The new Russian Anti-Bribery-Law


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This presentation gives an overview over the amendment (article 13.3) to the Russian anti-bribery-law. Organizations operating in the Russian Federation are required to implement certain preventive measures against bribery and other offences. The approach resembles requiremenst known from the US-FCPA and the UK Bribery Act.

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The new Russian Anti-Bribery-Law

  1. 1. The new Russian Anti-Bribery-Law Implications of the latest amendment 13.3 to the Russian Anti-Corruption-Law No. 273-FZ © 2013 1
  2. 2. Effective January 1, 2013, Federal Law No. 273FZ on preventing corruption was amended by article 13.3 • • • • Until the recent amendment it was left to the discretion of companies how to implement anti-bribery-measures, following the Business Judgment Rule Article 13.3 requires “organizations” to implement certain preventive measures (see next slides) aimed at preventing bribery This amendment is continuing the trend of steadily increasing antibribery-rules by Russian administration since 2006 “Organizations” as defined under the article 13.3. would include all companies operating in the Russian Federation (including those with foreign headquarters) as well as NGO’s © 2013 2
  3. 3. The six measures required by Article 13.3 1. 2. 3. 4. 5. 6. Assigning a dedicated function to be responsible for preventing corruption and other offences Co-operating with law enforcement authorities Implementing standards and procedures to ensure compliance Establishing a Code of ethical Business Conduct Preventing and resolving conflicts-of-interest Preventing false documentation of business transactions and the use of forged documents © 2013 3
  4. 4. 1. Assigning a dedicated function to be responsible for preventing corruption and other offences • • • • Obviously, the law requires companies to nominate a “Compliance Officer” like it is the case in most bigger multinational organizations Assigned tasks of the function would include the implementation of the compliance program, i.e. i) implementing core policies, ii) compliance training, iii) investigations, iv) remediation of compliance issues etc. The function must be effective, namely having adequate skills, resources and should be allocated at senior management level The role should be documented in a Job Description in order to satisfy documentation requirements by authorities © 2013 4
  5. 5. 2. Co-operating with law enforcement authorities • • • The requirements to cooperate with law enforcement agencies in case of compliance issues is very similar to the requirements articulated in the bribery laws of the US (FCPA) and the UK (UKBA) The level of potential fines in case of compliance violations is in the US and the UK heavily dependant on the will of a company to collaborate with official institutions. Russia seems to follow the same approach with this provision in article 13.3 Compliance issues must be managed in a thorough and professional manner (investigation, resolution and remediation). Documentation is of key importance © 2013 5
  6. 6. 3. Implementing standards and procedures to ensure compliance • • • Compliance standards and procedures are crucial for any compliance program. While Russia has traditionally been strong in written guidelines, focus should be on deficiencies in the compliance relevant areas and procedures Companies are strongly recommended to implement an Anti-BriberyPolicy that serves local legal requirements. Russian companies with Business Partners abroad should ensure that the policy is meeting the needs of the US-FCPA, UKBA and the OECD convention as well The need for additional regulation must be identified and can be industry specific © 2013 6
  7. 7. 4. Establishing a Code of ethical Business Conduct • • • Codes of Conduct are common for multinational companies. Based on US and UK experience they are – besides the “tone-of-the-top” – the key element to articulate a company’s attitude towards compliance with legal rules and obligations Article 13.3 does not give guidance on the expected content of the policy. However, following international best practices, at a minimum these areas should be ruled: i) anti-bribery, ii) anti-trust and fair competition, iii) CSR topics, iv) employee-related subjects, such as discrimination and harassment Employees must be trained on the Code of Conduct and sign their acceptance (documentation!) © 2013 7
  8. 8. 5. Preventing and resolving conflicts-of-interest • • • • This provision follows consequently the requirement for Russian government officials and their family members to disclose any expenses On the counterpart, managers and employees with ties to government members should disclose their potential conflicts of interest in writing Companies are required to respond to conflict-of-interest situations properly by taking adequate measures Following a common US practice it is advisable to let employees confirm on an annual basis if they have potential conflicts of interest or not (documentation!) © 2013 8
  9. 9. 6. Preventing false documentation of business transactions and the use of forged documents • • • This provision resembles the “book and records provision” under the US-FCPA. Companies are required to maintain accurate books and records of company transactions at all times The practical implications of the provision can be significant: Companies are required to implement effective controls over financial reporting. Accountants need to be trained on “red flags” in business transactions It is to be noted that the provision might be used by prosecutors in cases where ultimate proof of bribery is not available. Similar to US practice, companies can face the problem that they can not prove that a certain business transaction was NOT a bribe © 2013 9
  10. 10. Implications 1 • • • The Russian law does not describe sanctions for organizations who do not implement the six measures described in this presentation However, implementing the measures might greatly reduce administrative fines and penalties for organizations (under article 2.1 of the Administrative Offence Code a company is automatically at fault if it can not document that it has taken all possible steps to prevent an offence) Under Russian criminal law, individual managers might face liability for not having implemented the six measures as their behavior could be perceived as willful blindness or even involvement in criminal activity © 2013 10
  11. 11. Implications 2 • • • The new amendment 13.3 to the Russian Anti-Bribery-Law should be a watch-out for all companies who have a business operation in the Russian Federation Russian authorities have raised their anti-bribery requirements on corporate level to international standards It is reasonable to assume that Russian authorities will interpret the law following international standards as well © 2013 11
  12. 12. Thank you is the web resource center for Compliance training material and policies Ready-to-go solutions include for example • Code of Conduct templates • Anti-Bribery Policies • Anti-Trust Training • Conflict of Interest Training • Proper Behavior at the Workplace Training © 2013 12