Here’s the news: the government is required to consider our initiative within two months. This has already been stated by Mikhail Abyzov, the minister responsible for the “Open Government” initiative.
It will be reviewed by a special expert group; here is its membership.
We are not leaving this process to chance. Every member of the expert group will receive a briefing letter in which we explain the initiative, international experience, polling data, and everything else relevant.
After that, we will try to make sure journalists reach every member of the group and find out their personal view on the matter. We do not want everyone hiding behind collective responsibility.
A reminder: in this post, I outlined our immediate plans for promoting #Twenty and our goals.
Below you can read the briefing we are sending to the expert group. It is fairly long, but I guarantee that after reading it carefully, you will be able to persuade any friend, acquaintance, or even a taxi driver to support #Twenty.
We already said that we want to train 1,500 super-campaigners across the country, and this is the first step in preparing materials for them. If you want to become one of those super-campaigners, read on.
On December 9, 2014, the initiative “On Criminal Liability for the Illicit Enrichment of Officials and Other Persons Required to Disclose Information on Their Income and Expenditures” reached 100,000 citizen signatures on the Russian Public Initiative (ROI) website. It proposes implementing Article 20 of the UN Convention against Corruption and introducing penalties, including imprisonment, for officials whose real estate and other assets significantly exceed the income declared in their official filings. This would help stop officials from using illegally obtained funds, simplify the fight against bribery, increase scrutiny of asset declarations, and ultimately lead to a significant reduction in corruption in Russia.
According to a nationwide poll conducted in March 2014 by the Anti-Corruption Foundation, 87% of citizens believe the idea of punishment for illicit enrichment is the right one. It is also supported by the Communist Party of the Russian Federation, A Just Russia, and many deputies from United Russia, including Alexander Khinshtein, deputy chair of the State Duma Committee on Security and Anti-Corruption. In addition, Constitutional Court Chairman Valery Zorkin and Elena Panfilova, vice president of the international anti-corruption organization Transparency International, have spoken in favor of ratifying Article 20. Zorkin called the failure to apply this article one of the reasons why anti-corruption efforts in Russia remain unsatisfactory.
In February 2012, Vladimir Putin proposed “introducing a rule requiring parliament to consider public initiatives that gather 100,000 or more signatures online.” The initiative on criminal liability for illicit enrichment not only collected 100,000 votes, but also received broad support from citizens, civil society organizations, and politicians. It should therefore be considered by the State Duma in the near future and adopted at the federal level.
The Anti-Corruption Foundation has prepared a detailed analysis of why Article 20 of the UN Convention against Corruption should be applied, what citizens, politicians, and experts think about it, international experience with its implementation, and answers to frequently asked questions about the proposed initiative.
Why this problem matters
In this year’s Corruption Perceptions Index (CPI), Russia ranked 136th, alongside countries such as Nigeria and Cameroon. In a ranking compiled by the business association TRACE International to assess corruption risks for business in different countries, Russia ranked 134th, next to Benin.
The country’s leaders have repeatedly spoken about the need to fight corruption:
“The level of corruption can vary. I believe that in our country today it is unacceptably high,” — President V. Putin, May 13, 2006. (Russia was 121st in the CPI ranking.)
“Enough waiting. Corruption has become a systemic problem. And we must respond to this systemic problem with a systemic answer,” — President D. Medvedev, May 19, 2008. In the CPI, Russia was 147th in the world.
“We need more effective work to eradicate corruption in the system of public administration,” — President V. Putin, October 30, 2013. Russia was ranked 127th in the CPI.
One of the clearest and most visible signs to the public of possible corruption among officials is the possession of expensive assets that far exceed their declared income.
Here are a few examples:
Anton Drozdov, who has spent more than 25 years in public service, has chaired the board of the Pension Fund of the Russian Federation since 2008. The official’s family income over the past five years, including money from the sale of property and shares, totaled 47 million rubles. Yet one year after Drozdov’s appointment to his new post, his wife bought a seven-room apartment in the Patriarch Ponds area of Moscow. At the time, its value was estimated at 240 million rubles.
The wife of Security Council Secretary and former FSB director Nikolai Patrushev owns a house and a 4,500 m² plot in Serebryany Bor, an elite area of Moscow. This information has appeared in declarations since 2008. The property is estimated to be worth 1.1 billion rubles. At the same time, the combined income of the official and his wife over the past six years was about 100 million rubles.
Current presidential aide Vladimir Kozhin headed the Presidential Property Management Department for fourteen years, from the time Vladimir Putin arrived in the Kremlin. The family’s officially declared income over the past three years is 64 million rubles. Yet he owns a 7.7-hectare plot in the elite Gorki-10 settlement on Rublyovka, the upscale highway west of Moscow. The market value of the land alone is estimated at roughly 625 million rubles.
