Anti-corruption Legal Framework.

20.04.2009

LEGAL UPDATE No. 22

Goltsblat BLP advises that Federal Law No. 273-FZ, dated 25 December 2008, “On Combating Corruption” ( “the Federal law”) came into effect on 9 January 2009.

The Federal Law gives the first legal definition of corruption, which is worded comprehensively and applies to both the civil and municipal services, as well as legal entities. Corruption is defined as:

Abuse of official position, bribery, abuse of powers, commercial kick-backs or any other unlawful use by individuals of their official position to the detriment of the legitimate interests of society and the state, for the purpose of obtaining benefits in the form of money, valuables, other property or services of a property nature, other proprietary rights for themselves or for third parties or unlawful extension of such benefits to a given person by other individuals;

Performance of the given actions on behalf of or in the interests of legal entities.

Anti-corruption standards have been introduced: a unified system of prohibitions, restrictions and permissions precluding corruption is established for given spheres of activity.

Anyone wishing to take up or taking up a civil or municipal service position is now required to provide the employer with details of the income, property and property liabilities of himself/herself and his/her spouse and underage children.

Civil and municipal servants must take steps to preclude any conflict of interests in the form of contradictions between their personal vested interests and due fulfilment of their official duties and, if such conflicts do arise, must notify their immediate superiors in writing to this effect. If civil or municipal servants own securities, shares or ownership interests in the authorised capital of organisations, for the purposes of precluding any conflict of interests, they are required to put these assets under trust management in accordance with the legislation of the Russian Federation.

Civil and municipal servants have to inform their employer, the prosecutor’s office and other government authorities if they are ever approached to become involved in corruption offences, after which they enjoy government protection.

For two years after leaving their positions, former civil or municipal servants (according to a set list):

may take up positions in commercial or other organisations that were previously under their jurisdiction only with the consent of the commission for official conduct of civil servants and conflict of interest settlement;

when concluding an employment contract, must provide the employer with the details of their last position and, on receipt of this information and within 10 days of concluding the employment contract with the former civil or municipal servant, the employer should notify the previous employer to this effect.

If civil or municipal servants fail to fulfil these obligations, they may be dismissed or otherwise held liable and any employment contract concluded without the previous place of work being notified will be terminated.

If employers fail to notify former employers of civil or municipal servants of the conclusion of employment contracts with them, it is the new employers that will be held liable.

Sanctions may also be imposed on a legal entity if offences involving corruption are organised, prepared or committed or the conditions for such offences are created in its name or in its interests.  Such liability also applies to foreign legal entities when so envisaged by Russian law.
Foreign citizens who are not permanently resident in Russia, foreign legal entities, international organisations, their subsidiaries and representative offices that commit corruption offences outside Russia are liable under the Russian legislation in the cases and the manner stipulated by international treaties of the Russian Federation and federal laws.

Extensive amendments relating to fighting corruption have also been introduced into the Russian legislation by:

Federal Law No. 274-FZ, dated 25 December 2008, “On Amendments to Individual Legislative Acts of the Russian Federation in Connection with Adoption of the Federal Law ‘On Combating Corruption’ ”;

Federal Law No. 280-FZ, dated 25 December 2008, “On Amendments to Individual Legislative Acts of the Russian Federation in Connection with Ratification of the United Nations Organisation Convention Against Corruption, dated 31 October 2003, and the Criminal Law Convention on Corruption, dated 27 January 1999, and adoption of the Federal Law ‘On Combating Corruption’ ”.

For additional information, please contact:

Anton Sitnikov, Partner,
Corporate/M&A,
Goltsblat BLP
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

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