Tuesday, September 30, 2014

Russia’s Enactment of Bribery Law Applauded as ‘Big Step’ for Competition

May 10, 2011 in WTO Reporter

PARIS—The May 4 signing of Russia’s new anticorruption legislation is a “key step” toward improving business competition conditions to meet the country’s commitments as a member of the Group of 20, as well as smoothing Russia’s eventual entry into the Organization for Economic Cooperation and Development, the U.S. ambassador to the OECD told BNA the same day.

According to the Russian government, President Dmitry Medvedev signed anti-corruption legislation that, among other things, increases fines for bribery to up to 100 times the amount of the bribe involved. To become law, the legislation, which amends the Russian criminal code and other laws, must be published in the country’s official gazette.

The U.S. ambassador to the OECD, Karen Kornbluh, said the law appears to meet standards set under OECD’s 1997 Anti-bribery Convention and could pave the way for Russia to sign the convention as early as during OECD’s May 25-29 forum and ministerial week, which U.S. Secretary of State Hilary Clinton is scheduled to attend.

Russian entry into the OECD is likely to take significantly longer, she said.

The organization has 34 members, including the world’s most advanced economies. Thirty-eight countries, including some non-OECD countries, have ratified the OECD anti-bribery treaty, which was updated in 2009 to explicitly bar allowing tax deductibility for bribes.

Three OECD Criteria Must be Met

Kornbluh said the United States and other countries on OECD’s Working Group on Bribery will review Russia’s new law to assess if it satisfies three main requirements identified by the group and communicated to the country in June 2010.

She said those criteria include, first, whether the new legislation made it illegal to bribe foreign public officials; second, whether it increased the statute of limitations for foreign bribery committed by a legal person; and third, whether it significantly increased sanctions for both natural and legal persons for the offense of foreign bribery.

“Our preliminary read says that the legislation that President Medvedev signed does respond to the issues that the Working Group on Bribery identified,” she said.

G-20 Issue

The U.S. official said bribery is an important Group of 20 country issue for the United States because, “We don’t want our companies, which are subject to the U.S. Foreign Corrupt Practices Act, to have to compete against companies that are bribing to get business. Corruption undermines the market system and the rule of law.”

The G-20 Seoul Summit in November 2010 produced an action plan for combating corruption, promoting market integrity, and supporting a clean business environment .

The plan calls on G-20 countries not party to the convention—China, India, Indonesia, Russia, and Saudi Arabia—to cooperate more closely with the OECD Working Group on Bribery or join the treaty.

France has included fighting corruption as one of the goals of its 2011 presidency of the G-20 countries.

G-20 members are Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States…

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