The Smuggling of Cash and (Or) Monetary Instruments: Is the Sentence Final and Binding?

Author Name(s): Stanislav I.Golubev*,Natalia E. Panfilova, Nikolay N. Rybushkin
Author Email: tasikitten1@rambler.ru

Abstract

Being a part of the internal and foreign policy of a state, the customs policy is formed under the influence of the customs affairs, their place and role in solving the actual problems of foreign trade regulation, embraces the strategy of domestic and international events related to trade relations. A well-thought-out and purposeful customs policy contributes to the dynamic development of a state, while miscalculations in this sphere not only have an adverse effect in the economy, but also contribute to the growth of social contradictions, and may even lead to aggravation of international relations.

Smuggling is inextricably linked with the development of customs, the economy of the country, domestic and foreign trade. It develops in any social and economic conditions both in the case with the liberalization of customs tariffs, and when they become tougher. In the first case, the weakening of control over foreign trade activity contributes to the expansion of illegal import and export of goods, in the second case extremely burdensome custom duties make foreign goods uncompetitive. In both situations, measures to regularize customs fees and duties, their systemic and understandability, and the development of the system of customs and law enforcement bodies have certain effectiveness. Particular attention should be given to criminal law measures as the most repressive tool in countering smuggling. To this end, problems and effectiveness of the application of such criminal law measure as confiscation are revealed, based on the analysis of available judicial practice (the total number of materials studied is 140).

Introduction

Smuggling refers to one of the oldest types of crimes and, from the etymological point of view, designates the secret transportation or transfer of goods and valuables across a state border with their concealment from customs control or secretly carried or transported across the state border.

The Soviet period was characterized by the nationalization of foreign trade activity, which was under the control of the state and was carried out on behalf of the Russian Republic by specially authorized bodies. Monetary means, including foreign currency, were also limited in circulation and were allowed to be exported only with special permission [1].

The disintegration of the USSR in 1991 led to a crisis in the field of foreign trade regulation, which led to the adoption of regulatory documents that established customs and administrative boundaries with the former Soviet republics. This initiated the formation of the customs infrastructure at the country’s border and became a prerequisite for control the movement of goods across borders and the creation of a system to counter smuggling.

These processes were accompanied by a change in administrative and criminal legislation: a uniform rule that regulated the occurrence of criminal liability for smuggling (article 78 of the Criminal Code of the RSFSR) was reproduced in article 188 of the Criminal Code of the Russian Federation, and then the division of components of crime was made, depending on the object and the subject of criminal encroachment.

The direct object of such contraband was the most diverse social relations: in the sphere of economy, in the financial sphere, in the sphere of public security, and in the public order.

With the adoption of the Criminal Code of the Russian Federation, smuggling of currency was not considered as a single crime having an independent enshrining in one of the norms of the Special Part, but was included in the subject of Part 1, Article 188 of the Criminal Code of the Russian Federation along with other subjects.

In accordance with the changes made in December 2011, the legislator completely abandoned the notion of economic contraband. The new rules contained a rather large list of items restricted and banned in free circulation on the territory of the Russian Federation, but public relations securing the economic and financial sphere ceased to be protected. There was no such thing as money and currency in the dispositions of the articles.

Federal Law dated June 28, 2013 No. 134-FZ of the Criminal Code of the Russian Federation was amended by Article 200.1 providing for liability for the smuggling of cash and (or) monetary instruments. The development and adoption of the law are due to the need to implement the recommendations of the FATF into national legislation.

In particular, the recommendations indicate that countries should have measures in place to identify the physical cross-border movement of cash and negotiable instruments to bearer, including through a declaration system and / or an information system.

Countries should ensure that their law enforcement agencies have the legal authority to suspend or restrict the movement of cash or negotiable instruments to bearer suspected of financing terrorism or money laundering, or predicate offenses, or that are not legally declared, or which is represented by inaccurate information.

It is emphasized that countries must ensure application of effective, proportionate and deterrent sanctions to the persons who perform false declaration or represent false information. In cases where cash or negotiable instruments to bearer are related to the financing of terrorism, money laundering or predicate offenses, countries should also take measures, including legislative ones, which would ensure the confiscation of such cash or instruments [2].

The issues of counteracting to smuggling are currently the subject of scientific analysis by both foreign [3-8] and domestic scientists, but they, as a rule, do not turn to the study of law enforcement problems and the punishability of smuggling [9-13]. The exception, perhaps, is only the work of N. Kolokolov [14].

Conclusion

One of the reasons for establishing responsibility for the smuggling of cash and (or) other monetary instruments was the need to implement the FATF recommendations into national legislation, including the need to ensure the use of effective, proportionate and deterrent sanctions against persons who doubtfully declare cash and cash instruments to bearer. The purpose of criminalizing this act was also to increase the effectiveness of the fight against money laundering, including by controlling a cross-border movement of cash that is often used to finance terrorism and for other purposes that undermine the economic and socio-political foundations of a state.

It seems that the main way to counteract the illegal circulation of funds is the use of criminal punishment, as well as other measures such as confiscation. At present, it is the application of confiscation in the judicial practice that is the main reason for appealing against sentences passed under Article 200.1 of the Criminal Code of the Russian Federation, what requires the attention of law enforcement agencies.

Acknowledgements

The work is carried out according to the Russian Government Program of Competitive Growth of Kazan Federal University.

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