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Trends and climate
Have there been any recent changes in the enforcement of anti-corruption regulations?
Russian corporate bribery investigations According to information published by the general prosecutor’s office for 2017, legal entities were held liable for bribery offences in 325 cases (based on Article 19.28 of the Administrative Offences Code regarding unlawful remuneration on behalf of a legal entity). That means that compared to 2016 (397 cases), Russian investigations slowed down slightly in 2017. Since some legal entities have been convicted repeatedly under different case numbers, while the actual number of convicted legal entities is fewer than 325.
Almost all cases – predominantly dealing with illegal payments to civil servants or employees of other companies – resulted in the imposition of a fine. Depending on the bribe sum, the law provides for fines of up to Rb100 million (approximately $1.7million) or more. In most cases only the statutory minimum fine of Rb1 million was imposed. Often, the minimum fines were further reduced by the courts of appeal. That means that Russian ABC enforcement actions against legal entities continue to focus on small-scale bribery.
As an additional sanction, since January 2017 all legal entities convicted of bribery offences according to Article 19.28 of the Administrative Offences Code will be prohibited from bidding in state procurement tenders for a two-year period from the date of conviction.
The published information shows that, as in 2016, the ABC enforcement actions targeted exclusively small and medium-sized Russian companies with Russian beneficiaries (many in the construction, transportation, oil and gas, and retail sectors across Russia). No major Russian company has been held liable. Apparently, there have been no convictions of Russian subsidiaries of foreign companies or of foreign companies themselves.
Non-Russian enforcement actions In 2017, US, UK, Swedish and Dutch authorities completed several, partly multinational, enforcement actions in Russia and former Soviet republics. For the first time, the UK Serious Fraud Office concluded a deferred prosecution agreement (DPA) for violations of the UK Bribery Act extending to Russia. As in 2016, the US Securities and Exchange Commission and the US Department of Justice completed a number of investigations of violations of the Foreign Corrupt Practices Act in former Soviet republics. Most foreign investigations targeted large-scale bribery in the energy, telecommunications and infrastructure sectors.
Further, the World Bank's Integrity Vice Presidency (INT) debarred or cross-debarred 18 companies and individuals from former Soviet republics from further World Bank projects following fraud and corruption investigations, and opened eight new cases in these regions.
Large companies' failure to take anti-corruption measures Transparency International Russia's report Transparency in Corporate Reporting: Assessing the Russian’s Largest Companies, which was published on January 25 2018, revealed that most of Russia's 200 largest companies by revenue have so far failed to take basic anti-corruption measures:
- only 115 companies have anti-corruption rules which are publicly accessible on their website;
- most of the reviewed compliance documents do not include sufficient hospitality provisions (eg, requirement to report gifts or thresholds for acceptable gifts);
- only 20% of the companies expressly prohibit facilitation payments (which may qualify as bribery under Russian law);
- only 26% of the companies extend their anti-corruption policies to agents and consultants;
- 60% of the companies do not have an anonymous hotline for whistleblower reports; and
- most companies either do not conduct anti-corruption training at all, or organize it only on an irregular basis.
Debarment of corrupt companies from state procurement Since January 1 2017 corrupt companies have been debarred from state procurement contracts based on amendments to the Federal Law 44-FZ On Contract System in Procurement of Goods, Works, Services for State and Municipal Needs that tightened the requirements for participants in the procurement process.
Participation by a company in the procurement process means that its chief executive, members of the board and chief accountant must not be subject to any unspent convictions for a corruption offence under Articles 289, 290, 291 and 291.1 of the Criminal Code. Further, these individuals must not be subject to an unspent administrative or criminal conviction that prohibits them from holding offices or from engaging in activities which are connected to the delivery or provision of the goods, works or services that are to be procured.
Likewise, a company must not participate in the procurement process if the company itself, within two years preceding the submission of its bid, was convicted of corruption according to Article 19.28 of the Administrative Offences Code (illegal remuneration on behalf of a legal entity).
Register of blacklisted former state employees Since January 1 2018 state authorities have had to record information on civil servants, state officials and other state employees who have been dismissed from public service based on a loss of trust due to the commission of corruption offences. Information on the blacklisted individuals will be available through a unified register on the official website of the federal state information system.
The entries on the blacklisted individuals will be kept in the register for five years.
