Offense to thwart creditors’ satisfaction (Article 300 of the Criminal Code)

Offense to thwart creditors

Art. 300 of the Criminal Code

§ 1. Whoever, in the event of threat of insolvency or bankruptcy, frustrates or depletes the satisfaction of his creditor by removing, concealing, disposing of, giving, destroying, actually or seemingly encumbering or damaging the components of his property, subject to the penalty of deprivation of liberty for up to 3 years.

§ 2. Who, in order to frustrate the enforcement of a decision of a court or other state authority, frustrates or depletes the satisfaction of his creditor by removing, concealing, disposing, giving, destroying, actually or apparently charging or damaging the components of his property occupied or threatened by occupation, or removes signs of attachment, subject to the penalty of imprisonment from 3 months to 5 years.

The purpose of the provision is to protect eligible creditors against the actions of the debtor with a view to frustrating the satisfaction of claims or depletion of satisfaction.

The purpose and effect of the perpetrator’s action is to frustrate or deplete the satisfaction of his creditor in the event of an impending insolvency or bankruptcy. The offense is committed when the perpetrator leads to thwarting or reducing the satisfaction of his / her creditor. Crime is therefore effective. If, despite attempting to thwart the satisfaction of the creditor, the debtor has not achieved the effect of thwarting or depleting satisfaction, he can not be responsible for the crime (may be responsible for attempting to commit a crime, for example if the contract on the basis of which the item is invalid).

By frustrating satisfaction, it is understood that the creditor can not obtain his or her debts, even if it is not due (the defraud occurs when the creditor can not get his payment in any part); depletion is a reduction in the possibility of satisfying.

To thwart or reduce the satisfaction of the creditor, he / she accomplishes by removing, concealing, disposing of, forgiving, destroying, actual or apparent burden or damage to the debtor’s assets.

Hiding things is a concealment of the place where the thing is or the very fact of having things, as well as placing things in such a place that finding it has become difficult.

Disposing of the debtor’s assets component is an effective regulation, donation – it is a free transfer of things or a right or failure to collect a property right or property that has been transferred to the debtor free of charge.

The encumbrance of property components is the acceptance by the debtor of property obligations or securing of already existing obligations on property components.

The execution of the indicated actions, undertaken in the intention of thwarting or reducing the satisfaction, threatens to be responsible for the crime when the debtor has committed them in the situation of threatening insolvency or bankruptcy. It is not necessary for the debtor to become insolvent or to declare his bankruptcy. It is enough to declare bankruptcy or insolvency highly probable, if not in the near future.

The offense can only be committed intentionally, with direct or possible intent. The perpetrator of the offense may be, in addition to the debtor, also a person who, on the basis of a legal provision, a decision of the competent authority, a contract or actual performance, deals with property matters of another person. It is understood that the offense can only be committed against a creditor running a business. It is questionable whether the perpetrator of the act may be a debtor who does not run a business.

Prosecution of a crime takes place at the request of the victim, unless the victim is the State Treasury (in which case the offense is prosecuted ex officio). It is punishable by imprisonment for up to three years. If the damage was done to many creditors (at least 10), the perpetrator is subject to a penalty of 6 months to 8 years.

If the debtor defeats or depletes the satisfaction of his creditor by removing, concealing, disposing of, giving, destroying, actually or apparently encumbering or damaging the components of his property occupied or threatened by seizure, or removing seizure signs, acting simultaneously to frustrate the execution of the court decision or another state body, subject to a penalty of 3 months to 5 years (Article 300 § 2 of the Penal Code). The debtor’s actions in order to frustrate the enforcement of the decision of a court or other state authority are prosecuted ex officio.

The assets components concerned by the debtor’s indicated activities are only those property rights or things that are seized during the enforcement proceedings or which threatens to be seized (thus not all, as in the case of an offense under Article 300 § 1 of the Penal Code).

The debtor’s actions taken to thwart the satisfaction of the court’s ruling may consist in particular in removing the bailiff’s signs, i.e. in their photograph of the item being occupied or on destruction.

The condition of criminal liability of the perpetrator acting in order to frustrate the enforcement of the court’s decision is not conducting business activity; likewise, a creditor who is entitled by virtue of a court decision does not have to conduct a business so that the perpetrator can be held responsible for the offense.

From judicial practice

The case law of the Supreme Court emphasizes that not every act of disposing the debtor’s property in the course of execution or in the event of an imminent threat of execution leads to criminal liability under Art. 300 § 2 of the Penal Code. It is justified by such regulations only as assets that have a real impact on the frustration or limitation of the creditor’s satisfaction (see judgment of the Supreme Court of 27 February 2002, reference number V KKN 83/00, LEX No. 53056 and the order of the Supreme Court of on November 4, 2002, reference number III KK 283/02, OSNKW 2003, No. 3-4, item 34). Determining that the defeat or depletion of the creditor’s satisfaction took place in concreto as a result of the defendant’s regulation of this asset, which was occupied or threatened with seizure, belongs to the essence of the offense under Art. 300 § 2 of the Penal Code, and the statement of this circumstance in the description of the act is a condition for recognizing that the offender fulfilled the relevant statutory mark with his behavior.

A condition of criminality under art. 300 § 2 of the Penal Code is the existence of the claim of the creditor and the awareness of the perpetrator that the creditor has joined or has a serious intention, in one way or another disclosed, to proceed with the execution of this claim. On the other hand, it is not a condition for the existence of the decision of the court or other state authority that the debtor intends to frustrate. The object of the debtor’s criminal activities may be both a judgment that has already been pronounced and a decision that is to be taken.

A condition of liability for an offense under art. 300 § 2 of the Penal Code is the knowledge of the person making the aforementioned acts mentioned in the above-mentioned provision, that the property to which they refer is already occupied or at least threatened with seizure.

The offense referred to in art. 300 § 2 of the Penal Code also applies to property “at risk of seizure”. Therefore, it is not required that in the course of a transcendent action a ruling has already existed which the perpetrator wants to frustrate.

Offenses under art. 300 § 2 of the Penal Code, the debtor may also act when the execution is only threatening him, and so in the period when the creditor decided to pursue his claims in court.

The “thwarted satisfaction of the creditor” should be understood only as the total impossibility of satisfying his claim. By contrast, by “reducing the satisfaction of the creditor” should be understood to reduce the satisfaction of the creditor, and thus prevent the satisfaction of his claim in any part.

The provision of art. 300 § 2 of the Penal Code also protects claims that are not related to trade, including those resulting from tax obligations.

If, by reducing the satisfaction of the creditor, it should be understood that the claim can not be satisfied in any part, it should also be in view that due to the effective nature of the offense, the condition of criminal liability under this provision is to establish a special relationship between the behavior of the debtor and impeding or allowing objective assigning to the debtor that effect, as a result of which the creditor has suffered damage. This means that if the act of disposing the debtor’s property had no real impact on the satisfaction of the creditor, then in the absence of a trait of effect in the form of thwarting the satisfaction of the creditor, this offense was not committed.