Russian Bankruptcy Law is efficient

Monday, August 15, 2022

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The cabinet approved a package of bills targeting improvement of the bankruptcy procedure Thursday. Summing up the cabinet debate, Prime Minister Mikhail Fradkov stressed the importance of preventing "the negative effect of privatization or bankruptcy." Economic Development and Trade Minister German Gref told the cabinet at the session that the amendments concern, among other things, introduction of an efficient financial recovery procedure, greater responsibility for fictitious or deliberate bankruptcy, as well as other attendant unlawful doings. Mr. Gref noted that criminal responsibility intended for such offenses is actually idling because they defy being proved. In 2003, only one person was sentenced for fictitious bankruptcy and 26 for wrongful acts in bankrupting. The Economic Development and Trade Ministry has prepared amendments to the criminal and administrative violations codes with specification of such offences. Summing up two years of operation of the Bankruptcy Law, becoming efficient in January 2002, Mr. Gref noted that it has taken the edge off Russia's bankruptcy problems. "As our monitoring shows, the law is efficient indeed," he said. At the cabinet session, Mr. Gref stressed the need of a special approach to be shown in the bankruptcy of strategic, city-forming works, as well as natural monopolies and financial organizations. He noted that a special procedure existed utilizing a longer term of bankruptcy stages and a higher threshold for initiating it.

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