The unified register will allow employers in Russia to screen former state employees for corruption offences before hiring them. Checking the joint register should also become part of the know-your-customer due diligence of potential Russian business partners.
Restriction of disclosure of information Since December 31 2017 the government has been authorised to determine cases in which Russian individuals and organisations (eg, notaries, companies, public registers, banks and share issuers) no longer need comply with their statutory obligations to disclose information. These legislative changes have been introduced in response to US sanctions, in particular to the Countering America’s Adversaries Through Sanctions Act (August 2 2017), which envisages the possibility of imposing additional sanctions on persons who engage in certain transactions relating to Russia.
Based on these legislative changes, on January 12 2018 the government issued Order 5, according to which certain information (eg, pledges of movable property, issuing of an independent guarantee and financing agreements including assignment of monetary claims) is no longer published on the website of the legal entities' register if it relates to Russian legal entities or individual entrepreneurs which are subject to foreign sanctions.
On January 15 2018 the government issued Order 10, which relieves Russian companies of their obligation to disclose information on large-scale transactions and interested party transactions if these transactions are:
- performed in fulfilment of state defence orders and the implementation of military-technological cooperation; or
- entered into with Russian legal entities or individuals which are subject to foreign sanctions.
Are there plans for any changes to the law in this area?
Draft law – protection of whistleblowers On December 13 2017 the State Duma adopted in its first reading amendments to the Anti-Corruption Law which introduced measures to protect whistleblowers who report on corruption offences.
This legislative process follows the recommendations under the Organisation for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions to establish effective mechanisms for the protection of individuals reporting on bribery of foreign public officials.
Exceeding these recommendations, the draft law extends to reporting on any bribery offence in the public or private sector in Russia. According to the draft law, individuals who report on such an offence to their employer's representative, the prosecutor's office or the police must be "protected by the state". The protective measures include:
- confidentiality obligations regarding the whistleblower’s identity and content of their report;
- the whistleblower's protection against any discrimination in their employment situation for two years following the reporting; and
- the granting of free legal aid to the whistleblower.
If adopted, the draft law is likely to require organisations operating in Russia to:
- adjust their procedures for handling whistleblower reports from Russia;
- set up mechanisms to obtain the whistleblower's consent to the use of personal data; and
- adopt at the Russian level an internal document regulating the handling of whistleblower reports.
Draft law – bribery in the interest of affiliated entities In late December 2017, the State Duma adopted in the first reading legislative amendments which will close a loophole in the liability of legal entities for corruption offences according to Article 19.28 of the Administrative Offences Code (illegal remuneration on behalf of a legal entity).
This offence covers only cases of providing, offering or promising bribes by its representatives in the name or in the interest of the legal entity itself. Under the proposed amendments, bribery offences committed by the company’s representatives in the interest of its affiliated companies will also be punishable.
Draft law – additional compliance measures in public companies On January 12 2018 the State Duma adopted in the second reading amendments to the Federal Law 208-FZ On Joint-Stock Companies, which require public joint-stock companies to implement risk management and internal control measures. Public joint-stock companies are Russian joint-stock companies whose shares are publicly traded or whose company name and charter refer to it as public.
The public company's supervisory board must adopt a policy on the organisation of risk management and internal controls. Further, each public company must perform an internal audit to assess the reliability and efficiency of its risk management and internal controls. The audit must be performed by an officer of the company or a legal entity instructed by the company. To ensure independence from the company's management, the auditor will be appointed and dismissed by the supervisory board. The supervisory board will also approve the terms of the employment or services agreement with the auditor.
The amendments are expected to enter into force on September 1 2018.
Draft law – new anti-corruption standards for private companies On August 9 2017 the Federal Labour Ministry proposed significant amendments to Article 13.3 of the Anti-corruption Law. Article 13.3 obliges Russian organisations to develop and implement measures to prevent corruption and provides recommendations for these measures (eg, appointment of a compliance officer, adoption of a compliance code and cooperation with law enforcement authorities).
According to the amendments, private organisations will be obliged to develop and implement measures in accordance with certain approved anti-corruption standards. These standards are to be developed by a new National Council for Corruption Prevention consisting of representatives of the Chamber of Commerce and Industry of the Russian Federation, the Russian Union of Industrialists and Entrepreneurs and the government. Compliance by the organisations with these standards will be assessed and certified by specifically accredited legal entities (so-called ‘expert centres’).
