ORGANIZATIONS OBLIGATED TO TAKE STEPS TO PREVENT CORRUPTION

Since early 2013, organizations (including commercial organizations) have been required to develop and implement measures to prevent corruption. An open list of such measures is provided in Article 13.3 of the Law on the Prevention of Corruption, although no application guidelines or greater detail has been provided in Russian anticorruption law.

The corruption prevention measures listed in Article 13.3 of the Law on the Prevention of Corruption are formulated in a manner that allows various organizations to interpret them differently in accordance with their specific requirements, activities, etc. However, the absence of administrative liability for failing to implement such measures at the local level means not all organizations will comply with Article 13.3. In practice, the absence of such measures at an organization or doing business with counterparties that do not have adequate compliance procedures will be treated as a failure to take all steps necessary for the organization to comply with Russian law and have an unfavorable influence on decisions imposing administrative penalties in the event of corruption offenses.  

MINISTRY OF LABOR AND SOCIAL WELFARE ANTI-CORRUPTION RECOMMENDATIONS

In November 2013, the Russian Federation Ministry of Labor and Social Welfare in conjunction with leading Russian business associations adopted recommendations setting out steps to prevent corruption that Russian organizations may implement irrespective of form of ownership and sector (Methodological Recommendations on the Development and Adoption by Organizations of Measures to Prevent and Combat Corruption of November 8, 2013) ("Recommendations"). The Recommendations contain a detailed and thorough survey of Russian anti-corruption legislation, detailed commentary on the anti-corruption measures provided in Article 13.3 of the Law on the Prevention of Corruption, a standard conflict of interests declaration, and a survey of typical conflict of interest situations. This document significantly clarifies and expands the applicability of Article 13.3 of the Law on the Prevention of Corruption.

There are no formal penalties or other adverse consequences of failure to comply with the Recommendations. However, any company aiming to reduce its corruption risks can rely on the Recommendations as official guidance for the development and implementation of measures to reduce corruption risks. The practical benefits of introducing such measures will depend on the extent to which the entire spectrum of anticorruption law and enforcement practice is taken into consideration during the development of anti-corruption measures at a local level.

PLENUM OF THE RUSSIAN FEDERATION SUPREME COURT RULING SUMMARIZING COURT PRACTICE IN CASES OF BRIBERY AND OTHER CORRUPTION OFFENSES

The Plenum of the Russian Federation Supreme Court issued Ruling of July 9, 2013 No. 24 on Judicial Practice in Cases of Bribery and other Corruption Offenses that explains and clarifies the position of Russian courts with respect to various matters concerning the application of Russian Federation Criminal Code articles governing corruption offenses: giving and receiving bribes, commercial bribery, fraud, official forgery, and others. The Ruling emphasizes the responsibility of the courts to apply Russian law on a strictly case-by-case basis and to punish anyone committing corruption offenses, whether with respect to officials, or by abuse of position.

PRESIDENTIAL ANTI-CORRUPTION DEPARTMENT ESTABLISHED

In December 2013, the President of the Russian Federation established an Anti-Corruption Department within the Presidential Administration. This body is intended to unite and coordinate the fight against bribery, which had until then been in the purview of various departments. The primary task of the Department is to support the President of the Russian Federation in the implementation of state anti-corruption policy.

The focus of the Anti-Corruption Department is more likely to be on oversight of Russian officials, rather than the private sector. However, its activities will clearly affect market participants as well. In particular, one function of the Department is to improve Russian anti-corruption legislation, something that definitely requires improvement.

GOVERNMENT RESOLUTION ON GIFTS FOR STATE OFFICIALS

RF Government Resolution No. 10 on the Procedure for Certain Categories of Persons to Provide Information on the Receipt of Gifts in Connection with their Office or the Performance of their Official Duties, Surrender and Appraisal of Gifts, Sale/Purchase and Transfer of the Proceeds of Sale Thereof ("Ruling") was drafted in 2013 and adopted January 9, 2014, and brings together and to some extent toughens the rules applicable to gifts offered to Russian officials. In accordance with the Resolution, state officials must now inform their supervisors of all gifts received, irrespective of value. It is also established that the value of a gift is determined on the basis of the market value, confirmed where necessary by expert assessment.

The adoption of this resolution is expected to result in fewer gifts being accepted by officials. At the same time, it should not be forgotten that, irrespective of the value of the gift and the status of the official to which it is offered, the gift must not be intended to elicit any benefit or unjustified preferences for the giver. Otherwise it may be treated as a bribe.