We are glad to present you the eleventh issue of the St. Petersburg International Legal Forum Digest.
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Interview about the “Compliance: Global Legal Tendencies and Prospects” round table
Board Member of the RCCA, General Counsel for Russia and CIS of the merged Alcatel-Lucent group of companies, moderator of the “Compliance: Global Legal Tendencies and Prospects” round table
1. Why is the topic in question important for the international legal community? What determines its importance for Russia?
Nowadays compliance has become the key topic at a great variety of professional forums. Compliance defines standards of running a business all over the world, influences on stability of global economics in general and concrete company in particular.
Over the past few years the number of compliance investigations and size of sanctions for businesses that didn’t correspond to various compliance rules has increased dramatically and became an essential risk every lawyer should be aware of.
Activity of the United States Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) demonstrates the size of this risk. During the last few years they have heard a few dozens of cases concerning different international companies, their joint ventures, staff and third parties accused on corruption all over the world. During the years 2008-2013 the whole amount of the ten largest sanctions placed upon companies by these institutions reached $3,572 billion.
The year 2013 confirmed the trend of strengthening fight against corruption all over the globe.
For instance, DOJ and SEC are keeping initiating proceedings for breach of Foreign Corrupt Practices Act (FCPA), and in 2013 27 cases were initiated (in 2012 – 25). In Great Britain they continue serious activity to provide a more effective implementation of the United Kingdom Bribery Act (UK BA); they have introduced the guidelines concerning punishment for fraud, bribery and money laundering and founded the new responsible authority, National Crime Agency (NCA). In France Central Service for Corruption Prevention (Service central de prévention de la corruption, SCPC) suggested passing a special law based on the main principles and practices of FCPA and UK BA. China has always seen considerable changes in this area in 2013; fight against corruption is declared to be a national priority there, they have also made some changes in the national legislation, and for the first time ever managers of the Chinese office of the British global healthcare company GlaxoSmithKline (GSK) were indicted on charges of corruption while previously such cases were considered as part of civil or administrative legislation.
In Russia the latest most important step in fight against corruption was a Presidential Decree No. 224 of April 11, 2014 entitled “On the national plan of counteracting corruption in 2014-2015.” This law determines concrete activities of legislative, executive and judiciary agencies and defines a task to “make an interdisciplinary research based on the Russian Federation legislation” on a wide range of legal issues concerning anti-corruption management. I can suppose that as the result we will have a harmonized anti-corruption management system with due regard to “recommendations of international anti-corruption organizations” (clause 2(e) of the National Plan enacted by the Decree).
In 2013 in Russia amendments to the Federal Law No. 273-FZ of December 25, 2008 “On counteracting corruption” went into effect, in particular, clause 13.3 obliging companies to introduce concrete anti-corruption measures mentioned in the clause. Moreover, in July 2013 the Decree of the Plenum of the Supreme Court of the Russian Federation “On judicial practice concerning bribery and other corruption crimes” came into force, and it contains quite a few explications and specifications influencing law enforcement in this area considerably.
The above-mentioned legal changes which are in place in various jurisdictions witness a certain consistency with which international community counteracts corruption. Consistency and ubiquity of anti-corruption measures in different geographical regions contribute to implementation of the main principle of legal liability, namely inescapable punishment. Inevitability of punishment, rather than its severity, is, according to the theory of law, the most effective instrument to prevent crimes.
On the other hand, the dynamics in development of the legal regulation in this area on both national and international levels indicate that a special branch of law is being formed now, and it uses the whole range of legal instruments along with specific measures of tax and financial control, etc.
Obviously, working with such complex matters require the lawyers to show a deep knowledge of both national and international law as well as enhance their skills in legal analysis and law enforcement.
It is worth noting that there is neither unified definition of term “compliance” nor any concurrence between different jurisdictions or within a certain jurisdiction concerning definition of object, subject, topic and method used in this area of law.
This term is supposed to mean a number of national and international legal rules that regulate social relations in the area of fight against corruption in one or more jurisdictions. So that it would be simpler to identify the mentioned rules in practice all over the world, the term “compliance” is widely used.
Manifestations of corruption aren’t limited by borders of a certain territory and are a global-scale public menace.
