Issues of application of administrative supervision of legal entities

Ershova Kseniya Andreevna Lecturer of the Department of Criminal Law at Ural State Law University 620137, Russia, Sverdlovskaya oblast', g. Ekaterinburg, ul. Komsomol'skaya, 23, kab. 410 ksenni@gmail.com Other publications by this author

Criminal liability of legal entities is still a debatable issue [1 p. 5]. Some researchers prove the uselessness of this institution, arguing their position by the sufficiency of other forms of legal influence on legal entities, the impossibility of applying criminal penalties to them, the absence of personality, and, as a consequence, a guilty attitude to the committed act [2 p. 204], [3 p. 170], [4 p. 47]. Other scientists, discussing with representatives of the first group, consistently defend the possibility and necessity of recognizing a legal entity as a subject of crime and (or) criminal liability [5 p. 52], [1 p. 24]. In addition to the conceptual issues of criminal liability of legal entities, such as an act, guilt, punishment, a lot of narrower, specific issues of criminal liability of legal entities, such as criminal record, recidivism, other measures of a criminal nature and many others, are not fully resolved. One of the fully unresolved institutions of possible criminal liability of legal entities is the control of the post-criminal behavior of the guilty legal entity.

         When bringing an individual to criminal responsibility, the control of the convicted person's post-criminal behavior is carried out by the bodies executing the punishment imposed by the court.

         Other options for controlling the behavior of a person who has committed a crime and served the main sentence include the use of additional types of punishment and administrative supervision.

         These forms of influence on the convicted person are aimed at reducing the degree of his public danger, at eliminating the prerequisites and conditions for committing new crimes, as well as at correcting the behavior of the guilty person as a whole.

         In the case of the introduction of criminal liability of legal entities, the implementation of the goals of criminal punishment and the possibility of correcting the guilty organization will require resolution. The problem of reducing the public danger of the guilty organization, ways of correcting its actions, bringing its activities in line with the requirements of legislation and protecting the rights of victims violated by the commission of a crime will become relevant.

         Not being able to analyze all cases of control of post-criminal behavior of a legal entity and their impact on the assessment of the degree of public danger of a legal entity within the framework of one study, we will focus on one form - administrative supervision. In this regard, we propose to modify the institute of administrative supervision applied to individuals for possible future application to legal entities in case they are recognized as subjects of a crime and criminal liability.

         For individuals, administrative supervision is established by the court upon release from places of deprivation of liberty in the case of committing a serious or especially serious crime; crimes with recidivism of crimes; commission of an intentional crime against a minor^[6].

For legal entities, other grounds and procedures for the application of administrative supervision are possible. The grounds for applying administrative supervision to a legal entity may be: any type of recidivism committed by a legal entity; continuation of the criminal activity for which the legal entity was convicted.

Administrative supervision may be assigned to a legal entity both when a guilty verdict is handed down by a court of first instance, and after the entry of a guilty verdict into legal force at the request of the body executing the punishment.

In this case, a decision on the application of administrative supervision to a legal entity may be taken by a court at the location of the legal entity on the basis of the petition of the person executing the prescribed punishment in connection with malicious evasion from the performance of duties assigned by the court verdict. By malicious evasion of duties, we propose to understand the repeated failure to perform the duties assigned to the guilty legal entity by a court verdict that has entered into legal force, after the previous written warning of the body executing the punishment about the inadmissibility of evasion of duties, provided that their execution was objectively possible.

If a convicted legal entity tries to eliminate and eliminate the negative consequences of a crime for the first time, it does not need administrative supervision.

An example of the need to apply administrative supervision in the first case, that is, when a court makes a decision on administrative supervision together with a guilty verdict against a previously convicted legal entity, may be a situation where a legal entity convicted of air pollution is found guilty of committing another environmental crime - land damage, etc.

In the second case, the decision on the application of administrative supervision will be taken by the court at the location of the convicted legal entity at the request of the bodies executing the punishment and supervising the legality of the activities of the convicted legal entity in cases provided for by law.

In relation to a legal entity, the punishment imposed by the court is executed, however, the guilty legal entity does not begin to eliminate previously committed violations and (or) continues to commit an ongoing or continuing crime for which it was convicted. For example, in the case of a conviction of a legal entity for atmospheric air pollution, as a result of non-compliance with the regulations on the commissioning of sewage treatment plants, after the entry into force of a court verdict, the guilty legal entity, being subject, for example, to a fine, after its payment continues to commit the specified crime. Then the persons executing the sentence or exercising control over the legality of a certain type of activity (in our example, these are inspectors of the federal state environmental supervision ^[7]) apply to the court that passed the sentence with a petition for the application of administrative supervision measures.

