Foreign bribery

Legal framework

Describe the elements of the law prohibiting bribery of a foreign public official.

Article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity) prohibits the bribery of foreign public officials by legal entities. This offence punishes the illegal transfer, offering or promise of money, securities or other property, valuable services or other property rights to a foreign public official on behalf, or in the interest of a legal entity, in return for the foreign public official using his or her authority to act in favour of the legal entity.

The bribery of foreign public officials by individuals is prohibited by article 291 of the Criminal Code (bribe giving). According to the applicable court practice, this offence punishes bribe payments in return for (1) a foreign public official using his or her authority to act in favour of the bribe giver or the persons represented by him or her, (2) the foreign public official enabling another public official to take such actions, (3) general patronage or (4) general connivance.

Further, article 291.1 of the Criminal Code (mediation in bribery) punishes individuals for the direct transfer of bribes to foreign public officials on a considerable scale (ie, exceeding 25,000 roubles) on instructions by the bribe giver or bribe taker, as well as promises and proposals of such transfers.

Smaller bribery offences committed by individuals (those involving bribe payments to foreign public officials not exceeding 10,000 roubles) are punishable according to article 291.2 of the Criminal Code (small-scale bribery).

 Bribery committed by legal entities outside Russia

Since March 2016, Russian law enforcement authorities may also prosecute domestic and foreign legal entities for bribery offences committed outside Russia. Such extraterritorial prosecution requires additional justification – the offence must be directed against the interests of the Russian Federation or such possibility must be established by international agreements acceded to by the Russian Federation (article 1.8(3) of the Administrative Offences Code).

Definition of a foreign public official

How does your law define a foreign public official, and does that definition include employees of state-owned or state-controlled companies?

Both the Administrative Offences Code and the Criminal Code define a foreign public official as any appointed or elected person holding any position in a legislative, executive, administrative or judicial body of a foreign state, and any person performing any public duties for a foreign state, including for a public authority or public enterprise.

Gifts, travel and entertainment

To what extent do your anti-bribery laws restrict providing foreign officials with gifts, travel expenses, meals or entertainment?

Russian legislation generally prohibits the receipt of any remuneration by domestic public officials in connection with the performance of their duties from individuals or legal entities, including gifts, travel expenses, meals or entertainment. However, these rules do not extend to foreign public officials. Therefore, Russian anti-bribery laws prohibit providing foreign officials with gifts, travel expenses, etc, only to the extent that these actions qualify as bribery under the Administrative Offences Code or Criminal Code.

Facilitating payments

Do the laws and regulations permit facilitating or ‘grease’ payments to foreign officials?

There are no specific rules regulating facilitation payments. Therefore, such payments are subject to the prohibition of bribery under the Administrative Offences Code and Criminal Code.

Payments through intermediaries or third parties

In what circumstances do the laws prohibit payments through intermediaries or third parties to foreign public officials?

Legislative changes that entered into force on 17 February 2019 have extended the scope of liability of legal entities for bribery according to article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity) to payments through any intermediaries or third parties.

Previously, this offence only covered cases of bribery by the company’s representatives in the name or in the interest of the company itself. Under the amendments, bribery offences committed by the company’s representatives in the interest of its related companies are also be punishable. Since the term ‘related’ is not defined under Russian law, any type of relation between the favoured and the bribing company may suffice to constitute the latter’s liability. Further, the changes clarified that bribe payments to the bribe taker include payments to any person (individual or legal entity) who has been designated by the bribe taker to receive the bribe.

The purpose of these changes was to harmonise corporate liability with the liability of individuals under the Criminal Code. Article 291 of the Criminal Code (bribe giving) punishes the payment of bribes through any intermediaries, including cases where, upon instruction of the foreign public official, the bribe is handed over to another individual or a legal entity.

Individual and corporate liability

Can both individuals and companies be held liable for bribery of a foreign official?

Yes, individuals can be held liable for bribery of a foreign public official under the Criminal Code according to its articles 291 (bribe giving), 291.1 (mediation in bribery) and 291.2 (small-scale bribery). Companies can be punished according to article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity).

Private commercial bribery

To what extent do your foreign anti-bribery laws also prohibit private commercial bribery?

The same provisions of the Administrative Offences Code and the Criminal Code prohibit the bribery of domestic commercial organisations also prohibit the bribery of foreign commercial organisations. Since March 2016, Russian law enforcement authorities may prosecute domestic and foreign legal entities for bribery offences committed outside Russia, including private commercial bribery, if they are directed against the interests of the Russian Federation.

Defences

What defences and exemptions are available to those accused of foreign bribery violations?

