United nations office for drugs and crime (UNODC)

Against the background of the global financial crisis, the government’s role in regulating the socio-economic processes increases significantly. Accordingly, enhancing the efficiency of government activities and combating corruption become the tasks of prime importance.

The National Anti-Corruption Plan adopted in Russia makes a legal and organizational basis for struggle against corruption. The legal basis is based on an anti-corruption policy package.

For the first time in the legislative practice the concept of corruption per se as defined by the international legal acts and, first of all, by the 1999 Strasbourg Convention, which I signed from the Russian side when I was the Minister of the Interior, had been introduced into the current legislation.

Also, in compliance with the international practice, Russia made amendments to the Criminal Code that will allow for such punitive measures as confiscation of property to be applied to corrupt officials.

The Anti-Corruption Policy Package is primarily focused on prevention of corruption occurrences and preventive maintenance within the legal system. With this objective in mind, the government is tightening control over the credibility of information on property and income of government officials, as well as their immediate relatives. In addition to this, the concept of "conflict of interests" is being introduced into the law. Also, we strictly regulate situations associated with the conflicts of interest, for example, potential employment opportunities for governmental officials at a for-profit organization or failing to report known cases of corruption to authorized persons.

It is very important to defeat the economic roots of corruption, to terminate the excessive powers of executive and municipal authorities and to block corruption links in the system of government and business relationships. This is why the Anti-Corruption Policy Package provides for a unification of rights and responsibilities of governmental officials as well as for eliminating unreasonable prohibitions and restrictions in the area of economic activities.

Anti-corruption laws are based on the necessity to pursue a common and integrated policy in this area. The Head of State will personally oversee the fight against corruption through the Council established specifically to combat corruption; the Chairman of the Accounts Chamber is a member of this Council. Functions and positions of all government authorities involved in combating corruption, including the Accounts Chamber, are specified within the established law.
During recent years, the Accounts Chamber has been actively participating in developing an integrated nationwide system for combating corruption. Our tasks are not limited to the exposition of corruption crimes in the field of budget, federal property and national resource management. Thus, we carry on consistent work to improving legislation, which will strengthen relations with other law-enforcement and regulatory agencies, as well as on developing measures which will prevent internal corruption risks.

As part of the National Anti-Corruption Plan, the Accounts Chamber developed its own Action Plan where special priority is given to the legal basis for combating corruption. Within this project, we prepared amendments to the Basic Law on Government Procurement Contracts. The system of government contracts in Russia is extremely bureaucratized which creates a positive environment for corruption. It is enough to say that since the Law was passed in 2005 the prices in the public sector are speeding up.

Furthermore, in the conditions of the global financial crisis, excessive bureaucratization hinders both the implementation of government processes aimed at the motivation of economic activity and the support for strategically important branches of economy. Amendments to this law suggested by the Accounts Chamber are focused on developing an integrated federal contract system with a unified planning, budgeting and administrative system. As a draft project, the amendments were presented to the President and the Prime-Minster and were approved by them.

Another focus of the anti-corruption activities is to reduce administrative pressure that regulatory agencies themselves put on the economy. In this respect, the Accounts Chamber is engaged in work on introducing modifications to the Budgetary Code that are aimed at developing an integrated system of state financial control in Russia and more distinctive delineation of powers of internal and external financial control bodies. That will allow us to decrease redundancy in the work of these financial control bodies and, consequently, to reduce the total number of audit inspections.

The Accounts Chamber has been constantly making suggestions on optimizing the activities of numerous regulatory agencies, in order to reduce the administrative pressure they put on the economy. These suggestions have been considered during the preparation of draft legislation that makes provisions for clear and strict procedures for governmental authorities to arrange and perform audits on small and medium-sized enterprises.

Another high-priority task in this area is to further improve the legislative base in terms of its liability for violating budgetary regulations and, ultimately, for the inefficient and unproductive use of budgetary funds. The Accounts Chamber also gives due consideration to the improvement of legislation that regulates the system of federal property management. One of the priorities of our activities in this area is to improve the accounting of the Treasury’s property and the way in which it is documented within financial statements.

The Accounts Chamber also participates in improving bankruptcy legislation to tighten the liability for setting up fraudulent bankruptcy and use of bankruptcy as a tool for property redistribution (corporate raid). We have established and are actively running the Committee that combats corporate raid. Presently, governors of a number of regions initiated audit inspections on the strategically important enterprises owned by the state that are undergoing bankruptcy or a restructuring process.
Currently Russia is implementing large-scale investment projects with the participation of state funds. This being said, private-public partnership mechanisms have not been fully developed at the federal legislative or applicative levels, which creates conditions for financial abuse and corruption. The object of our much concentrated attention is implementation of the two most resource-intensive with the highest international significance investment projects: preparation for the 2014 Winter Olympics in Sochi and preparation for the 2012 APEC Summit in Vladivostok.

For example, our recommendations were accepted for the optimization of the general financing structure for the Sochi Olympics project, which allowed us to precisely divide flows of funds allocated for construction of athletic facilities and modernization of regional and municipal infrastructure. (By the way, in this case we used the experience of our British colleagues, who are supervising the preparations for the 2012 Summer Olympics in London.)

