On February 1, 2012, Russian President
signed into law a ban on bribing foreign officials. Russia has now joined the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“the Anti-Bribery Convention”) of the Organization for Economic Co-operation and Development (OECD).
The OECD created the Anti-Bribery Convention in 1997, which is comprised of 34 countries including many of the largest global economies, such as the United States, Australia, Canada, Japan, and members of the European Union. Countries that signed the Anti-Bribery Convention formally prosecute citizens who pay bribes abroad. The act was not considered criminal activity in Russia until May 2011. That is when Russia made changes to its legislation in preparation to sign the OECD convention. The lack of any threat that Russian businessmen may be prosecuted in Russia for such behavior gave them an unfair advantage over European and American competitors who are subject to domestic, criminal sanctions for making bribes abroad.
Russia’s signing into law a global convention to criminalize bribing of foreign officials is a major step in Russia’s effort to fight corruption. In 2011, Russia was rated the most “bribery-prone” country out of the world’s 28 biggest economies. A recent economic crime survey by PricewaterhouseCoopers found “Russia ranked 143rd out of 183 countries in the 2011 edition of Transparency International’s Corruption Perceptions Index.”
Key to Russia’s effort to stamp out corruption, however, is the enforcement behind the laws. This is where the Anti-Bribery Convention plays its role. Under the OECD Anti-Bribery Convention, governments of the OECD countries are committed to banning bribe payments overseas. After becoming a party to the Convention, Russia will be subject to peer reviews of its compliance with the Anti-Bribery Convention and, just as other signatory nations, Russia will be held accountable for enforcing the laws in order to meet the requirements of the OECD.
The Anti-Bribery Convention and appropriate enforcement thereof will hopefully result in lowering the risks of corruption, which is one of the major barriers for international companies attempting to do business in Russia. Corruption leads to weak enforcement of laws, non-transparent and inconsistent application of regulations, arbitrary licensing and permit inspections.
Russia’s joining the Anti-Bribery Convention promotes international cooperation on fighting bribery overseas, which hopefully will lead to eliminating unfair advantage over Russia’s European and American competitors as well as attract international investors.