What is “ensuring business safety” and do you really need it?



Russian law provides for the mandatory implementation of monitoring and oversight activities, authorized by state and municipal authorities, aimed at any and all legal entities - enterprises and organizations.


According to the Center for Legal and Economic Research, in recent years Russian entrepreneurs have become victims of monstrous repression by the state. Over the past 11 years, one out of every six business owners in Russia has had a financial criminal case filed against them. Two thirds of all enterprises against whom such cases were filed have been closed down. According to the CLER experts’ statistics, over 100 000 businessmen are currently serving sentences behind bars. Since 1996 the Economic Crimes section of the Federal Criminal Code has grown by 12 additional constituent elements of offence (corpus delicti). Half of those are considered serious felony offenses and many carry sentences of up to 5-10 years of incarceration. Recently, only two measures have reduced the pressure on businesses – the prohibition of pretrial detention (in most cases), and the requirement of a tax audit before the formal filing of a criminal complaint for tax evasion.

In the opinion of former Deputy Chairman of the Supreme Court, Vladimir Radchenko, a dangerous phenomenon is forming in Russia – Criminal-Code management of the economy. Speaking at a conference, at the Higher School of Economics, former presidential adviser Arkadiy Dvorkovich estimated that under the current conditions any entrepreneur has a 50/50 chance of facing criminal prosecution.

The phraseology of most current statutes is dubiously ambiguous which leaves ample space for random corruption; decisions and actions which may look perfectly legal to an entrepreneur may subsequently be considered in statutory violation by the regulatory agencies, the prosecution and the courts.  

Any legal entity operating on the territory of the Russian Federation can be subjected to between 30 to 40 types of administrative oversight. More about the monitoring and oversight powers of government agencies.

It is no secret that the agencies can have biased, just as easily as unbiased, opinions. In the opinion of Evgeniy Yasin (Academic Supervisor at the Higher School of Economics) the state is under the firm assumption that “entrepreneurs are by their very nature thieves, and even if some are not, it is not to their merit, so to speak, it is because we have not done our job.”  

In many cases the seizure of property and documentation by the regulatory and law-enforcement agencies is conducted in violation of the law (illegal search and seizure), sometimes unjustifiably aimed at pressuring the business by means of requisitioning unnecessary documentation unrelated to the matter in question. As a rule during illegal seizures the business owners are not provided with an inventory and copies of the confiscated documentation.

The fact of legal violations and abuse committed by the state vis-a-vis the private economic sector was recognized by the Chief Prosecutor (Attorney General) of the Russian Federation, Yuriy Chaika, in his annual speech in front of the Federal Council on the state of the rule of law in the Russian Federation on May 30th, 2012. In his opinion the actions of state operatives are often exercised without any control and thus result in a large number of complaints.

The regulatory agencies justify their need to confiscate information (seizure of documents and electronic carriers) with their obligation to gather evidence in order to build a case.

Thus, any “regulatory oversight” (even if it is not conducted on premises) means stress, wasted time, questions, inquiries, interrogations, inspections, demands, requirements to produce more documentation and information, further seizure of documentation and electronic carriers (servers, hard drives, computers etc.) 

With the aim of establishing the most favorable set of conditions in which a business can function normally, our holding company Audit-EuroFinance and LLC Russian Archive House provide their clients with specific help in case-specific circumstances when the normal functioning of the enterprise is in danger of illegal search and seizure by state regulatory and law-enforcement agencies.

PLEASE NOTE, that our services are not aimed at assisting your company in evading lawful state demands. Our services, are aimed at analyzing the legal compliances of the state’s demands to the letter of the law and preparing copies of only documentation which regulatory and law-enforcement agencies have legal entitlement to request, within the timeframes stipulated by law.