Under the Administrative Offences Code, a legal entity will be guilty of an administrative offence, including foreign bribery, if it can be established that it did not take all necessary measures to ensure compliance with the violated regulations and this violation constitutes the relevant administrative offence (article 2.1(2)). That means that a legal entity accused of an offence according to article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity) may claim that it has taken all measures necessary to prevent such bribery committed by its employees or agents. In particular, the legal entity may arguably claim that it fully complied with its obligations under article 13.3 of the Anti-Corruption Law to take anti-corruption measures to be exempt from administrative liability. 

However, given that the Russian government agencies apparently are not procecuting bribery of foreign public officials, available court practice gives no guidance on the proper implementation of the anti-corruption measures to avoid liability under article 19.28 of the Administrative Offences Code.

Agency enforcement

What government agencies enforce the foreign bribery laws and regulations?

Bribery and corruption offences under the Administrative Offences Code (committed by legal entities) and the Criminal Code (committed by individuals) are generally investigated and prosecuted by the Prosecutor’s Office of the Russian Federation.

In addition, the Investigative Committee of the Russian Federation – a federal authority previously part of the Prosecutor’s Office, but since 2011 separate and subordinated to the President of the Russian Federation – performs pre-investigative reviews of notifications of offences as well as preliminary investigations into individuals for bribery and corruption offences under the Criminal Code.

The competences of the Prosecutor’s Office and the Investigative Committee extend to foreign bribery laws and regulations.

Patterns in enforcement

Describe any recent shifts in the patterns of enforcement of the foreign bribery rules.

According to publicly available information, to date no Russian or foreign company has been convicted for bribery of foreign public officials.

However, legislative changes effective from 13 December 2019 provide for an extension of the term of investigation for corporate bribery under article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity) from two to 12 months in cases where judicial assistance is required. The explanatory comments to the bill explain these changes by the need to obtain judicial assistance in foreign states when prosecuting foreign legal entities for domestic or foreign bribery that is directed against the interests of the Russian Federation. This may be an indication that in future, Russia intends to prosecute foreign companies for foreign bribery.

Prosecution of foreign companies

In what circumstances can foreign companies be prosecuted for foreign bribery?

Under the Administrative Offences Code, foreign companies bear administrative liability for any administrative offences committed in Russia. Administrative offences under article 19.28 of the code (ie, unlawful remuneration on behalf of a legal entity) that were committed outside Russia can be prosecuted if they are directed against the interests of Russia (articles 2.6(2.1) and 1.8(3) of the Code).

Since the term ‘interests of the Russian Federation’ is not defined under Russian law, theoretically any foreign bribery offence involving a Russian element may be subject to administrative proceedings in Russia. However, the risk of unfounded investigations is limited to a certain extent by the express prohibition of double jeopardy – Russian jurisdiction arises only if the legal entity has not been held liable in a foreign state.

Sanctions

What are the sanctions for individuals and companies violating the foreign bribery rules?

Individuals may be held liable for violating the foreign bribery rules under the Criminal Code as follows:

  • Bribe-giving to a public official (article 291): depending on the bribe sum and other circumstances, up to: (1) a penalty of (a) 2 million to 4 million roubles, (b) two to four years’ salary, or (c) 70 to 90 times the bribe sum, and an occupational ban from certain professions for up to 10 years; or (2) imprisonment from eight to 15 years, a penalty in the amount up to 70 times of the bribe sum, and an occupational ban from certain professions for up to 10 years.
  • Mediation in bribery of a public official (article 291.1): depending on the bribe sum and other circumstances, up to: (1) a penalty of (a) 1.5 million to 3 million roubles, (b) two to three years’ salary, or (c) 60 to 80 times the bribe sum, and an occupational ban from certain professions for up to seven years; or (2) imprisonment from seven to 12 years, a penalty in the amount of up to 70 times the bribe sum, and an occupational ban from certain professions for up to seven years.
  • Small-scale bribery (article 291.2): depending on whether the bribe giver has already been convicted for bribery of a public official: (1) a penalty of up to 1 million roubles or one year’s salary; (2) forced labour for up to three years; (3) restriction of liberty for up to four years; or (4) imprisonment for up to three years.

 

For the commission of offences under article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity), the following penalties may be imposed on legal entities:

  • minimum: penalty of up to triple the amount of the bribe sum, but not less than 1 million roubles;
  • large-scale bribery: if the bribe sum exceeds 1 million roubles, penalty of up to 30-fold amount of the bribe sum, but not less than 20 million roubles; and
  • extra-large-scale bribery: if the bribe sum exceeds 20 million roubles, penalty of up to 100-fold of the bribe sum, but not less than 100 million roubles.

 

In addition, money, securities or other property, valuable services or other property rights that had been transferred, offered or promised shall be confiscated from the legal entity.

Companies convicted of bribery are included in a public register of offenders. As an additional sanction, they are prohibited from bidding in state procurement tenders for a period of two years from the date of conviction.

Recent decisions and investigations

Identify and summarise recent landmark decisions or investigations involving foreign bribery.

According to publicly available information, to date no Russian or foreign company has been convicted for bribery of foreign public officials.