The position of the Constitutional Court of the Russian Federation
Background
Since 6 April 2022, the provision of the Code of the Russian Federation on Administrative Offences has been in force, according to which a single decision must be made for similar administrative offences detected during a single inspection and a penalty must be imposed ‘as for a single’ offence.
The question arises: if a company (an employee) has already been fined under the old law for several offences that have ‘multiplied’, is it possible to obtain a review and annulment of all these fines?
In its Resolution No. 14-P of 02.04.2024, the Constitutional Court of the Russian Federation analysed several scenarios and speculated aloud (and in detail, on 27 pages).
Opinion of the Constitutional Court of the RF
If the application of the concept of ‘as for one’ leads to a reduction in the final amount of a fine when it is added up, the law has retroactive effect. For example, if a norm provides for a fixed maximum limit and the fines for several offences are added together, the fine falls below this limit.
If there is no such upper limit and the fine is calculated as a percentage of a certain base amount (e.g. the amount of an illegal currency transaction), then the situation of the person concerned does not improve in the first approximation: no matter how you calculate, the amount remains the same if there is no fixed upper limit (this is the case with companies prosecuted for illegal currency transactions under Part 1 Article 15.25 of the Code of the Russian Federation on Administrative Offences).
However, the Constitutional Court of the Russian Federation has confirmed that a person's interest is justified not only in a lower amount of the fine, but also in a reduction in the number of such fines. The Constitutional Court of the Russian Federation pointed out that the number of violations is significant when participating in tenders, when issuing licences and, finally, when appealing (many fines – many separate proceedings, higher costs). And it recognised that even in such a case, the law on the concept of ‘as for one’ can have retroactive effect, as it improves the situation of the person.
Finally, the Constitutional Court of the Russian Federation did not allow several fines to be simply cancelled for the reasons mentioned above, as this would mean that a person could no longer be held accountable due to the expiry of the statute of limitations. This is unjust.
Instead, the Constitutional Court of the Russian Federation instructs the enforcement body (in the case of Article 15.25 of the Code of the Russian Federation on Administrative Offences – the tax authority) to consider (in the sense of taking into account) such multiple fines as one, i.e. to minimise the negative consequences of the multiplicity of such fines for the person concerned.
Our comment: The Constitutional Court of the Russian Federation obviously struggled to reach its ‘thin’ decision. It is complex and cumbersome, and it is not entirely clear how it should be applied in practice when such companies participate in the same tenders or licence awards (who should determine and recognise that there was in fact only one violation).
It should also be recalled that only the decisions that have not yet been enforced can be reviewed (if this corresponds to the position of the Constitutional Court of the RF above).