JPRS ID: 8558 EAST EUROPE REPORT ECONOMIC AND INDUSTRIAL AFFAIRS

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• Content Type: REPORTS

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~6 ~ JULY i979 ~ ~ ~ C FOUO iil79 ) ~ ~ ~ ~ ~ ~ i OF ~i
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- ~ F'Olt OF'~ICIAL US~ UNI.Y
JPRS L/8558
6 ~uly ~1979
C~'OUO 11 /79~ .
E a st E u ro e R e o rt
p p
ECONOMIC AND INI~USTRIAI AFFAIRS
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JPRS L/Q558
.6 June 1979
EAST EUROPE REPORT
ECnNOMIC AND INDUSTRIAL AFFAIRS
( FOUO 11/ 79 )
CONT~NTS PAGE
BULCARIA
Varioua Kinds of Economic Crimes Examined
, (Docent Dimitur Mikhaylov; PRAVNA MISUL~ No 2, 1979) 1
CZECHOSLOVAKIA
Nuclear Research Inatitute in Rez Studying Fast Breedera
(TECHNICKY TYDENIK, No 19, 1979) 19
Development of CNC Systems in CS5R Noted
(Ivan Krsiak; TECE~VICKY TYDENSlC~ 22 May 79) 22
Economic Experiment Principles, Problems in Nutshell
(Hana Brydlova; POLITICKA EKONOMIE, No 3, 1979) 26
- a - [III - EE - 64 FOUO]
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r:ULGARIA -
VAK10U5 K'[NdS OF ECON~MiC CRIM~S EXAMINED
~ Soft~~ I'EtAVNA P1I5UL in Bulg~irian No 2, 1979 pp 20-34
[rlrcicle by Docent Uimltur Mikhaylov: "becisions of ehe Na,ional Party
Conference and 5truggle Against Economic Crimes"~
['Cext) i. Penal Policy Trends in the Struggle Agatnst Economic Crimes
l. 'Che nCP National Conference, held on 20 and 21 April 1978, formula[ed ~
on the basis oE the political line adopted at the llth Congress, scientific
decisions and theses on the further improvement oE the socialist organization
of labor and planned economic ma~agement. The report by Comrade T. Zhivkov,
BCP Central Committee Fir~: Secretary and chairman of [he Bulgarian People's
Republic S[ate Council, indicated the unquestionable successes in the imple-
mentatton of the party's course of "considerable quantitive and qualita[ive
changes in building a developed sociali~t society and creating conditions
for a gradual conversion to communism."
Compared with 1970, social labor productivity had doubled in 1976; the shift
coefficient rose from 1.8 to 2.7; profits more than doubled. Industrial
aucpuc in che firsc quarter of 1978 was 6.3 percent higher than in the same
period in 1977. Compared with 1975, Eoreign trade in 1977 was 23.6 percent
higher. Compared with 1975 the amount of social consumption funds in 1977
had r.iyen by 408 millio~ leva, while the r,.~tional income had risen 13 percent
wi[hin the same period.
2. At the same time, however, National Party Conference noted certain �
major shortcomings and violations, in the implementation of the Leninist
principles of a strict regime of savings and high effectiveness in the use
of labor, ma[erial, financial, and foreign exchange resources of the country.
Losses caused by deEective produc[ion are above admissible levels. In
industry alone such losses in 1977 exceeded the norms t~y a�actor of 2.
Thac same year over 73,000 workers in industry failed to meet their norms3
whereas 120,000 overfulEilled them by factors of 1.5, 2, and more than 2.
Takin~ this into consideration, the conference earmarked not only the basic
principles and directions but a nurr,ber of specific ways, means, and methods
Eor che effective protection of the socfalis[ economy. The decisions and
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t~~K or~tcrnt, usF ncrt,Y ~
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the~es explaincd the content ~~nd signiEtc~nce oE th~ pen~il pnliry in thc ~
strugKtp ugninyt r.rimc.~s :,gain~t thc sncif~list economy, for ecnnomic mnn~gr-
ment t~ thc moyt compte~: and mosc creative t~sk Encing the new :~tnte Eollow-
ing the victory of the soct~7list revolution. Summing up the mor~ thnn 50 ,
yea.s nE che Sovt~t stace, L. I~ Iirezhnev stressed that Che nature nf thh ,
new approach in cconomic m~7nagement and the principles governtng th~ cconomic
policy oE th~ soct~~lisc state ~re expressed, nbove nll, in "strengthening
the role ~C ~c:onnmic mcthods and incentives in na[ionttl economic manngement,
r~7dic.illy imvroving state pl~annin~, bro~denin~ the economic independence
~~nd initt~tive oE enterprises, kolkhozes, ~nd sovkhozes, and upgr~ding the '
responsibtlity and macerial incen~ive of production collectives related to '
[he rrsults of their activittes." i
3. The National Party Conierence inclicated, above all, the need to strengthen -
, 50C~~I15t discipline in all its varieties--labor, production, technological~ i
planning, contractual, financial, and so on. The solution of this "key
problem" is m~~de necessary by the intensive and ever more complex ties and
interrelationships within the nattonal economy, the productton rhythm oE '
modern eq~~ipment, and the new and more advanced technological processes. ~
- The cask is "to achieve organtc unity and cc,tal consistency between [he
development oE thg~ basic production elements such as labor, labor objects, ~
and labor tools."
The implementacion of this task calls for the fullest and most efficient
u[ili~ation of raw macerials, materials, energy, and Euels, as well as
considerab~le labor savings. The brigade and other collective labor methods ~
are considered basic in the org:nization of the work and must be based on
in[ernal cost accounting.
4. The dynamic development of the socialist economy also determines new
Eorms, structures, and methods of organization and planning. The compre-
hensive organi2a[ion of labor and its direct link with the organization oE
the wage syscem are of subsranrial signiEicance. `
The conference calls for the "basic requtrement that wages be earned. This
means that they must be consistent wi[h the fac[ual results oE labor
activiti~s and depend on the individual contribution of the worker or
' emplayee in carryfng out his assigned tasks." It is stipulated tha[ the
basic wage system will be "hourly," ie, the payments will be based on the
norm output per hour. At the same time, other progressive wage systems will
be used--normed planned ~ssignmen[, piece rate sys[em, payments based on
end results, and o[hers.
}iowever, along with the positive [rends and high effectiveness, the new
methods of socialisc organization of labor and planned economic management
also open some new factual ways and means for tne commission oE criminal
actions against the national economy. Variabili[y in the organization of
labor and wages, the possibility for a speciffc evaluation of the wage, and
so on, create at least an initial condition for criminal actions related to
economic activities and for the acquisition of public property. .
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5. 'I'he improvement oE the soctalist orgnniz~cion nf lf~bor nnd pl~nned -
c~cc~nomic: m~~n~gemr.nt 1Fir~rly dc~pend~ on thc~ le~dtng cndres in the n~ttonnl
~~~~uttc~my. 'I'hr Nut i~n~il I'nrty C~nf~~renr~~ tndicated sevrrt~l lmport.nnt at.lpuln-
i lai~4 ri~lrit~~cl t.a Ir~~diii~; rudr~~ti, ~tt~ulf~tinnw whieh frequ~~ntly becom~~ thc~
~;ubJects o[ individuul cCUnomic crimes. Onc o[ them applic~ to ycrengthrning
the "onc-man command in ecnnomic management~" it is precisely thiq "one-m~n
commcind" chf+t ts a tool for che screngthening oE socialist discipline and
~i b~~s{c obtig~~tinn of party organs and organiz~~tions.
The rcrport by Comrade 'C. Zhivkov (Op. cit. pp 40-41) indicates, in particular,
"che need for total consiscency becween the rights And obligations of every
m;~n,~ger ~nd e~~ch c~dmintstr~tive unit. Should a givem m~n~hger (or management
unic) have a cert~7tn range of obligakions, they must have all the necessary -
rights to rc~solve problems chat they are in charge of. On the other hand,
henc:rEc~rth wt must not ~yltow a manager or management unit directly respon-
sible for the solucion of a given problem to pass on its solutton to another
manager or ~idministrative unit. It is inadmissible Eor man~gers or admin-
tstracivc units co take over Eunctions ~~nd assignments within the range of
compecence of other managers and other management units. It is entirely
inadmissib~e for some managers, usually oE superior rank, to impose decisions
withou[ assuming responsibility fc,r chetr consequences."
6. Another exceptionally important feature applies to the quali[y of the
~ economic manager. The conEerence indica[ed two types, cwo categories of
economic managers. The first ca[egory consiscs of no more than conventional
cimid perEormers who note weaknesses. ?he o[her category consists oE managers
with knowledge and experience, and with a creative mind and a warm heart,
who can soberly assess and boldly assume the risk of innovative decisions
and actions. Occasionally they may err, for "there is no creative work
without risk" and the party favors [he type of managers who assume a ~
"sensible creative risk." In practice, however, frequently this category
of managers are constancly guided, con[rolled, directed, and even prosecuted.
They mey suffer Eor tr~e "right cause" or earn the "black ingratitude" Eor
all thcir noble effor[s.
/ Managers are not simply [echnical specialiscs and performers. "They are
flesh of the flesh and blood oE the blood of the class and the people,
promoted to leading work by the party as its representa[ives~ assuming all
obligations noc only as economic but as poli[ical leaders."
Ic is precisely on such poli[.ical and moral grounds that the party conference
encrusts the leading cadres "to react rapidly to new phenomena and trends,
ciisplay initiative and assume responsibility, consistently apply modern
management methods, and be intoleranc oE bureaucracy, callousness, and
irresponsibility...;" they mus[ noc fall behind the ini[iative of the masses
or hinder or suppress their activenESS; they must not violate the fa}~th,
selfconEidence, and inner impulses oE citizens and creative workers.
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Natur~illy, no tolerance could be displaycd, not to s~y encouragement tow~rd
m~7nagers who nre ronscc~ncly wrong or nssume ndv~~ntu~isCiC risks~
_ !
'l~ '1'h~~ c:anfrr~~nc~i~ furth~~r ~~mphnytt~~d t~~~it the role~ nnd slKnt~icunce nC '
can~rul org~ns in the m~nc~g~ment o[ economic nctivities. Its decision;~ ~
contain severnl matn ~spects concerning th~~ ways nnd means oE control cnrried
out by the v~rious organs ~nd orgnnizations, ns well ~s stipulations con- ;
cerning the nature, content, and signiEtcance of respective control functions.
I'ar[icular attentton is patd to thc basic stipulation that all par[y organi-
z~~ttons have the right to control yet do not always use this right expediently,
promptly, ~nd Eully. E'requently they are unable to ect as the political
leaders oE the respective labor collectives. "Inste~7d of directing the _
soclal man~~gemcnt org~~ns to the main problems, to strengchen chcm with
cadres, to develop thetr inittative ~hnd creativity, and to control their
activities, through petty intervention, tutorship, and insuEficient compe-
tence a number of party commi[tees take over the functions and ev~n parAlize ~
the work oE state and economic orgnns, grossly viol~ting established m~nage-
ment procedures and technology." Any assumption ~f the oper~tive-directival ~
and economic funccions by p~rty organizations and organs, even though they ;
may result in partial or temporary successes, bears the marks of one-sidedness ;
and unjustified actions related Co end results. This leads co b~re~ucra~ic ;
~dminis[ration, ordering, and technocracy. '
~
~
Atl types of duplication or confusing the tasks and functinns of the party i
organs and organizations wit~ those of state institutions and economic
enterprises must be avoided.
8. Another essential feature of control is its eEEectiveness. Control must '
not hinder the activities of economic organs and organizations. I[ must
not paralize [he creative initiative oE economic leaders but broaden and "
direc[ the social activities of the socialist working people. It must be _
based on the needs and interests oE socialist economic activities and help
~o implement the principles of socialist justice. However, cases of onc-
sidedness, subjectivism, pettiness, and professional ciistortion, which are
more damaging than the ac[ual use of control-auditing activities, are no
exceptfon. It is precisely in [his sense chat the responsibility of the
con[rolled economic leaders must not be converted into irresponsibility on
the part of controlling or auditing organs.
