Kazakhstan: White-Collar Crimes In Kazakhstan

Last Updated: 8 August 2016
Article by Colibri Kazakhstan LLP

"The more corrupt the state, the more numerous the laws"
- Tacitus, The Annals of Imperial Rome.

Kazakhstan is the Post-Soviet country which is facing and struggling with the corruption heavily. On the initial stages of its independence, Kazakhstan severely stressed the question of corruption. The state adopted several laws, codes and decrees aiming to eliminate the white collar crimes in Kazakhstan.

The annual Presidential address to state and its citizens always mentions anti-corruption issues and contribute to increase of public awareness on this matter. Anti-corruption measures are taken not only on country level, but on international level as well. The membership in the International Anti-Corruption Academy, ratification of UN Convention against Corruption and adoption of legislation for accurate implementation of Convention provisions are good examples.

Moreover, in 2014 Kazakhstan has developed and adopted the anti-corruption strategy for 2015-2025. Despite of all the measures taken to eliminate the corruption, Transparency International ranked Kazakhstan 140 out of 177 in Corruption Perceptions Index 2013, which means that the fight is still on the run.

In order to have a better understanding of the nature of bribe under the Kazakh law it is necessary to take a better look at the laws in the state itself.

In general, Kazakh law recognizes bribing or accepting bride as a criminal offence. In addition, the Supreme Court of Kazakhstan in its Decree No.9 dated 22 December 1995 clarifies the bribery as following:

"obtaining certain benefits by the bribe giver from the public official's performance or non-performance of certain actions"

The Criminal Code defines a bribe in a following way:

GIVING TO

  • a person authorized to perform state functions, or
  • a person of equal ranking,

EITHER

  • directly, or
  • through an intermediary,

OF A BRIBE IN THE FORM OF

  • money,
  • securities, or
  • other property,
  • title to property, or
  • proprietary benefits for actions, or
  • omission to act

IN FAVOR OF

  • the briber, or
  • persons represented by him/her,

if such actions (failures) are covered by the authority of the office of a person authorized to perform state functions, or a person of equal ranking, or if he/she by virtue of the authority of his/her office may contribute to such actions (failures).1

Public Bribery

Public bribery is an offence committed by the state officials. State official is a citizen of Kazakhstan holding a position (payable from the state or local budgets or from the funds of the National Bank of Kazakhstan) in the state authority and carries out official powers. There are two category of public officials:

  1. Persons authorized to perform state functions refers to all officials, delegates/members of Parliament and the maslikhats (local parliament), judges as well as all state officials.
  2. Persons equated to the persons authorized to perform state functions consists of persons elected to the local government, citizens registered as candidates for the post of the President of Kazakhstan, members of the Parliament and the maslikhats, as well as those who are registered as candidates for the post of members of elective bodies of local government, persons holding managerial positions in state organizations or organizations in which the state holds a share of 35 % or more.

Moreover, according to Articles 366 and 367 of Criminal Code of RK, term "state officials" refers not only to state officials of Kazakhstan, but as well as the state officials of foreign countries and international organizations.

The legislation that regulates public bribery offences are the Law of the Republic of Kazakhstan "On combating corruption" (the Anticorruption Law) and Criminal Code of the Republic of Kazakhstan (Chapter 15 "Corruption and other criminal offences against the interests of civil service and public control"). Anticorruption Law is more focused on prevention, detection, suppression of offences connected with corruption; it gives a definition of corruption, identifies a category of persons who can be connected with corruption, defines the elements of the corruption offences as well as consequences of breaches of the Anticorruption Law. The Criminal Code imposes the criminal liability for bribery actions recognized as criminal offences.

Private Bribery

Private bribery excludes the involvement of public officials, however, it is committed by the officials or managing entities of the private sector organizations (commercial organizations or any other organizations with the state's share in it less than 50%). Private bribery is regulated by the Criminal Code of the Republic of Kazakhstan (Chapter 9 "Criminal offences against the interests of service in commercial and other organizations").

Nature of The Bribe

As mentioned earlier, a bribe is defined as giving a gift in the form of money, securities, or other property, title to property or proprietary benefits for actions. From the Kazakhstan Criminal Code perspective, the term "bribe" is applied only to public bribes, whereas private bribes are defined as "unlawful benefit". In some jurisdictions, the term «bribery» refers to the act of providing bribes, while the term «corruption» refers to the recipient. In other jurisdictions «active bribery» refers to the act of providing bribes, while «passive bribery» refers to the recipient. All of this will be discussed in details further in the article.

