Anti-Corruption Clause in Civil Law Contracts: Theoretical and Practical Aspects of Use

Filatova Elena ORCID: 0000-0002-4330-9775 PhD in Law Associate Professor of Southern Federal University 344000, Russia, Rostov-On-Don, B.sadovaya str., 105/42 elenarum27@yandex.ru Other publications by this author

An effective system of countering corruption presupposes the need to implement a wide range of relevant measures both at the level of public administration and directly within the framework of improving the activities of enterprises and organizations in the context of giving its content an anti-corruption orientation. This orientation finds practical implementation in the form of the use of specialized tools and mechanisms that allow leveling the manifestations of corruption risks in the activities of an economic entity.

Such tools are increasingly being used at the present time, including the so-called "anti-corruption clause" in the text of contracts concluded by enterprises and organizations with their counterparties.

Before proceeding to the analysis of the essential content of this concept, it is necessary to consider the features of a legal reservation as such.

Experts consider a legal reservation, on the one hand, as a method of legal technique ^{[6, p. 142]}, and on the other, as a type of special legal norms ^{[10, p. 154]}. In particular, according to N.V. Latysheva and her co-authors, it is a similar norm focused on the implementation of a certain exemption from the general rules for the purpose of application in exceptional cases. Thus, it forms or transforms the existing regime of legal regulation within its scope ^{[11, p. 49]}.

Considering the question of the functional purpose of a legal clause, R.S. Kashansky identifies regulatory-restrictive, informational-corrective and protective functions that are provided by its use ^{[7, pp. 157-158]}. In this context, V.M. Koryakin and A.V. Pavlov subdivide legal clauses used in civil law contracts into three categories - defining the procedure for resolving disputes between the parties, delimiting their powers and imposing additional duties that protect the interests of the parties ^{[9, pp. 87-88]}.

At the same time, it is the legal clause that quite often acts as the legal basis for making a specific decision, which causes a very high degree of importance of its competent formulation.

Currently, the so-called "anti-corruption clause" is becoming an increasingly widespread form of legal reservation. In general, an anti-corruption clause is understood as a set of conditions included in the contract between the parties aimed at preventing the commission of corrupt actions in the process of executing this contract ^{[12, p. 4]}. A more detailed definition of this concept is proposed by R.V. Ivanov and V.A. Trubitsyna, specifying that these conditions impose obligations on the parties to the contract related to the prevention of actions with signs of corruption in the process of its execution, the organization of information exchange on the presence of corruption risks and the implementation of joint measures to level them ^{[5, p. 22]}.

V.M. Koryakin identifies three essential aspects of the category of "anti-corruption clause", stating that it is, firstly, a way to comply with the provisions of anti-corruption legislation, secondly, a form of manifestation of social and legal responsibility and, thirdly, a legal fact that causes the corresponding legal consequences ^{[8, p. 149]}.

The practice of using the anti-corruption clause was originally a mechanism of Anglo-Saxon law, where many ethical norms are introduced into the norm of the law, and which, accordingly, are subject, as a rule, to all major transactions.

At the same time, along with providing protection against possible corrupt behavior of the counterparty, the use of this clause is aimed at preventing the imposition of penalties related to the need for damages (damage claim). In particular, the so-called Bribery Act (the UK Law "On Combating Bribery") establishes the collection of a fine, unlimited in size, when a certain entity receives a bribe or an offer of it from an associated person and does not take adequate measures to counteract such behavior ^{[1, p. 205]}.

It is worth noting that the anti-corruption clause as a condition included in a civil law contract was first designated at the regulatory legal level in the Foreign Corrupt Practices Act (Law "On Corruption Abroad") adopted in 1977 by American legislators ^{[13, p. 79]}.

The use of an anti-corruption clause has now become a generally accepted practice in the world of implementing contractual relations between the parties, especially in cases where agreements are concluded by large companies.

It should be noted that the domestic legislation does not establish the mandatory nature of the inclusion of an anti-corruption clause in the text of a civil contract. Accordingly, there are no regulatory requirements for its content content.

Most often, the need to use this clause is established in the text of the anti-corruption policy of the organization or another local-level regulatory act adopted pursuant to Article 13.3 of Federal Law No. 273-FZ dated 25.12.2008 "On Combating Corruption", which postulates the obligation of the organization to develop a set of corruption prevention measures, including the introduction of standards and procedures that are focused on ensuring her conscientious work. At the same time, the Methodological Recommendations on the development and adoption of organizational measures to prevent and combat corruption, approved by the Ministry of Labor and Social Protection of the Russian Federation, contain a recommendation on the need to include an anti-corruption clause in contracts adopted by economic entities.

The anti-corruption clause in modern conditions is no longer a simple legal formality, but acts as a fairly effective tool that can significantly protect the company from the manifestation of corruption risks in the process of interaction with its counterparties ^{[3, p. 76]}. At the same time, the use of an anti-corruption clause in the text of the contract between the counterparties, at the same time, imposes certain obligations on the parties to this contract. In this context, it should be concluded that ensuring the most significant effect when using this tool involves establishing a reasonable balance of possible advantages and potential consequences of the obligations assumed by the organization, which implies the need for a sufficiently clear understanding of the goals, features of formulation, methods of practical implementation and legal consequences of including an anti-corruption clause in the text of the contract.