The fact that manifestations of corruption go beyond the jurisdiction’s boundaries challenges traditional rules and the very idea of jurisdiction. Legal conflicts occur more and more often, and complicated problems of extraterritorial force of law and competition of legal systems do also appear.
Ambiguity in defining the subject of “compliance” results in absence of clear requirements for professional competence and methodology appropriate for working with legal arrangements in the area of anti-corruption management in all jurisdictions so that their formal incoordination wouldn’t provide additional options to develop corruption.
For this reason, we do plan to emphasize the legal component of our discussion session and discuss legal trends and future prospects of compliance on a global basis.
2. Who will take part in the session and what topics will the panelists discuss?
We understand that discussion sessions at St. Petersburg International Legal Forum bring together the most distinguished experts in various legal areas from around the world so that they could discuss the key issues of international importance and significance. For this reason, we would also like to gather participants from different parts of the world. We have invited lawyers from the USA, Great Britain, Middle Asia, Pacific Rim (China and Hong Kong), Baltic region.
We’d like to discuss this issue using the example of such areas of law as international M&A and international commercial arbitration which are strongly affected by compliance factors. Compliance viewed as part of the international commercial arbitration is an absolutely new trend in international law.
For instance, Daniel Levin, White Collar Crime Partner, White & Case LLP, Washington, DC, will highlight recent achievements in the implementation of FCPA, latest trends in the development of judicial practice concerning such important legal concepts as, for example, “personal jurisdiction”, new approaches of the United States Department of Justice to deferred prosecution agreement (DPA) and non-prosecution agreement (NPA), and future prospects of FCPA enforcement practice.
Elizabeth Robertson, Partner in the K&L Gates LLP London office’s Corporate Crime team, will dwell on changes that were in place in the UK anti-corruption legislation in 2013, tell about the National Crime Agency, UK BA implementation and prospects for businesses.
Emmanuel Jolivet, General Counsel of the ICC International Court of Arbitration, and Vladimir Khvaley, Vice-President of the ICC International Court of Arbitration, Partner of the Baker&McKenzie Moscow office, will discuss the role of ICC in fight against corruption, changes in the approach of international arbitrators to this problem, and the “end of the era” of legalism.
We also expect a paper by representative of the Institute of Legislation and Comparative Law under the Government of the Russian Federation on key tasks which need to be completed in order to enhance anti-corruption legal regulation, implementation of international compliance principles in the Russian Federation with due regard to our legal system in light of the clause 2(e) of the Presidential Decree No. 224 of April 11, 2014 “On the national plan of counteracting corruption in 2014-2015.”
We are also waiting for a distinguished speaker from the People's Republic of China. I will tell his name later, but now I’d suggest paying attention to the topic of his speech. He will review considerable changes in Chinese legislation, judicial practice and law enforcement in the area of fight against corruption; recommendations on how businesses should act; role of compliance as an important factor to enter crucial stock exchanges in Singapore and Hong Kong; development of compliance rules in key jurisdictions of the Pacific Rim.
Laura M. Brank, the head of Dechert's Russia Practice, Partner in Moscow and Washington, DC, will tell about the growing role of compliance in corporate law area, compliance due diligence in M&A transactions. She will also highlight how deterrent non-compliance with the rules may be, to what extent compliance influences corporate rankings, M&A and investment activity in the world.
The Partner of Colibri Law from Uzbekistan will make a review of jurisdictions in Central and South-Western Asia which are considered in terms of compliance practice to be very complex, mostly because of their high position in corruption rankings made by international agencies. We’ll consider practical issues that arise when a certain company decides to start business in the area of interest, possibilities to build legal defense of business, main legal tendencies and forecasts concerning running a business in this region, legal analysis and recommendations.
Managing Partner of the Sorainen law firm will explain how national legislation in Baltic countries and supranational legislation of the EU regulates compliance and provide the analysis of law enforcement practice.
We invite everybody to join our discussion at the IV St. Petersburg International Legal Forum! Looking forward to seeing you soon!