The conference clearly and definitely stated that preven[ive control must
be the main con[ent in controlling activities. This reasserted and developed
the task included in the Uniform Program for the Scruggle Against Crimes and
~ther Legal Violations and Antisocial Actions (adopted by the Bulgarian
- People's Republic State Council with Deciston No 38, dated 27 November 1975),
namely: the state and social organs and organizations "shall take measures _
to intensify the educational influence'of the social environment, improve
the social climate in the collectives, and eliminate conditions which arise
leading to the commission of antisocial actions; [hey shall take measures
to create an atmosphere of intolerance toward individuals committing such
actions..., and to energize and upgrade the effectiveness of the work of the .
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r.ourts, the prosec:utor's ofEice, ~~nd the nther 5CAtC nnd concrol org~ans Eor
the dl~;rovery and climin~icion of tne rr~sons find conditions Eor crimes And
other legc~l viol~ttons ~nd antisocif~l actions."
9. Thc earmarked politic~~l me~sures Eor improvtng the socielist organi-
xatton of l~~bor and plnnnc~d economic mnnagement ~r~ also ~ concern Eor the
moldin~ oE the new man rind his mentality and ideological education. This -
means ~h~7t the pr~~ctical activities oE party, state, economics, and public
orgc~nizations and organs "must cooperate most Eully in the Eurther improve-
ment and ~~ssertion oE the socialist way oE life and con~ributes to the over- .
:ill shnping oE the new man--the socialist working man~" -
We musL cnsure thc stabtlity and unity oE labor collectives and esrablish
"social mech~ynisms" consis~ent with the highly organized nature oE labor
under socialism. We m~st increase the level of organization, creaeivity,
and self-intciative of all socialist working people. We must decisively
struggle against cases oE careless or neglectful attitude toward social
intorests and public property, piece organization in the work, and endless
waste of time.
The implementation of cliis cask calls Eor ~"profound reorganizntion of
- thinking and conce~ts" and actions of the working people in order to reach
a high quality c~nd effectiveness oE labor in all realms oE social life. No
toler~nce should be displayed and, even less so, "favors" be done at the
expense of the collective and the public inr.erests. A firm end must be put
to all kinds oE "channels and loopholes" leading to easy and light earning
oE unearned income or obtaining material benefits. The efforts on the
ideological and legal fronts must be focused on developing a"sharp feeling
for the new, a feeling of responsibility Eor assignments, and intolerance
, oE weaknesses and shortcomings in the work," and for enhancin~; the level of
socialist consc#8usness and labor upbringing, particularly among the grow-
ing generation.
~ 1C. These ideas and directions in the struggle against economic crimes are
of ?xcepcional importance and leading significance in the case of judicial,
prosecu[or's and investigative organs in "systematically struggling to pre-
vent and expose crimes agains[ socialist property and the socialist economy-- ~
mostly thefts, embezzlements, neglect, improper documentatio~land reporting
- of produc[ion results, and production of substandard goods."
From this viewpoint, the basic principl~sof socialist penal policy (legality,
democracy, humanism, and socialist internationalism) are specifically mani-
fested in the s[ruggle with crimes agains[ the socialist society, as follows:
Measure of economic, organizational-cadre, educational, and social controlled
nature, and so on, are of decisive significance;
The real and effective protection of the socialist economy could be ensured
mainly through the ways and means of preventive work;
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The function oE the penal law in the scrugglc ~7gainst economic crimes is
import~~nr, ~~bove ~~ll, with a view to preventive-restr~ining and educ~tional ~
influcnce;
Soci711y dangernus actions directed against the socialist economy must be
considered as crimes only to the extents to which they harm or threnten ~
substunti~~lly, L~scingly, or to higher extent social relations relared to ~
directtng economic activities;
R~ckless actions committed ~~gainst the socialist er,onomy axe essentially �
not punishable; should they bc punishable, by exception, substaneial timi~~-
tions and ~uarAntees h~~ve been stipulated;
The criminal narure oE actions agatnst the national economy is limited by a
number oE objective circumstpnces--value of the respective type of economic
relation, cl~aracceristics of the object of the crime, importance of harmful
consequences, peculiarities related to the ways and means oE the perpetration,
and so on;
In some minor cases the existing trend of decriminalization is most exten-
sively manifested at the present stage in the commission oE economic ctimes;
The objective need arises for cooperation among CEMA-member countries in
the struggle against economic crimes, on a broad basis and in a variety of -
directions--legislation, reciprocal aid among courts, cooperation amorg
specialized state organs, protection of international construction projects,
and so on.
These basic trends are further determined by the status and trends of develop-
ment of economic crimes. .
~ II. Some Trends in the Developmen[ of Economic Crimes
11. Crimes against the socialist economy are the most severe forms of
direct or indirect violations of social relations related to socialis[
ownership and the national economy which are "the foundations on which the
materia}2and spiritual values of the socialist society are created and multi-
plied." In 1977 such crimes accounte d for approximately one-third of all
crimes of a general nature. This does not include so-called latent or
concealed crimes. Taking iiito consideration undetected and unknown crimes
the actual percentage of crimes within the overall condition of criminality
in our country would be higher.
Compared with crimes directed against socialist ownership (chapter five of
the special section of the Penal Code) crimes committed against the socialist
economy (chapter six of the special sectfon of the Penal Code) are not so
substancial and do not account for a considerable percentage of the overall '
condition of criminality in our country. Over the past nine years their
share of all crimes of a general nature was as follows: 1969, 5.6 percent; ~
1970, 5.1 percent; 1971, 4.4 percent; 1972, 3.9 percent; 1973, 4.0 percent;
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197G, 4.7 percent; 1975, 5~2 percent; 1976, 5.3 percent; nnd 1977, 6.0 percent~
'~h~sp d~ta indicate the Eollowing: a. an ueven relbttve increase in the num-
ber nf economic crtmes; b~ steady decline of thetr ~7bsolute nnd rel~tive
pc~rcen~~ges in the first four years, reaching ~he lawest potnt in 1972--no
more tl~nn 3.9 percent oE all crimes of ~7 general nature--f~fter which they
_ beg~~n to rise ag~in, reackiing thEir peak in 1977--6.0 percent; c. the nearly
identical positton withtn the nverall state of criminality at the beginning
and the end oE this nine yer-~r period with a slight increase of 0.4 percent
tn 1977, ie, a slight rising trend; d. a cer~ain stationary nature of
punished tconomic crimes and punished individuals (over the past five years
~~n aver~ge of S.0 percent of ~11 crimes of a general nAture and a nearly
equal ,�~mount of sentenced indivi.duals).
12. }lowever, this does not exhaust the overall characterization and per-
centage of crimes committed against the socialist economy in the overall
condition and dynamics of crime.
First, the damages caused by crimes committed a~ainst the national economy
are far more considerable in t.^rms of volume, size, and importance compared
, with t~arm caused by crimes directed against socialist property. This con-
clusion is based on data on maltcious damages caused ~he national economy
detected through financial audits. Such damages have been steadily rising
after 1969, ie, since the enactment of the new Penal Code. In 1977 the
absolute volumP of noted damages was hfgher by a 2.5 factor compared with
1969.
5econd, outside such da[a there remain unnoticed damages, including so-called
latent economic criminality. The real harm caused the national economy is
far more considerable. This fact increases the social danger of economic
crimes and emphasizes the socio-political significance of the struggle
againsr them at the present stage.
Third, another factually existing circumstance is of no lesser essential
importance; crimes against the national economy create favorable conditions
or grounds for crimes against sacialist property--thefts, embezzlement by
officials, documentary fraud, misappropriations, and others. Naturally,
the opposite influence is presen[ as well: encroachments agains[ socialist
ownership create objective and subjective conditions for committing economic
crimes which parallel, facilitate, or conceal them.
13. Crimes against the socialis[ economy are unevenly broken down sectorially
as well.
Over [he past five years general economic crimes have accounted for 20.9 per-
cent, ie, for about one-fifth of all crimes committed against the socialist
economy. The most numerous among them are crimes related to violations of
the price system as per Articl.e 225 of the Penal Code (13.3 percent),
followed by negligence as per Article 219 of the Penal Code (4.2 percent),
and, thirdly, crimes related to planning as per Article 222 of the Penal
Code (0.7 percent).
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Crimes commikted in the different economic sectors ~ccount Eor 79.1 percent '
or Eor ~pproximately Eour-fifths of the crimes committed Ag~inst the socialist
economy. The highest share among [hem is thAt of crimes committed by
individual economic sectors as per Part II oE Chapter Six of rhe special -
section of the Penal Code (47.4 percent), In other words, they account for ~
nearly one-h~lE of the crimes commicted against the socialist economy. !
_ hfost frequent among the crimes committed in the various economic sectors is
proEiteering as per Arcicle 233 oE the Penal Code (29.7 percent); second is ~
che~~ting purchasers or customers as pr_r Article 232 of the Penal Code (7 per- ~
cenc), followed by crimes related to the quAlity of industrial goods as per , ~
Arttcle 228 nf tt~e Penal Code (0.8 percent), !
I
Second among ~he crimes in different sectors are those related to the monetary !
and credit system as per Section IV, Chapter Six'( 24.6 percent), mainly '
foreign exchange related crimes as per Article 250 of the Penal Code; third ~
are crimes against foreign trade monopoly as per Part III of Chapter Six of ~
- the special section (7.1 percent), essentially smuggling as per Article 242. ~
of the pena 1 Code. ~
~
14. Uata on the specific sectors in which economic crimes are committed are
also of substantial interest. Over two-thirds of all economic crime~ are ~
committed in trade as per Articles 233, 232, and 225 of the Penal Code.
This is Eollowed by crimes in the financial and credit sector; third are
crimes against rural and forest economy; they are followed by the indus- ~
trial, construction, and othe r sectors. This gradation reflects the nature ;
- of social relations in the corresponding sector of the socialist economy, I
~he characteristics of the individual types of crimes, and the specifics of i
the struggle against them.
I
From this viewpoint not only crimes in the various economic sectors whose ~
direct target is social relations in the corresponding sector (such as, for I
example, the production of substandard industrial goods as per Article 228 ~
of the Penal Code), but general economic crimes are characteristic and most ~
frequently committed in one or several economic sectors. As a typical ~
general economic crime neglect alone is found in nearly all economic sectors.
- Still, data for 1973-1977 indicate that over one-third of criminal neglect
cases (35.2 percent) take place in the field of trade, followed by agri-
culture and the forest economy (27.8 percent), industry (16.7 percent),
construction (5.6 percent), transportation and communications (3.7 percent),
housing and communal construction (3.7 perc;ent), health care, social security,
and physical culture (1.8 percen~), finances, credit and insuance (1.8 per-
cent), and other national economic sectors (3.7 percent).
15. In reality the socialist economy suffers its most substantial damage `
as a result of neglect and the production of poor quality, substandard, and
_ ~.infinished industrial goods. The corresponding crimes as per Articles 219
and 228 of the Penal Code are second and third in the state of delinquencies
as per Parts I and II of Chapter Six of the Special Section of the Penal Code.
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FOit UE~T'ICTAL, U5L UNLY
They ~~re exeremrly insignificc~nt in the c~vrr,~ll condittnn of ehe crime r~te
in Bulg~ria, Thts significanc yet contrndictory situf~tton may be explained '
with the help aE dtEEerent circumstfinces, ~he mo~t imporr.ant amnng whirh
Callow 5~~vcr~il dtrcc~tons.
Ftrst, lack of adequacc concern ~r production of substandnrd industrial
goods leads to m~~?~jor d~~?nages inElicted on thc~ socialist economy. However,
- this ts not always due to actually committed crimes. Most Erequently the
re~sons ~~re oE an obJ~,~c~ive nature--~~cciden~~~l, economic-organizational,
~dmtntstrative, cadre, and so on. Subjective reasons are most Erequently
linkecl wtth collective decisions, lack oE individual responsibility, or non- -
punishable responstbil!ry--political, administrative, fin~~nci~~l, civic, etc.
;ieconcl, ~here indeed exists some gaps and inaccuracies in determining the
~zrounds, content, and system of penal responsibilities and in separating
penal fr.am oth~r types of responsib~!ities for economic delinquencies.
Nevertheless, since penal corrective ways and means are important yet not
decisive in the struggle against crimes under socialism, they could be �
applied with even greater substantiacion on an exceptional basis only and
extreme illegal clses affecting tl~e conduct oE economic acti~~t~ies. Of all
actions considered crimes according to the penal code, actions ag~~inst the
socialist economy are tt~e least subjected to penal conr.rol, entailing the
greatest difficulties, and punishments stipulated and imposed for such
crimes are, perhaps, the leasc eEfective. Far more effective, in practice,
_ ~ire measures of organizational-political, administrative-economic, Einancial,
labor-legal, or civic-legal nature.
