by Oana Strătulă (Partner)
In order to achieve a correlation between the reality of the fact and the sanctioning legal norm, the Criminal Code and the Criminal Procedure Code – which have entered into force on February 1, 2014 – bring a series of updates regarding the measures that the criminal court may take for the purpose of protecting the interests of creditors and the criminalization of facts which, up to this point, were likely to attract, broadly, only the civil liability of the guilty persons1.
Thus, during the criminal prosecution, the judge of rights and liberties or, where appropriate, the judge of of the Preliminary Chamber or the Court may order the prohibition of the initiation or, where necessary, the suspension of the dissolution or liquidation procedure of the legal entity; the prohibition of the initiation or, where necessary, the suspension of the merger, division or reduction of the share capital of the legal entity, started before or during the criminal prosecution; the prohibition of some patrimonial operations which are likely to involve the reduction of the patrimonial asset or the insolvency of the legal entity; the prohibition of concluding certain legal documents, which are established by the judicial body; the prohibition of performing the activities such as those that led to the offense.
A new offense: the abuse of trust by defrauding creditors
On the other hand, the new Criminal Code, through art. 239 criminalizes a new form of abuse of trust, respectively the abuse of trust through defrauding the creditors, consisting of the action of the debtor to dispose, conceal, damage or destroy, totally or partially, values or goods from the patrimony or to invoke acts or fictitious debts with the purpose of defrauding the creditors.
Thus, with the entry into force of the new criminal law, the operations previously practiced by the debtors, consisting of the reduction of the heritage, whether real or fictitious, with the purpose of defrauding the creditors’ interests – which were put in the situation of no longer being able to recover their receivables from the debtor – now represents a criminal offense and shall be punished with imprisonment from six months to three years or with a fine.
Another method of committing the criminal offense of abuse of trust through defrauding the creditors consists in the action of the person who, knowing that he will not be able to pay, purchases goods or services causing harm to the creditor. In other words, for example, if a person purchases a good with the payment in rates, knowing that he will not be able to pay those rates and that in turn will cause a loss to the seller – creditor, commits the offense mentioned above.
The phrase “knowing that he will not be able to pay“, used by the legislature certainly takes into account the direct intention of the debtor which states that he will cause harm to the creditor and seeks to produce this damage by purchasing products or services knowing that he will not be able to pay for them.
Of course, the effective probation of the direct intent, respectively the fact that the debtor knew that he could not pay, will cause problems in practice, given the fact that, most likely, the guilty person will defend himself invoking that, in reality, he did not know that he can not pay and hoped that up to the due date he will obtain the necessary amount of money.
Public auctions, to the attention of the new Criminal Code
Another novelty is that the new Criminal Code incriminates the embezzlement of public auctions, which consists in removing, through coercion or corruption, a participant from a public auction or in the arrangement made between the participants in order to distort the price of adjudication. The embezzlement of public auctions is punishable by imprisonment of 1-5 years.
A special form of fraud in connection with public funds which is sanctioned by art. 306 of the Criminal Code is the illegal attainment of funds. This consists in the use or the presentation of false, inaccurate or incomplete documents or data in order to receive the approvals or the warranties necessary for granting the financings obtained or guaranteed by public funds, if it results in unfairly obtaining these funds.
Bankruptcy enters the Criminal Code
The offenses of simple bankruptcy and fraudulent bankruptcy, previously regulated by the Law 85/2006 regarding the insolvency procedure, have been included in the new Criminal Code, but with no significant changes compared to the previous form.
Thus, Art. 240 of the new Criminal Code – the simple bankruptcy – stipulates the punishment with imprisonment from three months to one year or with fine if the individual debtor or the legal representative of the legal entity debtor does not introduce or introduces belatedly the application to open the insolvency proceedings. This offense applies if the introduction date of the application exceeds with more than six months the term stipulated by the law since the emergence of the insolvency state.
In other words, if the debtor which ascertains the emergence of the insolvency state does not introduce the application to open the insolvency proceedings or if he introduces it belatedly, i.e. more than six months after the expiration of 30 days from the occurrence of the insolvency state, he commits the offense of simple bankruptcy. Unlike the previous regulation, namely the Law 85/2006, in the current regulation, if the offense of simple bankruptcy is committed, the start of the prosecution is made at a preliminary complaint of the prejudiced person.
In the case of fraudulent bankruptcy, the new regulation brings an additional specification, in the sense that in order to attract the criminal liability, the facts have to be committed in fraud of creditors. Thus, according to Art. 241 of the new Criminal Code, it is considered the offense of fraudulent bankruptcy which is punished by imprisonment from 6 months to 5 years, the act of a person who, in the fraud of creditors, falsifies, evades or destroys evidence or hides a part of its property assets; puts forward inexistent debts or shows in the records of the debtor, in another document or in the financial situation undue amounts; withdraws, in case of insolvency of the debtor, a part of the assets.
By criminalizing as offenses some acts committed by debtors which have the intent to defraud the interests of creditors, the new criminal law aims to discourage a number of practices which have become habitual in the business environment and, consequently, to ensure a better compliance of the rights of creditors and their ability to effectively recover their receivables.
1. This is a translation of the article published on February 07, 2014 in Business24.ro. For the Romanian original text, please visit this link: http://www.business24.ro/legislatie/codul-penal/editorial-avocat-oana-stratula-cele-mai-importante-modificari-ale-noului-cod-penal-pentru-mediul-de-afaceri-1541600