Yalta International Economic Forum Information portal

+7 (812) 6430709

Yalta International Economic Forum Information portal

+7 (812) 6430709

21 April '17

Protecting business rights and interests: best practices

Protecting business rights and interests: best practices

Section moderator Andrey Nazarov, Co-chairman of the Delovaya Rossiya All-Russia Public Organisation, said in his opening address that all the issues connected with doing business are important. Mr Nazarov noted that free conduct of business and entrepreneurship were priorities of our state’s economic policy. Amendments have been introduced into Article 300 of the Criminal Code of the Russian Federation which envisage fines and not criminal punishment and, given total compensation for damages, relief from prosecution.

He went on: “As President Putin said, only one in three cases reaches the court, which is a sign that business comes under serious pressure. Economic amnesty has covered more than 3,000 businesspeople. The Russian Prosecutor’s Office has stepped up its monitoring of compliance with the rights of entrepreneurs. An inter-agency working group for businessmen’s cases meets on a monthly basis. One would like to see broader powers of the Prosecutor’s Office in protecting the rights of entrepreneurs.” Mr Nazarov added that according to statistics foreign entrepreneurs in 2016 were 23% more optimistic than in 2015 when the figure was only 6%.

In the Doing Business rating Russia is rising steadily from 62th place in 2015 to 51st place in 2016. The forecast for 2017 is 40th place.

The speaker identified the following areas of work to protect business: to improve the quality of justice, to change the approach to dispensation of justice, expanding trial by jury to economic crimes. In his opinion, “economic crimes should be investigated more leniently in order not to do harm to business.”

Galina Tokareva, Adviser to the Prosecutor General of the Russian Federation, said that out of the 460,000 inspections of businesses declared in the plan for 2016 only 386,000 went ahead. The Prosecutor General’s Office turns down between 40 and 45 percent of declared unscheduled inspections. A single register of visits to enterprises is kept. Public councils under prosecution bodies are doing a good job.

The Prosecutor General’s Adviser said: “A hot line for business was set up after the St Petersburg International Economic Forum 2016. Of the 700 complaints one in four have been confirmed. In 2016 more than 169,000 violations of entrepreneurial rights were uncovered and 99 criminal cases were opened.”

Prosecutor’s oversight ensures the implementation of socio-economic programmes in the regions and municipalities. In 2016 the Prosecutor General’s Office caused the payment of 50 billion roubles of various debts.

Innocenzo Orlando, an international affairs expert and member of the Italian Committee of the International Chamber of Commerce, said that in Italy both private and public property is protected under the country’s constitution. Independence of judges is similarly protected.

“In Italy there are more than 6 million private enterprises. The schedules and procedure of inspecting them are clearly formulated under the law. All this is done in the interests of society.”

Evgeny Tarlo, Vice-President of the Russian Federal Bar and President of the Pravovoye Gosudarstvo Foundation said: “I’ve been practicing law for more than 30 years. I hear the same thing year after year. Unfortunately, the law situation is going from bad to worse. There can be no separate justice system for business. The whole system needs to be improved. One judiciary reform is not sufficient. The whole chain from inquiry to investigation to trial must be reformed.”

He said that 15 million criminal cases in the country have been suspended, and every year 550,000 cases are investigated. A global clean-up and restoration of the totally destroyed system of preliminary investigation are needed. He thinks the introduction of trial by jury for business would paralise the whole system. Juries try less than a thousand cases a year while business cases number more than 25 million a year.

The speaker thinks the courts must be independent, the presiding judges should rotate every two years and representatives of judiciary departments should be excluded from qualification boards. A legally rigorous definition is needed of the concept of “entrepreneurial activities” in order to rule out arbitrary interpretations and bringing of charges.

Irresponsibility of officials is an endemic disease, Mr Tarlo believes. Everyone who breaks the Criminal Procedural Code must answer under the law. Law enforcement has become a lucrative business: people go there to make money, and one should not be mealy-mouthed in declaring it.

Vladimir Konstantinov, Chairman of the State Council of the Republic of Crimea, had this to say: “We returned to our civilization space three years ago. We have preserved all the basic sectors of the economy. Refitting business into a new legal space has no analogues. Crimea is experiencing steady economic growth. Ukraine was a totally corrupt state. Business is adjusting itself to a new jurisdiction. The adaptation period is coming to an end. The emerging system of government in Crimea is not of a corrupt type.”

The Chairman of the State Council believes the work to reduce administrative barriers must go on. Opinion polls and statistics show that few people want to go into business. Everybody wants to be a prosecutor, a policemen or a government official. The working man must become popular. We have to go back to the slogan: “All is allowed that is not forbidden.”

Svetlana Luzhetskaya, business ombudswoman in the Republic of Crimea, noted that Crimea has a Public Council and an independent centre of public procedures called Business Against Corruption. There is interaction with control and supervisory bodies (46 agreements have been signed).

The number of inspections in 2015 was 7,293; in 2016, 8,433. Unscheduled visits have been reduced by 46%. The number of registered enterprises increased by 10%.

Boris Titov, the Presidential Commissioner for Entrepreneurs' Rights, said: “Our take is that the situation is not noticeably changing for the better. Unresolved problems in 2016 numbered 230. Sociological surveys give little cause for rejoicing: 59% of respondents speak about high risks and lack of security in doing business. Most Russian businessmen think the law does not protect them although on the whole criminal law has been in the process of becoming more humane for ten yeas already.”