Third, in the case of criminal actions committed againsc che national economy
(pac�ticularly in cases of neglect or production of substandard induskrial .
, goods), it is not always possible prompr_ly to establish all direct or in-
direct dartiages caused the national economy. Possibilities exist of counter-
ing damages done the national economy with adva~tages or even profits bene-
fitting ~he individual enterprise, and vice-versa.
A number of factors exist (tempestuous development of the socialist economy, -
frequent changes in the legal management system, and so on) to provide
"objective" foundations or to "legitimize" damages caused as the result of
improper actions.
- Fourth, a nu?nber of weaknesses and shortcomings may be found in the activities
of operative-research, financial-auditing, investigative, and other special-
ized state organs in exposing and proving economic crimes. Consequently,
frequently no prosecution is instigated. The so-called latent or concealed
criminality is most characteristic in this case and appears in a variety of
forms.
Fifth, there is a certain practical underestimating of legal punitive
measures and means in the struggle against neglect and the production of
substandard industrial goods. This is due not only to shortcomings in legal
regulations but to difficulties in the application of penal norms (as, for
example, in cases of extreme necessity, justified production risk, improper
official order, or equality of official positions in terms of punitive norms).
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_
1~'tlk il~~tCiAt. lJSh: t)NI.Y
dn ~he ba~is ~f th,~~ b~~3c directions t~lidw~d fn pcn:~l pnli~y ~t thp prhghnt
gtd~~, ~nd t~ktng tr~td cc~natder~cion ch~ c~ndic~on, dyn~micg, .nr~d ~trurturr
of e~:nnnmic rrimes, I~c us nncp che m~r~ imporcant t8g{tg end problpm~ of
CC~f11~t1UIO~~Cd1~ ppn~l-procpdur~l, and pcnal-lhg~l n~turp in th~ ~~ru~glp
ag~inqt chig e~t~gary df crim~a. ~
III~ Basic penal-Legal ~ro bt~m~ in the Struggle Aq~in~t Econornie Crimee
16. '['he CtlSltg related to the clariCicatton dC the rp~snns nnd ednditiong
Enr thh rommission c~f erondmic Crimes and the el~bor~tinn nt mc~sur~s for
thpir r~ductidn or prrvpntion are particutarty topic~l. Th~ tr~ditinn~l ~nd
- ca a certain extent, rnucin~ !S~ilC~SCLCtl1 indic~tnrg are obviou~ty insuEfi-
rtent. ~Cf~ctive ways and meen5 for the clurification nf the reagons for
and thc~ el~bor~tion of ef~ertive measures in the struggle ag~in~t economiC
crime~ must bc el~borated ~nd ~rplied ~ the b~si~ of rnncpmporary cconomic,
5cientiCiC ~nd techniCal echicv~m~nts. The cnmpr~hpnsive approach, thh rc~al
ways and means used fvr the cxpvsur~ of so-called lacent ecdnomic crime~,
and so on, are of great thEOretical nnd praccic~l impor[ance.
It is tru~ th~t no special stipulations exist in thr field of penal pro-
cedur~l law and rriminology on ch~ procedure gnvprning trt~ls for economic '
crimes, thh ccimpetence of corresponding judtci~l organs~ and so on. In _
reality, how~ver, this category of erimps is eh~racteriz~d by ~ numbhr of .
spccffic fe~tures which determin~ the need for a certain specializatton on
chp part of the operecive- investigative and prosecutor's- investigative end
ju~i~t~~ organs. The comprehensivN nature of economtc crimes drmands of the
specialized organs firm knowtedgc in th~ v,~rinus fields of sdcialist law
(penal, civil~ labor, administracive, And so on), as well es durable knowledge
in ocher scientific areas such ~s eCOnomirs, Einance, accounting, sociology, ~
Qsychology, and so on. '
The characteristics in providing proof of eronomic crimes determine the need
for the elaboration of a special method and cactics for [he investigation
and expasure of such crim~s. In chis case the "qualicy or level of financial-
auditing accivities and preliminary control are of substantial significance.
A number of theoretical and practical problems arise concerning the nature,
tasks, and functions of financial-accounting expert assessments related to
economie crimes--the legali[y and substantiation 4f primary financial-
accounting data~ the possibility to resolve this way the prnblem of the
financial or administrative nature of actions committed against the socialist
economy~ making a distinction between~~he practical competence of the expert
and of the judicial organ, and so on.
The nature of economic crimes and the personalicy of cheir authors are sub-
scantially reflected on the penalty: the determination of the initial penal
system and the prerequisices for its amendmenc, places where imposed penalties ~
must be served, jail terms fn particular, ahead of term release, etc.
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F'Uk c~NFIC[AL US~ c)N1.Y
_ Naturally, thc dtrc~tinns in the strugglc c~gaingt ~connmir Cr~meq, bag~d dn
the decisinns of th~ N~tLdn~t Pa:ty Cnnterenrh, Cdrrnulutp d numb~r nf ~p~ctEtc
task~ Cnncerning ~'urthee irnprov~mencs in the fi~ld of qnri~ligt p~nnt il~,~g-
leti~n ~nd punishment. 'Chp p~nnt th~dry ~qU~ily EACf!g ~ numb~r nf prablpmg
thp mdKt impdrtnnt of which coutd be CItlJ9~~1t!d into ~evprdl mnr~ important
grnup~.
17. `The n~ture oE crtmps agalr~st thp sDGielist Econdmy may bc~ r~dur~d to
tmpreper ecnn~mi~ ~yctiviti~g, ~r itlegel nr ~et~nomicatly improphr implemgn-
catinn of entrusted task5 end fun~tlons by hcanmmic BUb'ECC9. This is ~
~tot~rinn nr infrtn~ement ot the r~quirement~ relat~d to thp normnl~ corrpet~
and legal conduet ~f soriatist econnmic uCtivicips. Such requirpments ~re
based on the objertiv~ economic lews under soci~lism. They ure consiet~nt
_ wtth canc~mporary sciencific and tECMfl~C~II ~ccnmplishmencs and ere found in
party dp~isi~ns and exi~cing l~ws~
, It ts on this b~sis that the linp dtviding thp two most important eategorirs
oE crimes dgainst the socialist peondmy Ls dr~wn: "Nocros applicable cn crimeg
tommicced against sociat property rptain [his chacactpristic in che casp of
certain crimtnel encrdachments over tndividuat pro~ects regnrdles~ oC subst-
quent spe~ific consequences nf [h~ action~ whereus norms rel~ted to economic
ccimes protecc the proper e~~duct of soctatist economic accivities ~nd thC
dynamics crf economic life."
Th~ b~slc discinccion between econdmic crimes and other groups of crimes
listrd tn che special sectton of the Penal Codc--crimes against the P~ople'y
Etepublic (Chapter One), ageinst the eCCi~ict~s of stacr nrgans ~nd social
arganizations (C}~apter Eighc), and others--is made in nccordance with the
same criterion. The direct ob~ect of crimes cortmittcd against the People's
Republic and,above all, subversinn and sabocage (Articles 106 and 107 of
the Penal Code) are soctal ~elations linked wich the socio-economic organi-
zacion, the dictatorship of che proletaria[, or the sta[e of the whole people.
The influence method alone is "economic." In che case of ecanomic crimes
not only the method of influence is economic but the directly afEected tar-
gets are precisely socialist relations related to the conduct of economic
activities. �
The objert of crimes as per Chapcer Eight of the special section of [he
Penal Code include sncialist svcial relations related to the proper and
normal funccioning of the state, economic, and social apparatus, its prestige
and the trust of che working people in state organs and sociat organizations.
"The social danger of economic crimes is thet chey violace normal economic ~
activities. It is precisely chis characceristic that must be borne in mind
wich a view co reducing the number of economic crimes committed againsc
socialisc ownership and crimes based on offfcial position which~ even though
in some cases may present certain obstacles to the conduct of economic
activities have another ~~rget--socialist property and the proper activities
of the state apparatus."
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~
t~'~It U~FICIAL USF: ~NLY ;
18. The rhnr~Ct~ristir~ nf thc~ cdrget of cennnmic rrimpg nr~ rrfl~cted on
their gygtem as per Chapt~r 5ix of the speci~l geetion nE the Ppn~l Codp. .
Thp l~gi~letnr prdc~eds dn th~ b~si~ of cw~ ertt~rta: a. Bd~ics n~tur~ of
pstablish~d r~quir~ments, nnrms, or reg~lattons govprning the conduct of
peonomic Rctivitips, t~, wh~th~r or noc they are universally applicabl~~ ~
whether or not thpy ~pply tn ~11 or mdst s~etor~, or ~1~~ ~pply m~r~ly to ~
thp CEgp~CtlVh ~~ctnr~ sub~hrtor, nr unic nf ~ronomtr activitie~; b. Supple-
men~ary--che rh~racc~riscics ~nd the 9bC~0-politicel atgniEicanc~ oE eco-
nomic rel~ttons of speriEic hronomic s~~tors or units. : i
Cnmpar~d with ch~ ~bnlish~d p~na1 eodp chp thus dp~crib~d gy~t~m oE peonomic ;
erimes offers ~ number c.f ~dv~nt~ges. g~s~d on ~~i~ntific rrit~rie~ it +
introdu~eg consid~ra~:t order and clarity. ,It is used to pxpl~in rhe con- ' a
tent and significance of the nature nf corrhsponding ect~nomic crimes end
th~tr sppar~tton from stmil~r homogeneous or h~t~rog~npc~ug crimeg.
i
How~vpr, th~ system and stru~t~rp dE ~conomit crimps sufEer from rertain ~
g~ps, l~ck c~f specificicy, ~nd imp~rfertions. The sncio-policical naturp
and cnntpnt of individual economic crim~s, differences betw~en gpneral and ;
spectal crimes, and the distinction betwer.n thcm nnd individu~l similar or
different crimps ~nd, particnlarly, similar administracivr violationg~ havr ,
noc be~n comprehensively and profoundly clartfied. A number oE theocetical
~nd practical problems h~ve remained controversial whtl~ improvements in
legistation and judicial pr~ctices have raised new problems facing penal law.
Following are some of them:
a, Not all general economic crimes may be commitced within each of che
individual national economic spctor~. Neglect alonr (Arttcle 219 af the
Penal Code) is of such general significance, for it could be committed to a
greater or larger extent in ail seccors of the national eronamy. Other .
general economic crimes have a more or less timited range for their real
implemencation, depending on the nature of the direct target, and their
specific content and purpose. On this basis some authors pven reject the
possibility that "general etonom~5 crimes" may be classified in a separete
subgroup or individual category.
It is also possible co argue againsc the view that some economic crimes have
been classified in Part I of Chapter Six of the special sectior of the Penal
Code (such as, for example, disclosure oE a so-called economic secret as
per Articte 224 of the penal Code in which the direct target of the crime
are social relacions linked with foreign trade activities; violations oE the
procedure governing building on cultivaced land or pasture as per Article
221a of the Penal Code in which the land is the direct target).
b. The adopted syscem of ecanomic crimes should not be considered as com-
plete. Some economic crimes stipulated in other laas remain ot!tside the
Penal Code, such as criminal encroachmen[ on state measuremen[s and measuring
tools as per Articte 43 of the Law on Measurements and Measuring Toals (DV,
No 289 of 9 December 1948, amended in IZV., No 14 of 15 February 1952); ,
descruccion or damaging af natural sites, earth formations, and others, as
per Article 35, paragraph 2, and Article 36, paragraph 2, of the Law on the
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FUk ONi~'1C1AL US~i UNLY
E'ratcctidn of Naturc (bV, No 47, oE 16 June 1y67); criminal vi~ldtinn nE th~
~ygtrm gr~verning invencions nncf rntion~li~uttdn~ pcr Artielh nC the
L~w on inventtons and Ratitinalix~tiong (bV, Nn gl nC 1$ Ortob~r 1968~.