Different requirements will apply to organisations which are owned or controlled by the Russian state. These organisations must implement specific measures already listed in the amendments and comply with anti-corruption standards approved by the government.
The draft amendments must still be submitted to the State Duma. If adopted as currently proposed, they will enter into force on January 1 2019.
Which authorities are responsible for investigating bribery and corruption in your jurisdiction?
Bribery and corruption offences under the Administrative Offences Code (committed by legal entities and individuals) and the Criminal Code (committee by individuals) are generally investigated by the Public Prosecutor's Office. The relevant functions of the Public Prosecutor's Office are distributed among:
- the General Prosecutor's Office at the federal level;
- the prosecutor's offices in the 85 so-called ‘subjects of the Russian Federation’ at the regional level; and
- the prosecutor's offices of the districts and cities at the municipal level.
In addition, the Investigative Committee of the Russian Federation – a federal authority previously part of the of the Public Prosecutor's Office, but since 2011 separate and subordinated directly to the President of the Russian Federation – performs pre-investigative reviews of notifications on offences and preliminary investigations against individuals for bribery and corruption offences under the Criminal Code. The Investigative Committee performs its functions at the federal, regional and municipal levels, through its:
- central office at the federal level;
- investigative departments in the subjects of the Russian Federation; and
- investigative departments of the districts and cities.
In specific sectors, the functions of other law enforcement authorities may overlap with the investigative functions of the Public Prosecutor's Office and the Investigative Committee. In particular, violations of antitrust requirements during public procurement processes, especially state tenders, are often accompanied by bribery and corruption offences which are then investigated by the Federal Anti-monopoly Service (FAS). Following the completion by FAS of its own investigations and the imposition of administrative penalties for the violation of antitrust requirements, the matters may then be transferred to the Public Prosecutor's Office for the opening of criminal proceedings.
What are the key legislative and regulatory provisions relating to bribery and corruption in your jurisdiction?
The relevant Russian legislation mainly consists of the following:
- anti-corruption laws – in particular:
- the National Anti-corruption Plan, which is adopted every two years by the president, coordinates efforts to combat corruption in Russia and lists the specific anti-corruption measures to be taken by the Russian state; and
- Federal Law 273-FZ on Combatting Corruption (December 25 2008), which sets out the legal and organisational framework for the prevention and combat of corruption and the mitigation and remediation of the consequences of corruption;
- antitrust regulation – in particular, Federal Law 135-FZ on the Protection of Competition (July 26 2006), of which Article 17 regulates antitrust requirements applicable to public tenders and Article 18 sets out rules for selecting financial organisations;
- public procurement regulation – in particular:
- Federal Law 44-FZ on the Contract System in State and Municipal Procurement of Goods, Works and Services (April 5 2013), which was adopted to prevent corruption and other violations in the area of public procurement; and
- Federal Law 223-FZ on Procurement of Goods, Works and Services by Certain Types of Legal Entities (July 18 2011), which establishes specific procurement procedures for legal entities of the Russian Federations such as state corporations and state companies;
- the Administrative Offences Code, which establishes administrative liability for violations of anti-corruption laws and antitrust and public procurement regulation; and
- the Criminal Code, which establishes criminal liability for violations of anti-corruption laws and antitrust and public procurement regulations.
What international anti-corruption conventions apply in your jurisdiction?
The following conventions apply:
- The United Nations Convention against Corruption of October 31 2003, ratified by Federal Law 40-FZ (March 8 2006, entered into force on March 21 2006).
- The Council of Europe Criminal Law Convention on Corruption of January 27 1999, ratified by Federal Law 125-FZ (July 25 2006, entered into force on July 28 2006).
- The Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime of November 8 1990, ratified by Federal Law 62-FZ (May 28 2001, entered into force on May 31 2001).
- The United Nations Convention against Transnational Organised Crime of November 15 2000, ratified by Federal Law 26-FZ (April 26 2004, entered into force on April 29 2004).
- The International Convention for the Suppression of the Financing of Terrorism adopted by the General Assembly of the United Nations on December 9 1999, ratified by Federal Law 88-FZ (July 10 2002, entered into force on July 13 2002).
