Commentary on Article 242. Submission of Knowingly False Information About Banking Transactions of the Criminal Code of the Republic of Kazakhstan
1. The submission by employees of a bank or a branch of a non-resident bank of the Republic of Kazakhstan of knowingly false information concerning transactions on bank accounts of legal entities or individuals, as well as the issuance of sureties, guarantees and other obligations that are knowingly unsecured by the actual financial condition of the respective bank or non-resident bank of the Republic of Kazakhstan, where such actions have resulted or could have resulted in the infliction of substantial damage on a citizen, an organization or the state, —
shall be punishable by a fine in an amount of up to two hundred monthly calculation indices, or corrective labor in the same amount, or community service for a period of up to one hundred and twenty hours, or arrest for a period of up to forty days, with deprivation of the right to hold certain positions or engage in certain activities for a period of up to three years.
The social danger of the criminal misdemeanor under consideration lies in the fact that abuses committed in banks and other credit institutions cause harm to the financial system and the economy of the state as a whole.
The object of the criminal misdemeanor is the public relations associated with the conduct of banking operations.
The subject matter of the criminal misdemeanor under consideration consists of:
knowingly false information concerning transactions on bank accounts of legal entities and individuals;
the issuance of sureties, guarantees and other obligations that are knowingly unsecured by the actual financial condition of the respective bank or non-resident bank of the Republic of Kazakhstan.
In accordance with Article 6 of the Law of the Republic of Kazakhstan dated July 26, 2016, “On Payments and Payment Systems”, a bank account shall be understood as a method of recording and accounting for the movement of a client's money in a bank or an organization carrying out certain types of banking operations, as well as the contractual relationship between the client and the bank or an organization carrying out certain types of banking operations in relation to the provision of banking services to the client.
Bank accounts are opened upon the conclusion of a bank account agreement and (or) a bank deposit agreement between the bank and the client.
Paragraph 1 of Article 6 of the aforementioned Law sets out the types of payment systems, the criteria and methods for determining their significance. Payment systems, including foreign payment systems, are divided into the following types:
systemically important payment system;
significant payment system;
other payment system.
In accordance with paragraph 2 of Article 6 of the Law of the Republic of Kazakhstan “On Payments and Payment Systems”, the National Bank of the Republic of Kazakhstan classifies a payment system as a systemically important payment system when it simultaneously meets the following criteria:
payments and (or) money transfers relating to the monetary obligations of participants in the securities market of the Republic of Kazakhstan and (or) the foreign exchange market of the Republic of Kazakhstan are carried out through this payment system;
payments and (or) money transfers are carried out through this payment system for the purpose of implementing the monetary and credit policy of the National Bank of the Republic of Kazakhstan.
The National Bank of the Republic of Kazakhstan classifies a payment system as a significant payment system if it meets any of the following criteria, except for systems classified as systemically important payment systems:
payments and (or) money transfers in the national currency within the territory of the Republic of Kazakhstan are carried out through this payment system during a year in an amount not less than the indicator established by the National Bank of the Republic of Kazakhstan;
payments and (or) money transfers in foreign currency within the territory of the Republic of Kazakhstan are carried out through this payment system during a year in an amount not less than the indicator established by the National Bank of the Republic of Kazakhstan;
international payments and (or) money transfers are carried out through this payment system during a year in an amount not less than the indicator established by the National Bank of the Republic of Kazakhstan;
payments and (or) money transfers are carried out through this payment system during a year in an amount not less than the indicator established by the National Bank of the Republic of Kazakhstan for money transfer systems;
interbank payments for settlements using payment cards are carried out through this payment system during a year in an amount not less than the indicator established by the National Bank of the Republic of Kazakhstan.
The types of payment services include:
services for accepting and executing payments and (or) money transfers using a bank account;
services for accepting cash for crediting to bank accounts, including accounts of third parties;
services for accepting cash to make a payment without opening a bank account for the sender of money;
services for carrying out money transfers without opening a bank account;
services for issuing and redeeming electronic money;
services for issuing payment cards;
services for the sale (distribution) of electronic money and payment cards;
services for accepting and processing payments made using electronic money;
services for processing payments initiated by a client in electronic form and transmitting the necessary information to a bank or an organization carrying out certain types of banking operations for the execution of a payment and (or) transfer or the acceptance of money in respect of such payments.
Various transactions may be carried out through the respective bank accounts.
