GOVERNMENT RELATIONS IN RUSSIA

Authors: Eugeny Roshkov, Yury Panasik, Pavel Melnikov (Kesarev Consulting)

The Constitution confirms the rights of citizens to associate to protect their interests and guarantee freedom of activity of public associations. The rights of the business community are not separately reserved in the Constitution.

In respect of cooperation with the state, citizens have the following rights:

• the right to participate in state administration directly or through their representatives;
• the right to elect and to be elected to state authorities and local self-government authorities;
• the right to send individual or collective inquiries to state authorities and local self-government authorities; and
• the right to appeal in court the decisions and actions of state authorities, local self-government authorities and officials.

In most cases, draft laws have a chance to be passed, subject to approval by the government or the Presidential Executive Office (or both). Draft laws introduced by State Duma members of oppositional factions, by legislative assemblies of constituent entities of Russia or those unapproved by the government or the Presidential Executive Office have almost no chance of being passed.

The issue of delegating authority for the regulation of lobbying is on the table but there has been no discussion on the topic.

Consultation process

Several basic methods and tools can be used by Russian citizens, the business community and public organisations to influence the decision--making processes of bodies of legislative and executive power, though the degree of real influence remains low.

Public councils, expert councils and working groups

Public councils, expert councils and working groups are advisory bodies established by legislative and executive bodies. They are comprised of representatives of civil society, the business community, scientific and expert communities, etc. The powers of these bodies can include participation in the preparation of legislative and other statutory legal acts, participation in meetings and discussions of legislative and executive authorities, and ensuring public control over activities of the authorities. In 2012-14, a reform of public councils under the authorities took place. The reform was aimed at reducing the councils’ dependency on agencies. However, further monitoring of the councils’ activities showed that these bodies performed a non-essential function and did not have any significant influence on the decision-making of state authorities.

Executive authorities establish public councils, expert councils and working groups

Regulatory impact assessment of draft statutory legal acts and other public consultations. In general, any draft of a statutory legal act (SLA) developed by federal executive authorities must undergo regulatory impact assessment (RIA). RIA is divided into two stages: departmental RIA; and RIA of the Ministry of Economic Development. The first stage includes: placement of a notice of SLA development; development of a draft act; preparation of an executive summary and public discussion; and independent anti-corruption expertise. At the first stage, the body that develops the act independently determines the extent of the regulatory impact of the draft SLA. The minimum term for public discussion is 10 days and is directly proportional to the level of regulatory impact. Any user registered online at www.regulation.gov.ru may take part in the discussion. Proposals and comments received before the deadline must be mandatorily reviewed by the body that develops the SLA within 20 days, and a summary of the policy proposals specifying the position of the developer must be published on the portal. The second stage is the preparation of the Ministry of Economic Development’s opinion. Draft SLAs that affect economic activity must mandatorily undergo RIA. Based on the results of an RIA, an opinion about the excessive pressure on business is prepared. In this case, the opinion is not mandatory (ie, the government can continue the development of the SLA even if a negative opinion is given). A mandatory RIA procedure exists only for draft SLAs developed by executive authorities. SLAs issued by legislative or judicial bodies, or the President, are not required to undergo RIA.

The government regularly uses these exceptions as justification for adopting SLAs without RIA. There is also a procedure to assess actual impact with regard to existing and previously adopted acts, to determine whether or not their use achieved the results expected at their development. Following the results of the assessment, the existing act may be revised or abolished. At present, however, this procedure is poorly developed (it includes a very limited number of acts) and has no significant effect on the current regulation. A public executive body implements RIA for SLAs.

Foreign Investment Advisory Council

The Foreign Investment Advisory Council (FIAC) is an advisory body under the government headed by the Chair of the Government. The FIAC is composed of the representatives of approximately 50 major foreign investors in the Russian economy. The FIAC’s activities are divided into two segments. The first includes annual meetings with the Chair of the Government where key problems of foreign investors are articulated and priority areas of the FIAC’s focus are determined. Following the results of the meetings, a list of assignments and instructions of the government is prepared. The second includes the ongoing activity of the FIAC’s working groups. Proposals are prepared with regard to its framework for general improvement of the investment climate in Russia. Meetings of the FIAC’s executive committee under the chairmanship of the Minister of Economic Development can take place several times a year.

Parliamentary hearings

The Federation Council and the State Duma have the right to hold parliamentary hearings on issues within their competence. Members of the public have the right to participate in public hearings. Following the results of a hearing, materials are prepared that may include recommendations for legislative activities. Recommendations can be published and sent to the government. In practice, parliamentary hearings play a minor role in the legislative process. They are usually held to generate media coverage and to draw stakeholders’ attention to the topic under discussion.

