11.08.08

At a meeting in Gagarin on Thursday, July 31, President Dmitri Medvedev announced that he has signed a National Counter- Corruption Plan. This document has been posted on the President's official website. 

In the plan, President Medvedev issues instructions to write a bill on administrative penalties for companies or organizations involved in corruption. The Prosecutor General's Office will investigate such cases. According to presidential aide Larisa Brycheva, these amendments will be submitted to the State Duma as soon as September. A year ago, a group headed by then-presidential aide Viktor Ivanov was working on this issue. The bill written by that group proposed penalizing companies even for "actions that establish preconditions for corruption-related infringements."

That bill listed six forms of penalties: a warning, a fine, suspension of operations, a ban on particular forms of activity, confiscation of assets, and shutdown.

Alexei Melnikov (Moscow City Board of Lawyers) argues that penalizing a company for crimes committed by its employees is "like punishing a football club for the misbehavior of its fans": this motivates the company to see that its employees observe the law. But an excessively broad range of penalties only offers an extra pretext for corruption, says Melnikov; severe fines would be the most effective measure.

At the meeting, Medvedev promised to use "proletarian legality" in sorting out any municipalities that fail to comply with the law on granting small businesses priority rights to buy out the premises they lease. In terms of measures for improving state administration, priority will be given to oversight in relation to alienation of property and providing state assistance in countering corruption.

Some measures have been taken already. For example, as of this year, federal state unitary enterprises (FGUPs) are forbidden to dispose of (sub-lease or transfer the rights to) their land. An Economic Development Ministry source notes that a bill extending this prohibition to state institutions - like the Russian Agricultural Academy - was signed into law by President Medvedev on July 22. The next step should be a law forbidding state agencies and municipalities to transfer land rights on a non- competitive basis (without an auction). At present, auctions are only mandatory if a plot of land is being leased for housing construction, says the source.

A bill requiring a majority transition to auction-based mechanisms has already been passed by the Duma in the first reading.     The plan also covers regulating the provision of state aid.

Unjustified state aid has been banned since 2007 under the law on protecting competition. Municipalities must apply to the Federal Anti-Monopoly Service (FAS) for permission to receive state aid.

Alexei Sushkevich, department head at the FAS: "We have received around 1,000 of these applications in the year since the law came into force, and most of them will be approved."

The plan instructs the federal government to arrange a transition to online auctions for selling confiscated assets. This idea has been discussed for several years, but the law on disposing of state property still doesn't regulate the use of electronic procedures, says Anton Yemelnikov, general director of SETonline (electronic auction organizer); this area is only covered by the law on state purchasing.

The Russian Federal Property Fund (RFFI) made 1.048 billion rubles in 2007 from selling confiscated assets. In March, Deputy Prosecutor General Alexander Gutsan estimated that the federal treasury had missed out on 21 billion rubles in revenue because confiscated contraband was being sold at throwaway prices.

Applicants for public servant or judge positions can expect oversight to be applied to their assets. A bill on income and asset declarations for judges is in the Duma already, submitted last year by the Supreme Arbitration Court. Moreover, according to a presidential administration source, public servants will be obliged to report any dubious proposals they receive, or any suspicious behavior among their colleagues.

Political analyst Dmitry Badovsky says it is necessary to specify procedures for business owners who enter state service and hand over the managment of their assets to others for the duration of their state employment. Gennadi Gudkov, deputy chairman of the Duma's Security Committee, proposes monitoring the assets and incomes of employees of fully or partially state-controlled enterprises, along with the assets and incomes of their relatives.

Anatoly Lyskov, chairman of the Federation Council's Judicial and Legal Affairs Committee, acknowledges that the parliament needs anti-corruption measures as well: the activities of lobbyists must be ruled out.

Vadim Soloviev, member of the Duma's State-Building Committee, maintains that public and parliamentary oversight institutions should be developed. Lyskov proposes requiring the parliament's consent for appointments of key ministers in the government's security and law enforcement bloc and financial bloc.

Before the Counter-Corruption Plan was developed, the Kremlin established a Counter-Corruption Council and an inter-agency working group. Sources from the Council report that Medvedev made corrections to the plan personally, and even rejected the first draft of the plan "for its complacency."

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Source: "Vedomosti"