Th~ indir~tpd critrrta for drawirig the diKttnction betwren gpner~l ~nd
s~pnrFtit~ ~ennami~ crimpg nrc ndt idpntiCally t~cc~pt~d in thc lpgisl~tiona~
Judicial prnetie~s, ~nd th~nri~s nf the snctalist ~ountri~s. F'or px~mple,
c:ommrrctal lnterc~~~ton ~nd pntprpri~e ~rp considpred ns per Articl~ 234 oE
thr pen~~l Cnde, rrtme~ cammtttpd tn indtvidu~l ecdnnmic sectorg; yet accord-
ing tn Article 153, Part II nC t~i~ penbl Code nf the RSFSR th~y ~re cnn-
~tdprcd gpnpr~l pronnmic crim~s; aCCOrding to Art~clp 239 of th~ P~net
Ct+d~ profit~ering is usuatly considered ~ crim~ ag~inst sori~ligt trade1~ven
though gome nuchors cnnsidpr tt n Eorm oE exptaiting economic ectivity.
d. Of leth crim~s ~gainst the nntur~l ~nvironment dre assuming ever greater
domeqtic~ ~nd Intern~tionat stgniElCance. A number oE problems arise dE their
systemattc clas~ificatidn within the penal code and in connection wtth
drawing a distinccion b~twcen chpm and similar crtm~s such ~s crim~s
committrd ~gainst public health, socialist property, citizens' rights and
othcrs.
19~ Th~ subj~cr is of very great imporcanc~ in determining che mechanism,
structure, end content of the nacure of corresponding economic crimes.
nepending nn additional fentures of the perpetracor, his relationship with
the object and th~ target of the crime, end the rights and obligations
entrust~d to hfm by virtue of l~gal norms and the rules governing the
sncialist community, we could distinguish among chrec basic c~tegortes of
subj~r,cs of economic crimes, namely:
t) An nfEiciat (Article 219, paragraph 1; Arcicles 220, 221, and 221a; 222;
and 226, paragraph 2, oE tt,e Penal Code); a manager or a control organ
(Article 219, paragraph 2; Articles 228, 231, and 239 of the Penal Code);
2) Individually defined features: seller (Article 225, paragraph 3 and
Article 232, paragraphs 1 and 3); lessor (Article 25a); receiver (Article
2~9); middleman (Artir.le 234, paragraph 1)~ entrepreneur (Article 234, para-
graph 2), and Eore~g~~~cicizen (Arcicle 240 oE the Penal Code);
3) Any criminally liable individual who violates or fails to carry out cer-
cain economic oblidacic~ns (Article 221, paragraph S; Articles 223, 224, 22S,
226, paragraphs i and 227, 230, 232, paragraph 2, 233, 236, 237, 238,
and 241-2S0 of the r~nal Cnde).
Particularly interesting is che concep[ of officiat. This has been the
object oE2~epara[e ~nd excensive clarificacion in theory and judicial
practice. Certain difEiculties hgve appeared also 3n clarifying the con-
tent of specific2~ubjects. Somp of them are legally defined in laws outside
the penal code, while in other cases this has been left to legal theory
and judicial prac[ice.
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:Z
~c~~ c~N e rc r~~t. uSN, c~H~,Y
Alr~i~~ wl~h t.he~ ~pc~etc~l f~Ut1IIt{Cq nf thr. Nub~r.c~, in chr rfiwr n[ Anme rr.dn~mie "
crimr~ r~rcnin rel.htions urc vtipulntcd G~ cxiqt bctw~cn thc~ perp~tr~tnr ~nd
the nbJr.c~t or the t~rgct of the ~rimp. ~nr px~mplc, n knnwn udventngcuus ~
' hgrmful denl, ~s per Artirle 220 of th~ P~nal Codc~ m~y b~ made only by nn
dfficiul nuthori~ed tn mak~ dr~ls by virtup of n lnw, regulntion, bylnw, nr `
dth~r lrgc~l ~rc, or has br~n given such rights on the bagis of other l~gitt-
mate mr~n~ (neerre Nn 7, 1976; SB, p~ge 12; Resolution 58-75-OSN1:, SB.~
png~ 7U).
?U~ Substnnti~hl problrms nri~c in tegtsl~ttnn ~nd, particulnrly, tn ~udiriF~l
pra~rct~r in thr clariEtcation oE snrne churacteriscic objec:tivp ~igns of
rcannm(c crimes.
A typicnl form of encroachment nn the socinlist economy m~y be found in
active ~ctinns vtol~ting the est~blished g~neral or specialized requircments
~nd rules governing the canduct of econnmic activities. NaturAily, ntso
encirely po5siblr ~re cases nE in~ction or Eailure co cnrry nut speciEic
economtc oblig~tions.
Character{stic of economic crimes ~re the complex combinetions nf actinns
and in~ctions, nr combinetions oE ac[Ive nnd pnssive acts of beh~~vior.
' ~requently the perpetrator begins with tt legitimatc action pursued in n
~ r~rt~in direction which, however, may be preceded, paralleled, or followed
by the nonfulfillment of strictly deEined ablig~tinns relat~d to securtty
nr rconomic expedtency me~sures or requirements following ~ difEerent direc-
t[on. The opposi[e is possible as well: The perpetrator may be inactive
~ legitimately and economically expedicntly, but it is prrcisely such tnaction
that must be preceded, paralleled, or followed by .~ctive economic actions
ti~ chr same or a diEferent direction.
b. 5vmc~ charactrristtc features of the action h~yve a further influencr on
the forms nf more complex economic crimes: a. a continuing economic crime
(Article 26 of thc Penal Code) is a complex combinacion of the basic Eorms
oE the corresponding executive action with specific and various committed
actions and inactions; b. extended economic crimes based not on the struc-
ture of the penat nocm or type of corresponding crime but on the legal
nature oE another law or legal norm specifically or no[ specilic~lly
stipul~ted by the penal code; c. specific more complex economic crimes
committed "repeatrdly" (Article 231, paragraph 1, i[em 1 of the Penal Code), ~
"systema[ically" (Article 242, paragraph "a," Article 233, paragraph 2,
Item 2, and Article 250, paragraph 2, item 1 of the Penal Code) or "exercised
as an occupation" (Ar[icle 234, paragraph 1, item 1 of the Penal Code).
c. One of the basic objective criteria which distinguishes economic crimes
from other crimes and from administrative violations or other illeg~l acts
is the extent of the harm or endangering of socialist economic accivities,
ie, the nature, size, or dimension are harmful consequences. A con-
siderable number of such actions are considered economic crimes precisrly ~
because of the size and significance of harmful consequences and their re-
flection in the development of the national economy, namely: "considerable
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f~Ok Uh i~ LC I ~11. 11;;1; l1NI.Y
~I,im;i~;c4," "cun~~tdera~blr 111r~~~1 inc~~m~," "r.nnqiJrrnbl~ mutartr~l benetl~y,"
~~~tlY~C 51xC~~~ ~~ftt~tl VcIIUC~~~ Ot' "m~~ynr harm." 'Chi~ ~5 t1 que~ti~n dC I,hE' g0-
c~~lled Enctual charactrri~tics which must bc ~stablished by the progh~uttdn- ~
tnvc~s~lg~tivc ~nd Judictul organs on th~ basiq di their E~rtu~l f~F~tures~
~xplutned in cerms nE cnntent, and A55E'45CCJ in term~ nf pcnal yignifiC~nc~.
~eg~rdles~ of th~ cyt~ybli~hrd criteri~ c~nd fndicators dE suprcmr court
pr.~r.t{rr~~ thr Judicinl nr~ans are expertrnrinR ma~nr difEtCUttieK in thrir
c~1~irl f(~�rit t~~n ~~nd prrrlwr rippl ic~sit inn~
21. F:ayrnci~hlly, c1CC{ut1S ~gc~inst che sncintist ~cnnomy are puniqhcd whcn
committ~d delib~rately~ tn the c~~s~ oE n subgrnup of eCnnomic crimea the
intrnc may bc only direct while in ntherq it mny bp direct or ~ventuel.
5hould crannmic crimes be committed with ~ direct intent, sub~ectively
chry ~7re charactertzed most tr~quently by chc sp~cial purpose, usu~lly
exprr.ssed in ccrms oE g~ining m~teriat benefits (Articles 222~ 224, ~nd 234
of the Pen~hl Code).
Of c~ll eronomic crimes ne~l~ct nnd failurc tn rx~rcise ndequnte control
(Article 219, paregraphs 1 and 2 of the E~cnal Code) nre puntsh~blc should
they involve carelessnesy as wcll. Accrpttng, on nn exceptinnnl b~sis, the
pun{sh~~bility Eor such uncaucious ~ctions, the legislator hAS also stipu-
la[ed ~ydequ~te grounds and guarantc~es: the aEfeCted sociai relr~tions must
be nf substantial socto-politic~l ~nd ,~uridicnl significancc; thc actinn~.
must present increased social danger; real and signiEicent damages must be
caused [o the enterprise or the national economy, and so on. Nevertheless,
the socialist legal theory is faced with the problem oE whether or not we
shoulcl rxclude the punishabilicy for an actton committed ag~inst the SACIJII5C
r~unc~my in gencr~l~ ca~sed by l~yck of caution, or ~~t least adopt. the poaition
c~f chr prn~~l code oE the GDR--that the acc{on must be deliber~~te--and thac
l~~ck of c~ution may have been displayed only 'n terms of generally dangerous
Consequehces. ,
22. Decriminalization is an essentiai trend in socialist penal policy.
Curren[ly it is most systematically and extensively applied in economic
crimes even though it does no[ follow a single line. Along with decriminal-
ization, the penal code applies recriminalization, ie, the restoration oE
penal liability should the same type oE action rccur aEter the perpetrator
has been subjected to nonpenal measures of inEluence.
'fhe penal code makes use of three basic me[hods for the penal trea[ment of
economic crimes of minor social danger.
a. On the basis oE Article 424, paragraph 1, of the Penal Code, the stipula-
tions of Ax[icles 31 and 32 of the Law on Administrative Violations and
Penalties are applied, ie, they are considered adminfstrative violations.
The main criterion here is the level of social danger of the action expressed
chrough two legal-technical methods: a. In the case of "minor cases" and
b. when the "value of the target of the action is minor." According to the
Law on Adminis[rative Violations and Penal[ics Eive "minor cases" of encroach-
mencs against socialist economy are penalized (Article 225, paragraph 6;
Articlc 228, paragraph 3; Arcicle 231, paragraph 2; Article 232, paragraph 3;
15
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( .
i~U{t Oh'H'1CfAL U51: c1NLY
~inJ Arttcl~ ~4~, nnrr~graph 5 nC thr E~enc~l Cndcr). Thc only r~~r n~ ndmin-
iwtr~tlv~ pcn~lty b~yed exClugtvhly ~n the "vc~luc o[ the nb)ect n~ thr. crtmc" ~
I:~ stipulntcd in the CdSe of fnrcign currency Crim~a f~s ~EI' ACC{CL@ 2Sn,
p~rngraph ~ of the k~en~l Code, yhould the valuc oE the Eorcign exchnng~
VE11UE9 nr property und~r foreign cxchnng~ control ranges Erom 2C en 250 levt~.
b. In twn CEfSi'S decriminnl izcd aet inns nrc~, nncc~ aguin~ ~onsidrrc�d ~connmic '
crimESS vinl~~ttnns of thr priC~ system (Article 225, parngraph 7) and d~-
crptton nf purch~~srr~ or cuqtomers (Article 232, pnregraph 4)~ 'Cf~is r~quirc~s i
thrrr prrrcquisitc;~: an ndminiscrative punishment must hove nlr~~dy :
he~~n impos~d nn the perpetratnr by decrpr en~cted fnr ~~ch a crime, consist- j
In~ ~~f "minar casE;" b. che ~
prrpetrator must commit the qame Crime con-
41(~CC~'d a"mtnnr casc;" c. at th~ time th~t the second crime has been ;
~ommittcd tess th~n one year has p~ssed since the commission of the Eirst i
crime. 'Chc perpetrator is held criminally liable for the second crime even ~
though it may be n"minor case~" `
i
~
c. Violattons of rental regulations ~r~ eonsidered n separate type of crime: ?
tk~e earning of rent~~l exceeding the lelgally admissible level (Articl~ 225a ~
oE the Penal Code). One of the conditions Eor this crimp must be the Eact
~hat the perpetrator has already been punished administratively for such nn '
action. The first occurrence is not sub~ect to penal regulations. The {
second nctinn is considered a crime providing that the perpetrator has
already been punished for the initial action before that. 'fhe period of
tfine elapsed Eollowing th~ punishment for the first violation is ignored ~
providing th~t the legal consequences of the administracive punishment are
s[ill on record. This is a case of a crime for a violgtion committed for thc~ .
second time.