- The Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on Financing of Terrorism of May 16 2005, ratified by the Federal Law 183-FZ (July 26 2017, entering into force on August 6 2017).
Specific offences and restrictions
What are the key corruption and bribery offences in your jurisdiction?
The following are the key corruption and bribery offences in Russia:
- Unlawful remuneration on behalf of a legal entity – Article 19.28 of the Administrative Offences Code prohibits the bribery of Russian or foreign civil servants or state officials or executives of commercial or other organisations to induce them to use their authority to act in favour of a legal entity.
- Bribery in commercial organisations – Articles 204 and 204.2 of the Criminal Code prohibits the giving to and taking of bribes by executives of commercial or other organisations in connection with their positions in these organisations.
- Mediation in bribery in commercial organisations – Article 204.1 of the Criminal Code prohibits the direct transfer of bribes to executives of commercial or other organisations on a considerable scale (ie, exceeding Rb25,000, approximately $400) on instructions by the bribe giver or bribe taker, as well as promises and proposals of such transfers.
- Bribe taking by civil servants – Articles 290 and 291.2 of the Criminal Code prohibits the taking of bribes by Russian or foreign civil servants or state officials to induce them to use their authority to act in favour of the bribe giver.
- Bribe giving to civil servants – Articles 291 and 291.2 of the Criminal Code prohibits the giving of bribes to Russian or foreign civil servants or state officials.
- Mediation in bribery of civil servants – Article 291.1 of the Criminal Code prohibits the direct transfer of bribes to Russian or foreign civil servants or state officials on a considerable scale (ie, exceeding Rb25,000, approximately $400) on instructions by the bribe giver or bribe taker, as well as promises and proposals of such transfers.
Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?
Prohibition of gifts exceeding Rb3,000 in relationships between commercial organisations Article 575(1) of the Civil Code prohibits any gifts – except for common gifts with a value of up to Rb3,000 (approximately $50) – in relations between commercial organisations. Since under Russian law any benefits transferred to the donee qualify as a gift (Article 572(1) of the Civil Code), this prohibition also extends to travel expenses, meals, entertainment and other hospitality costs.
In practice, the prohibition on gifts with a value of more than Rb3,000 is reflected in the Russian companies’ compliance regulations. Violations of these restrictions may then also have adverse labor law consequences for the relevant employees.
Even if the transfer of the gift does not violate Article 575(1) of the Civil Code (ie, the gift is common and its value does not exceed Rb3,000), such transaction may still be subject to liability under the Criminal Code if it was performed with criminal intent.
General prohibition of receipt of gifts by civil servants and state officials Russian legislation generally prohibits the receipt by Russian civil servants and state officials of any remuneration in connection with the performance of their duties from individuals or legal entities (including gifts, money, loans, services, entertainment costs and travel expenses).
The general prohibition to accept gifts does not apply to gifts received by Russian civil servants and state officials in connection with protocol events, business trips and other official events. However, gifts received at such occasions are deemed to be state property and subject to transfer to the relevant state body (eg, Article 17(1)(6) of Federal Law 79-FZ on Public Service of the Russian Federation).
General prohibition of receipt of gifts by employees of state corporations According to Article 349.1 of the Labour Code and Article 2(b) of Order of the Russian Government 841 of August 21 2012, the general prohibition to receive gifts is extended to certain positions in state corporations and state companies.
State corporations and state companies are non-commercial organisations which are set up by the Russian Federation under a federal law (Articles 7.1 and 7.2 of the Law on Non-commercial Organisations).
Commercial organisations with a majority participation by the Russian state (eg, Gazprom Public Joint Stock Company and Rosneft Oil Company) do not qualify as state corporations or companies in the meaning of Article 349.1 of the Labour Code.
Administrative and criminal liability The violation of the above-listed restrictions regarding the granting and receiving of gifts does not entail any administrative or criminal liability. Such liability would require the completion of additional elements of an administrative or criminal offence, in particular criminal intent. The scope of the penalties under the Administrative Offences Code and the Criminal Code depends on the amount of the bribe sum.
Best practice Best practice in Russia is the adoption by an organisation of internal compliance regulations incorporating:
- the prohibition of granting and receiving gifts exceeding Rb3,000 in relationships between commercial organisations, according to Article 575(1) of the Civil Code; and
- the general prohibition of granting any gifts to Russian civil servants and state officials or employees of state corporations and companies.