Enquiries to state authorities

The Constitution enshrines the right of citizens to send individual or collective enquiries to state and local self-government authorities. Citizens have the right of written enquiries and to a personal appointment with a member of a state authority. Written enquiries must be considered within 30 days of the date of their registration. Such enquiries do not have any serious effect on the legislative process. For instance, there is a ‘Russian public initiative’ website (www.roi.ru) where citizens can advance various initiatives. Upon receipt of 100,000 signatures, the initiative must be considered by an expert working group under the government , which decides whether or not to develop the initiative. If an initiative has gained more than 35,000 votes, it can be submitted to the State Duma. In the autumn of 2017, 14 initiatives received 100,000 votes; of these, one has been implemented and one has been adopted with reservations. Ten initiatives have also been implemented that received less than 100,000 votes. Since introducing this system in March 2013, more than 11,000 initiatives have been submitted.

General

• There is no specific regulation of lobbying in Russia. At different times, the State Duma considered at least three draft laws on the regulation of lobbying. Initiators of the draft laws were usually State Duma members from oppositional factions who did not have any significant political weight.
• The Constitution formally provides citizens with the right of association to protect their interests, and guarantees freedom of activity of these associations. Thus, public associations - social organisations in particular - are the main bodies that will promote public interests. In practice, the most active lobbyists are industry and business associations (the Russian Union of Industrialists and Entrepreneurs, Business Russia, the Russian Grain Union and many others).
• The regulator of public organisations is the Ministry of Justice. Public organisations are registered through the Ministry of Justice, which also maintains the register of public organisations.
• In addition to public organisations voluntarily established by citizens, the law provides for the existence of the Chamber of Commerce and Industry (CCI) and the Public Chamber. The CCI initially aimed to represent the interests of its members in state authorities. The Public Chamber is composed of the representatives of civil society, the scientific and expert community, business representatives, etc. It has the right to carry out examinations of draft laws, draft SLAs, etc, and to send its members and representatives to participate in the meetings of committees and commissions of the Federal Assembly. The CCI and the Public Chamber have a low status and limited influence.
• There is no formal definition of lobbying in the federal laws of Russia. However, a definition is enshrined in the Law on Lawmaking and Statutory Legal Acts of Krasnodar Krai. Legislators of the region define lobbying as ‘activities of designated persons on information interaction with the lawmaking body of the region for the purpose of expressing the interests of the relevant organisations in the regional lawmaking’. Consolidation of this concept in regional legislation is unusual and is an exception for Russia.
• In general, the topic of developing the law on lobbying and regulation of lobbying activities does not attract the attention of the relevant stakeholders (government agencies, large businesses, etc) and consequently has not led to the introduction of regulation in this sphere.
• There  is no registration of lobbyists in the absence of regulation of lobbying activities. Nevertheless, voluntary registration of public organisations with the Ministry of Justice is possible. Registration is required for an organisation to obtain legal capacity (i.e, to receive all rights and benefits provided for by the Federal Law on Public Associations). Registered organisations must publish an annual report on the use of their property; inform responsible authorities about the continuation of their activities; inform responsible state authorities about the amount of money and other property received from foreign sources, and what the funds will be used for; maintain accounting and statistical reporting; and provide information about their activities to the responsible authorities.
• Public organisations are not required to disclose information about interactions with representatives of authorities, the business community, civil society, etc.
• In 2014, the Ministry of Economic Development prepared a draft law whereunder state and municipal employees holding positions in the senior management category or generally at a senior level were required to submit information on a monthly basis about their participation in meetings with representatives of public associations, the business community and non-profit organisations. However, the draft law establishes the meetings for which certain information does not have to be divulged: in the framework of public services provision and state control; in the framework of coordinating, advisory, expert, working and other consultative bodies; press conferences, etc. The draft law was subject to public discussion in late 2014 and was submitted to the government for review in November 2015 but has not been brought before the State Duma since then.
• The draft law of the Ministry of Economic Development proposes introducing amendments to the procedure of citizens’ enquiries to state authorities.
• Citizens are required, during a personal appointment with a public officer, to produce an identity document and to provide information about whose interests the citizen is representing. This information must be recorded in a specific card designed for this purpose.
• No system of lobbyists’ registration exists in the absence of regulation.
• Public associations are registered by the Ministry of Justice. Registration is financed by the federal budget. Legal entities and entrepreneurs are registered by the Federal Tax Service, which is also financed by the federal budget.
• No separate system for physical persons’ registration exists.
• There are no official registers of lobbyists. However, the draft law of the Ministry of Economic Development proposes that information about the meetings should be published on the internet on a monthly basis.
• The Ministry of Justice maintains the register of public associations that can be accessed online. Public organisations must also regularly publish the reports about their activities online, which are usually of a general nature and do not only relate to the issues of interaction with state authorities.
• There is no code of conduct enshrined in law; however, various public organisations have the right to adopt this type of document. Voluntary compliance with the code of conduct is independently regulated by each public organisation. In addition, major companies (mostly foreign) have codes of conduct that take into consideration anti-corruption laws, including the Foreign Corrupt Practices Act and the UK Bribery Act in terms of interaction with state authorities and public officers. These codes are usually mandatory for employees and are applicable to the companies’ business partners.