For legal entities, the use of administrative supervision seems justified in cases of repeated commission of a crime in the field of economic activity or against environmental safety. The introduction of administrative supervision over the activities of a legal entity is possible when it is necessary to improve the corporate policy of a legal entity [8 p. 19 ]. In contrast to the prohibition of engaging in a certain type of activity, the specified administrative impact, in our opinion, can be assigned in the case when a legal entity systematically violates the provisions of the law in the course of carrying out activities, even after being brought to criminal responsibility. This supervisory measure may be aimed at preventing the continuation of criminal activity by a convicted legal entity.

It is advisable to apply administrative supervision in cases when the activity of a legal entity pursues legitimate goals, but in the process of its implementation, significant violations of the requirements of the current legislation are allowed [9 p. 53 ]. The introduction of administrative supervision is possible in the case when a legal entity does not allow a separate criminal episode, but either systematically carries out activities in the process of which crimes are committed, or commits a single complex, ongoing or continuing crime that does not stop even after the entry into force of a court conviction. 

In our opinion, administrative supervision applied to a legal entity can be appointed for a period of one to three years. Taking into account the purpose of supervision - improvement of corporate policy, that is, bringing the organization's activities in strict accordance with the law, such a period should be sufficient to eliminate the violations committed. It is advisable to combine with administrative supervision another measure of a criminal nature - confiscation of property on the basis of Article 104.1 of the Criminal Code of the Russian Federation. The service of bailiffs can perform administrative supervision in coordination with the body authorized to identify violations committed, that is, the body that oversees the use of natural resources and the implementation of economic activities, etc. Supervision of the legality of the activities of authorized bodies should be carried out by the court that imposed the punishment. Bailiffs, performing administrative supervision together with other authorized bodies, follow the plan of administrative supervision containing specific measures to improve corporate policy approved by the court at sentencing. In the course of administrative supervision, the executive bodies of a legal entity exercise powers with restrictions related to the conviction of a legal entity. For example, the distribution of profits among the participants may be suspended until the full implementation of the corporate policy improvement plan. In addition, as a measure of administrative supervision, a restriction on the transaction capacity of a legal entity may be used in order to prevent the use of assets for other purposes not related to the execution of a court decision. Restrictions may be related to the execution of large transactions and decisions on the distribution of profits and dividends. Obligations related to labor relations, mandatory payments to the budget and current expenses should be made as usual.

The corporate policy improvement plan applied within the framework of administrative supervision assigned by the court to a legal entity committing environmental crimes, in our opinion, should include measures of a restorative nature.

The prerequisites for administrative supervision of a convicted legal entity for committing an environmental crime and the application of restorative measures to it in order to stimulate legitimate activity are the norms of regulatory branches of law. Thus, in Article 77 of the Federal law "on Environmental protection"^[7], the rule on compensation for environmental damage in full is fixed, which can be considered the basis for recognizing the correction of a legal entity and the early termination of administrative supervision.

Restorative measures are orders imposed by the court, designed to eliminate previously committed violations in the activities of the organization and prevent the commission of new ones. The use of measures of a restorative nature is possible when a person who has a criminal record for committing an environmental crime has not been removed and has not been extinguished, commits a new environmental crime. Another reason for the use of restorative measures within the framework of administrative supervision may be the continuation of the illegal activity by a legal entity for which it was convicted. A legal entity that has voluntarily carried out technical re-equipment aimed at preventing the commission of repeated environmental crimes in the future is exempt from further administrative supervision.

A change in the corporate policy of the guilty legal entity, the introduction of environmental-saving technologies and the commission of other similar actions aimed at stopping the crime or preventing its recurrence in the future should be considered as a basis for the early termination of administrative supervision and the removal of a criminal record, since the legal entity has proved correction by its lawful behavior and does not require further supervision and (or) restrictions in connection with with a previously committed crime.

In addition to technical re-equipment, which must be performed by a legal entity within the time prescribed by the court, the grounds for recognizing the correction of a legal entity and the early removal of a criminal record and the abolition of administrative supervision over it can be voluntary environmental audit, which will confirm the transition to environmental-saving technologies as the basis for exemption from the negative legal consequences of criminal liability [ 10 p. 118 ].

After serving at least half of the term of the appointed administrative supervision, in case of achievement of its goals — improvement of corporate policy, including technical re-equipment of production and fulfillment of other obligations imposed by the court, a legal entity with the consent of the body executing the punishment may be released by the court from further execution of administrative supervision and removal of criminal record.

In case of evasion from administrative supervision, the court, on the recommendation of the body performing administrative supervision, may extend the term of administrative supervision for 6 months. We propose to consider evasion from administrative supervision as non-fulfillment of obligations imposed by the court within 3 months or more from the date of entry into force of the court decision on the application of administrative supervision or termination of the execution of a court order without objective reason, if the convicted legal entity received the first written notification about it. The deadline for the beginning of the execution of the judgment is 3 months due to the need to perform actions to plan changes ordered by the court.

