establish maximum producers' wholesale prices for the specified medicines, as well as maximum amounts of wholesale mark-ups and maximum amounts of retail mark-ups on the producers' actual wholesale prices for the specified medicines.

In accordance with the additions to article 14.4² of the Code of Administrative Offences, fines are established for the sale of medicines at prices exceeding the volume of wholesale and retail mark-ups established by the Russian Government on the actual prices of the producer.

The liability for such offences will:

• vary from RUB 200,000 to RUB 500,000 – for an organisation's officers;
• in double the amount of the excess revenue received from sales at the wrongfully overstated prices regulated by the government for the entire period (but not longer than one year) in which the violation was in effect – for individual entrepreneurs;
• in double the amount of the excess revenue received from sales at the wrongfully overstated prices regulated by the government for the entire period (but not longer than one year) in which the violation was in effect – for legal entities.

Help from your adviser

Pepeliaev Group provides legal support with respect to all issues that may arise in connection with the measures taken to prevent the spread of the coronavirus infection, and their influence on your business, as well as on any other legal matters. We will pull out all the stops to provide an instant response with practical recommendations concerning your specific situation.