Vladimir Putin signs Law introducing fines for supporters of financial pyramids

Russia’s president Vladimir Putin earlier this week signed “Federal Law On Amendments to the Russian Federation Code of Administrative Offences”, with the document introducing tougher penalties for those who support the activity of financial pyramids.

The Law envisages administrative fines for individuals and businesses that organize financial pyramids and attract investors. There are fines also for those who urge the public to take part in such activities and for public dissemination of information that encourages participation in financial pyramids.

The maximum size of the fines will be RUB 50,000 ($712) for individuals. The maximum financial penalty for business employees will be RUB 100,000, whereas the maximum fine for corporate entities will be RUB 1 million.

The Law also includes a definition of a financial pyramid, as an entity which pays to existing investors from the investments of new investors. Another characteristic of a financial pyramid is that it does not conduct a legal activity with the funds attracted.

The Russian Duma passed the law on February 19, 2016, whereas the Federation Council approved it on March 2, 2016.

There is another legislative piece that Russian lawmakers have to yet to consider. It includes amendments to the Criminal Code and will introduce a penalty of up to 6 years in jail for those who set up financial pyramids.

You can view the English version of the Kremlin press release by clicking here.

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