In case of termination of execution of a court decision due to objective circumstances, a legal entity cannot be found guilty of non-execution of a court decision. If a legal entity suspends the execution of prescribed actions, although it can continue them, then signs of evasion from administrative supervision appear in its actions.

In case of malicious evasion from administrative supervision, which may be expressed in non-fulfillment or improper fulfillment of obligations imposed by the court after repeated written warning of the body authorized to perform administrative supervision in respect of a convicted legal entity, the court may extend the application of administrative supervision for up to 1 year or transfer materials to the body authorized to initiate criminal prosecution on the grounds of a crime 314.1 of the Criminal Code of the Russian Federation.

Of course, due to the peculiarities of the act fixed by the disposition of Part 1 of Article 314.1 of the Criminal Code of the Russian Federation, a legal entity cannot become the subject of such a crime. At the same time, the act stipulated in part 2 of this article can be committed by both an individual and a legal entity.

It should be emphasized that repeated failure to comply with court orders by a legal entity, unlike the actions of an individual, cannot be associated with the commission of an offense of a certain orientation. Many of the offenses specified in the disposition of Part 2 of Article 314.1 of the Criminal Code of the Russian Federation do not correspond to the legal nature of a legal entity. At the same time, malicious evasion itself, such as: refusal to commission treatment facilities, making transactions without the permission of the body performing administrative supervision, a legal entity can perform. In this regard, we propose to amend Article 341.1 of the Criminal Code of the Russian Federation Part 2.1 in the following wording:

"Malicious evasion of a legal entity, in respect of which administrative supervision has been established, from restrictions or prescriptions established by a court in accordance with federal law, -

is punishable by a fine of up to 10 million rubles with a ban on engaging in a certain type of activity for up to 2 years or without it."

The time of evasion of a legal entity from the execution of administrative supervision should not be counted within the time limit set by the court. The optimal mechanism, in our opinion, will be the suspension of the duration of administrative supervision from the beginning of evasion until the resumption of the execution of court orders by a legal entity, which complies with the rules set out in Part 3 of Article 78 and Part 2 of Article 83 of the Criminal Code of the Russian Federation.

         Summing up, we note that the proposals on the introduction of administrative supervision for legal entities found guilty of committing a crime focus on the restorative potential of criminal law, which applies both to victims of crime and to persons committing crimes ^{[11, p. 18]}. Administrative supervision measures aimed at improving corporate policy and eliminating conditions conducive to the commission of a crime are aimed at three categories of subjects. These are victims recognized as such in the judicial process, actual victims not recognized as victims in accordance with the established procedure, whose rights and legitimate interests were harmed by the crime committed, the guilty legal entity itself.

The objective ability of legal entities to compensate for the damage caused by a crime is much higher than that of individuals. A lot of works by supporters of criminal liability of organizations are devoted to this issue, so we will not repeat the previously given arguments ^{[12, p. 221]}. We will only point out that this situation is more often formed when committing crimes in the field of economic activity.

In our opinion, more important is the possibility of compensation for damage to actual victims who remain outside the scope of both criminal and civil proceedings. This situation is typical for environmental crimes. In case of contamination of individual components of the environment, exceeding the MPC of various hazardous substances, committing other actions that lead to deterioration of the quality of the environment, it is often not possible to identify all the real victims of the crime committed. In fact, all persons living or staying in the territory exposed to harmful effects become victims. When committing such crimes, the right to a favorable environment guaranteed by the Constitution of Russia is violated. Exceeding the concentration of harmful substances can cause acute and chronic diseases, deterioration of the health of citizens. Nevertheless, these consequences today are taken out of the scope of criminal law and process, although they determine the severity of the committed act and can serve as a basis for its classification as a crime and not other offenses.

Currently, the company is subject to minor fines as part of the administrative process and continues to carry out illegal activities ^{[13, p. 201]}. In the event of the introduction of criminal liability of legal entities and the application of administrative supervision to the convicted legal entity in case of non-fulfillment of obligations to terminate criminal activity, the legal entity will be forced to eliminate the violations committed and take measures aimed at preventing the recurrence of similar crimes in the future as part of the execution of the court decision. And even if the damage already caused will not be compensated, an indefinite circle of actual victims will be protected from repetition or continuation of illegal actions.

The third subject of the restorative effect is the guilty legal entity itself, so  how, with the help of administrative supervision measures, the legitimate activity of the guilty legal entity is restored and, as a result, the organization is restored as a law-abiding entity.