22 September 2006
Egorov, Puginsky, Afanasiev and Partners lawyer commentsfor the article"Arbitration Court Sets Rules for Gift-Giving to Government Officials" byKommersant, Russia

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// Arbitration Court Sets Rules for Gift-Giving to Government Officials

Russia's higher arbitration court is preparing to define the protocol for governmental officials and judges in receiving and declaring gifts. The maximum permitted value of gifts received in connection with one's job is being increased from 500 to 4,000 rubles, and it will be necessary to declare personal gifts of more than 100,000 rubles. Infractions of these rules can become grounds for criminal prosecution. Experts note that similar rules exist in many countries around the world but admit that the prospects for the effectiveness of their control over Russian judges and officials is uncertain.

The court's amendments to the laws governing gifts for officials have already received approval from the presidential administration and are now being discussed with interested parties among the departments affected by the changes and with experts in the field. On Monday Russian Finance Minister Aleksey Kudrin declared that Russia needs to create a special system for fighting corruption, particularly in connection with controlling gifts given to officials.

The current limit of no more than 500 rubles per gift is governed by numerous restrictions. Russian federal government servants can receive such gifts only at official events, and municipal officials do not have the right to receive any gifts at all.

The amendments being prepared by the court propose a single rule for all government servants: any official will now be eligible to receive gifts of up to 4,000 rubles, but only in conjunction with official events. More expensive gifts will need to be turned over to the government. The most important change, however, concerns personal and everyday gifts to officials that are not connected with their official duties – a sphere that so far the law has not touched. The new laws would require that all gifts worth over 100,000 rubles be declared, with the exception of gifts from close relatives.

Under the new laws, officials themselves will be responsible for estimating the value of the gifts they receive and deciding whether a gift is in connection with their official duties. If an official accepts a gift that he or she believes is worth more than the allowed amount, it will qualify as a bribe and will be considered grounds for criminal prosecution, said Higher Arbitration Court chief of staff Igor Drozdov.

The adoption of the amendments is widely believed to be a sign that Russia is joining the West in its attitude towards gifts received by officials and the ways that the giving and receiving of these gifts are regulated in order to avoid conflicts of interest or outright bribery.

However, representatives of business associations doubt that the amendments will make the struggle against bribe-taking effective. "The times of bribes in suitcases are long past, and now rewards take other, often even nonmaterial forms," said Edward Godzdanker, the deputy director of TNK-VP Management company's legal department. "Often close relatives of influential officials and judges work in the sphere of business and make use of possibilities to exercise influence."

The provision concerning gifts from close relatives is seen by many experts as an obvious loophole in the law, as is the question of what constitutes an official event. The question of borderline cases – gifts some consider so ordinary, such as flowers for women on March 8, as to be insignificant – is also likely to need clarification. However, Drozdov considers the question to be not only one of law but also of ethics and business reputation.

Experts believe the bill allows to give gifts to officials indirectly, via close relative, without any declaration. It’s also a problem to define what shall be considered an official event. "May it be applied to the participation of officials and judges in seminars abroad, if the organizers pay for the business-class flight and stay in fashionable hotels?" – asks Igor Serebryakov, senior lawyer of the Law Offices “Egorov, Puginsky, Afanasiev and Partners”.


Olga Pleshanova