Setting Sham Companies is a Crime, At Last

President Dmitry Medvedev has signed a law which can send behind bars those who establish sham companies. The idea is to make fighting tax evasion and financial fraud easier. Now, the law enforcement agencies will not need to investigate and prove the whole criminal scheme. The very fact of setting a company on someone else’s name – a homeless, a drug addict or an unfortunate who lost his passport – is a crime. Also, the law criminalizes giving (or taking) IDs for setting sham structures. Criminals will be fined up to $10,000 or sentenced to three years in prison.

Every second company in Russia is created for tax evasion. The talks of fighting sham organisations as instruments of fraud and corruption have been going on for at least 15 years. In modern Russia, which came into existence in 1991, it means almost the same as ‘since the beginning of times’.

At last, there is a small chance that those behind ‘one-day’ companies and those crackpots who lend their passports to criminals will face punishment.