The Supreme People's Court's Judicial Council on December 20 issued Resolution 01 guiding Article 201 of the 2015 Penal Code regarding trial of criminal cases involving usury in civil transactions.
The Supreme People’s Court’s Judicial Council on December 20 issued Resolution 01 guiding Article 201 of the 2015 Penal Code regarding trial of criminal cases involving usury in civil transactions.
Accordingly, usury means provision of a loan at an interest rate that is at least five times higher than the maximum interest rate specified in the 2015 Civil Code.
In case high-interest loans are provided in the form of assets, the value of such assets will be monetized upon the settlement of criminal cases.
Under the Resolution, illicit earnings mean interest amounts exceeding the law-prescribed maximum interest amount and other illegal amounts payable by borrowers to lenders. The new regulation details the identification of illicit earnings for examination of penal liability.
Accordingly, if a civil transaction has expired, the illicit earning for determination of penal liability includes the interest amount and other illegal amounts paid by the borrower after deducting the interest amount of the law-prescribed highest interest rate.
In case the civil transaction is detected before it is expired, the illicit earning for determination of penal liability is the interest amount plus other illegal amounts paid by the borrower after subtracting the interest amount calculated at the law-specified maximum interest rate by the time of detection.
In case the borrower has paid the interest amount and other illegal amounts to the lender, the illicit earning for determination of penal liability is the actually paid amount minus the interest amount calculated at the law-specified maximum interest rate.
Under the Resolution, money amounts and assets used in a usury case, interest amounts calculated at the law-specified maximum interest rate collected by the lender, and profits the lender additionally gets from using such illicit earnings will be remitted into the state budget.
Illicit earning collected by the lender for giving a high-interest loan will be refunded to the borrower, unless the borrower has used the loan for an illegal purpose such as gambling or illegal drug trading. In this case, such illicit earning will be confiscated and remitted into the state budget.
In case high-interest loans are provided in the form of assets, the value of such assets will be monetized upon the settlement of criminal cases.
Under the Resolution, illicit earnings mean interest amounts exceeding the law-prescribed maximum interest amount and other illegal amounts payable by borrowers to lenders. The new regulation details the identification of illicit earnings for examination of penal liability.
Accordingly, if a civil transaction has expired, the illicit earning for determination of penal liability includes the interest amount and other illegal amounts paid by the borrower after deducting the interest amount of the law-prescribed highest interest rate.
In case the civil transaction is detected before it is expired, the illicit earning for determination of penal liability is the interest amount plus other illegal amounts paid by the borrower after subtracting the interest amount calculated at the law-specified maximum interest rate by the time of detection.
In case the borrower has paid the interest amount and other illegal amounts to the lender, the illicit earning for determination of penal liability is the actually paid amount minus the interest amount calculated at the law-specified maximum interest rate.
Under the Resolution, money amounts and assets used in a usury case, interest amounts calculated at the law-specified maximum interest rate collected by the lender, and profits the lender additionally gets from using such illicit earnings will be remitted into the state budget.
Illicit earning collected by the lender for giving a high-interest loan will be refunded to the borrower, unless the borrower has used the loan for an illegal purpose such as gambling or illegal drug trading. In this case, such illicit earning will be confiscated and remitted into the state budget.
(Source:VLLF)