23. ~inally, an immediate practical task affecting the penal theory stems
from the decisions of thc National Party Conference: co cl.arify the compre-
hensivr and complex problems of sensible and creative risk in production
work and its importance in terms of criminal l~w. According to the pre-
domina[ing concept in socialist legal theory, a justified production risk
is a separ~te circumstance which excludes the social danger stemming Erom
the c~m~aitted action. "Crounds for freedom of responsibility in such a case
consist of social useEulness of such manner oE carrying out professional
obligations, based on the pu~gose of improving the production process and
upgrading its productivity."
Despite this, a number of mat[ers remain unclarified in the field of socialist
legal theory: the legal nature of the justified production risk and its
signiEicance, types of risks, correlation between justified production risks and
other grounds or circumsca~~~es leading to the exclusion of the social
danger, guilt and [he illegality of the action, and so on. For this reason
the penal code does not contain stipulations regarding ,jusciEied production
risks even though a stipulation was considered in ane of the drafts of the
penal code. Judicial praccices, however, do not acknowledge its right to �
exist (Decision 1138-70-III, SB, pp 26-27). .iustified production risk is
Eoundonly in Article 169 of the Penal Code of the CDR and Article 217,
16
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rok u~~f~~ic:r~~i. u;~i. ~~NC,v
LL~ir ~ c~f thr Prn~~l Codr oC thr E'o115h I'c�dple's ~cpublic, by virtuc nC
whic:h c~rtuin actiong committed ~gnln5t the soCialtst eCdnomy bre not
cdnsidr.rcd crimin~l.
FOOTNO'CCS
l. `i'. 7.htvk~v, "Za Usuvur~hcnstvuvnne np Sntsinlistichesk~tn Orgnniznsiyu
nn 'Trudn i n~7 ptnnnvoto ~ukovodstvd na Iknnomikutn" [On Improving the
Snci~7lt~t Org~niz~~tion nf Labor and Planned Economic Manngement], Par~izd~t,
So[t~7, 1978, pagc lg.
2. 5Ee"Iteshenie i Teziyi nn N~7CSion~ln~tg KonEerentsiyu na BKP" [Decision
and 'Chcses of the N~~tinnnl Confer~nce of the BCP~, F'artizdnt, Sofi~, 1978,
NP g-9.
S~r T. 7.hivkov, Op. cic, pp 24-25, 27.
G. i. I3rezhnev, "Leninskim Kursom. Rcchic i 5r~~t'i" [The Leninist Course.
- Sprecl~cs .~nd Articles~, 41, Politizdat, Moscow, 1970, page 308.
5. 5ee "Keshenie i Tezist...," pp 2~-24.
6. Ibid.
7. ibid, pp 41-55.
8. 5ee T. Zhivkov, Op. cit, page 58.
9. "ReshEnie i Tezisi...," page 15.
10. Ibid,pp 47-48.
11. "Basf.c Stipulation on [he Role and Activities oE Judicial and Prosecution
Organs in the Period of Building of a Developed Socialist Society," adopted
with bectsion No 3~ of 27 November 1975 by the State Council of the
aulgarian People's Republic, Sofia, 1975, page 7.
12. T. Zhivkov, "Otchet na TsK na $KP za Perioda Mezhdu Desetiya i Edinadeset:y~
Kongres i Predstoyashei[e Zadachi" [BCP Committee Report on ~ne Period
Between the lOth and llth Congresses and Forthcoming Taslcs], Partizdat,
Sofia, 1976, page 113.
13. See V. V. Korobeynikov, "Strengthening Socialist F~egality in Economic
Activities Through Prosecutor's Supervision," SOVETSKOYE GOSUDARSTVO I PRAVO,
No 2, 1978, pp 106-114.
14. See A. S. Koblikov, "Social Significance of Criminal-Procedure Law and
Means to Upgrade It," SOVETSKOYE GOSUDARSTVO I PRAVO, No 9, 1978, pp 14-20;
A. A. Khmayrov, "Criminalistic Characterization of Crimes and Ways for
Obtaining Proof in a Criminal Case," PRAVOVEDENIYE, No 3, 1978, pp 59-66;
17
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~nK or r rc t~~t, u~r nNI.Y I
i
Erven C~ku, "Snmc rrnC~dural f~roblemg oE a Criminal 'Crinl Involving CCOnomic i
Matt~r~"(Repor~ 5ubm.tted ~t rhe Intcrnytion~l Con[~r~n~.e nn "CrimeH t ~
~ Cnmmitted in the Cour$~ oE ~conomic ACtivitieq") 5cgcd, 2-6 Octnb~r 1978; ~
Cc~zn Kntnnn, "'C~sks oE gookkec~ping Bxpercis~ in the Course oE providing prooC
~or Cconomic Crimes," (Report ~t thc samc conEer~ncr), 5eged, 2-6 bctober 1978.
1S~ Iv. Nenov, "Prestupleniya Protiv Sotsialisticheskoto Stopnnstvo po
t3ulgarskoCo Nerodnodemokratich~gko prnvo" [Crimes Ag~inst the Sociali~r
~c~nomy Aecording to thc 8ulgariAn Peoplp's bemocratic Law], SoEir~, 1953,
- p~hg~ 20.
th. "Kurs Snvetsko~o Uoolnvnu~o Prava" [T??e Cn~~rse on Sovte~ Cr.iminal. ?~aw],
Vnl V, Dloscow, 1~1)1, pa~e 3~8.
17. 5c�e P. T. Nekiplov, "Pony~ciye t Sistem~ Khoayaystvennykh Prestupleniy
po Sovetskomu Ugolovnomu Pravu'' [Concept and System oE Economic Crimes
According to Snviet Criminal Law], Rostov na Donu, 1963, p~ge 107.
18. "Kurs 5ove~skogo Ugolovnogo Prave," Vol V, pp 394, 403-418.
,
19. See Iv. Nenov Op. cit, pp 291 and following; Criminal Law, Special Sec- ~
tion, Vol 1, pp 315-320.
20. See, Eor example, Decree No 3, 1970, SB, pp 11-12; No 6/1971 SB, pp 10-11;
No 12/1973, SB, pp 13-14; and No 9, 1975, SB, page 16; Decision 73-74--OSNK~
SB., and Resolutton 3-77-OSNK, SOTSIALISTICHESKO PRAVO, No 5, 1978, pp 92-93.
21. See, for example, Articles 187 and following, Article 228 and following,
oE the Law on the Defense of the State [DV No 275, 22 November 1950].
22. "Kurs 5ovetskogo Usolovnogo Prava," Vol II, Moscow, 1970, page 397.
'
COPYRIC}IT: Edinen Tsentur po Naukite za durzhavata i pravoto 1979 c/o Jusator,
5offa
5003
CSO: 2200
18
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~OR O~~ICIAL US~ ONLY
CZECKOSLOVAKTA
NUCL~AIt RESEARCH INSTITUTE IN REi: STUDYING FAST BItEEDERS -
Pragu~ TFCHNICKY TYDENIK in Czech No 19, 1979 p 1
(Article: "Before Fast Breeder Reactore Begin Operation"J
(Text] The Nuclear Reaearch InstiCute in Rez is involved in studiea im-
portant for the development of nuclear power syaCem and technology not
only in Czechoslovakia but also in other CEMA member atates. It is
closely collaborating in particular with the Soviet inatitutes. In coop-
eration with the nuclear institute in Obninsk and with the direct partici-
pation of Soviet experta, Che inatitute in Rez ia dealing with such im-
porCant problems as improvement of inCernal screening of faet breeder
reactors. It is known that fast breeder reactors are aystems of the fu-
ture. Their advantage is that they can utilize nuclear fuel coneiderably
more efficiently and that they also produce more source of fuel than they
use (they are the so called fertile reactors). Fast breeder reactora
will be introduced in industrial operation by the 1990's. The Soviet
Union is leading in their development.
The reaearch tasks assigned to the institute in Rez will be reaolved in
three stagea: calculated and experimental tests of the passage of neutrons
through pure iron; transport of neutrons through sodium; and teata of the
proposal for internal screening with measurements ueing WR-3 reactor.
. The first stage took place last year. The calculations were conducted
during September and October with the participation of three Soviet experta.
Balls with diametera of 20, 30 and 50 cm were made of pure iron (bulk 31.8
kg, 107 kg, and 497 kg, resper_tively). Neutron source Cf252 was placed by
remote control in the center of the balls--source FJF1 10g n/s was used--
and after their passage through the iron the spectrum of the neutrons was
- � measured. The following apectrometric methods were developed and applied
for the measurements: 5cintillation spectrometer for fast neutrons with
a stilben crystal, proportional hydrogen computer, multisphere epectro-
meter. For comparison of the calculated and experimental solution one may
conaider the extent to which the applied system of constanta may be ac-
cepted and in what area the data need correction.
19
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_
I
FOEt OFFICIAL U5~ ONLY
The studiea in the �ield of acreening exemplify Che uray Czechoslovakia may ,
partic~.pate in the solution of urgent resenrch problems in cl.ose con~act
with Che Soviet institutea. -
Nuclear technology has been developing rapidly in the CEMA counCries. We
all are concerned aboue future needa of energy~ That 3s not expressed '
solely in the cooperation in reaearch; for inatance, the parCicipation of
Czechoslovak mechanical engineering in Che approaching developmenC of nu-
clear power ie sufficiently well known. ;
. ~
< -.,s. ~ , �
~ : ~ 1
~ ~ ~ ~ ~ ~ ~ ~
,
a
i
4 tt , (
~`E:~ r !
~ r ~ ` i
~ ~ ` +~M"'~~: ~
~ �v ~ ~ ~t. ~ ~ 'y _
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~ \ i
. M. ~ ~
� ~ >
. . ~ ` ~'Y.
. ~ / e : . ` ~ i
:i. ~ . , ~ 5 � ` .
~ - k Y,
~ ~Y I
" ~ ~ i
x ~
!~s F ,�s~'
3~ C ~ ~
s~ ~~d i
I
~ ~.f ; i
~ ~
~y: blj u~,L ~ n ;j?,. .
F : ~~X ~ ~ ~ y CS. ~
� ',S
~
{
a
..Fa~t.~ ~ !
. ~ I
Measurements of neutron passage through pure iron. P. Otopal ad~usCing a i
control device for the remote control placement of a neutron Cf2 2 source ;
into the center of the ball. The department of Czechoslovak Inatitute of ;
Technology in Prague made its premises available for thia purpose.
i
,
20 j
FOR OFFICIAL USE ONLY '
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. I
1~'OIt O~~ICtAL USI's QNLY
~r ~ ~ .
, ~ ,,,~"0""'~ ' ~~f
yNi ~~f , ~ .
~
~ ~
r , V~~
-
y ~g
~
t .,r~ '`i~' ,A J �
w~ ` '`t
~
y ~
,~ac
~ . ' ~ e~� ~ . �
' t
� �~.Y
c:h:.~ ~
1 t .
A view at the place of work: container, Cravel,, control device for remote
,control placement of the neutron source, and the balls (with 20, 30, and
50 cm diameter).
COPYRIGHT: 1979 - VYDAVATELSTVI A NAKLADATELSTVI ROH PRACE
9004
CSO: 2400
21
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' I
rn~ aN~ricrnL uti~: ONLY ~ '
;
,
C~ECHOSLOVAKLA
~I
I
i
_ ;
i
~
,
,
i
~
I
D~VELOPMENT OF CNC SYSTEMS IN CSSR NOTED I
~
Prague TECHNTCKY TYDEN.IK in Czech 22 biay 79 P 6 ~
,
[Article by Iv~n Krsiak, CSc, Research Institute for Machine Tools and '
Machining Processes; "The Development of CNC Systems With Miniprocessors ~
in Czechoslovakia"] ~
;
i
i
[Text] In recent years the machine tools industry has gone through some ~
ma~or changes caused by the ever more widespread use of miniprocessor- ~
type control equipment. Whereas in earlier years the applications of !
control equipment were confined to the use of so-called numerically ~
controlled (NC) machines, the output of which, as measured in terms of ~
single otorkpieces (not at a11 in terms of lot volumes), amrn.inted to ~
only a few parcentage points of the total output of all machine tools, ~
current miniprocessor control devices are now beginning to have an ~
impact on the industry as a whole, since they are now also being applied j
to the mAin classes of machine tools~ i.e., conventional or manual.l,y
controlled machines (in this case the term menual control refers to the
control of a machine by means of buttons on a control penel or in
accordance with a program which is manually insert~d by means of a push-
butt on keyboard into the memory of a simple machinF- control system and
not to the manual control of a machine by means of' cranks or levers).