In particular, speaking about the main goals pursued by the use of this tool, we note that, first of all, they consist in ensuring compliance of the organization's activities with the provisions of anti-corruption legislation, compliance with ethical standards, as well as reducing corruption risks.

It should be noted that the use of an anti-corruption clause provides the possibility of termination of the contract in the event that its terms were the result of commercial bribery or another type of corruption violation, and also allows the organization to terminate relations with the counterparty involved in such violations fairly quickly. Finally, it contributes to the formation and maintenance of such standards of behavior in relations between counterparties that they cannot violate without being subject to certain sanctions.

There are no clearly defined requirements for the formulation of the substantive side of the anti-corruption clause in the text of the contract between the counterparties. Often, the source to which its parties turn when regulating this aspect of contractual relations is the model anti-corruption clause formulated by the International Chamber of Commerce in 2012 ^{[2, p. 304]}.

In this version of the reservation, in relation to contractual relations of economic entities, it is prohibited to carry out a number of actions against managers and employees of the counterparty party, both directly and indirectly. Such actions include bribery, extortion or inducement to give a bribe, abuse of influence for selfish purposes, as well as laundering of income obtained through the use of corrupt practices.

In line with this approach, the substantive side of the text of the anti-corruption clause is formed in most contracts concluded by the largest domestic companies using this tool in their practice of interaction with counterparties. In particular, the Regulation on the Procedure for Interaction between JSC "Russian Railways" and the user of Railway Transport Services establishes the obligation of the parties to this interaction, their employees, persons affiliated with these parties, as well as intermediaries in the process of fulfilling their obligations not to resort to the payment of funds or the transfer of valuables to any persons in the context of achieving illegal goals in order to influencing decisions made by these persons or actions carried out by them. Also, the obligations of the parties include a ban on the offer to pay funds or transfer valuables for these purposes, as well as on the permission to carry out such actions.

With respect to counterparties, affiliated persons, employees and intermediaries, it is stipulated not to commit bribery or receiving it, committing commercial bribery or other actions that violate the requirements contained in the national anti-corruption legislation, as well as international acts aimed at countering corruption activities.

If one of the counterparties has a suspicion of committing or the possibility of committing any of the above corruption actions, he must notify the other party in writing, providing materials or stating the facts on which these suspicions are based. In this case, the other party is obliged to inform within twenty working days about the results of the consideration of the notification received by it.

In case of confirmation of the facts stated in the notification, indicating the presence of violations, or failure to receive a response on its consideration within the prescribed period, the party that sent this notification is granted the right to terminate the contract unilaterally out of court. This step must be implemented by sending a written notification no later than sixty calendar days before the date of termination of the agreement containing the anti-corruption clause.

At the same time, it is important to note that the scope of use of the instrument in question is not limited to the procedures for concluding and implementing business contracts. The inclusion of an anti-corruption clause in the text of an employment contract concluded by an organization with its employees is increasingly becoming widespread.

As a rule, in the text of such a clause included in an employment contract, the employee who enters into it is obliged to avoid committing and, by virtue of the available opportunities, contribute to the prevention of corrupt actions, inform the employer or direct supervisor about the facts of such actions taking place in the organization and the persons involved in their commission, as well as inform the management of the a place or a potential conflict of interest.

In turn, in relation to the employer, prescriptions are established not to bring to disciplinary responsibility an employee who has reported corruption actions, as well as mandatory familiarization of employees with local legal acts regulating anti-corruption processes at the level of the organization.

At the same time, in modern conditions, in a significant number of domestic organizations of various profiles, as a rule, receiving budget funding, lists of corrupt or corruption-dangerous positions are formed, assuming additional requirements to persons holding such positions. This category includes positions in which the person who holds them can use the functionality of their powers to solve problems with a corruption component ^{[4, p. 248]}. In this context, it seems necessary to establish in the local regulations of organizations in which such lists have been formed and approved, the mandatory nature of the inclusion of an anti-corruption clause in the text of an employment contract concluded with persons holding corrupt (corruption-dangerous) positions.

In addition, the position of a number of domestic jurists who state the expediency of fixing at the legislative level the mandatory inclusion of an anti-corruption clause as a tool that forms the legal basis for compliance with anti-corruption obligations by the counterparty in the text of the economic contract seems to be quite justified ^{[14, p. 59]}.

Summing up the results of the analysis, it should be stated that the practice of including an anti-corruption clause in the text of an economic contract is becoming more common. A groundless refusal to include it in the text of the contract can have a very negative impact on the reputation of a commercial organization. At the same time, the formulation of the text of the anti-corruption clause should be the result of a thorough preliminary analysis of the possible consequences, the occurrence of which may lead to non-compliance with the provisions contained therein. Otherwise, an unprofessionally formulated anti-corruption clause may lead to the imposition of obligations on the parties or one of the parties to the contract, the fulfillment of which is beyond their control, and lead to negative legal and financial consequences.

Thus, the use of this tool implies the need to take into account a wide range of circumstances that determine the choice of the most acceptable conditions for the inclusion of specific provisions of the anti-corruption clause in the text of a civil contract.

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