Anton Kabakov (Partner, lawyer) presented the recent amendments to the anti-corruption law and gave recommendations on necessary actions which all companies operating in Russia should to take in order to avoid tremendous fines and expelling.
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1. Anti-corruption compliance in Russia by Anton Kabakov
Hellevig, Klein & Usov August 27, 2014 1
4. 4 Tax Advice Compliance and Corporate Law Labor and
Immigration law Dispute Resolution Intellectual Property Rights and
Contract Law
5. 5 2006 2008 2011-2014 UN Convention on Corruption ratified
Criminal law convention on corruption ratified Russian Anti-
Corruption Law Amendments to anti-corruption law Ministry of Labor
guidelines Amendments to Administrative Offenses and Criminal Codes
National anti- corruption roadmap
6. CASE STUDIES (May apply to Russian subsidiary misconduct) 6
Pfizer was prosecuted by the U.S. government for illegal payments
made by its subsidiaries to foreign officials in Russia and other
countries to obtain regulatory approvals, sales, and a greater
number of prescriptions for its products
7. CASE STUDIES (May apply to Russian subsidiary misconduct) 77
Daimler AG paid $185 million to the U.S. government for violation
of FCPA by bribing officials in several countries, including
Russia
8. 88 Organizations must develop and take anti-corruption
measures.
9. Organizations are encouraged to take the following measures:
99 Responsible officers Cooperation with authorities Introduction
of standards Code of ethics Prevention of conflicts of interest
Prevention of false reporting MEASURES
10. STANDARDS AND PROCEDURES 10 Analysis of business processes
Corruption risk assessment Mapping of corruption risks List of
possible violations Establishing preventive procedures
11. 11 Mandatory for all companies (Article 19 Law on
Accounting) Risk Mapping and Assessment Subjecting risky
transactions to authorization Checking the Economic Feasibility
Monitoring of Accounting Data External Audits
12. 12 DDs and Vetting Procedures Reporting conflict of
interest Conflict of interest standards Prevention of Conflicts of
Interest
13. Hotline, reporting procedures Protection of whistleblowers
Investigation procedures Disciplinary procedures and actions
13
14. 14 Employment Agreements POAs and Proxies Contracts with
Suppliers and Distributors Standard Anti-Corruption Clauses
15. 15 Risks Penalty for Companies Criminal Charges for
Management From RUB 1 Million to Several Billion (Article 19.28(1)
Code of Administrative Offenses) The illegal transfer, offer or
promise on behalf of or for the benefit of a legal entity to an
official (including foreign official and officials in international
organizations), manager in commercial or other company, of money,
securities or other property, the provision of services in the
nature of property, or granting property rights for the commission
of actions (inactions) associated with his/her position... "
Failure to implement anti- corruption measures could be interpreted
as involvement or support of corrupt practices by company
employees.
16. CASE STUDY (1) (Saratov Regional Court Decision dated
28.05.2013 Case N 7-297/13) 1616 The court ruled as follows: "...
imposition of an administrative fine of 1 million rubles with
confiscation of funds in the amount of 8,000 rubles ... and stated
that "... transferring money amounting to 8,000 rubles as a bribe
... the lawyer attempted to obtain funds in enforcement proceedings
..."
17. Volgatorg: The court ruled in favor of "... an
administrative penalty in the form of a fine of 1 million rubles
...." and stated that "... The deputy store manager acting on
behalf of the company... committed a crime - attempted bribery ...
" 17 (Saratov Regional Court Decision N 7-478/13 of dated
12.09.2013) CASE STUDY (2)
18. 18 Establish real procedures Policies and standards How can
your company protect itself? A legal entity is guilty of an
administrative offense if it had the opportunity to comply with the
rules and regulations the violation of which results in
administrative liability, but it did not take all possible measures
to comply with them. (Article 2.1(2) Code of Administrative
Offenses) Take all possible measures to comply with anti-corruption
regulations:
19. The court ruled: "... An investigation and court
proceedings should determined whether the company had an
opportunity to prevent corrupt payment by an official on behalf of
the company ... 19119 CASE STUDY (1) (Ruling N 2360-O of the
Constitutional Court of the Russian Federation dated
24.12.2012)
20. The court did not impose a fine and stated: ... the facts
supporting the offense ... have not been established ... [since]
... sufficient measures were taken by the company... namely ... job
description was developed..." 20 (Supreme Commercial Court ruling N
16234/06 dated March 20, 2007) CASE STUDY (2)
21. ZAO Intrace-Avto: The court did not impose a fine and
stated: ... the Court concluded that the company was not at fault
as it had taken all the necessary measures to comply with the law:
adopted internal policies ... 2121 (Decision of Moscow Federal
District Court dated July 5, 2004 in Case N KA- A40/5421-04) CASE
STUDY (3)
22. 22 WE PROPOSE Reviewing your current anti-corruption policy
Reviewing your processes to assess and map risks Preparing the
following anti-corruption documents: Anti-corruption policy or
supplemental provisions Standard supplemental employment agreement
Standard clause for agreements with clients and suppliers Official
enactment (Minutes of general meeting, etc.) Standard clause for
power of attorney IT systems aimed at making the processes
transparent (automatic recording, clear authorization matrix,
reporting)
23. Call-center for all offices: +7 495 225 30 38 Anton Kabakov
[email protected] +7 (921) 397 1193 23
