Bankruptcy, criminal legal aspects and disengagement from fraud

Abstract

Today the relations concerning bankruptcy and of providing creditors' property rights are important legal institution primarily in terms of legislative changes. Since the legislation of Ukraine de jure provides two types of insolvency: the total (regulated by the Law of Ukraine as amended on 22.12.2011. "On restoring the debtor's solvency or bankruptcy") and special (regulated by the Law of Ukraine dated 07.12.2000. "On Banks and Banking Activities"). Also, the adoption of the new Law of Ukraine dated 22.12.2011 "On restoring the debtor's solvency or bankruptcy", which entered into force on 01.18.2013, changed the approach of judicial recognition of a stable financial insolvency, in particular, now stable financial failure priory is not proven and can be refuted in court. Therefore, if the criminal proceeding will be started against the person (on the basis of the offense provided for in the disposition of art. 219 of the Criminal Code of Ukraine) and stable financial failure finds its confirmation in the Commercial Court, the absence of a crime should be stated, and as a result a need to close a criminal proceeding appears.

In practice, the application of rules that establish criminal responsibility for the crime of bankruptcy causes some difficulties. Such cases rarely reach a court, "falling apart" already at the stage of preliminary investigation, thus only a few cases of bringing criminal charges against those who is guilty of bankruptcy are recorded. Mostly, initiators who seek a criminal bankruptcy aim to: - hide another crime, including embezzlement of budget funds and financial fraud; - avoid taxation; - restructure debts by debiting to a fictitious reorganization; - get rid of debts to creditors; - eliminate a competitor or to take control over the company or its assets.

Bankruptcy (art. 219 of the Criminal Code of Ukraine) represents a complex of attacks in the field of bankruptcy and still means danger to the public economic relations as may cause a great material damage to the state or creditors. This crime threatens the procedure established by legislation of the economic activities in the interests of citizens, legal persons and state from the risks related to the insolvency of economic activity that is legally recorded during the bankruptcy proceeding of such entity. At its core, the bankruptcy as a civil category is an integral part and normal thing of the market economy, the natural process of competition. This is a new concept for our country that more and more reminds of itself with litigations, in which companies that are unable to meet obligations before creditors and budget, are declared bankrupts, that is why the main issue of criminal responsibility is its improvement and bringing to the European standards.