Question

Why would BP personnel think they could get away with bribing an employee in the Russian anti-bribery prosecutor’s office? If a company decides to bribe, how many years need to go by so that they are safe from prosecution?

Answer 1

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.

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.