Under the Kazakhstani legislation both public and private bribery are punishable. Thus, Article 253 of Criminal Code prohibits both giving and receiving a commercial bribe. Previously mentioned Chapter 15 of the Criminal Code (Corruption and other criminal offenses against the interests of civil service and public control) contains three clauses which prohibit corruption crimes:

Article 366 prohibits receipt of a bribe; Article 367 prohibits giving a bribe; and Article 368 prohibits acting as an intermediary in receipt/giving a bribe.

The Anticorruption Law contains no monetary thresholds in relation to providing gifts and entertainment to the state officials so any gifts or other benefits will not be in line with the said Law.

The Criminal Code also contains no thresholds, except that it allows:

  • to give the management bodies of private companies or state officials a gift or remuneration the cost of which does not exceed 2 MCI2 (approx. USD 22);
  • to give or receiving from, render services of material nature or use of such services as a gift or remuneration if the cost of property or services does not exceed 2 MCI (22 USD);
  • Kazakhstan law does not allow any facility payments

The following persons can be held responsible for a violation of the Anticorruption Law:

  • persons authorized to perform state functions;
  • persons who are equated to those authorized to perform state functions.

Under the Criminal Code:

  • the persons above who are subject of the of the Anticorruption Law;
  • any other individual who committed or attempted to commit an act of public or private bribery, or made such act possible, or assisted in such act can be held liable as author, co-author or accomplice; and
  • a manager of the legal entity can be held liable for abuse of powers.

Offering and receiving a bribe are separate criminal offences (corruption) regardless of whether the bribe is accepted or not. A promise to provide an advantage if it was not given due to reasons beyond the control of the promising person is sufficient to qualify as criminal attempt for the bribery. Actual delivery of the advantage is not required.

Public bribery offence can be committed both actively and passively. Active bribery is when a person directly or indirectly gives a bribe to a person authorized to perform state functions or a person equated to authorized person (in Kazakhstan or abroad). Passive bribery is, in contrary, when a person authorized to perform state functions or a person equated to authorized person (in Kazakhstan or abroad), directly or indirectly, accepts a bribe.

Private bribery is defined similarly, but only the subjects of an action are different. Active bribery directly or indirectly giving/transferring money, securities or other properties or illegal service rendering of material nature to a person who is performing managing powers in a corporate entity for using his/her office and power in favor of the interests of the person giving the bribe. Passive bribery is when a manager of the legal entity illegally accepts money, securities or other properties or services of material nature in change of using his/her office in favor of the briber's interests.

Criminal code sets the following punishments for the public bribery offences:

Giving bribe - punished by a fine in the amount of twenty-fold tol fiftyfold of the bribe, and imprisonment from 3 to 15 years, with or without confiscation of property and lifetime prohibition to hold certain positions or engage in certain activities.3

Receiving bribe - punished by a fine in the amount of sixty-fold to eighty-fold of the bribe, and imprisonment from 3 to 15 years, with or without confiscation of property and lifetime prohibition to hold certain positions or engage in certain activities.

Intermediation in bribery - fostering a bribe-taker and a briber to achieve or implement the agreement between them about receiving and giving bribes - punished by a fine in the amount of ten-fold to twenty-fold of the bribe, and imprisonment from 2 to 6 years, with or without confiscation of property and lifetime prohibition to hold certain positions or engage in certain activities.

Punishments for the private bribery4 offences:

Abuse of power - fine up to 4000 MCI (approx.43 000 USD), corrective labor at the same rate, or restriction of freedom for up to 4 years, or imprisonment for the same term, with confiscation of property or without it, with prohibition to hold certain positions or engage in certain activities for up to five years.

Giving bribe or commercial bribery fine up to 5000 MCI (approx. 53 000 USD), corrective labor at the same rate, or restriction of freedom for up to five years, or imprisonment for the same term. If there are aggravating circumstances5 imprisonment from 7 to 15 years, also with property confiscation, prohibition to hold certain positions or engage in certain activities up to 5 years.

Taking into account the above, it is obvious that punishment for the public bribery is on a larger scale than the punishment for the private bribery. Considering that public officials represent and contribute for the proper functioning of state system and well-being of the population it understood why legislation regulates the public bribery offence more severe than those in private sector.

Footnotes

1 Article 366 of the Criminal Code

2 Monthly calculation indicator, 1 MCI is 1982 tenge (approx. 11 USD)

3 Depending on the nature of the offence and subject to suspension or extension under specific circumstances.

4 Not full list of private offenses provided by this article

5 Repeated criminal offence, extortion, criminal offence committed by a group of persons in conspiracy or by an organised crime group and others.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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