• There is no legislation restricting the use of the media by lobbyists to influence stakeholders and public policy outcomes. However, the executive branch sends businesses clear messages that using the media is counterproductive, though businesses still try to publicise and promote their interests through media channels, despite the media having a limited impact on stakeholders. As a rule, the media becomes involved regarding initiatives that will have an impact on the public. In addition, the state perceives attempts to use the media and other channels to influence public policy negatively, especially if these attempts look like interference in political processes.
• In November 2017, a law was passed introducing foreign agent status for media outlets that receive foreign financing
• Russian legislation does not regulate conflicts of interest for politicians and political parties.However, the issue of conflict of interest is applicable to state employees. A conflict of interest is defined in Russian law as a situation in which the personal interest of a public officer affects or could affect the proper, objective and impartial performance of his or her official duties. Personal interest is defined as income in the form of money, property, non-property rights, property-related services, work deliverables or any benefits received by a public officer or his or her close relatives (or both), citizens or organisations to which a public officer is connected by a familial, property, corporate or similarly close relationship. Public officers must take measures to prevent any possibility of a conflict of interest. Such measures include warning his or her employer about a potential conflict of interest. If a state employee holds securities or any other rights for equity participation in any organisation, he or she must transfer these rights to a trustee who will be responsible for their management (trust management) in order to avoid a conflict of interest. The same requirements apply to municipal officers, employees of the Central Bank, employees in state corporations, the Pension Fund, etc. The need to report about the conflict of interest is also formally applied to individuals occupying public office, including the President, the Chair of the Government, his or her deputies, federal ministers, State Duma members, Federation Council members, and judges of the Supreme Court and Constitutional Court. In practice, compliance with the requirements for registering a conflict of interest is not adhered to strictly. In particular, the practice of registering shares in businesses for adult children or the practice of fictitious divorces is widespread in order to preserve business management within the family. Many government officials actually own accounts and property abroad.
• In addition to the registration of a conflict of interest, a number of other requirements for public officers is established by law. Thus, public officers and individuals holding public office are required to submit information on their income, property and property-related obligations on an annual basis. This information must also be provided with regard to his or her spouse and minor children. For individuals holding public office, more severe restrictions are put in place. In addition to the declaration of income and expenses, it is established that they are not entitled to engage in entrepreneurial activities or other paid activities, except for, among others, teaching, creative activities and scientific work, and receiving speech fees. Owing to the fact that Russia has not still ratified article 20 of the United Nations Convention against Corruption - which provides for punishment in the event of a significant increase in the assets of a public official that he or she cannot reasonably explain, in relation to his or her lawful income - unfortunately, public officials are still able to capitalise on conflicts of interest.
• It is prohibited to receive gifts (except for simple gifts that do not cost more than approximately US$50 and gifts at hospitality events) in connection with the official capacity or the performance of the official duties of individuals who: occupy public office; occupy the public office of a constituent entity; occupy municipal offices; are public and municipal officers; or are employees of the Bank of Russia. Members of the State Duma and the Federation Council are not banned from receiving gifts. Nevertheless, there is a ban set for them as well as for public officers on receipt of monetary rewards, loans, services, payment for entertainment, leisure activities, transport expenses and other compensations in connection with the performance of their official duties. 
• There is extensive general anti-corruption legislation. Most of the laws and regulations are aimed at minimising corruption among public employees and individuals holding public office. The main law in this field is the Federal Law on Counteracting Corruption, which establishes the fundamental principles of corruption control, and the legal and organisational basis for preventing and fighting corruption. Additionally, Russia has fully or partially ratified the following international conventions in the field of combating corruption: the United Nations Convention against Corruption; the Criminal Law Convention on Corruption; the United Nations Convention against Transnational Organized Crime; and the Organisation for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials. Responsibility for corruption is established by various provisions of the Criminal Code. However, anti-corruption laws are not effectively implemented, as evidenced by the corruption cases that have frequently arisen, and, when they are implemented, they are not enforced in a manner that is equal for all social groups. Forfeiture of property as a measure of restraint of corrupt practices is not frequently used in the field of fighting corruption. Restrictions are established in this field in accordance with the law to avoid a conflict of interest. If a public officer managed any subordinate within his or her authority, employment in this subordinate organization is possible only subject to permission granted by a special commission on prevention of conflicts of interest. Additionally, when entering employment, public officers are required to notify their future employer to the fact that they worked in public service, and the employer must notify representatives of the state of the previous place of employment about the conclusion of an agreement with the employee within 10 days. All the above requirements apply to public officers for two years after their dismissal from public service. The practice of employment of former public officers in private companies is widespread. Thus, upon leaving public service, public officers sometimes hold positions on the board of directors of large companies, government relations units, etc.