Interview about the “Employee in a Transnational Company. Hiring Foreign Personnel in the Context of Globalization” discussion session
Partner of ALRUD law firm, moderator of the “Employee in a Transnational Company. Hiring Foreign Personnel in the Context of Globalization” discussion session
1. Why have you, as moderator of the session, chosen the topic of hiring personnel in transnational companies this year?
Due to globalization of international relations and development of economic integration, employment relations more and more often outreach the territory of particular states and become international. Currently, interconnections between different regions and the need for competent personnel are constantly growing, and very often these needs are covered by global cross-border personnel relocation. As Russia is continuously becoming more and more important in the world economy, Russian experts often go abroad to temporary work in foreign offices of Russian and international companies, and at the same time nowadays there are quite a number of foreign specialists based in Russia.
In practice it leads to the necessity to take into account the specifics of regulation and registration procedures in connection to international secondment arising in both local and foreign jurisdictions. This also triggers the necessity to promptly resolve challenges related to temporary employment of transferred employees, including immigration issues.
At the same time businesses, especially multinational companies, have to face differencies in national legal approaches to regulation of employment and transfer of personnel. Development and implementation of effective mechanisms meeting the demands of businesses in foreign workforce with due regard to current labour markets’ development is actively carried by governments on both national and international levels.
Thus, as part of the Russian legislation enhancement, a special bill on lease of personnel and all related issues (including secondment) has been being discussed for 4 years. This year the law was finally passed. It forbids personnel lease while allowing temporary assignment, including that in affiliated groups, on the basis of the federal law that should yet be introduced.
2. What topics do you plan to discuss?
At the session we plan to consider the most significant aspects of working in a transnational company from different viewpoints, including such issues as provision of social guarantees to the transferred employees, mounting needs for competent personnel, regulation of secondment in Europe, current immigration rules and recent tendencies in their enhancement.
We will focus on three main question pools. First of all, it is the definition of secondment and its peculiarities, especially compared to lease of personnel - how it is regulated in different countries, possible ways of formalizing secondment, specific practical aspects of sending/receiving a temporary staff member to/from another jurisdictions. Secondly, we will consider the immigration rules which apply to secondments and practical aspects and concerns with respect to hiring temporary staff members. Finally, we will discuss the status of a secondee, his/her rights and social guarantees. Does a secondee enjoy the same level of social guarantees or a different level depending on a jurisdiction of a receiving employer? What are the specifics with regard to social guarantees provided to a secondee? How the responsibilities between sending employer and receiving employer are shared according to the regulation of different states?
3. Who will be speakers at your session?
The session features leading lawyers in the area of labour law. Sophie Maes, Claeys & Engels, Belgium, Stefan Fischer, Kliemt & Vollstaedt, Germany, and Marco Sideri, Toffoletto De Luca Tamajo e Soci, Italy, will share their experiences in resolving problems of cross-border movements and hiring foreign personnel. Julia Borozdna, Pepelyaev Group, Russia, will tell about recent changes in the Russian legislation. As a member of the Association of European Business, Julia has been working on that bill regulating the lease of personnel and secondment. It will be particularly fascinating to get a commentary from representatives of major Russian companies hiring foreign employees. The panel will also feature presentations of the Russian Federal Migration Service, International Labour Organization, International Organization of Employers who will dwell on global trends in this area.
I am sure that the session will highlight the different aspects of the cross-border transfers of employees, and the comments of speakers will provide the audience with practical up-to-date information on current regulation. I will be glad to welcome the participants of the IV St. Petersburg International Legal Forum at our session.
Representatives from 62 states of different regions of the world have already registered for the Forum including the USA, the EU, Middle East, BRICS, Northeast Asia, CIS. Registration is still open.
This year the Forum will welcome 43 Official delegations headed by Ministers and Deputy Ministers of Justice and Chairmen of Supreme, Constitutional and Arbitration Courts.
Currently, the SPILF business programme comprises 47 roundtables within 10 tracks.
On June 20, 2014 Legal Insight Magazine is honored to invite the attendees of the Forum to join the Award ceremony of the IX annual competition “Best Legal Departments of Russia – 2014” which this year convenes as part of the Forum. Over 200 Russian leading lawyers – heads of legal departments of major Russian and international corporations and law firm partners – gather annually to celebrate the winners’ triumph. Visit the website www.bestlegaldepartments.ru for further information or read about the Ceremony in the special issue of the Legal Insight Magazine 4(30) May 2014 dedicated to the Forum-2014.