At the same time, the similarities between NC machines and conventional
machines are constantly increasing, since the conventional machines are
being adapted to accommodate certain functional c anponents that were
originally intended exclusively for NC machines, e.~. feed drive f
mechanisms. ~
i
� What are the principal benefits of the application of miniprocessors in
~
the machine tools industry? The most important aspect of these benefits ;
has nothing to do with the advent of complex computational systems
stored on single silicon chips, that is, in terms of the density of
bits per chip in relation to its physical dimensions. Identical or even
greater bit densities had been achiev-d even earlier in semiconductor ~
memories and calculators. The main benefit created by the use of j
~
22 � ~
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I~Uk Ul~ l~ 1:C I AL USI~: UN[~Y
,
mirit~~rocessors consists in the fact tho~t thcy have ennb~.ed mgnuf~cturera -
of r.ontrol systems ~,tid, more and more oi'ten, the manufacturern of
_ m~LChine too.la them3elves to mfilce syst;ematic use of the c~p~bil.3~ti e~ of
~~~mi~nil,r.r tec}u~otogy ;~y;items.
Attempts to use camputers for the control of machine tools were in
evidence at the very outset of the development of NC systems, but at
that time these applications proved to be too costly. This situation
changed somewhat with the advent of minicomputers at the str~rt of the
197o's. The relatively low cost of minicomputers permitted their uge
for certain more complex applications. However, it needs to be aaid that
the cost of minicomputers was not so low so as to permit a general
changeover from fixed-connection systems (i.e., systems with invariable
logic functions) to computer-equipped systems (called CNC systems--in
English "Computei~ Numerical Control" systems). This conversion process
is ~ust now getting under way, thanks to the advent of minipracessors
and minicomputers.
Zhe first CNC systems equipped with minicomputers appecired on the market
as early as 1970. But the significantly more widespread applicstion o4'
computer systems in this industry did not take place until after 1974,
wt~en CNC systems equipped with miniprocessors appeared on the market.
Far exa.mple, at the Second EMO [expansion unknown] machine tools
exhibition held in 1977 in Hannover, out of rz total of 345 NC machines
that were on display, as many as 221, or nearly two-thirds, were
equipped with miniprocessor CP1C systems. This ratio was even more marked
in the case of lathes, where out of a total of 156 NC lathes on display
75 percent were equipped with miniprocessor CNC systems. ~arther
progress xas made last year in the development of CNC systems equipped
with miniprocessors, while the use of fixed-connection NC systems and
CNC systems incorporating minicomputers levelled off or declined.
The harnessing of microelectronic technology in the machine tools industry
paved the way for the emergence of a new class of control systems, i.e.,
systems with manual data input capabilities that are often referred to
~ ~,s HNC systems (Hand NC in English or Handeingabe NC in German). The
physical dimensions of these systems are small, and so they e.re often
mounted in machine control panels. They are also inexpensive and
, very dependable. In the case of these systems it is possible by
means of a;,ushbutton keyboard to set up or modify the progrem for a
given machined component directly on the machine. These systems are
very popula~:~ snd the number of their users is constantly growing. Since
the production of these systems is very simple owing to the use of
minicomputer technologies (the focal point of production problems has
shifted to the software area~, these systems are being produced more
and more often directly by the manufacturers of machine tools which are
23
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N'Uk UN'~'1CtAL i)51, t)NLY
~ble to do the begt po~nible ,~ob ~f sd~ptinp, them td the rcquir~m~ntn nf
thc ttitiC}1~t1eH in termn of their control~, in~tfsllnLian, r~nd hn~kup vitb
hi~;t~-voltapr feed box~g. Mnrketing i~su~d and the ~imp~it'iC~tion
of ~r_?�vir.i.ng Hr~e ulgo an imp~rtant ~vn~idert~tit~n~
mhe product;idn of mini~roce~~~r eygtem~ ha~ ~1~~ g~tt~n und~r wny in
~ome of th~ soci~li~t cr~Untri~~~ Amon~ th~~~ ~+e gtiauld m~ntidn th~
5~viet gyot~mg 1M~2 equipped With an ~l~ktrdnikg 50 minicamput~r and
~U`i7 equipped rrith sn NC Os'I' minicnmput~r, th~ Hungsrian By/8tEt11tl
Ue~imerik ~00 anci 700 equipp~d ~aith a Tex~g Ingtrum~nt~ 990 minipror.d~~crr,
nialc~g equippe~i With ~ Mot~rdl~ 6g00 mi~~iproc~nnor ~nd th~ Nun~r PNC 71~
sygtem With u m~nual ~s~ta input r~p~bility, the (Sb~ NC ~21 gy~t~m
~quipped With a domestically m~snuf~~tur~d U 80f3D miniprec~gg~r (~imilr~r
to the Intel ~008 miniproC~~sor), and the pr~li~h 1~rn Nuc~n ~00 gygt~m
equippec3 With nn Intel 80$OA minipror~~sbr produced und~r ~ 1ie~n~~
' purchr~s~a f'rom the 5Wedish firm Asen. Most nf
the~e ~ygtems aer~
displnyed at the exhibition of
marhine tooj~ prc~duced by C~MA Cduntrie~
h~ld in November of last yenr in Hrnd.
In line With worldwide trends in the develcp~ent of NC Lechnologi~g _
Work ha~ also gotten under vay in the CSSR on the dev~lopm~nL of CNC
~y~tems equipped with miniprocessors. The Teala plgnt in Kalin hgg b~~n
�rrnrking on the development ot' a minicomput~r-Lyp~ sygt~m ever since
1975. Due to the in~eceasibility of the needed miniproceeaor circuiLs
this development timrk has been carried out using nvailgble domestic
compnnents, even th wgh it is true that the rentral unit is
cocnpletely interchangeable With the Intel 3000 or, fnr gimpler
qpplications, the Intel 8080A miniprocessar syat~ma. At the present
- tim~ the Tesla-Y.olin plant is wrHpping up aork on the development of
~snd gnaring up for the production of the N5 660 system far the rontinuous
~:ontrol of lathe machine~. In addition. work is proceeding in thi~
entcrprise on the development of the t~S 680 system for ~re~i8iori
applfcatinn~ (mHChinin~; centers, continuoug milling). In th~ case
of both ~ystems a pro~rammable NS q00 serie~ automqtic rgn be inst[~lled
in housin~ module s+ith dimensions of 600 x 1~$00 x 600 mm for the
purpo~e of controlling nachine technological functions. The Research
In~titute for Ma?chine Tools and Machining Processes and the Tesla A.S.
Popov Communications Technology Research Institute ~re aorkin~y together
on the development of software for both systems.
In January 1977 xork got under xay at ZPA-Kosir (Instrument~tion and
Automation Plants in Kosir~, s+ith the cooperation of the Research
Instfr,ute for tdachine Tools and t~Sachining Processes, on the development
of sr~ orthogongl NS-632 system for drilling machin~s, ar~ NS-633 system
:or milling machines, and a continuous NS-642 sysLem for lgthe ma.chines.
This develo~nent ~rork is proceeding on the bs~is of an imported Intel
8080A miniproces~or system and a CMOS-type semiconductor memory with
24
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F'dk dM'~ tC t AL USE aNLY
regarve b~t~~ry pnWer. ~e~ta ~f th~ ftr~?b ~ayr~t~an in thi~ ~~r~~gi th~
N~ 63~, were guceeggful~y ~ompleted tn eon~unetion vith th~ FCR-y0
miliing ~chin~ produced by the Kurim M~ehine Too1 Factori~~~
CO~YR~BHT: Vyd~?v~t~l~tvi e nakl~daLel~tvi ROH Pr~ce, 197~
1181~
G~O: 2400
25
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i
FO[t OFFICIAI, U~B ON1~Y
- CZ~CH03LOVAKIA �
~CONUMIG EXPEttIM~NT PRINCIPL~5, P~tOBLEMS IN NUTSNELL
~ra~u~ PdLiTiCKA ~KONOMi~ No 3, 1979 pp 305-310
~Articl~ by Hana Brydlova: "The Comprehensive Experiment in MAnege~nt of
Effici~n~y ~nd Quality--IniCial Reeult~ of Ite Implem~ntation")
[T~xtj Th~ i5th CPCZ Congree~ seC e mompntnus Cesk to develop and further
improve the manag~ment of national economy ao that it may help to raiee nare
effectively the efficiency of production, activate th~ r~eerv~g and the growth
of labnr productivity, and upgrade the quality of production. In order to
fu~fill thie ta~k it i~ necessary to seareh for, test and introduc~ beet~r
methode of planning and comprehensive etimulation, and to enforce such n~ee-
ures that are in hermony with the tendenciea ob~ectively asserted in the "
devel~pment of the Czechoslovak ~conomy. The compreheneivp experiment in
management of efficiency and quality~ implemented since 1971's by 12 ecanomic
produrtion units~ repregents epecific fulfillment of the above-mentioned ;
rEfortg.
Principles of the Experiaient1
~
The experiment in managecient of efficiency and quality is a compreheneive ex-
periment in the sense that its purpose is to teat new factors and tools af-
fecting efficiency and quality in every area of the plenned management eystem~
in other words~ in the process of planning, material incentivea, and in rais-
ing reeponsibility on individual levels of management. In addition, ite pur-
pose is to help implement the principles of organization of the bage of pro-
duction, With an emphasis ~n the concern and departmental form of management.
At the same ~ime, the comprehensive character does not imply that e~~ery tool
and every factor will be tested in every area of the reproduction procpes,
because the effect of some of them is regarded as satisfactory, irrespective
of the fact that certain measurea have already been adopted in previous yeare.
Planning ~
The basic prerequisite for a more efficient management, particularly es con-
cerns planning and material incentives~ is the principle of a long-range
' effect. The situation that has prevailed up to now will be gradually changed
so that the five-year plan will become the basic tool of tnanagement.
.
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A~~drdingly, ehe fulfillmpnt di thp pl~nn~d Cg~k~ wi11 b~e ~~~~~~~d f~r th~
~ntire 5-y~gr p~ri~d, nAmely, in individu~l yp~r~ ~umul~eiv~ly from th~ b~gin-
ning ~f thh 5-y~~r p~ri~d. The 1~ng-r~ng~ ~ff~ce gnd ~t~bility naeutially do
noe mean ab~olut~ ri~idity. in th~ fr~m~work of th~ir long-rang~ ta~ke
tndividu~l ~ronomic production unie~ will hav@ td eope with th~ eff~ct~ ~e~m- -
ming from ~eonnmie life, and ehanges on ~he e~ntral 1ev~1 wi11 be made only in
~~rinug ~ageB~
'Cn a c~rt~in ~xt~nt thc prineipl~ prpfprring ehe er~ation ~nd fulfillment of
th~ progr~~~iv~ plang dv~r ov~rfulfillment of limited pi~ns i~ ~nhane~d in rhe
~xp~rimpne. Prpf~r~nee for the progrp~~iv~ plan i~ aff~cted ~bov~ all by the
introdurtinn of long-rang~ ~eonomic c~nditiong gnd ~tandard~ (for ~ 3-year
p~ridd) ~n gg tn ~liminatp th~ effect of support to lagging economic produc-
tion unie~ again~t tho~e economic production unit~ that are overfulfilling the
rdgk~ of th~ five-y~ar pL~n. The principle of a long-range effecC will a18o
fnvnrably infl~~nc~ a pr~mpter fu1fi11ment of rationalizatidn ta~k~ becau~~
the ~adn~mic productidn unit~ gain from the o~hieved effert~ high@r r~~ourc~a
fdr th~ir m~e~rial incentiv~ fund~. Mdr~ov~r, cht long-r~ng~ eff~ct ie en-
forcpd in thp gtandards ~et for th~ wa~e ar~~, in th~ Ar~a of limited inve~t-
mentg (th4 fund for development) and in cngh lncenCivee for the reeult~ oE
expnrt.
