by Jane Shvets, Anna V. Maximenko, and Elena Klutchareva

Effective anti-corruption compliance programs include protections for whistleblowers that raise corruption concerns.  Article 13.3 of Russia‘s 2008 Federal Law No. 273-FZ on Counteracting Corruption (the “Anti-Corruption Law”) addressed Russian lawmakers’ expectations regarding effective compliance programs.[1]  But the law was silent on whistleblower protections.  Recently proposed legislation in Russia may help address this gap.

Even before the Anti-Corruption Law came into effect, Russian law included several provisions that could be interpreted to provide some protection for whistleblowers.  For example, Russian employment law prohibits discrimination and sets out an exhaustive list of permissible grounds for dismissing an employee for cause; firing an employee for blowing the whistle on potential corruption is not among them.  As a result, firing an employee for whistleblowing could ran afoul of Russian employment law.  In addition, the Russian government can protect individuals whose security might be threatened as a result of their participation in criminal proceedings that involve alleged corruption.  The state might, for example, provide such witnesses with physical protection, relocate them, or even give them new identities.

These legal protections, however, were not specifically tailored to corruption-related offenses and did not address certain key issues.  In particular, Russian law does not protect a whistleblower’s identity; there is, therefore, no assurance of anonymity for those willing to report potential corruption.  The absence of such protections dramatically increases the risk of retaliation by those whose misdeeds are reported and others.

In 2013, the Ministry of Labor and Social Protection of the Russian Federation (the “Ministry of Labor”) recognized this shortcoming.[2]  The Ministry of Labor identified the importance of establishing a whistleblower hotline and procedures designed to protect whistleblowers from formal and informal sanctions.

Soon thereafter, the Russian President, in National Anticorruption Plan for 2014-2015, instructed the government to develop a legal framework for protecting whistleblowers from prosecution by officials whose actions they reported.  In 2015, the Ministry of Labor drafted a bill,[3] but it did not advance through the legislative process for more than two years.

The Russian government recently resumed its consideration of legislation to protect whistleblowers.  In October 2017, the government introduced in the State Duma amendments to the Anti-Corruption Law that would provide state protection to certain persons who inform their employers or state authorities of corruption-related crimes.[4]  As drafted, this protection extends to state or municipal officials or employees who allege criminal violations by their employers or state authorities.

In addition to the already-existing protections in criminal proceedings and certain protections in employment relations, the contemplated state protections include the following:

• Confidentiality: Information on the whistleblower and the data included in a whistleblower notification are to remain confidential and cannot be disclosed by the employer, its officials, state authorities, persons rendering legal assistance on a pro bono basis, or attorneys.  The whistleblower’s identity can be disclosed only upon his or her consent.
• Legal assistance on pro bono basis: Whistleblowers are entitled to pro bono legal assistance to help prepare the reporting of a corruption offense and in connection with any claim of discrimination resulting from such reporting.
• Guarantees against discrimination: An employer can only take adverse employment action against a whistleblower – e.g., termination, imposition of disciplinary penalties, or transfer to another position –  after approval by an ethics and conflict-of-interest commission or similar authority.  A state prosecutor must be invited to attend the meetings of such authority.  This guarantee is effective for two years from the date of the reporting of the corruption offense.  The employee may be terminated earlier only if the information provided in the whistleblower’s report is determined to be unfounded in an internal investigation conducted by the employer.

The proposed bill leaves room for interpretation.  For example, the mechanism of involving an ethics and conflict-of-interest commission or similar authority in employment-related decisions related to a whistleblower is intended to apply to both state and private employers, but it is not clear whether the already existing corporate authorities of the private employers will qualify as “similar authorities” and be able to adopt such decisions.  This issue may be further clarified during the next readings of the bill in the State Duma.  If the bill is adopted by the State Duma, it will require approval of the Council of Federation and signature of the President to become a law.

Footnotes

[1] For more details, see Paul R. Berger, Dmitry V. Nikiforov, Bruce E. Yannett, Jane Shvets, and Anna V. Maximenko, “Anticorruption Compliance Programs under Russian Law: Article 13.3 and the FCPA/UKBA Experience,” FCPA Update, Vol. 4, No. 9 (Apr. 2013) (PDF: 214 KB).

[2] For more details, see Dmitri Nikiforov, Bruce E. Yannett, Anna V. Maximenko, and Jane Shvets, “Russia Issues Detailed Recommendations on Compliance with Russian Anti-Corruption Law,” FCPA Update, Vol. 5, No. 5 (Dec. 2013) (PDF: 290 KB).

[3] See Ministry of Labor bill.

[4] Information on the bill is available.

Jane Shvets is a Partner at Debevoise & Plimpton LLP.  Anna V. Maximenko is International Counsel at Debevoise & Plimpton LLP.  Elena Klutchareva is an Associate at Debevoise & Plimpton LLP

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