State Duma deputy Igor Rudensky owns 1.5 hectares of land in the Istra district outside Moscow. The plot’s market value is estimated at 74 million rubles. On the property, the deputy is building a house worth 44 million rubles. In addition, he buys high-end Italian furniture. One table in his home costs nearly 1.4 million rubles, more than half of a deputy’s annual salary.
At present, prosecutors are not investigating these officials, because formally the possession of assets whose value significantly exceeds official income is not, in itself, evidence of any crime. Introducing criminal liability for illicit enrichment would solve this problem, and law enforcement agencies would be required to establish the true origin of the funds. Citizens and civil society organizations would then be able to demand investigation results and answers about the sources of officials’ income.
Public opinion on corruption and illicit enrichment
According to a poll conducted by VTsIOM (the Russian Public Opinion Research Center) in October 2013, 80% of citizens believe the level of corruption in Russia is high or very high. According to the Public Opinion Foundation, 68% consider intensifying the fight against corruption to be the state’s most important task. The Levada Center reports that for 32% of Russians, corruption was a greater concern than other problems.
In March 2014, the Anti-Corruption Foundation conducted a nationwide poll of Russians to find out their attitude toward the problem of illicit enrichment.
Do you agree with the statement: “In general, officials live a wealthier lifestyle than they can afford?”
Do you agree with the statement: “All or almost all officials live beyond their means?”
Do you agree with the statement: “Criminal liability should be introduced for officials who cannot explain the origin of their income”?
Thus, 87% of citizens directly support introducing criminal liability for illicit enrichment. This is further evidence, in addition to the 100,000 signatures collected on ROI, that the issue of officials enriching themselves is a matter of public concern.
What the bill would do
The initiative is a practical way of implementing Article 20 of the UN Convention against Corruption in Russia. It includes a draft law and an explanatory note, under which a new article—“illicit enrichment”—would be added to the Criminal Code. Under it, an official could face criminal liability if the value of their assets significantly exceeds their lawful income. Lawful income is defined as the income listed in the official’s declaration, which they would be required to file annually for themselves, their spouse, and their children, including adult children, from the moment they enter public service and for three years after leaving office.
An excess of asset value over income of more than 5 million rubles is considered significant. In that case, the offender could face a fine, a ban on holding public office for up to three years, or imprisonment for up to two years. If the excess is more than 10 million rubles, the penalty is up to five years in prison; if it is 30 million rubles, up to seven years. If the excess is less than 5 million rubles, the official would face administrative liability and be punished by dismissal and disqualification from public service for up to three years.
The prosecutor’s office and special commissions within state bodies would be responsible for verifying the accuracy of the information in declarations and comparing it with the assets actually held by the official. The proposal envisions active use of journalistic investigations and the work of anti-corruption civil society organizations. They would be able to submit information either to prosecutors or to the official’s place of employment.
Practical results of adopting the bill
If the bill is approved, and Russia thereby begins implementing Article 20 of the UN Convention against Corruption, it will make the following results possible:
A real fight against corruption. Officials will no longer be able to freely buy assets and live lavishly on illegally obtained funds. As a result, some of them will face criminal prosecution and their illegal activity will be stopped, while others will choose to live within the law out of fear of criminal liability.
Making it easier to punish corrupt officials. Once the law is adopted, it will be enough to compare the value of an official’s assets with the income listed in their declaration, rather than conducting intensive surveillance and documenting, for example, the exact moment a bribe is handed over. The current situation—where an official with a low salary owns expensive real estate, yet cannot even formally be investigated—will become impossible.
Greater attention to declarations. At present, an official can run a business while concealing it and failing to disclose the income. The law would force them to report everything, because otherwise they would risk criminal charges. Most of those who are illegally engaged in business while in public office would prefer to leave their posts. Full disclosure would also make it possible to identify whose income clearly does not match their official salary and to uncover dubious schemes for obtaining money, such as fees for fictitious creative work or loans that never have to be repaid.
Greater public trust in the state. If civil servants’ income becomes transparent, people will trust them more. Public resentment toward officials who live lavishly on modest salaries will decline. People will begin to trust the state more, invest in Russian businesses, and develop their own enterprises.
Constitutional Court Chairman Valery Zorkin’s view of Article 20
In 2004, in an interview with Rossiyskaya Gazeta (the official Russian government newspaper), Zorkin said that the top priority was to ratify the UN Convention against Corruption and begin bringing legislation into line with its requirements. “There must be a threshold from which the application of this norm [on criminal liability for illicit enrichment] becomes mandatory without exception,” said the judge and distinguished legal scholar.
