The Law Isn't Harsh Enough, But It's The Law

As the Russian law stands, when a public official cannot explain the origin of his wealth, relevant assets are to be confiscated.

The devil, as always, in the details.

Husband of a state official bought a car. All civil servants fill out a declaration of personal income and income of family members. Sources of funds used to buy the car were not included in the declaration. The prosecutor filed a lawsuit to recover the cost of the car.

In court the official produced new evidence explaining where she got the money. The court, however, ruled against her on the grounds that she referred to the sources which were not included in the original declaration and that "the evidence was created for the hearing in order to give the appearance of legality of purchase of the vehicle."

The official appealed to the Supreme Court of Bashkortostan. The court sought ruling from the Constitutional Court of Russia on the following:

Are new sources of income, not included in the declaration, admissible? Is it possible to seize assets belonging to family members? Is it possible to recover not the asset but cost?

The Constitutional Court said yes, yes and yes.

This is fully in line with international practice but contrary to the letter of Russian law.

According to the Federal Law "On Control of the Correspondence of Government Officials' and Other Individuals' Expenditure to Their Income" assets are confiscated if relevant funds were not stated in the declaration. Apparently, this is the will of the legislator: the officials are asked to disclose their income and then, an iron curtain falls and "ready or not, here I come!"

The weakness of this approach is that it presupposes that the failure to declare income by a state official is a criminal offense, and this is not so.

Accordingly, the Constitutional Court interprets the rule as the allocation of the burden of proof. The judgment simply shifts the burden on the official: undeclared income is deemed illegal. This presumption, however, can be rebutted.

In practice, this means that officials can "legalize" their assets at any time by presenting, for example, a loan agreement.

Nevertheless, the decision of the Constitutional Court should not affect the original case: the court of the first instance has already assessed the evidence not in favour of the appellant.