Last month brought more news from Russia in its ongoing effort to step up its anti-corruption efforts. On May 15, 2013, the Russian banking industry was stunned when law enforcement authorities arrested Vladimir Golubkov, the Chairman of Joint Stock Commercial Bank Rosbank (“Rosbank”) on suspicion of commercial bribery.1 Mr. Golubkov’s arrest was one of the most widely reported cases of alleged commercial bribery in Russia, as a result of his high rank at Rosbank and Rosbank’s status as one of the top ten Russian banks and as part of one of the world’s leading banking groups, Société Générale.
Mr. Golubkov, who had a long history of employment with Rosbank that predated Société Générale’s acquisition of the bank, was arrested in his office while allegedly receiving a bribe in the amount of RUB 5 million (approximately US$ 160,000). According to law enforcement authorities, it represented the last tranche of a bribe totalling approximately US$ 1.5 million, paid by a businessman in exchange for the extension of a loan agreement and the reduction of the loan interest rate and monthly payments. Mr. Golubkov’s arrest was recorded on tape – which was subsequently made available on a Russian government website.2 The tape does not document where the cash came from, or whether or how Mr. Golubkov received it, but instead simply shows the cash, already in stacks, sitting atop his office desk.
According to law enforcement authorities, this money was transferred to Mr. Golubkov by his colleague, the Senior Vice President of Rosbank, who was allegedly observed receiving it from the businessman the day before. Both Mr. Golubkov, who has not admitted to committing a crime, and his colleague, who reportedly confessed to acting as an intermediary for Mr. Golubkov, are currently under home custody.3
They are accused of violating Article 204 of the Russian Criminal Code, which criminalizes commercial bribery, defined as an unlawful transfer of money to persons occupying managerial positions in commercial organizations for the purpose of influencing their actions or inactions in performing their managerial duties. Criminal penalties are extended to both bribe givers and bribe takers, and include fines in the amount of between 40 and 70 times that of the bribe and imprisonment of up to seven years. For bribe takers (as Mr. Golubkov is alleged to be), penalties may also include disqualification from occupying a managerial position for up to three years.
The case is currently under investigation. If it results in an indictment, it will be transferred to a court that will decide whether Mr. Golubkov and his colleague are indeed guilty of the alleged crime.
Mr. Golubkov’s case may be quite sensational – given that it resulted in a major management shake-up at Rosbank4 – but it is not unique. In 2012 alone, Russian authorities prosecuted more than 1,200 commercial bribery cases. In the banking sector, three managers of the Distressed Assets Department of OJSC Sberbank of Russia were accused of offering to liquidate a businessman’s indebtedness to Sberbank of RUB 700 million in exchange for a bribe of RUB 100 million, to be paid via an intermediary.5 Just a week before Mr. Golubkov’s arrest, the head of a regional branch of CJSC European Industrial Bank was accused of extorting a one percent kickback from a businessman’s banking operations in exchange for unblocking his bank account and lifting cash withdrawal limits.6
Foreign and Russian companies that operate or invest in businesses in Russia would be well-advised to devote substantial attention to anti-commercial bribery compliance. This includes ensuring that their compliance policies cover not only improper payments made to government officials, but also improper payments to managers of private companies that fall within the scope of Article 204. Further, companies should ensure that their policies explicitly prohibit bribe taking, something not always incorporated in anti-bribery compliance programs.
Current practice shows that the receipt of bribes is of particular interest to Russian authorities, and that even the mere accusation of receiving bribes may be detrimental to business, as the police do not hesitate to release the information about alleged violations before a trial or court determination of the merits. Recent events in Russia demonstrate the wisdom of firms implementing policies, procedures, and controls that embody a “golden rule” of compliance – do not allow officers, employees, and intermediaries to receive that which they should not give themselves.