In November 2013, in a speech marking the 20th anniversary of the Russian Constitution, Zorkin called the fight against corruption and illicit enrichment “one of the most painful problems in Russian society.”
Transparency International’s view of Article 20
Transparency International is a non-governmental international anti-corruption organization with branches in more than 100 countries. In 2010, it called for Russia to ratify Article 20 of the UN Convention against Corruption and introduce the concept of “illicit enrichment” into the Criminal Code. At the time, the head of its Russian chapter, Elena Panfilova, said that the absence of this norm gave corrupt officials a free hand.
In December of that year, Panfilova, by then vice president of the entire organization, reaffirmed her position. “I think we should return to this [[ratification of Article 20]. It should not be possible for someone who has never worked a day in business, whose declaration shows ordinary bureaucratic income and no declared treasure chests, suddenly to have huge plots of land and villas—both in Russia and abroad—and then, when asked where they came from, answer, ‘that’s just how it happened,’” she said in an interview with Vladimir Pozner on Channel One. International experience with Article 20
The world’s first bill calling for public officials to be punished for acquiring assets if they cannot prove their lawful source appeared in 1936 in Argentina. This norm became law only in 1964, when criminal liability was introduced for cases where “an official cannot explain the origin of funds used to enrich himself or a third party.” That same year, India introduced punishment for “possession of resources whose origin a public official cannot explain.”
In 1996, illicit enrichment as a criminal offense was included in the Inter-American Convention against Corruption (IACAC). It was then included in the African Union Convention on Preventing and Combating Corruption (AUCPCC), adopted in 2003. Finally, the UN Convention against Corruption was adopted in 2003 and entered into force in 2005.
As a result, by the mid-1980s, criminal liability for illicit enrichment had been introduced in Colombia, Ecuador, Egypt, Brunei, Pakistan, Senegal, and the Dominican Republic. By 1990, at least 10 countries had introduced criminal penalties for this offense; by 2000, more than 20 countries; and by 2010, more than 40.
Some countries where illicit enrichment carries criminal liability:
Argentina, Article 286 of the Criminal Code, in force since 1964 Any person who is unable to explain the origin of their substantial enrichment (or that of third parties, if used to conceal their assets), acquired while in public service or within two years after leaving it, is punishable by two to six years’ imprisonment, a fine of 50% to 100% of the amount of the illicit enrichment, and a lifetime ban from public service.
In 2004, Argentina’s former natural resources minister María Julia Alsogaray was sentenced to three years in prison and fined $500,000 for illicit enrichment. Prosecutors analyzed her income and spending from 1988 to 1996, found a major discrepancy, and demanded an explanation. The official said she had earned money through consulting services and had also received funds from her former husband and father. The court was not satisfied with these explanations, sent her to prison, and ordered her to pay the full amount deemed illicit enrichment into the state treasury.
Hong Kong. Prevention of Bribery Ordinance, Part 10, in force since 1971 Any public servant who: (a) maintains a standard of living above that which corresponds to his current or past official income; or (b) controls money or property disproportionate to his current or past official income, without a satisfactory explanation of how he is able to maintain such a standard of living or how the money or property came under his control, shall be found guilty of an offense and sentenced to up to 10 years’ imprisonment and a fine of up to HK$1 million (about US$130,000).
India. Prevention of Corruption Act, Article 13, 1988 version A public servant is deemed to have committed an offense if he, or any person acting on his behalf, owns or controls money or property disproportionate to his known sources of income and cannot provide a satisfactory explanation for it. This offense is punishable by a fine and imprisonment from one to seven years.
China. Article 395 of the Criminal Law of the PRC, in force since 1997 Any public official whose property value or expenditures clearly exceed lawful income, where the discrepancy is significant, is required to explain the sources of the property. If he cannot prove that the sources are lawful, he may be sentenced to up to five years’ imprisonment and confiscation of the portion of assets exceeding his proven lawful income.
Lithuania. Article 189-1 of the Criminal Code, in force since 2010 Any citizen who possesses assets worth more than 500 minimum subsistence levels (about 65,000 litai, or US$24,000), knowing that they could not have been acquired from lawful income, is punishable by a fine, arrest, or imprisonment for up to four years.
In Lithuania, not only officials but any citizen can be prosecuted for illicit enrichment. The article is used not only to fight corruption but also to combat the laundering of any criminal proceeds. In the autumn of that year, a court sentenced a student to a fine after she failed to explain the source of the money used to buy an apartment. She was also ordered to return the value of the property—about €100,000—to the state treasury. Investigators said the young woman had been helped to buy the home by her father, who was linked to drug trafficking.
