Update: there is now an English translation of the legislation on the Kremlin’s website. How accommodating!
Dima’s day is finally here – on October 1, after Pres. Medvedev met for the first time with the newly-formed Anti-Corruption Council, the Kremlin announced that anti-corruption legislation will be introduced into the Duma ‘within a few days.’ The legislation could not come at a better time. Russia’s stock market has lost 50% of its value since May and now inflation appears to be spiraling out of control as demand begins to exceed capacity. The TNK-BP and Hermitage affairs, Putin’s Mechel comments, and the war in Georgia have also scared away already skittish and liquidity-hungry foreign investors. Most importantly, watchdogs are reporting that Russia’s corruption levels are at an 8-year high, though this could in part be due to the general expansion of economic activity over the past eight years. Indeed, Medvedev needs to get to work on the long, difficult structural reforms that are necessary in order to modernize Russia’s economy.
The legislation was introduced on October 3, and consist of one main bill – On Anti-Corruption Measures (О Противодействии Коррупции) – and several amendments to existing Federal Laws. The laws are considered quite comprehensive and meant to ‘seriously toughen‘ the sanctions against and enforcement of corruption in Russia. The basis for the legislation is the National Anti-Corruption Plan, approved at the end of July of this year. The legislation includes many significant provisions, including new requirements that federal and municipal employees and their families state the sources of their income and any ownership in companies (Article 8), an obligation to inform on the corrupt acts of other officials (Article 9), and a prohibition on private sector work for officials in the two years following their service (Article 12).
The legislation is likely to be viewed with suspicion and sarcasm from foreign investors and other observers at first. If enacted and enforced, however, the anti-corruption measures could form the basis for a cure to the ‘grave illness‘ that currently weighs on the Russian political and economic system. It will be interesting to see how many changes the legislation undergoes while in the hands of those who will be most heavily impacted by its provisions (i.e., Duma deputies). Also of note is the likely impact of the credit crisis in Russia on this bill – the need to reassure foreign investors will possibly expedite its passage. I will try provide a more detailed analysis of the legislation in a future post.