According to him, due to imperfect Russian legislation the procedure of bankruptcy has become an instrument in the re-distribution of property and, as a result, "many industries in the country have ceased to exist," said the Kremlin spokesman. He adduced the following example of deliberate bankruptcy: in the middle of 1990s in the Russian Far East, sea-going ships "were on a 10 dollar a piece sale." The judges are unable to counter fictitious bankruptcies because the property is sold before the trial and therefore the courts "become the instruments in the hands of unscrupulous persons," said Viktor Ivanov.
He spoke in favour of perfecting the bankruptcy legislation and toughening punishment for the persons who took part in fictitious or deliberate bankruptcies. According to Ivanov, the Federal Service for Financial Recovery has sent thousands of applications about deliberate bankruptcies, but no more than 20 cases were accepted by courts, and "only a few were sentenced." The representative of the Putin administration called upon the judges to be more attentive in considering the procedure of bankruptcy of big defence enterprises. Viktor Ivanov said that solvency has been restored only at 30, out of the 10,000, enterprises which undergo a bankruptcy procedure. "If the process continues to go on at such a speed, our defence will find itself with arms in the coming several years," said the Kremlin representative. He cited another example: for more than four years the Research Institute of Radio Technology has been in the procedure of bankruptcy, and during this period it has lost 80 percent of its property.
He also drew the attention of the judges to the problem of fly-by-night firms. According to the data of the Kremlin administration, a million and a half legal entities have been registered in Moscow, but only 300,000 of them submit balance sheets and pay taxes. "All others are a burden on our economy," said Viktor Ivanov. According to him, these ghost firms are registered also in accordance with the lost passports, more than five million of which, the militia statistics say, are now on the wanted list in the country.