Ruling of the Constitutional Court of the Russian Federation on the statute of limitations: Analysis
Background
The Constitutional Court of the Russian Federation considered the possibility of applying the limitation periods established by the Civil Code of the Russian Federation in a situation where, at the suit of the General Prosecutor's Office, property is seized for which there is no evidence that it was acquired with legitimate income (this is subparagraph 8, paragraph 2, Article 235 of the Civil Code of the Russian Federation).
According to the Civil Code of the RF we could speak about two limitation periods: 3 and 10 years (Article 196 of the Civil Code of the RF), but neither of them suited the Prosecutor General's Office.
In other words, recognizing a person as a criminal and conviction under the Criminal Code of the Russian Federation for corruption is not the only option. It is long, complicated, has a high threshold of proof - and there are statutes of limitations too. Therefore, the Prosecutor General's Office can, as a second option, file lawsuits under the Civil Code of the Russian Federation, seizing property from a person who, let's say, bought an estate with a declared low income. And the Prosecutor General's Office is considering the option of not applying any statute of limitations to such lawsuits (for reasons of public importance).
What did the Supreme Court of the Russian Federation say?
The Supreme Court took a different position: it said that the prosecutors' claims are not aimed at the protection of intangible benefits (after all, they demand to turn, for example, shares of legal entities into the income of the state!), there are no other limitation periods except those in Article 196 of the Civil Code of the Russian Federation. Therefore, the limitation period is applicable.
What was unusual about the session of the Constitutional Court?
The session is called the process of the year. There are several reasons for that.
The position of the Supreme Court sharply diverged from the position of the Prosecutor General's Office (and, as we will learn, from the position of the Constitutional Court). This is very rare.
Representatives of the Supreme Court, the Prosecutor General's Office, the State Duma, the Council of Federations, the President of the Russian Federation, the regional court, and other prominent figures of law participated in the meeting - and all of them expressed interesting arguments.
The scientific community was unexpectedly active in such a difficult dispute with the Prosecutor General's Office, fully supporting the position of the Supreme Court. Such authoritative experts as Dr. Karapetov, Dr. Egorov, Erokhova and Dr. Bevzenko presented their conclusions, which is rare.
The broadcast was watched by thousands of people, which also does not happen often with the sessions of the Constitutional Court.
Conclusions of the Constitutional Court
The Constitutional Court ruled that the statute of limitations does not apply in such cases (i.e. it supported the Prosecutor General's position). Despite the existence of Article 196 of the Civil Code of the Russian Federation, where they are established, for the Prosecutor General's Office and corruption cases - the statutes of limitations do not apply.
The scientific community was very concerned that the Constitutional Court would at the same time decide the fate of the expropriation cases: the Prosecutor General's Office requested that the statute of limitations should not apply to them either. The Constitutional Court stated separately that this ruling did not apply to privatisation claims. And there are already two points of view: the Constitutional Court has closed the issue (i.e. left the application of the statute of limitations to privatisation) or left the issue open for another session.
A separate issue is the fate of the property of corrupt officials sold to bona fide third parties. The court hastened to explain that persons who could not have known the origin of the property were entitled to expect "the preservation of its actual ownership".
What are the risks, why is this all so important?
The abolition of statutes of limitations that are set forth in the Civil Code (for certain types of cases, corruption) is a rare occurrence. In such a case, is it likely that statutes of limitations will also be abolished for other transactions, for example, those violating the recent restrictive measures under the Decrees of the President of the Russian Federation? Pandora's box is open - we just have to wait.
How can we defend ourselves against such lawsuits, given that many years may pass and evidence in defense of the defendant may be lost? Can we count on the courts to take this into account and favor the defendant?
Check out our Telegram channel for more useful articles and the latest news.