Criminal Cases on Financial Offences: What Court Practice Has Shown

The charge must be specific

A representative of the judiciary noted that, before a case proceeds to the merits, the court must define the scope of the charge brought.

In tax evasion cases it is essential that the charge sets out the specific acts of the person concerned, the circumstances of the alleged violation and references to the relevant provisions of tax law. Where this information is insufficient to understand the substance of the charge and to mount a defence, the matter should be resolved at the stage of listing the main hearing.

"If the charge lacks sufficient information confirming the person's guilt, the court is obliged to decide on returning the case."

The sheer volume of documents gathered by the investigation does not in itself mean that a case should automatically proceed to the merits.

A contract and an invoice are not enough: the court assesses whether the transaction was genuine

A separate part of the discussion concerned Article 216 of the Criminal Code of Kazakhstan and situations in which the investigation questions whether work was actually performed, services actually rendered or goods actually delivered.

Speakers stressed that the legal documentation of a transaction and its actual performance are not the same thing. The court may examine not only contracts, payment documents and invoices but all circumstances capable of confirming the real substance of a business operation: warehouse records, transport data, correspondence, photographs, and testimony from employees and contractors.

One speaker gave a straightforward example: the court may establish whether goods were received into a warehouse, who transported them, and whether they were subsequently used in the construction of a particular facility.

The takeaway for business is that primary documentation must be supported by evidence of actual performance, particularly for significant or non-standard transactions.

Knowledge and intent must be proven, not presumed

One of the key issues was the mental element of a tax offence. Participants discussed how knowledge of the falsity of information submitted in tax reporting is established, and whether the mere fact that an accountant or director signed a declaration is sufficient.

The position of the judiciary:

"The question of knowledge… is the main point to which the court pays attention."

An explanation that an employee was simply following the director's instructions may not suffice. The court examines correspondence, negotiations, the person's involvement in discussing the terms of the transaction, and their conduct in preparing documents.

Equally, the fact of a signature should not automatically imply intent. It must be established whether the person knew the information was false and knowingly took part in the scheme.

Payment of tax terminates the case but does not settle the question of guilt

Participants examined in detail the note to Article 245 of the Criminal Code, which allows proceedings to be terminated, where the statutory conditions are met, following payment of the tax and penalties due.

A judge drew attention to an important nuance: such termination is a non-exonerating ground.

"The fact of payment does not in itself resolve the question of a person's guilt or innocence."

Even after paying the tax, a person is entitled to contest the charge and to require the case to be heard on the merits if they seek exoneration. The choice between terminating proceedings and continuing to trial should therefore be a considered one, taking all legal consequences into account.

A job title does not determine liability

One of the liveliest discussions concerned who within a company should answer for a tax offence — the director, the CFO, the chief accountant or the person who carried out the instruction.

The position of the practising defence lawyer was unambiguous:

"The job title should not attract particular attention here… Criminal law is about intent, about what functions a person had and how they performed them."

Participants agreed that liability must be personalised. What must be established is who actually took the decision, who held the relevant authority, who understood the tax consequences and who knowingly took part in the acts that formed the basis of the charge.

The question is especially acute in large corporations, where decisions pass through several levels of approval and involve business units, the finance function, the tax department, compliance and senior management.

In a large company, internal documents are decisive

A representative of large business noted that in complex corporate structures it is impossible to identify who genuinely participated in a decision on the basis of a job title alone.

Job descriptions, employment contracts, internal policies, delegation-of-authority matrices and approval procedures all become significant.

"The first thing to focus on when speaking of criminal liability is, after all, personal, individualised responsibility."

Where internal documents show who approved and authorised a particular decision, the real centre of responsibility can be established more precisely. For business, this means that a well-designed allocation of authority is not only a matter of corporate governance but also a tool for managing criminal law risk.

The Constitutional Court's position on organised criminal groups

Particular attention was paid to the practice of classifying employees' conduct as having been committed by an organised criminal group.

Participants discussed the ruling of the Constitutional Court limiting the application of Article 262 of the Criminal Code to persons associated within a lawfully established commercial organisation, where the legal entity itself was created for legitimate business activity.

The defence lawyer described this approach as fundamentally important:

"The provision genuinely filters out those individuals who were inside the company, subordinate to its hierarchy, performing their duties…"

The session cited examples in which classifying conduct as that of an organised or transnational criminal group substantially increased sentences for economic offences. The new legal position should help draw a clearer line between an ordinary corporate structure and a genuinely criminal association.

Do not rush to give evidence

The discussion of how company representatives should behave once law enforcement takes an interest carried real practical weight.

An expert noted that the mere prospect of criminal proceedings creates serious internal pressure and pushes management or employees to close the matter as quickly as possible. It is precisely these hasty steps that later complicate the defence.

"The most important thing to do is not to rush."

Equally important is training in advance those employees who take significant financial decisions: the limits of acceptable communication with investigative authorities, the procedure for providing information, and the consequences of their own explanations. The defence lawyer added a simple recommendation — obtain professional advice before giving evidence and, where necessary, attend procedural steps together with a lawyer specialising in this category of cases.

For accountants, documentation becomes personal protection

The risks facing accountants and staff of outsourced accounting firms were discussed separately. Participants cited cases in which a person carried out a client's or a manager's instruction but was later unable to prove where that instruction had come from.

"Record every transaction, every exchange of correspondence."

Confirmation of management instructions, correspondence on a transaction, approvals and primary documents can be critical in establishing a specialist's actual role and whether they acted with intent.

An adviser helps with the decision but does not assume the company's responsibility

A substantial part of the discussion concerned the liability of external tax and legal advisers.

A professional opinion is an important source of information for a company, but the final business decision is taken by the company itself. That said, an adviser's role does not end with the delivery of an opinion: professional ethics call for supporting the client if advice previously given becomes the subject of a dispute with state authorities.

It is not possible to transfer to an adviser the entirety of responsibility for subsequent tax or criminal law consequences. The extent of that responsibility is determined by the terms of the engagement and the substance of the service provided.

Tax rulings as an instrument of certainty

The session also considered developing tax rulings — a mechanism for determining in advance the tax consequences of a particular transaction or business model.

Such an instrument would give taxpayers greater certainty before entering into a transaction and reduce the risk that state authorities subsequently interpret the same circumstances in a fundamentally different way. In time, it could narrow the gap between the positions of business, advisers and the tax authorities on complex questions.

The main conclusion: manage the risk long before a criminal case

Protecting a business from criminal law risk does not begin when a summons arrives. It is built much earlier — through a transparent allocation of authority, sound primary documentation, records of approvals and instructions, internal compliance procedures, evidence that business operations were genuine, and training staff in how to conduct themselves procedurally.

Criminal liability, meanwhile, must remain personal and rest not on a job title or formal involvement in a business process, but on the proven role of the specific individual and the presence of intent.

The practical message of the discussion can be put as follows: a business needs not only to pay its taxes correctly, but to be able to demonstrate on paper how decisions were made, who made them and on what grounds.