Under these private-public partnership mechanism development projects in Russia, we created a number of state corporations. Their task is to consolidate efforts of government and business in the strategically important areas of economic development, for example, in the aeronautical engineering or nanotechnology industries. For the most part, the legal form of these corporations is a non-profit organization which complicates immediate control over them by the government. At the moment the Accounts Chamber signed relevant agreements with almost all of those corporations on the procedures for the auditing of their financial and operational activities. Our primary concerns, at this point, are efficient management of financial resources and estimating risks when using budgetary funds.
The global financial crisis also contributed to the adjustments in the Accounts Chamber work. In Russia, like as in other countries, we are implementing large-scale anti-crisis programs designed for allocating additional funds to the economy at the amount of over 10% of GDP. Recipients of state financial support funds are a broad spectrum of banks and enterprises from all forms of ownership. In this respect the Accounts Chamber reorganized its work so as to perform real-time monitoring of state financial resources used in three key areas: in banks, in major companies-borrowers and in the regions.

Regional audit institutions are of great assistance to us; they provide us with information on how efficiently state financial support funds are used at the local levels. Activities in this area are coordinated by the Association of Audit Institutions established in 2000. Here high emphasis is placed on a methodological aspect: on arranging seminars and research/practice conferences and on sharing practical experiences of audit institutions participating in anti-corruption activities.

The key aspect of the global economic crisis is its magnitude, i.e. it affects almost all national economies of the world. Although every country has its specific character, manifestations of the crisis are in many ways similar. For instance, significant support provided by the government to banks and other financial institutions by no means always results in the improvement of lending conditions for enterprises and individuals. In connection with this, the Accounts Chamber was one of the first organizations who, in October last year, supported the decision on establishing a new INTOSAI Working Group for the development of strategy techniques and government audit under the conditions of the global financial crisis.

Development of such strategy techniques is becoming more and more important in our cooperation with law-enforcement agencies. Thus, in association with our colleagues we currently work on the development and implementation of the indicator system that will allow for evaluating the level of corruption risk within the federal and municipal administration bodies. Also, we plan to develop a method for an external quality evaluation of the internal audit systems and management of the institutional risks of the budget fund recipients, including those involved in the private-public partnership.

The final result of our work in this area should be the development of the techniques that will allow us to carry out on a regular basis a performance audit of the efficiency of use of such budgetary funds allocated for implementation of the National Anti-Corruption Plan. We believe that this will create a basis for a system which will monitor the efficiency of the state anti-corruption policy.

In the meantime, the Accounts Chamber is implementing a set of measures aimed at minimizing internal corruption risks. An approved methodology for designing our activities stipulates that a working plan should, in the first place, include issues associated with budget implementation and solutions for the most urgent problems of the socio-economic development of the country. Alterations to the audit schedule, including those introducing additional objects, are acceptable only when there is relevant substantiation as considered by the Board. In accordance with the international anti-corruption standards all audit employees must sign an agreement to adhere to a series of rules, which now includes the code of ethics of the audit institution employee. Our Anti-Corruption Plan also includes such measures as the establishment of a task force for internal anti-corruption control, arrangements for the rotation of auditors and eliminating possibilities for repeated involvement of the same auditors in auditing the same objects.

A most important component of the Accounts Chamber anti-corruption activities is strengthening international cooperation. We work in close contact with the specialized organizations, such as the Group of States against Corruption (GRECO), FATF and the Egmont Group, and promote international anti-corruption standards in Russia. The Accounts Chamber State Research Institute for System Analysis, as part of the United Nations Development Program in Russia, implemented a pilot project aimed at the expansion of the national potential in the area of expert anti-corruption examination of the legislation and improvement of coordination between government and society activities within the anti-corruption sphere.

As a member of the INTOSAI Governing Board the Accounts Chamber of Russia works diligently to activate SAI partnership in this area. Upon our initiative, in 2001 an INTOSAI Working Group on the Fight against International Money Laundering was established. During last years it has really contributed to the integration of the SAIs into the international and national systems of fight against the "financial laundries". The anti-corruption themes make a priority in our cooperation within the frames of EUROSAI, ASOSAI, Council of Chairmen of SAIs of the Commonwealth of Independent States and other international organizations.

In the system of bilateral cooperation I would like to put particular emphasis on a very productive experience of coordinated action with our counterparts from the UK National Audit Office. In 2007 we made public our joint report, where we, on comparing the two countries’ experiences, analyzed the further possibilities of enhancing the Accounts Chamber role in implementation of the anti-corruption government strategy.

This January together with our colleagues from the SAI of Ukraine we started to check the implementation of the obligations on the external economic contracts of the natural gas supply to the Ukraine and its transit through the territory of the Ukraine to the European consumers by the joint Russian-Ukrainian enterprise "Company Rosukrenergo". The primary target of this control event is to bring out possible corruption schemes and prevent the same old story when the European consumers suffered because of the non-transparent realization of the Russian-Ukrainian agreements.

To summarize I would like to mention that the global economic crisis, as well as adoption of specialized national anti-corruption programs in numerous countries, help to ensure a higher level of active cooperation on this issue under INTOSAI and other international SAI organizations.