Annals of the Neo-Soviet Crackdown: Debtors Must Pay to Leave the Country Today . . . and Who Must Pay Tommorow? Kasparov?
The Moscow Times reports on yet another nail in Russia's neo-Soviet coffin, yet another step down the slippery slope from which, falling, there is no return. Today debtors can't leave. Tomorrow, who knows.
The authorities appear to be cracking down on debtors, barring thousands of people from leaving the country, the Federal Court Marshals Service said Monday. Over the first nine months of this year, 8,366 people were hit with travel bans because they had not fulfilled court orders to repay debts, a statement posted on the service's web site said. This figure is more than 40 times higher than that for last year, when only 187 people were refused exit for this reason, RIA-Novosti reported. Igor Komissarov, a spokesman for the service, said Monday that news of the tighter ban on travel had prompted debtors to settle up with creditors to the tune of 1.4 billion rubles (about $56.5 million). He said the total debt covered by existing court judgments was 12 billion rubles. "Foreigners are affected too, of course," Komissarov said, adding that a Greek citizen ordered by a court to clear his debts with a major bank had only recently had his ban lifted after paying off the entire sum.
The practice of refusing debtors the right to leave the country is a troubling one for some Western legal experts, who say the measure contradicts international law. "In most EU countries, creditors and debtors have to deal with each other according to civil law, and not criminal law," Helga Springeneer, a lawyer with the Federation of German Consumer Organizations, said by telephone from Berlin. "A court can order the search of homes or offices to impound property, but it can never infringe on the right of free movement." But Svetlana Ganushkina, of the human rights group Memorial, said the travel ban did not limit human rights. "The way things work in this country, it is easy to hide from creditors and banks," Ganushkina said. "Therefore, any mechanism to help make people repay this money and, most importantly, to dissuade them from leaving their debts to law-abiding family members and fleeing the country should be welcome." Sergei Melnikov, an attorney with the Moscow-based firm Your Lawyer, also said the authorities' actions were legal. "The law was examined in 2005 to see if there was any contradiction between it and basic human rights, and no contradiction was found," he said. Melnikov added that the key factor keeping the measure within the law was that the travel ban was "temporary, lasting only until the debt is paid or agreement is reached between debtors and creditors or one party and the court." The marshal service's Komissarov said the service was not trying to stop people from leaving the country for good but was simply using the only tool it had to make sure people paid up. "This is a system that really works," Komissarov said. "We can't kill people, or put them in prison, but we can stop them crossing the border."
While lending to private individuals has only become relatively widespread over the last five years, banks have experienced enormous growth in the booming consumer-lending market. Recent court cases have highlighted controversial practices in lending like hidden charges for opening bank accounts. But Russians have one of the world's best records for repaying loans. Delinquent loans were only 1 percent of the total over the last two years -- about one-third of the average for emerging economies -- according to a Merrill Lynch report released earlier this year. Although not a direct comparison, the U.S. Census Bureau reported in 2003 that more than 12 percent of all households were carrying debt that they were unlikely to be able to repay. The rate for Germany was lower, at 8 percent in 2006, the number for Britain in 2004 was 7 percent, and the corresponding figure in France was closer to 3 percent, according to data collected by the Federation of German Consumer Organizations.
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