According to paragraph 1 of Article 30 of the Law of the Republic of Kazakhstan dated August 31, 1995, “On Banks and Banking Activities in the Republic of Kazakhstan”, banking activity means the performance by banks of banking and other operations established by Article 30 of the Law. According to paragraph 2 of Article 30: “Banking operations include:
acceptance of deposits, opening and maintenance of bank accounts of legal entities;
acceptance of deposits, opening and maintenance of bank accounts of individuals;
opening and maintenance of correspondent accounts of banks and organizations carrying out certain types of banking operations;
opening and maintenance by banks of metal accounts of individuals and legal entities, which reflect the physical quantity of refined precious metals and coins made of precious metals belonging to the respective person;
cash operations: acceptance and issuance of cash by banks and the National Postal Operator, including its exchange into smaller denominations, exchange, recounting, sorting, packaging and storage;
transfer operations: execution of instructions of individuals and legal entities regarding payments and money transfers. A license to carry out transfer operations shall be issued to banks and legal entities specified in paragraph 6-1 of this Article;
discount operations: accounting (discounting) of bills of exchange and other debt obligations of individuals and legal entities;
bank lending operations: provision by a bank, a mortgage organization, an organization that is not a bank and carries out brokerage and (or) dealing activities in the securities market, or subsidiaries of the national management holding in the field of the agro-industrial complex, of loans in monetary form on the terms of payment, maturity and repayment;
foreign currency exchange operations, including exchange operations involving cash foreign currency and other transactions;
(excluded by Law No. 222 dated January 12, 2007);
(excluded by Law No. 222 dated January 12, 2007);
collection of banknotes, coins and valuables;
acceptance of payment documents for collection (excluding bills of exchange);
opening (issuance) and confirmation of letters of credit and fulfillment of obligations thereunder;
issuance by banks of bank guarantees providing for performance in monetary form;
issuance by banks of bank sureties and other obligations on behalf of third parties providing for performance in monetary form”.
The provision of microcredits by organizations carrying out microfinance activities in accordance with the Law of the Republic of Kazakhstan dated November 26, 2012, “On Microfinance Activities”, does not constitute banking operations. This Law regulates public relations associated with the provision of microcredits, establishes the specific features of the establishment, legal status and activities of organizations carrying out microfinance activities, and also determines the specific features of state regulation of organizations carrying out microfinance activities, as well as control and supervision over their activities.
According to subparagraph 4) of Article 1 of the Law of the Republic of Kazakhstan “On Microfinance Activities”, a microcredit is money provided by an organization carrying out microfinance activities to a borrower in the national currency of the Republic of Kazakhstan, in the amount and manner determined by this Law, on the terms of payment, maturity and repayment.
Bank accounts are opened upon the conclusion of a bank account agreement and (or) a bank deposit agreement between the bank and the client. According to paragraph 1 of Article 747 of the Civil Code, under a bank account agreement, one party (a bank or an organization carrying out certain types of banking operations) undertakes to accept money received for the benefit of the other party (the client), execute the client's instructions to transfer (issue) the corresponding amounts of money to the client or third parties, and provide other services stipulated by the bank account agreement.
Bank accounts are divided into current and savings accounts of individuals and legal entities, separate subdivisions of legal entities, as well as correspondent accounts of banks.
When opening a bank account, an individual identification code of the client is assigned to the client or a person designated by the client for the purpose of accounting for clients' money in the bank (or an organization carrying out certain types of banking operations), on terms agreed upon by the parties.
Legal entities and citizens independently choose banks for servicing and have the right to conclude bank account agreements with either one bank or several banks (paragraph 2 of Article 747 of the Civil Code).
According to paragraph 1 of Article 748 of the Civil Code, a bank account agreement must be concluded in writing. Failure to comply with the written form of a bank account agreement shall result in the invalidity of that agreement (paragraph 2 of Article 748 of the Civil Code).
Criminal liability under the commented article arises in cases where the guilty person — an employee of a bank or a branch of a non-resident bank of the Republic of Kazakhstan — submits knowingly false information concerning transactions on bank accounts of legal entities or individuals. Distortion of information may relate to any transactions involving clients' accounts: false information about the balance of a client's account, false information about the movement of funds through a client's accounts, etc.
The procedure for issuing sureties, guarantees and other obligations by a bank is regulated by legislation.
