Saeima establishes criminal liability for paying salaries “off the books”

(10.03.2016.)

On Thursday, 10 March, the Saeima in the third and final reading adopted amendments to the Criminal Law. Inter alia, the Law has been supplemented with a new section establishing criminal liability for employers who pay salaries to their employees without registering these payments in their accounting.

Such an offence will carry criminal liability if the employer has paid a significant amount in “off the books” salaries – that is, payments that exceed ten minimum monthly salaries. The Saeima has already adopted related amendments to the Administrative Violations Code establishing administrative liability for paying of “off the books” salaries in an amount up to ten minimum monthly salaries.

Violation of rules on paying remuneration will carry a prison sentence of up to two years, or short-term incarceration. The Law also provides alternatives to prison sentence – community service or a fine, with a prohibition to carry out a specific or any type of commercial activity or profession, or perform specific duties for a term of up to three years.

The Law already allows for employers paying salaries “off the books” to be punished under the section on tax evasion. However, the actual fact of paying salaries under the table can be established more easily than tax evasion, and therefore the new amendments will simplify the work of law enforcement agencies.

In the third and final reading the Saeima also supported the proposal to expand the Criminal Law definition of bribery. Based on the revised definition, it will be possible to bring charges not only for offering and giving a bribe, but also for promising to do so. Thus, it will be a criminal offence if, following an official’s request, a person agrees and promises to provide a bribe. Until now the promise of a bribe, if not followed by actual provision thereof, was not a criminal offence in Latvia.

The definition of bribery was expanded based on recommendations from the Organisation for Economics Cooperation and Development (OECD). Latvia is bound by the requirements of the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Furthermore, the amendments provide prosecutors with a wider range of options in penalising offenders, such as issuing a penal order which allows to keep the case from having to be reviewed in court for sentencing. Henceforth, it will also be possible to make out a penal order for serious crimes carrying a penalty of up to five years in prison.

These changes will allow for simplification of the criminal process and reduce the burden placed upon courts. A prosecutor will be able to apply a penal order if the accused admits his/her guilt and commits to reimburse damages.

The amendments to the Criminal Law also improve the regulations regarding illegal movement of persons across the border. If the illegal transportation of an individual has been performed by a state official taking advantage of their position, a group of persons with prior intent, or if more than one individual has been transported, then such an offence will carry a penalty of up to five years in prison.

If transportation of individuals has been performed by a group of persons and it has lead to serious consequences, or if more than five individuals have been transported simultaneously, the penalty will be 2-8 years in prison. The offenders may also be penalised with confiscation of property, as well as probation for a period of up to three years.

If the illegal transportation of an individual has led to the death of two or more people, the penalty will be 3 – 15 years and probation for up to three years.

The authors of the amendments point out that since 2014 the number of detained illegal migrants and persons transporting them has increased significantly. If in 2013 only three cases were brought on such charges, then in the first half of 2015 this number already reached 28, according to the State Border Guard information.

Estimates from FRONTEX show that illegal transportation of persons across borders and human trafficking is the second largest and most profitable criminal activity, surpassed only by the illegal drug trade. The authors of the amendments explain that illegal transportation of one person usually brings perpetrators a profit of 500 to 5000 euros.

 

 

Saeima Press Service

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