“Package” of Anti-Corruption Laws enacted in compliance with the Anti-Corruption Plan (approved by the Russian President on July 31, 2008):

• Federal Law “On Fighting Corruption” No. 273-FZ of December 25, 2008;

• Amendments to the Russian Civil Code;

• Amendments to the Russian Criminal Code;

• Amendments to the Russian Administrative Code;

• Amendments to other legislative acts.

Amendments to the Russian Civil Code:

- Prohibition of making gifts to Public Officials, if the value of the gift exceeds 3,000 Russian Rubles (about 100 USD) (art. 575.1);

- Exception made in respect of gifts received in the course of protocol events, official business trips, or other official events. However, if the value of the gift exceeds 3,000 Russian Rubles, such gift shall be recognized Federal, Regional, or Municipal Property (art. 575.2).

Amendments to the Russian Criminal Code:

Sanctions are toughened, in particular:

- for Abuse of Powers by a person performing management functions in a commercial, or other organization: the maximum term of imprisonment is increased from 3 to 4 years (art. 201.1);

- for giving a “Commercial Bribe”: the maximum term of imprisonment is increased from 2 to 3 years (art. 204.1);

- for receiving a “Commercial Bribe”: the maximum term of imprisonment is increased from 3 to 7 years (art. 204.3).

Amendments to the Russian Administrative Code:

The Code was completed by Provisions on Liability for the following two Administrative Offences:  •  Illicit Payment on behalf of a Legal Entity (art. 19.28) Sanction – fine of up to the triple amount of the transferred money, or triple price of the transferred property, or services, but in any case no less than 1,000,000 Russian Rubles (about 33,000 USD) with confiscation of the unlawfully transferred valuables. •  Unlawful Employment of a Public Official (ex-Public Official) (art. 19.29)  Sanction for legal entities – fine of up to 500,000 Russian Rubles (about 16,600 USD).

Definition of “Corruption” (under Federal Law “On Fighting Corruption”):

Corruption is  a)unlawful use by a private individual of his/her official capacity in contradiction with the lawful interests of the Society and the State for the purpose of receiving profit (which may be in the form of monetary funds, valuables, other property, or services of financial nature, other property rights) either for himself/herself, or for third persons; b) unlawful granting by a private individual of profit in the way described in cl. (a) above; or c) performance of actions provided for in cl. (a), or cl. (b) above on behalf of, or in the interests of a legal entity.

Corruption includes, without limitation: 

• Misuse of Official Authority; • Giving a Bribe; • Accepting a Bribe; • Abuse of Powers; • Corrupt Business Practices (giving or receiving a “Commercial Bribe”).

“Public Officials” may be defined as officers and employees of the federal or regional state bodies belonging to the legislative, executive, or judicial branches of power.

Public Officials are divided into: • High-level Officials - officers holding posts that are directly established by the Russian Constitution, or federal laws, or by the statutes, or laws of the Russian regions (e.g. the Russian President, Prime-Minister, Federal Ministers, federal judges, Prosecutor-General, Governors of Russian regions).  Particularity in the legal status of such Officials: due to the specific regulation of their activities sometimes general provisions, requirements and restrictions established in respect of Public Service are not applicable to them. • Other Officials holding a Public Service post. The professional activity of such Officials consists in ensuring the execution of powers of federal and regional state bodies and also of the High-level Officials. Listed in the corresponding Registries.  

o Civil Service is divided into Federal Public Civil Service and Regional Public Civil Service. Military Service and Law-enforcement Service belong to the category of Federal Public Service.

 o Public Service vs. Municipal Service

Public Service consists of: 

 • Civil Service;

• Military Service;

• Law-enforcement Service.

Within 2 years after resignation from Public Service, prior approval by a competent state Commission is required for the ex-Public Official to be hired by a commercial or a non-commercial organization, previously managed or controlled by such Public Official.   The Employer of a person, who has resigned from Public Service less than 2 years before being hired by such Employer, is obliged to inform the state authorities on the conclusion of a Labor contract with such person within 10 days of the conclusion.   The Labor contract signed between an ex-Public Official and his/her new Employer in violation of the above requirements shall be terminated.

Failure to comply with the restrictions related to engagement of a Public Official (ex-Public Official) gives grounds for imposing an Administrative Fine in the following amounts:  

• on officers of the Employer: from 20,000 to 50,000 Russian Rubles (approx. from 650 to 1,650 USD);

 • on the Employer – private individual: from 20,000 to 50,000 Russian Rubles (approx. from 650 to 1,650 USD);

• on the Employer – Legal entity: from 100,000 to 500,000 Russian Rubles (approx. from 3,300 to 16,600 USD).

• Public and Municipal Authorities

• Legal Entities and Private Individuals

o In most cases only Disciplinary Liability is imposed on Public Officials for failure to comply with the rules meant to prevent corruption or reveal it at an early stage

(e.g. for failure to comply with the rules meant to prevent the “Conflict of Interest”, or avoid negative consequences thereof; for non-provision, or provision of misleading, or inaccurate information on the amount of profit, property and financial obligations; failure to inform on attempts to corrupt; failure to meet the restrictions on employment after resignation from Public Service).  o Administrative liability (fines) for violation of anti-corruption rules is provided for in a limited number of cases (Unlawful Remuneration on behalf of a Legal Entity and Unlawful Employment of a Public Official (ex-Public Official).  Mitigating factors: sincere repentance, voluntary informing of the authorities on the committed violation, prevention of the negative consequences, etc.

o Criminal liability for major violations: bribery, commercial bribery, abuse of powers, serious misuse of official authority, prohibited commercial activities.

 Mitigating factors: acknowledgement of guilt, providing assistance to the authorities in detection of the crime and of the accomplices, commitment of the crime in the result of hard life circumstances, etc.

Exoneration from criminal liability for giving a bribe, or a commercial bribe in the following cases: there was extortion in place, or if the person, who has committed the crime, informs the competent authorities of the bribery.

- Account Chamber of the Russian Federation;

- Federal Security Service of the Russian Federation;

- Prosecutor’s Office;

- Ministry of Home Affairs;

- Ministry of Justice;

- Anti-corruption Council with the President of the Russian Federation;

- Courts.

• Anti-corruption expertise of legislative acts and bills: adoption of the Federal Law No. 172-FZ dated July 17, 2009 and several Governmental Regulations.   • Disclosure of information on the amount of profit, property and financial obligations of Public Officials, their spouses and minor children.   • Commissions for fulfillment of requirements to professional behavior of Civil Service Agents and for resolution of the Conflicts of Interest: establishment and functioning.

• Russian Anti-Corruption Legislation is primarily aimed at fighting corruption in Russia, while the FCPA is meant to prevent corruption outside the USA.   • The definition of a “Public Official” under Russian legislation is more narrow than the definition of a “Foreign Official” under the FCPA.

Alina Schurova Partner of

Georgiev & Partners Law Firm

40/2, bld. 3, Prechistenka Str.,Moscow, 119034, Russia

+7 495 787 72 52+ 7 499 245 70 40

Schurova@georgiev-partners.ru