The adoption of such internal compliance regulations is one of the anti-corruption measures to be mandatorily undertaken by each organisation operating in Russia, according to Article 13.3 of the Anti-Corruption Law.
What are the rules relating to facilitation payments?
There are no specific rules under Russian law regulating facilitation payments. Such payments are therefore subject to the general rule on the prohibition of gifts whose value exceeds Rb3,000 (approximately $50) in relationships between commercial organisations and the penalties for unlawful remuneration and bribery under the Administrative Offences Code and the Criminal Code.
Scope of liability
Can both individuals and companies be held liable under anti-corruption rules in your jurisdiction?
Under the Administrative Offences Code, both individuals and companies can be held liable for administrative offences (Articles 1.4(1) and 2.10).
Under the Criminal Code, only individuals can bear criminal liability (Article 19). However, a draft law extending criminal liability to legal entities is under consideration by the Russian State Duma.
Can agents or facilitating parties be held liable for bribery offences and if so, under what circumstances?
No specific rules under Russian law regulate the administrative or criminal liability of agents or facilitating parties. These agents and parties are therefore held liable for bribery offences under the Administrative Offences Code (in particular, unlawful remuneration on behalf of a legal entity according to Article 19.28) and the Criminal Code.
Can foreign companies be prosecuted for corruption in your jurisdiction?
Under the Administrative Offences Code, foreign companies bear administrative liability for administrative offences committed in Russia. Administrative offences under Article 19.28 of the Administrative Offences Code (ie, unlawful remuneration on behalf of legal entity) which were committed outside Russia can be prosecuted:
- if they are directed against the interests of Russia; or
- in the cases provided for by international treaties which Russia has signed (Article 1.8(3) of the Administrative Offences Code).
The Strategy of National Security of the Russian Federation (approved by Presidential Decree 683, December 31 2015) defines the national interests only vaguely as the “aggregate of internal and external needs of the Russian state to ensure security and sustained development of its identity, society and nation”. Based on this vague definition, theoretically any foreign bribery offence involving a Russian element may be subject to administrative proceedings in Russia.
However, the risk of ungrounded extraterritorial investigations is limited to a certain extent by the express prohibition of double jeopardy – Russian jurisdiction arises only if the foreign company has not been held liable in a foreign state.
Under the Criminal Code, companies – including foreign companies – cannot bear criminal liability (Article 19). However, the State Duma is considering a draft law to extend criminal liability to legal entities, which would impose criminal liability on foreign companies based on principles identical to those of the Administrative Offences Code.
Whistleblowing and self-reporting
Are whistleblowers protected in your jurisdiction?
At present, Russian law contains only one specific provision on the protection of whistleblowers. Article 9(4) of the Anti-corruption Law states that civil servants or state officials who report on corruption violations will enjoy state protection. This protection is afforded in accordance with the general Russian legal provisions granting protection to participants in criminal cases (in particular, the Criminal Procedure Code, Federal Law 119-FZ on State Protection of Victims, Witnesses and Other Participants in Criminal Proceedings (August 20 2004) and Federal Law 46-FZ on State Protection of Judges, Public Officials of Law Enforcement and Controlling Bodies of (April 20 1995)).
However, on December 13 2017, the State Duma adopted in its first reading amendments to the Anti-corruption Law which introduced measures aimed at the protection of any individuals who report on corruption offences to their employer's representative, the prosecutor's office or the police.
Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed?
Under Article 4.2(3) of the Administrative Offences Code, the voluntary disclosure of an offence to the competent law enforcement authority qualifies as an extenuating circumstance. This means that the amount of the fine imposed on an organisation for violation of Article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity) will be reduced. However, the court has sole discretion as to the scope of reduction of the fine.
According to Articles 204 (bribery in a commercial organisation), 204.1 (mediation in bribery in a commercial organisation), 291 (bribe taking by a civil servant) or 291.1 (mediation in bribery of a civil servant) of the Criminal Code, the bribe giver is released from criminal liability if he or she:
- actively enabled the discovery or investigation of the crime;
- was subject to blackmailing by the bribe taker; or
- following commission of the crime, voluntarily informed the competent law enforcement authority of the bribe taking.