Th~ linkagp of the mobiie factor of aages with profitability of th~ fund~ of
production actg in support of the progres~ive plan. Unlike in thp plan fnr
197~-1980, the draft for annual plans has given the economic production unit
the ri~ht to plan a higher mobile factor of wages in the extent proposed for
highpr proEitability of the production fundg. For the time being, the exis-
tpn~~ ~f the i~dicetore determining the creation oE funda of reaarde exerting
an antistimulating effect on the progr~ssive plan but demongtrating a poaitive
effect on the implementation of mandatory tasks of the ennual plan ha~ not
been resolved.
~inancinl Management
The concept of the experiment strive~ fc+r +^r~na{f{~e~;OT1 of che khozrashchot.
In this conjunction, the financial plnn and financiel-economic tooli? have an
important role. Profitability measured according to the production, funds, and
the sy~tpm of etandards for personal, collective and material incentives of
th~ pnterprise will becoa~ important tagks of the five-year plan in the experi-
mentir:q economic production units. Proportionally with the raise in a~atsrial
stimulation, efficiency of economic sanction aleo Will be increased.
The fnllowing principles repreaent a specific form of intensification of the
khozrashchot and application of standards:
--to ~xpand the scope of the wage means contingent on profitability of the
funds of production and on determining indicatore;
--to raise the resources of the development fund and to enhance the atimula-
tion by linking the fund for development with the profits in foreign trade;
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--~n in~r~~~~ eh~ ~ffi~i~ncy of th~ fund Enr euieural and ~oGial n~~ds by
linking th~m with the re~ults df fareign ~rad~ and pric~ advanr~g~a f~r pro- .
du~eg df ~up~rior kechnological ~nd economic grade;
--to inCroduc~ the fund of tangibl~ etakee in the reeult~ of export; the g~n-
~ra1 director hae the right to u~e this fund according to the regulationa on ;
grant~ nf epproprtate incentive funde;
--eo ~timula~e p~rmanent reduction of eupplie~ on the baeie of their acceler- ~
ated turnov~r by tranefering seving~ in th~ dev~lopment fund; ~
--to ~nforce sanceiong for ~xc~eding budget outlays in conetruction, for a ~
f~ilur~ to meet th~ technical-economic indicator~~ etc. ~
1
In the ~rea of financial man~gement the ~xperiment wi11 test thp effect.of ~
~~ev~rsl n~w f~rtors on the sector of the financial plan, paymentg to the gtate ;
budg~t, ~tc~ in nther words, faetorg activating the effect of finances, how-
ever, not in an isolated manner but in a linkage with other areas of the eyg- ~
tem of planned mnnagert~ nt. i
~
in th~ ar~a ~f r~pr~duction df ba~ic f~ndg the experiment is focused particu- ~
larly on limited inv~gtments. It aima at achieving bettpr efficiency of the
fund~ spent for thp purpose of maximizing the shgre of progreg~ive programs of ;
modernization and rapidly returnable nctiong, Financinl r~eources for guch ;
actions must be created by the economic production unit ~ccording to set norms. ~
A certain part of the meang will be totally designated for superior organs,
ngmely, for decieions on programs that required enlarged labor force and
importe from the capitaliat states, and furthermore, for actions implea~enting
the tagkg of socialist economic integration, technological developenznt and ao
on.
Regulation of the Wage Development
In the area of planned regulations of the wage development the meagureA are
oriented so as to reinforce the motivating function of the system in order to
prevent any weakening of its control function. The motivating effect is
focused on higher efficiency and quality of all work and, at the same time,
on exertion of direct economic pressures on eaving of human labor while making
its abaoluCe savings more advantageous. The level and dynamiam of tariff
wages are contingent on th~ amount and efficiency of human work and, further-
- more, on the type of the work and working conditiona. This linkage determines
the development of the essential part of the wages. The supratariff factor
motivates specific results of work, its efficiency and quality. The regula-
tione of this Eactor depend exclusively on indicators of efficiency and qual-
ity. The potential complex exploitation of the wage resources is being test-
ed simultaneously because the stimulating effects of both thoae wage factors
are interrelated. This interrelation will gradually gain strength.
Creation and Planning of Prices
In the planning and setting of prices a more flexible and thorough enforcement
of the criteria of socially necessary outlays for production and utilization
of products, and a more intensive effect of prices and price ceilinga on the
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~eimulnttdn af ~fficient inn~vati~on n� prnduct~ ~nd qunlity nf ~~rad~ction gr~
f~1ldw~d nnd th~ prinriple df pri~~ unity i~ being nb~erved ~C rhe game tim~.
'Th~ fnrm~ ~f the interr~lation in pl~nning nf pric~~, pric~-g~tting ~nd priCp
~timulation wiCh ~th~r ~~etnrs of th~ plnn, wieh ecnnomiC too1~ and with ehe -
m~e~rial inc~ntive ey~tem ar~ being teeted ~imultan~ou~ly.
.
Technieal Develnpment and Quality of PrnducCe
Thp GItAR~~g implem~ne~d in the mgnagem~nt of teehnd~.ogie~l d~velopment ar~
foCU~ed prim~rily nn ~ uniform method of creation and proces~ing of plane for
teChnical d~v~lopm~nt on individual levelg of management and planning. For
that reagon, codrdinated plann for technological development and plane for the
fulfillment of the ta~k of t~chnological development and, furthermore, a uni-
form mpthnd for evalu~tinn of planned tagk~ are being introduced in the
~conomic production unitg.
Men~ur~s in th~ erea ~f qunlity control will eliminate the negntive effect of
indicators focused on qunntity, and improve the efficiency of tools focuged on
~ffiei~ncy and quality. ~or that purpdse the indicator of innovations and
high~r t~chniCal-economic level of prnductn is plannpd. In eddition, credit~
for prnduction included in the plan were regtricted, th~ toole of material
incentives gnd exploitgtion of priCes were modified.
Foreign Trade
In this area thc experiment is fdcused on the creation of atimuli for the best
posaible development oE ~fficiency and extension of t}ie volume of eEficient
report, in other words, it endeavors to render efficient export more advan-
tageous and tn foster its preferential development. More powerful incentives
have been created in the case of inefficient or insufficiently efficient ex-
port in order to make export more efficient by improving its quality and re-
ducing the costg of production. In the first place, under the term of
efficiency of export are considered reduction of actual internal outlays in
production of foreign exchange by export and at the same time, obtaining the
best possible prices on foreign markets. Simultaneously the responaibility
of the khozrashchot sector for foreign exchange returnability, high efficiency
of the applied foreign exchange funds and their savings in import have been
considerably more emphasized.
Initial Results in the Implementation of the Experiment2
, Although the experiment has been in effect for a relatively short period
(specifications of the plan for 1978-1980 were made in the first quarter of
1978 and the implementation of the experiment itself did not begin until the
second quarter), a posit:ve aspect of its implementation is reflected by the
fact that economic thought and the approach of economic workers in the econom-
ic production units and enterprises to the problems of efficiency are gradual- ~
ly undergoing a change. Its specific expressions are some favorable results
in the first 6~onths, particularly in indicators of efficiency, as well as -
,
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r~spnn~ible gpprnanh~g ~n eh~ p~rc nf eprt~in ~~onnmic produCCion unitg Co ~
highpr effici~ncy ~nd C~ th~ adoption of advanced plan~.
N~Curally~ whilei pr~pgring Ch~ir plan for 1979 all econ~mic producCion unirs
did not approACh the fulfillment of planned e~ek~ and decisive indicatore,
~u~h ng the sCrucCUrp fnr the utilization of prod~ction and the indicator of ;
eECici~ncy, in a desirabl~ way. Not only are their approach~~ considerably '
differ~n~iated, but in g~n~ral it ~ppears Chet thu~ far there is no really
a~~~r~:neiul difference betw~en the exp~rimenting and oCh~r economie prnducrion
. units in rhpir approach to the propo~ed plan. f
i
C~rtuin digturbing influences of th~ external environment (the non-experiment- ~
in$ cnt~rprise~) gre reflected in experimenting enrerpri~ea, such ag the over- ;
egtimated indicators of grosg production and production of goodg, and a
digregard for the indicator of quality. At the eame time~ this does not imply }
that the above-mentioned indicators ahould be eliminated, but rather, that the f
�ulfillment nf the plan musC be assessed comprehenaively, with consideration !
tn rhp agpece of production es well ae itg utilization, and parricularly its '
effiriency. Snme difficulries and complexities atem from the fact that tt~e ~
experimenting gnd other economic production unitg must be managed by central ?
organs according to different principles and regulationa. '
Planning Activities
_
When bringing the Sixth Five-Year Plan up to the conditiona of specification~ f
fnr tlie 1978-1980 plan, the most difficult problem was to determine the tnska ~
for pxport, particularly for export to the nonaociuliat countries. In com- ;
parison with the guidelines for the Sixth ~ive-Year Plan, the task for export
~of the machine-building economic producKion units was reduced and the tagk for ,
export of consumer goods raised.
The economic production units under the authority of the Ministry of Industry f
of the CSR have criticized the fact that the demanding tasks for the 1978-1980
period in final utilization of the production have not been supplied with
adequate amounts and structures of raw materials and materials from domestic
sources and import; the economic production units demand that in order to
intensify the long-range effect of the plan, the economic production units be ~
` acquainted to the necessary and global extent with basic inputs of raw mater- t
ials for the same period. Moreover, these economic production units have not ;
fully resolved the problem of financing the investments in the 1978-1980
period. '
_
!
There are problems also in the relations of the economic production units with f
the bank. In view of the unresolved issues of financial funds for the plan,
the bank did not conclude practically over the entire 6-month period any ;
credit contracts with nwst of the experimenting economic production units, ~
which were supposed to establish a basis for the relations of the economic i
production units with the bank. With some exceptions, ad hoc arrangements !
existed in credit relations. ~
,
,
~
1
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~ox o~~ictAt, us~ oxt.Y
N~v~rCh~l~s~, mn~r of the economic: prnduCCinn unirg hav~ pnsitiv~ly A~g88HE'.cI
Ch~ gp~CifiCnCion of the plan for 1978-1980 ~g ~ fncCnr with n lnng-rnngp
~Ef~ce ttnd ~g ~ f~eCor pr~viding stability for Ch~ pl~n. TO~~YAt1C~ ~11 selecr-
~d indicaCors ig one nf the main aepecrg nf ehe gy~tem of long-rnnge effectg
ng weLl ~s of fl~xibility. It mnkes it pogsible Co react flexibly Co changing
Conditinns withnut a chang~ in the p1an~ The economic production units
~ppreCiatp this aepect, but they criticize the epecification of I:he plan con-
eerning eh~ number of workerg (indicator of the increment of workere has been
speci�ied, but not their totel number, which depends on the initial situaCion).
'~h~ ~orr~lnCion nf th~ principle of long-range effectg with the implementa-
tion of certain tolerances musC be consistently enforced, including an anuly-
sis nf the effecCs of the tolerance system. The Ministry of Industry, for
exemple, points to th~ problem of noninvestment imports from Che capitaliaC
countries. Although it does not represent a mandatory indicator over a pro-
longed perind, for som~ economic prod~cCion units iC ig a decisive prerequisite
fur their long-range plan as well ~s for their annual plan. In oCher cases
this concerns evaluation of the volume indicator of final producCion (for
exnmple, export, delivery for the domestic markeC). The experimenting uconomic
producCion units cannot reduce their roral finnl output becau~e only plus
tolerance applies to it. Moreover, the requirement of higher efficiency is
linked with the necessity to substitute import with cheaper domeatic materials
and raw mnterinls. In terms of the system, this substituCion is extremely
difficult, becauae it is in confli~~~ with the indicator of deliveries for the
domestic market in whnlesale prices (plus tolerance only) and also, it may
affect the total final output as well. Therefore, it appeara advantageous to
expand this tolerance to the minus r~nge tno~ which would solve the problem of
volume indicators in the experimenCing economic producCion units. At the same
Cime, however, this whole problem must be resolved also in terms of balancea
in the draft of operational plans.