Answers to questions
Below are answers to the most common questions that arise when discussing Article 20 of the UN Convention against Corruption and the need to implement it in Russia.
Russia ratified the UN convention without any exemptions or reservations, so there is no need for any further discussion of this issue. This view was expressed by Sergei Ivanov, head of the Presidential Administration. In his opinion, “claims that Russia did not ratify Article 20 are a myth.”
Answer. Russia adopted a law ratifying the UN Convention, and it lists the articles over which our country accepts jurisdiction. Article 20 is not among them. In other words, Russia excluded Article 20 from further application, even though it ratified the Convention. In this situation, demands to adopt Article 20 are not baseless but justified—Russia is not applying it at present. A federal law is not a technical document; it is precisely what determines which articles our country will implement, and Article 20 is not there. It is also worth noting that the initiative under discussion does not merely call for formally including Article 20 in the ratification law, but for implementing it in practice—namely, by adding punishment for illicit enrichment to the Criminal Code.
Article 20 of the UN Convention against Corruption does not require states to criminalize illicit enrichment; it merely recommends that they consider doing so. Many European countries and the United States have not introduced criminal liability for illicit enrichment, so Russia has no need to do so either.
Answer. Article 20 of the UN Convention does indeed not oblige states to include illicit enrichment in their criminal codes. Drafting international conventions is a complex negotiating process, especially for conventions of this scale. We know that there is a special diplomatic language, with its own turns of phrase, expressions, and formulations. That is a reasonable approach.
Criminalizing illicit enrichment is, to some extent, a necessary measure to intensify the fight against corruption. That is why, in various forms, it has been used in corrupt countries such as Argentina, Hong Kong, and Singapore (which in the 1970s were extremely corrupt), as well as China, Colombia, and many others. In developed countries with low levels of corruption, such as Finland or Sweden, there is simply no need for it—the culture of legal compliance allows other mechanisms to work instead: mandatory disclosure, a free press, a developed democracy with alternation of power, independent law enforcement, and their clear and timely work. Russia ranks 136th in perceived corruption and is much closer to Argentina and 1970s Hong Kong than to modern Finland. We need to adopt this article not because the UN convention obliges us to do so. We need it for ourselves, as an effective method of fighting corruption.
Applying Article 20 of the UN Convention against Corruption contradicts Article 49 of the Russian Constitution on the presumption of innocence. That is why our country chose not to implement it or introduce criminal punishment for illicit enrichment.
Answer. The proposed bill does not contradict the Constitution. The offense is defined as a significant excess of the value of an official’s assets over lawful income—that is, income listed in declarations. Investigators analyze the market value of the property, the actual manner in which it was acquired, and election-related declarations. As a result, the burden of gathering evidence remains with the investigation, just as it does in any other criminal case, and the presumption of innocence is not violated. The fact that the principles of Article 20 of the UN Convention against Corruption can be implemented without violating the law is confirmed by the fact that its ratification is supported by Constitutional Court Chairman Valery Zorkin. The task of monitoring officials’ assets is already handled by the “Law on Combating Corruption,” which introduced mandatory asset declarations for all officials and penalties for false information.
Answer. Such a law does indeed exist. However, it does not punish illicit enrichment. It regulates the procedure for filing declarations. Under the law, nothing prevents an official from owning a house worth 100 million rubles while having an official income of 1 million rubles. The penalty for false information in a declaration is extremely weak—dismissal, and even that without a ban on future public service—which does not encourage officials to comply. In addition, declarations and conflicts of interest are supposed to be reviewed by state bodies themselves, and they are often not interested in doing so. These measures do not provide полноценного punishment for illicit enrichment.
Introducing criminal punishment for illicit enrichment would increase accountability, meaning officials would be afraid to live beyond their means or hide income from disclosure. In addition, investigations would be handled by law enforcement agencies, helping to avoid situations where, for example, serious allegations are made against a deputy but the decision is taken by a State Duma commission made up mostly of his own party colleagues.
If a deputy has a business but does not declare the income in order to conceal it and remain in the Duma, does this law apply to him? Should an official really be sent to prison for seven years even if he merely hid a business from disclosure but did not steal anything?
Answer. By law, officials must fully disclose all their income and bear responsibility for failing to do so. In addition, deputies are prohibited from engaging in business activity, and concealing such business should be punishable. If an investigation establishes the existence of a business, and/or the official admits guilt and tells the full story, that will be taken into account. Instead of a prison term, the court may limit the punishment to a fine and a ban on public service.