Following the adoption of the proposed legislative changes according to which criminal liability is extended to legal entities, organisations that self-report may also benefit from these leniency provisions.
Cross-border reporting The reporting to non-Russian law enforcement authorities regularly requires the transfer of protected data from Russia to foreign jurisdictions. The collection and cross-border transfer of such data is subject to extensive Russian regulation.
In particular, emails, WhatsApp messages, SMS and other correspondence by Russian employees are protected by the ‘privacy of communication’ principle. Unless the Russian company adopted internal rules on the use of office communication means for business purposes only, the collection and transfer of such data requires prior written consent by the relevant employees.
The transfer of personal data of Russian employees also requires the relevant employee's written consent to the transfer (which may, by way of precaution, also be reflected in the employment agreement). In case of a cross-border transfer, such a transfer must be specifically allowed by the consent. Since the employee's consent can be difficult to obtain in practice, the relevant data may have to be depersonalised before the transfer. Further, a data transfer agreement must be signed between the employing Russian company and the foreign recipient. In addition, due to Russian data localisation requirements, the primary database for personal data transferred abroad must be set up in Russia and, before the transfer of any new data, be updated accordingly.
On the other hand, Russian law has no general attorney-client privilege. A concept similar to this privilege exists only as ‘advocate secrecy’ in relationships between clients and advocates (ie, lawyers who passed a bar exam to represent clients in criminal and certain civil law court proceedings). Therefore, the protection of the attorney-client privilege does not usually restrict the (cross-border) transfer of data.
Dispute resolution and risk management
Is it possible for anti-corruption cases to be settled before trial by means of plea bargaining or settlement agreements?
Since 2009, Chapter 40.1 of the Criminal Procedural Code has allowed plea bargaining agreements to be entered into in criminal proceedings, including proceedings regarding bribery offences.
Under a plea bargaining agreement, the defendant undertakes to provide information and to cooperate in the investigation of crimes committed by other persons (disclosure of his or her own crimes does not suffice). If the defendant fulfils these obligations and circumstances aggravating his or her liability are not determined, the sentence for his or her own crimes will not exceed half of the maximum punishment provided for such types of crime by the Criminal Code. The court has discretion to show further leniency.
Are any types of payment procedure exempt from liability under the corruption regulations in your jurisdiction?
Russian law does not provide for such concept.
What other defences are available and who can qualify?
Under the Administrative Offences Code, a legal entity will be guilty of an administrative offence 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 in order to be exempt from administrative liability.
What compliance procedures and policies can a company put in place to assist in the creation of safe harbours?
Article 13.3 of the Anti-corruption Law obliges organisations to develop and implement measures to prevent corruption. According to the law these measures can include:
- designating departments and officers responsible for preventing bribery and other violations of law;
- cooperating with law enforcement authorities;
- developing and implementing policies and procedures designed to ensure ethical business conduct;
- adopting a code of ethics and professional behaviour for employees;
- identifying and regulating conflicts of interest; and
- preventing the creation of false accounts and the use of forged documents.
The general obligation under the Anti-corruption Law to develop and implement anti-corruption measures is further elaborated by the Methodical Recommendations for the Development and Adoption of Anti-Corruption Measures of the Federal Labour Ministry (November 8 2013). This document lists in detail the specific steps which are recommended to be taken by organisations in order to comply fully with their obligation under the Anti-corruption Law.
The Anti-corruption Law does not provide for penalties where an organisation fails to implement the required anti-corruption measures. However, such failure may lead to liability under the Administrative Offences Code if the organisation is unable to demonstrate that it has taken all measures necessary to prevent bribery committed by its employees or agents.
Record keeping and reporting
Record keeping and accounting
What legislation governs the requirements for record keeping and accounting in your jurisdiction?
General accounting principles are regulated by the Federal Law 402-FZ on Accounting (December 6 2011). The requirements for financial reporting are set out in the Federal Law 129-FZ on State Registration of Legal Entities (August 8 2001). The consolidation of financial reporting is regulated by the Federal Law 208-FZ on Consolidation of Financial Reporting (July 27 2010). The requirements under these federal laws are further specified by:
- regulations on accounting, issued by the Federal Finance Ministry;
- charts of accounts and instructions on their application, issued by the Bank of Russia and the Federal Finance Ministry;
- accounting standards for specific sectors issued by the Bank of Russia;
- main methodical instructions and recommendations issued by the Federal Finance Ministry; and
- summaries of practice of application of legislation, prepared by the Federal Finance Ministry.
