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Resolution of the Constitutional Court of the Russian Federation No. 43-П of 29 June 2026 in the case concerning review of the constitutionality of Article 159 of the Criminal Code of the Russian Federation following a complaint by citizen S. N. Shevryukov. The judgment held Article 159 of the Criminal Code of the Russian Federation inconsistent with the Constitution to the extent that law-enforcement practice permits the special offence of fraud involving the deliberate non-performance of contractual obligations in business activities to be disregarded solely because the injured party is a commercial organization with the participation of a public-law entity.
The General Director of MontazhElektroSpetsService LLC, acting as contractor under an agreement with Sakhalinenergo PJSC, undertook to reconstruct a cable line by replacing the cable between two transformer substations. Instead, he merely created the appearance that the work had been completed in full: he ordered the old cable to be left underground, connecting fragments of a new cable to its ends, approved and submitted documentation containing knowingly false information, and fraudulently misappropriated the customer’s funds in excess of two million rubles.
By a judgment of the Yuzhno-Sakhalinsk City Court of 15 May 2023, the act was classified under Part Four of Article 159 of the Criminal Code of the Russian Federation (misappropriation on an especially large scale using an official position). The courts refused the defence’s request to reclassify it under Part Five (the special offence of business fraud, a medium-gravity offence): one of the parties to the contract was a public joint-stock company whose shareholder was the Sakhalin Region. The applicant, arguing that both the contractor and the customer were commercial organizations and subjects of business activity, challenged Article 159 of the Criminal Code of the Russian Federation as permitting unequal protection of private and public property.
The Constitution proclaims equal protection of private, state, municipal and other forms of property (Article 8, Part 2) and at the same time contemplates the participation of the Russian Federation, its constituent entities and municipal formations in economic activity, including indirectly, through the establishment of commercial organizations and participation in them. Property, as the material foundation and economic expression of the freedom of society and the individual, is a condition for the free pursuit of business and other economic activities (Resolution of the Constitutional Court of the Russian Federation No. 11-П of 14 May 2012; Resolution of the Constitutional Court of the Russian Federation No. 5-П of 24 March 2015; Resolution of the Constitutional Court of the Russian Federation No. 26-П of 7 November 2017). Protecting property through criminal law requires equal protection of all its forms, which does not preclude differentiating the assessment of the public danger of an act depending, in particular, on the identity of the parties to the relevant relations.
At the same time, criminal-law measures must be adequate and consistent with the principles of justice, equality and legal certainty, as well as with the principle of nullum crimen, nulla poena sine lege; a law establishing criminal liability may not be interpreted broadly or applied by analogy (part two of Article 3 of the Criminal Code of the Russian Federation) (Resolution of the Constitutional Court of the Russian Federation dated 8 December 2022 No. 53-П). By establishing liability for encroachments on property, the legislature is required to ensure the mutual consistency of the provisions of criminal and civil legislation on the basis of constitutional requirements (Resolution of the Constitutional Court of the Russian Federation dated 24 February 2026 No. 8-П).
The Civil Code defines commercial organisations as organisations whose primary objective is to make a profit (Article 50(1)); it permits their establishment by public-law entities and the participation of the latter in corporate commercial organisations (Article 66(5) and Article 125). Within the meaning of civil legislation, whether a legal entity is classified as a commercial organisation does not depend on whether public-law entities participate in it or whether that participation is direct or through entities under their control. In paragraph 2 of the Notes to Article 159 of the Criminal Code of the Russian Federation, the legislature extended the special offence to cases where the parties to a contract are individual entrepreneurs and/or commercial organisations, without stipulating any special conditions concerning the connection of such organisations with the State. In view of the interrelationship between criminal and civil law, this presupposes equal protection for the property of all commercial organisations and is grounded in Article 8(2) of the Constitution.
Relying on its previously developed legal position (Resolution of the Constitutional Court of the Russian Federation dated 11 December 2014 No. 32-П), the Court recalled that the purpose of introducing special fraud offences for business entities is to distinguish such activity from criminally punishable acts, exclude the resolution of civil-law disputes through criminal prosecution, protect bona fide entrepreneurs from unlawful prosecution, and at the same time prevent guilty persons from escaping liability under the cover of a civil-law transaction. The current regulation has largely remedied the previous defect, under which the identity of the party injured under the contract was irrelevant to the legal classification.
