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The Bell reminds that such cases are most often launched by Federal Tax Service (FTS or FNS), as well as creditors. Previous industry surveys showed that 30% of the companies are on the verge of insolvency, especially in trade, services, transportation and storage, as well as construction and real estate.
Industry players surveyed by The Bell believe that as the ban on corporate bankruptcies would expire in October 2020, a new spike in cases will be likely at the end of 2020 and in 2021.
The latest review found that 94% of firms surveyed felt that they lack protection from baseless criminal charges, according to the latest annual review by the presidential ombudsman for business which shows that these problems are highly relevant, and have gotten worse in some cases.
Allegations of corporate economic malfeasance are often made by law enforcement officials with personal interests at stake or based on initiatives from a competing firm. A large part of investigations never results in judicial action, however, due to the failure of investigators to show cause. Even so, investigations may be very burdensome for targeted firms as documents are confiscated and assets frozen. Indeed, 74% of respondents said that the Russian justice system was neither independent nor objective. About a quarter of respondents felt that corruption has increased over the past year.
The review also looked at the regulation and monitoring of business activities such as fire safety and compliance with environmental requirements. Companies said that many of legal requirements, particularly numerous inspections, were difficult and costly. The authorities can also use inspections and fines as a way to squeeze out revenues for the state treasury or their own pockets. The report noted that the number of inspections imposed on companies has decreased considerably in recent years, but penalties on companies for violations have increased. Last year, on average, one in four
15 RUSSIA Country Report August 2020 www.intellinews.com
