Abuse of power. Article 201 of the criminal code

What does the law say about the abuse of power?

The use by the person referred to in the previous paragraph, of his/her powers against the interests (certainly legitimate interests) of the organization in order to obtain benefits for himself/herself or other people or inflict damage to other people, if those actions or inactions led to substantial harm to the rights and legitimate interests of individuals, companies, society and the state shall be punishable with the following:

• From a fine to deprivation of liberty for a maximum period of 4 years;
• If the abuse has caused grave consequences, the maximum term of imprisonment may be ten years.

The main target of the crime is the normal activity of commercial or other companies, and their legitimate interests.

The rights and legitimate interests of citizens, companies, society and the State are considered as an additional target of this crime.

The most common examples of the abuse of power.

1. One of the typical examples of the abuse of power is when the CEO of the society creates a company (often with a similar name) with his/her involvement, to which he/she diverts a part of or all of the orders and customers from the company where he/she was or continues to be the CEO. In this case, the unconscientious CEO often does not stop there: office and commercial properties rent contracts are terminated and the new ones are concluded with the company under his/her control, the employees are transferred to work in the new company. The old company actually ceases operations or, at best, loses part of its business.

In this case, both the company itself, which has become the subject of criminal actions, and members of the company, too, may qualify as a victim. That being said, under the current court practice, the applicant in such cases may be the new CEO, board member or member of society.

2. Another example might be the conclusion by the General Director of a transaction on behalf of the company on conditions unfavorable a priori, at low or excessive prices, often without the consent of the company members, with counterparties that are in one way or another under the control of the perpetrator, as a result of which the company gets damaged and third persons or the general director himself/herself get profits (see the Cassational Ruling of the Rostov Regional Court for the case No22-9035 dated 28.10.2010, the Cassational Ruling of the Rostov Regional Court for the case No22-6998 dated 19.09.2012).

3. The third characteristic example of the abuse of power is when the CEO or head of division signs on behalf of the company an acceptance certificate with the counterparty, thereby accepting the works and creating the basis for payment to the contractor. In this case, the offender knows that the works have not been performed or have been performed improperly and should not be accepted (see the Cassational Ruling for the case No 4994 by the Rostov Regional Court).

Delimitation between the abuse of power and embezzlement.

Abuse of power (Article 201 of the RF Criminal Code) should be distinguished from embezzlement: Swindling (Article 159 of the RF Criminal Code), Swindling in the sphere of entrepreneurial activities (Article 159.4 of the RF Criminal Code), embezzlement or squandering (Article 160 of the RF Criminal Code).

Both in case of the abuse of power and embezzlement, a company may lose its property, in connection with which, in practice, there often appear problems of classification and differentiation of these crime components.

• The main element that distinguishes the abuse of power from various types of embezzlement is the intent. In the case of abuse of power the intent aims to use the powers against the interests of the company for the person’s own benefit or the benefit of other people. In case of embezzlement the intent is aimed at the theft of property and getting it at the person’s disposal or handing it over at the disposal of other people. An example of court practice is the Supervisory Ruling of the Russian Armed Forces dated 06.03.2002 for case No 5-D01-365.
• Another element that distinguishes the abuse of power from embezzlement with the use of official position is the nature of property seizure: in case of the abuse of power the property is either not withdrawn or withdrawn, but temporarily and/or for a certain fee. (Resolution of the Plenum of the RF Armed Forces No19 dated 16.10.2009).