When the terms ‘business’ and ‘Russia’ are found in the same sentence, the word ‘corruption’ is never far behind it seems, so it is unsurprising that much has been made of how the UK Bribery Act could effect (indeed hopefully improve) the investment climate in the ambit of the Kremlin. The Lawyer has a special feature on the build-up to the materialization of the law:
“The practice areas that I spend most of my time on now are compliance, anti-bribery and anti-corruption,” reports Paul Melling, founder of Baker & McKenzie’s Moscow office. “A lot of Russian clients are concerned about their exposure to the Bribery Act as a result of obtaining a listing in the UK. Many Russian companies – the smart ones anyway – see the increased focus on extraterritorial regulation of anti-corruption as an opportunity in many ways.”
Melling describes situations where Russian companies seekingbusiness partners overseas or foreign investors are focusing on theircompliance practices to reassure these potential partners that they aresticking to the new legislation.
“They can see that that gives them a distinct competitive advantage overRussian companies that don’t do it,” Melling says. “In a strange way,legal developments in the past few years in the UK and US are having aneffect on business practice here – perhaps as much as the efforts thatRussia’s president Dmitry Medvedev himself is making.
“In thelong term it will be quite good news for companies doing business here.In the short term it creates headaches for multinational companiesbecause Russia is one of the few emerging markets predicting revenue andprofit growth, but it also has associated risks.”
Lawyers think some Russian companies are also examining the Bribery Actfor other reasons. Astapov Lawyers partner Oleh Malskyy says there is afear that competing corporations could use the legislation as acompetitive weapon.
“It’s not to be compliant, it’s not because of the fear that UKauthorities will go after them; it’s more looked at as a matter ofsecurity to protect against possible activities of competitors,” hesays.
But the result is the same, with Russian clients attempting to comply with the Bribery Act’s provisions.
Read the whole article here.