What are the requirements for record keeping?
The general accounting requirements are as follows:
- Accounting must be maintained without interruption from the date of the organisation's state registration until the date it ceases its activity due to reorganisation or liquidation.
- Accounting must be maintained according to a general system or a simplified system.
- Maintaining accounting and record keeping must be organised by the organisation's chief executive.
- Accounting must be maintained based on an accounting policy adopted each year.
- All commercial facts must be documented by primary accounting documents on paper or in electronic form.
- Information reflected in the primary accounting documents is subject to timely registration and storage in the accounting registers.
- Assets and liabilities are subject to inventarisation.
- Accounting items are to be recorded in Russian roubles.
What are the requirements for companies regarding disclosure of potential violations of anti-corruption regulations?
Under Russian law, companies are not specifically obliged to disclose potential violations of anti-corruption regulations. However, the voluntary disclosure of such violations may be part of the measures taken by organisations in order to comply with their obligations under the Anti-corruption Law to develop and implement anti-corruption measures.
What penalties are available to the courts for violations of corruption laws by individuals?
Individuals may be held liable for committing the following anti-corruption offences under the Criminal Code:
- Bribery in a commercial organisation – Article 204 provides for either:
- a penalty of:
- up to Rb2 million (approximately $35,000) to Rb5 million (approximately $85,000);
- two to five years' salary; or
- 50 to 90 times the bribe sum; and
- an occupational ban from certain professions for up to six years; or
- imprisonment from seven to 12 years, a penalty of up to 50 times the bribe sum and an occupational ban from certain professions for up to six years.
- a penalty of:
- Mediation in bribery in a commercial organisation – Article 204.1 provides for either:
- a penalty of:
- up to Rb1.5 million (approximately $25,000);
- 18 months’ salary; or
- 40 to 70 times the bribe sum; and
- an occupational ban from certain professions for up to six years; or
- imprisonment for up to seven years, a penalty of up to 40 times the bribe sum and an occupational ban from certain professions for up to six years.
- a penalty of:
- Bribe taking by a civil servant – Article 290 provides for either:
- a penalty of:
- up to Rb3 million (approximately $50,000) to Rb5 million (approximately $85,000);
- three to five years' salary; or
- 80 to 100 times the bribe sum; and
- an occupational ban from certain professions for up to 15 years; or
- imprisonment from eight to 15 years, a penalty of up to 70 times the bribe sum and an occupational ban from certain professions for up to 15 years.
- a penalty of:
- Bribe giving to a civil servant – Article 291 provides for either:
- a penalty of:
- up to Rb2 million (approximately $35,000) to Rb4 million (approximately $70,000);
- two to four years' salary; or
- 70 to 90 times the bribe sum; and
- an occupational ban from certain professions for up to 10 years; or
- imprisonment from eight to 15 years, a penalty of up to 70 times the bribe sum and an occupational ban from certain professions for up to 10 years.
- a penalty of:
- Mediation in bribery of a civil servant – Article 291.1 provides for either:
- a penalty of:
- up to Rb1.5 million (approximately $25,000) to Rb3 million (approximately $50,000);
- two to three years' salary; or
- 60 to 80 times the bribe sum; and
- an occupational ban from certain professions for up to seven years; or
- imprisonment from seven to 12 years, a penalty of up to 70 times the bribe sum and an occupational ban from certain professions for up to seven years.
- a penalty of:
Companies or organisations
What penalties are available to the courts for violations of corruption laws by companies or organisations?
A legal entity which commits an offence under Article 19.28 of the Administrative Offences Code (unlawful remuneration on behalf of a legal entity) may face the following penalties:
- Bribery – a penalty of up to three times the bribe sum but not less than Rb1 million (approximately $17,000).
- Large-scale bribery – if the bribe sum exceeds Rb1 million (approximately $17,000), a penalty of up to 30 times the bribe sum but not less than Rb20 million (approximately $350,000).
- Extra-large scale bribery – if the bribe sum exceeds Rb20 million (approximately $350,000), a penalty of up to 100 times the bribe sum but not less than Rb100 million (approximately $1.7 million).