There are some oCher data in the area of planning that are noteworthy. On the
whole, the economic production units approached the differentiated specifica-
tion of quality indicators in a positive way; also, in the area of technical
development and quality, the so-called coordinating plans and plans f~or the
fulfillment of tasks of technological development were applied in harmony with _
the regulations of the experiment. However, the departmental secCor did not
issue any mandatory specification for the whole 3-year period in every area.
Of course, some mandatory indicators specifying programs of innovation and
quality of products have been stipulated, while the ascending trend had been
achieved in general year after year.
Another problem appeared in the specification of the indicator of ceilings for
investment and noninvestment imports for scientific and technological develop-
ment in view of the fact Chat this indicator fails to differentiate between
imports from the socialist countries and imports from the capitalist countries,
nor between import for investment and import for noninvestment purposes. As a
result, some minisCries did not specify this c+eiling at all. Therefore, it
must be modified Co some extent.
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~urehermore, ~s ie eurned our~ mogC econnmic production unit~ ep~Cified tA9ItA
and indicaCors for their enCerprises for a 1-year period only. Although the
meehod of specificgtion ia in the ~uthor~.ty of the general director of Che
ecnnnmic production uniC, an atrempt muat be made to intensify long-range
planning also on the lower levels of managemenr.
C~rt~in shortcomings were evident in grants of bonuses and rewardB to leading
formatinns in the enterprise. The trend toward uneven specification of rhe `
~innual plnn for individunl qunrters, which m~kes iC possible to obtgin bonuses -
for ut legst rhree quarters of the year, is not only detrimenta]. to a sCeady
Eulfillment of ~nnual tasks, but iC also contradicts ehe principle Chat a
maJor pnrt of rewards and bnnuses be contingent on the fuLfillment of the
tnsks Edr Che whole year. ~urthermore, iC is noC correct to set identical
r~tes For bonuses in individual qunrters since this fails to stimulate inCerest
in the fulfillment of rhe rasks for the whole year.
One of.tt~e nims of the experiment is to stimulate the inCeres~ of Che economic
production uniCs and enterprises in adopCing progressive plans. Some economic
production units intensified their plan for 1978, particulArly indicators of
quality, and thus, they avt~iled themselves oF Ct~e opportunity to give
preference to the plan in terms of material incentives. The drafts for the
plan for 1979 demonstrated only slight interest in the adoption of a progres-
sive plan; some economic production units submiCted such a plan even with
certain obvious negative deviations. Since sufficient data are lacking for
the evaluation of this fact, thus far it cannot be said unequivocally whether
~ the principle of preferences in the fulfillment of progressive plans, which is
anchored in the experiment, is, or is not, intensive enough.
Experience in the Price Area
Stimulation of savings of materials and innovation in pro~duction was tested in
the area of price stimulation along with the stimulation of the technological
standard of the products, qualiry of the products, fashion and luxury goods,
and along with the observation of price ceilings. At the same time, measures
were adopted for price-setting and :or regulation ~f deliveries of the latest
fashion goods and luxury products due to their inadequate development and pro~
duction. Experience has shown that higher rates of price stimulation, intro-
duction of differentiated processes in planning that production, and the link-
age o� price stimulation with allotments to material incentive funds stimu-
lated the manuf~cturers' interest in the production of technologically
advanced, top-quality products and in fashion goods.
The conditions for the application of higher rates in price stimulation also
led to pos~tive experience in tests of price stimulation in other organiza-
tions (introduced on 1 September 1978).
The experiment has further shown that changes in wholesale prices evidently
must be approached more efficiently in order to generate more intensive
interest in efficient production on the one hand, and, on the other hand, to
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prev~nC Che orgnniz~Ciong from cushioning th~ condietons �or Che fu1fi11menC
of Cheir own producCion at the nurr~nt ie~~i of wholeeal~ pricee.
C~regip problems appegred during the negotiaCions oE the ch~ngeg of prices
w1Ch the coneumera. ~or inst~nce, fareign Crade organizaCione are re~ecting
changeg of prices thaC aggravate their planned reproduction indicatora~ even
if thoee are the prices of highly profiCable export goods. AC tihe same tim~,
their low profitability in wholesale pr3.ces doea not seimulate the manufac-
turerg ~nough to increase rheir production for export.
Wgge Regulating and Material Incentive ~'unds
Efficient regulation of ehe basic fgctor of wage funds of economic production
uniCs depends primarily on Che selection of the performance indicator. The
indicator of constant units of work, prod~ction of goods wiChouC Che effect of
unplanned changes in the line of producta, and fulfillment of the plan of
production proper were applied in 1978~ In general, however, the performance
indicator predominated. It is highly desirable ChaC the regulation of the
basic wage factor be expediCiously reoriented to constant units of work or
constant wage units or, Co sCandard neC production.
Changes in Che system regulating the development of wages reflecCed in the
tools of material incentives have been thus f,ar inconsistent. In payments of
bonuses and grants of rewards the focus on the indicators and conditions of a
quantitative character continues.
Material incentives of the leading workers are based on the evaluation of
their activity by a cumulative method from the beginning of the experiment.
The view that the workers of an economic production unit or of an organization
which has made up for the indicators unfulfilled in previous years should be _
entitled to receive annual rewards also for the past year~ is not entirely
consistent with the principles of the experiment. Such a process would weaken
the tangible stake in a steady fulfillment of Casks. So long as the economic
production unit fulfilled the essential indicators in the initial period and
not in Che following years according to the cumulative evaluation, it is
desirable to reduce the annual reward more efficiently and thus to increase
the pressure for a steady fulfillment of tasks and, simultaneously, to compen-
sate material benefits derived from rewards granted i~ past years.
In general, the following situation is evident thus far in the area of crea-
tion of material incentive funds: the fund for technological development has
been completely centralized on the level of economic production units; Che
fund for development also shows a high degree of centralization; in agreement
with the regulations of the experiment, the fund of rewards is being created
on the level of economic production units and distributed to individual enter-
prises according to the results achieved; the construction fund has been de-
centralized in enterprises in about one-half of the economic production units,
or as the case may be, it is created in the economic production units as well
as in enterprises; the fund for cultural and social needs is completely within
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the ~nmp~e~nc~ nf ~ne~rpri~~s, whi1~ �undg for materi~l incene~.v~~ ~.n expore '
~nd r~g~rve fund~ have be~n cenergliz~d nn the 1~ve1 nf ~cnnomi~ produnrion
unies in Che overwh~lming ma~ority of cases.
~innnnial Management
Arrnngements in financial-economin tOb15 n� fore~.gn trgde ~nd Crans�er of g
pnrt nf r~wardg from the rewardg fund to Grage ourlays entail a reducCion in '
th~ plnnned prdduction of profitg by approximately 23 pernent. Thig i~ ,
reflecred in rhe r~turns tn rhe state budget~ Simultan~ouely the reaourceg
for digCributinn and dispognble prnfits of the economic producrion units gre ~
reduced. '
The level of the fund for development and its share in financing o� the invest- ,
ments considerably differs in individual economic production units, according
to the typ~ of reproduction of basic funds. At the gamp time creation of the
develnpment fund Calls for higher interpst on the part of the workera in the
economic prdducrion uniC in obt~ining n~cegqary resources to cover the needs ;
of the development in the area of limiCed invesCm~nCs. ;
Foreign Economic Itelations
The 12 experimenting economic production units and 14 foreign trade orggniza- ;
tions concluded 25 agreements on participation in economic results of export.
i
'1'he experimenting enterprises demonstrated slightly inferior reaulta in export
than industry as a whole. In the first 6 months of 1978 the plan for export ~
to the nonsocialist sCates was not fully met, while exporC to the socialist
states was slightly surpassed. In the draft of the plan for 1979 the economic
produceion unit proposed lower deliveries to nonsocialist ~tates as compared ~
with the specification of the tasks for 1978-1980. In this conjunction the
economic production units are stressing their difficulties in the fulfillment
of investment and noninvestment export, while the foreign trade organizations, ~
on the contrary, are calling attention to the delays in introduction of inno- ~
vations, prolonged terms of production of samples of innovated goods, and
inferior quality of products. ~
!
The tangible stake of the economic production units in export was considerably {
simplified in the center-economic production unit relation as well as within
the economic production unit. The level of involvement appears on the whole ;
proportionate, with the excepCion of highly efficient economic production j
units with a large share of export in total sales. ~
i
In the area of import the current system of management has not been efficient .
enough in stimulating savings, as required by the situation of the Czechoslovak ~
economy in the sector of foreign relations. !
~
The tangible stake of foreign trade organizations is also unsatisfactory. ~
According to identical evaluations made by foreign trade organizations, ~
~
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ccnnnmic prnducCi~n unit~ und miniyCrieH, r~ mere ~eak~ in tl~c~ dif~~ren~e be- -
Cween th~ ~e~nd~ird �c~r th~ inc~nCive~ cnrr~gpnnding tu Ch~ r~prnduCtion
indicaedr of d~liveri~s �ulfilled by Che ~ppropri~Ce ~cnnnmiC prdducrinn unit ~
in Che current y~~r as comp~red wieh the rEprnduction indtcaCnr in the pr~ced-
ing y~ar has prnv~ed ung~Ciafactory~ Iee imprnv~ment cn11s for Che applic~tinn
nE principleg slmilar tn ehnse ~ppli~d in th~ acanomic productinn unitg.
'Th~ Cons~quenceg nf d~terinraCing re].~tion~ in regl exch~ng~ betwe~n export
nncl impnrt ~nd ~r~du~lly worsening bal~nce nf tr~de gnd p~ymenC~ cnnnect~d
wieh th~ dev~lnpment in wnrld nwrk~Cs cc~ll nn Che on~ hand fnr plannpd cr~n-
tl~n nf gy~t~mic precnndirinns bas~ed on ~xp~rience from the implementation oE
_ rti~ ~xp~riment, and ~n the other hgnd, fnr n gradunl introduction nf structur~l
ch~ng~s that will securp prnduction and exporC of prdducrg marketable even in
th~ mnse sophisricnted mnrkets.
The ~nmprehensive experimenC in mangg~menC of efficiency and quality repre-
s~ntr~ n mpuningful step in the procesg of improvement of the plnnned mc~nage-
m~ne. Its purpnse is to r~snlve or gr~du~lly eliminate tho~e shortcnminge
gnd problems that impuir efficiency of social producrion and neg~tively affect
- the ~atisf~ctinn of the needg of foreign ~~nd domeytic murkeCe.
Inieinl experience has shown that some negntive phenomenu could Ue succeseful-
ly eliminated and that the eronomic producCion units and enterprises arp
demonstraring more initiative and responsibility in their approach, especially
to the problems of efficiency.
Nevrrtl~eleg~, some problems are still in evidence. The Covernmental Committee
for the Problems of planned rianagement of Natinn~~l ~conomy, fully gwnre nE
the problems, is trying to deal with them step by step. This calls in partic-
ulur for a radical solution of the effect of volume indicators of production
in experimenting economic production units, for an assessment of the method of
determining [he number of workers according to the mpthod of total capacities
(and not according to the method of increments), for an evaluation of the
method for determination of long-range mandatory noninvestment imports for
scienCific and technological development, as well as for an elaboration of
proposals for the allowance of minus tolerance in the total performance
indicator, tn make it possible to resolve the change of conditinns in order to
improve the efficiency of the national economy.
The production sector, i.e. the experimenting economic production units3, is
calling attentinn to certain problems and shortcomings. Their experience has
shown rhat all conditions and prerequisites for an efficient performance of
the tools of management have not been completely prepared and therefore, the
tools which in all their measures would directly follow t~ie implementation of
scientific and technological progress and growth of efficiency have not been
so far realistically and completely coordinated.
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~OOTNOT~S
1~ Prepgr~d on Ch~ b~sis of the C~xC of Che Comprehensive Experiment approved
by the deciaion of the Preaidium of the government of Che CSSR on
8 Denember 1971.
2. prep~r~d on rh~ basis nf rh~ report by the Governmental Commirtee for the
rroblemg of pl~nned Management of NaCional Economy, presented to the
gt~vernmenr nf ?;:~e CSSft in December 1978.
3. S~e for example arricles in HOSPODAItSKE NOVINY Nos 30, 33, and 37, 1978.
COPYRIGHT: ACAn~MIA, Praha 1979
9004
CSO : 2400 E~
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