At the same time, a different approach to differentiating the offences has emerged in law-enforcement practice. Its basis is part three of Article 20 of the Criminal Procedure Code of the Russian Federation, which classifies cases concerning offences under parts five to seven of Article 159 of the Criminal Code of the Russian Federation as cases of private-public prosecution, but excludes from this category cases involving harm to the interests of a state or municipal unitary enterprise or a commercial organisation in whose charter (share) capital a State or municipal entity has a participation interest. Article 23 of the Criminal Procedure Code of the Russian Federation expressly provides that causing harm to the interests of such an organisation simultaneously causes harm to the interests of the State or municipal entity. An additional basis is the distinction drawn in the Criminal Code between liability for offences against the interests of service in commercial organisations (Chapter 23) and official offences (Chapter 30), with managers of business companies predominantly owned by the State classified as officials (Note 1 to Article 285).
As the applicant’s case also demonstrated, these provisions are being interpreted broadly: the criminal and criminal-procedure laws are used in conjunction in a manner that does not follow from their purpose, so as to classify under parts one to four of Article 159 of the Criminal Code of the Russian Federation as fraud conduct involving the deliberate non-performance of contractual obligations in business activity but directed against the property of a commercial organisation founded or participated in by a public-law entity, even though Article 159 of the Criminal Code of the Russian Federation itself does not resolve the issue in that manner. This violates the principles of justice and legal certainty and, where the amount misappropriated is less than two hundred and fifty thousand roubles, also the principle of nullum crimen, nulla poena sine lege. The Court concluded that Article 159 of the Criminal Code of the Russian Federation was inconsistent, to that extent, with Articles 19 (parts 1 and 2), 34 (part 1), 54 (part 2) and 55 (part 3) of the Constitution; amending the Article was deemed unnecessary because it is not applied when interpreted in the unconstitutional manner.
The Resolution eliminates the practice whereby a public-law entity’s participation in the capital of a commercial counterparty effectively transferred business fraud from the special offence (parts five to seven of Article 159 of the Criminal Code of the Russian Federation) to the general, more serious offence (parts one to four). From the date on which the Resolution enters into force, classification under parts five to seven is to be made regardless of whether the injured commercial organisation was established by the Russian Federation, one of its constituent entities, a federal territory or a municipal entity, or whether any of them participates in it.
The practical significance of the reclassification is substantial. The special offences provide for different damage thresholds (substantial damage — at least two hundred and fifty thousand roubles; large-scale damage — more than four million five hundred thousand; particularly large-scale damage — more than eighteen million), place the act in a less serious category, and extend to it the private-public prosecution regime and the safeguards provided for business activity. This narrows the gap in the criminal-law consequences between the misappropriation of property from a privately owned company and its misappropriation from a company with State participation.
The finding that the provision is partially unconstitutional entails the review of judicial decisions concerning other persons convicted under parts one to four of Article 159 of the Criminal Code of the Russian Federation if the classification was based on the exclusion of commercial organisations with public-law entity participation from the category of victims of business fraud. The applicant’s own case is not subject to review in connection with the Resolution, and compensatory mechanisms do not apply to it, because, before the Resolution was delivered, the Supreme Court had already reclassified his acts under part five of Article 159 of the Criminal Code of the Russian Federation, with a reduction in the sentence.
The Constitutional Court did not impose on the legislature an obligation to amend the legal regulation: the defect lies not in the text of Article 159 of the Criminal Code of the Russian Federation, but in its broad interpretation in conjunction with the rules on private-public prosecution and officials. The Resolution has direct effect, and courts hearing cases, including cases commenced before it entered into force, may not rely on the provision in the aspect found unconstitutional.
This analysis was prepared on the basis of the CasusLegal database (case law of the highest courts of the Russian Federation). The titles of the cited decisions link to their full texts in CasusLegal.