OREANDA-NEWS. The State Duma has passed in the first reading the draft laws that introduce administrative and criminal responsibility for the creation of financial pyramids.

The definition of financial pyramids will find its way to Russian legislation for the first time with introduction of responsibility for their building and advertising although the first financial pyramids were seen in Russia as early as in the early 90s when many people became their victims.

Amendments to the Administrative Offences Code of the Russian Federation suggest that the administrative fine for building, operating and advertising financial pyramids can be up to 1 million rubles. Amendments to the Criminal Code also require penal labour for a term of up to four years or imprisonment of up to one year. A serious fraud results in penal labour for a term of up to six years or imprisonment of up to two years.

'The Bank of Russia believes this draft law is very important in terms of existence of the market of decent financial services, - says Valery Lyakh, in charge of the Main Office for Countering Malpractice in the Open Market. - At the same we pay special attention to the need for further financial education and higher financial literacy of the population. A case is quite common when people in their eagerness to get a quick profit invest their money with eyes open in organisations which use indecent practices. However, in this case they should be fully aware that the activity of financial pyramids actually has nothing to do with payments to its participants. The organisers build pyramids to collect quick money from the population and vanish or build a new pyramid. Such law was a necessity a long time ago, and its preparation took more than a year. We have to admit that 2014-2015 witnessed a sky-rocketing increase in financial pyramids. Although smaller in size, they grew in numbers, especially in the regions of Russia.'

From the middle of 2014 up to the middle of 2015, the Bank of Russia and law enforcement bodies revealed that 2 billion rubles worth proven damage was done by at least 250 financial pyramids, and this number reflects just a share of investments people lost.

Often financial pyramids pretend to be organisations involved in legal business. The Bank of Russia identifies the key forms and types of financial pyramids and posts such information on its website. In the meantime, new structures appear on a regular basis acting one way or another as financial pyramids and imitating the activity of decent organisations not limited by financial institutions.

'The Bank of Russia and its territorial divisions are planning to keep a close eye on tracking and identifying financial pyramids operating in different Russian regions and forward corresponding data to local law enforcement bodies, - says Valery Lyakh. - Support of regional administrations, public organisations and concerned population will add to effectiveness and efficiency of this campaign.'