Why should “illicit enrichment” be in the Criminal Code at all? Aren’t law enforcement agencies already required to determine whether an official took kickbacks or stole from the budget?
Answer. Introducing criminal punishment for illicit enrichment makes it possible to start an investigation when an official has not been caught committing direct theft, but their lifestyle and assets clearly do not match their official income. The concept of “illicit enrichment” in the Criminal Code would simplify anti-corruption mechanisms. But this does not mean abolishing investigations into budget theft, bribery, and other crimes.
Officials’ illicit enrichment is already addressed by a law requiring disclosure of expenditures if a property purchase exceeds the amount of income earned over three years.
Answer. Such a law does indeed exist, but it does not establish criminal liability for illicit enrichment. If the amount of an official’s purchase exceeds their income, they may be dismissed, and the information is supposed to be passed to prosecutors for investigation. No additional criminal article is introduced.
At the same time, under the law, declarations are reviewed by commissions within the agencies where the official works. For example, a State Duma commission may clear a deputy simply because he is a fellow party member.
Formally, the law provides for greater control over officials’ assets, but in practice it leads nowhere. Introducing criminal liability for illicit enrichment would make oversight of officials’ assets far more effective, involve society and the media, and increase the likelihood that officials will actually be held accountable. That would make a real fight against corruption possible.
Politicians supporting Article 20 of the UN Convention against Corruption
Dmitry Medvedev, Prime Minister, leader of the United Russia party
“It is a matter of choice, and it is something we can do. In fact, I’ll say right away that the Justice Ministry is currently preparing a proposal on Article 20. But we must weigh all the pros and cons. On the plus side, it helps fight corruption, and that is good: let them explain where the palaces came from, as you say—that is normal and fair for everyone. But there is also an argument against it: we all understand that our law enforcement system is imperfect.”
Alexander Khinshtein, State Duma deputy from United Russia Deputy Chair of the Committee on Security and Anti-Corruption
“I will tell you what needs to be done: fully restore the institution of confiscation, make officials’ expenditure declarations mandatory, and ratify Article 20 of the UN Convention.”
Boris Reznik, State Duma deputy from United Russia, member of the Committee on Security and Anti-Corruption
“Society has the right to ask any official how, on a paltry salary, he came to own a mansion worth millions of dollars.”
Valery Trapeznikov, State Duma deputy from United Russia, member of the Committee on Labor, Social Policy, and Veterans’ Affairs
“I view ratification of Article 20 positively. Sooner or later, we will adopt it.”
Sergei Mironov, head of the A Just Russia faction in the State Duma, member of the Committee on Housing Policy and Housing and Utilities Services
“We believe it is necessary to take at least two steps: first, ratify Article 20 of the UN Convention; second, introduce the confiscation of the property of corrupt officials and their families.”
Mikhail Bryachak, State Duma deputy from A Just Russia, First Deputy Chair of the State Duma Committee on Transport
“Unfortunately, Article 20 of the international anti-corruption convention, which defines the very understanding of corruption, is not yet in force here. If we start with that, all our efforts will be far more effective.”
Ivan Melnikov, Deputy Speaker of the State Duma from the Communist Party, member of the Committee on Education
“Both I and my comrades have demanded the introduction of criminal liability for illicit enrichment.”
Pavel Dorokhin, State Duma deputy from the Communist Party Deputy Chair of the Committee on Industry
“As the Communist Party faction, we supported the collection of signatures against officials’ illicit enrichment and in favor of ratifying Article 20 of the UN Convention against Corruption.”
On November 22, 2014, the All-Russian Civic Forum, among whose organizers was the Civil Initiatives Committee of former Russian Finance Minister Alexei Kudrin, adopted a resolution. It contains a “demand that the state authorities of the Russian Federation ratify Article 20 (‘Illicit Enrichment’) of the UN Convention against Corruption.”
As we can see, the Communist Party, A Just Russia, some State Duma deputies from United Russia, and the All-Russian Civic Forum support consideration and application of Article 20 in Russia. This shows that Article 20 enjoys broad public support, and therefore both it and the bill that would implement it should, at the very least, be discussed seriously and in detail in State Duma sessions.
Conclusions
Vladimir Putin’s proposal to have parliament consider initiatives that gather 100,000 votes online was intended to allow citizens to “shape the legislative agenda, put forward their own proposals, and define priorities.” The initiative on criminal liability for illicit enrichment reflects exactly such priorities: it is supported by 87% of Russians, as well as politicians, experts, and civil society organizations. It should therefore be considered by the State Duma as quickly as possible and implemented in practice in Russia.
P.S. If you need it as a file, it is here.