Russian parliament to examine two bills on financial pyramids


The Russian government has submitted two bills concerning counteracting financial pyramids with the State Duma – the lower chamber of the Russian parliament.

The first bill is № 881225 “On amendments to the Code of Administrative Offenses of the Russian Federation”, whereas the second is № 881156 “On amendments to the Criminal Code of the Russian Federation and to the Penal Enforcement Code of the Russian Federation”, with both bills toughening the penalties for the organization of financial pyramids.

Official data shows that 160 entities, possessing the features of financial pyramids, were functioning in Russia in 2014. The number of victims of such fraudulent businesses last year was officially more than 9,000, whereas the associated losses amounted to RUB 1.7 billion ($25.6 million).

pyramidThe amendments to the Code of Administrative Offenses envisage administrative penalties for organizing financial pyramids and for advertising such entities. This includes attracting new clients to such companies. The sanctions include fines in the range RUB 5,000 – RUB 50,000 for individuals; fines from RUB 20,000 to RUB 100,000 for business representatives or institutional employees; and fines from RUB 500,000 to RUB 1 million for corporate entities.

The amendments to the Criminal Code give the Russian police the power to counteract financial pyramids.

The Criminal code will punish organizers of financial pyramids with hefty fines, with the maximum penalty (in case the sum misappropriated is big) being a prison sentence of 6 years.

To view the official announcement, click here.

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Russian parliament to examine two bills on financial pyramids

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