Under Article 242 of the Criminal Code, the subject matter of the criminal offense shall be only sureties, guarantees and other obligations that are knowingly unsecured by the actual financial condition of the respective bank or non-resident bank of the Republic of Kazakhstan. That is, the guilty person, knowing that the bank or non-resident bank of the Republic of Kazakhstan is actually unable to secure its obligations to clients due to its financial condition, misleads clients or third parties.
From the objective aspect, the criminal offense is characterized by:
socially dangerous alternative acts — submission of knowingly false information concerning transactions on bank accounts of legal entities or individuals, as well as the issuance of sureties, guarantees and other obligations that are knowingly unsecured by the actual financial condition of the respective bank or non-resident bank of the Republic of Kazakhstan;
consequences in the form of substantial damage caused to a citizen, an organization or the state, or the threat of such damage occurring;
a causal relationship between the act and the consequences, where the consequences of the criminal offense have occurred.
The submission by employees of a bank or a branch of a non-resident bank of the Republic of Kazakhstan of knowingly false information concerning transactions on bank accounts of legal entities or individuals implies that the guilty persons, having access to clients' bank accounts by virtue of their official positions, mislead account holders, their authorized representatives, or persons who, pursuant to legislative requirements, are entitled to receive information about the existence and status of bank accounts of legal entities or individuals.
The issuance of sureties, guarantees and other obligations that are knowingly unsecured by the actual financial condition of the respective bank or branch of a non-resident bank of the Republic of Kazakhstan implies that bank employees (a manager, customer service managers, etc.) issue obligations that subsequently cannot be fulfilled due to the financial condition of the bank or branch of a non-resident bank of the Republic of Kazakhstan.
The methods of committing the criminal offense provided for in Article 242 of the Criminal Code do not affect the legal classification of the act, but may constitute elements of other independent criminal offenses. Thus, for example, additional classification under Part 3 of Article 384 of the Criminal Code is not excluded in cases where a bank employee, for the purpose of submitting knowingly false information concerning transactions on bank accounts of legal entities or individuals or issuing sureties, guarantees and other obligations that are knowingly unsecured by the actual financial condition of the respective bank or branch of a non-resident bank of the Republic of Kazakhstan, destroys or conceals the media containing such information. Likewise, additional classification under Article 385 of the Criminal Code is not excluded if the offender, while submitting knowingly false information about banking transactions, forged or manufactured counterfeit documents, stamps, seals or forms.
The next element of the objective aspect of the criminal offense provided for in Article 242 of the Criminal Code is the consequence in the form of substantial damage caused to a citizen, an organization or the state.
By its structure, the corpus delicti of the criminal misdemeanor under consideration is formal-material and is deemed completed from the moment employees of a bank or a branch of a non-resident bank of the Republic of Kazakhstan submit knowingly false information about banking transactions that has resulted or could have resulted in substantial damage to a citizen, an organization or the state. Under subparagraph 38) of Article 3 of the Criminal Code, substantial damage means damage caused to a citizen in an amount exceeding two thousand times the monthly calculation index, or damage caused to an organization or the state in an amount exceeding ten thousand times the monthly calculation index.
From the subjective aspect, the criminal misdemeanor may be committed with either direct or indirect intent. The person realizes that they are submitting knowingly false information concerning transactions on bank accounts of legal entities or individuals, as well as issuing sureties, guarantees and other obligations that are knowingly unsecured by the actual financial condition of the respective bank or branch of a non-resident bank of the Republic of Kazakhstan; foresees the possibility or inevitability of causing substantial damage to a citizen, an organization or the state; and either desires such consequences or is indifferent to their occurrence.
The subject of the criminal misdemeanor is special: it is an employee of a bank who has reached the age of sixteen.
The act provided for in Article 242 of the Criminal Code of the Republic of Kazakhstan is classified as a criminal misdemeanor.
Commentary of 2021 to the Criminal Code of the Republic of Kazakhstan, by Isidor Shamilovich Borchashvili, Honored Figure of Kazakhstan, Doctor of Law, Professor, Academician of the Kazakhstan National Academy of Natural Sciences, member of the Scientific Advisory Councils under the Constitutional Council of the Republic of Kazakhstan and the Supreme Court of the Republic of Kazakhstan, member of the working group on reform of the law enforcement system under the Security Council of the Republic of Kazakhstan, Honored Employee of the Ministry of Internal Affairs of the Republic of Kazakhstan.
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