21:00 GMT +326 September 2017

    Russian Press - Behind the Headlines, September 4

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    Human Rights Organizations Criticize Law on ‘Foreign Agents’/ No Industry Lobbying in State Duma/ Finance Ministry to Tax Bribes


    Human Rights Organizations Criticize Law on ‘Foreign Agents’

    The Agora Human Rights Association has asked Justice Minister Alexander Konovalov to explain the law classifying non-government organizations (NGOs) as “foreign agents.” They argue that the law can be misinterpreted and incite conflicts. They want explanations, saying that otherwise by November the Justice Ministry will face lawsuits.

    They write that the law stipulating that NGOs must register as “foreign agents” includes obscure wording, which could aggravate or create conflicts in relations with NGOs.

    Agora wants the Justice Ministry to answer their eight questions within a month. According to the law, Russian NGOs that “take part in political activities in Russia, including in the interests of foreign sources,” are foreign agents. What does the term “in the interests of” mean? Are the provisions of the Civil Code that regulate actions “in the interests of someone” applicable in this case? The human rights activists also want to know if an NGO must apply for registration as a foreign agent if it receives foreign funding but does not operate in the interests of foreign sources, and if so, on what grounds it must do so.

    Lawyers say the law recognizes an NGO as a political actor if it takes part in organizing or holding political actions, including by providing funds. What does the term “political actions” mean? Is attending the meetings of the presidential Council for Civil Society and Human Rights a political action aimed at “ensuring that a state agency adopts decisions that will change state policy?” What does “molding public opinion” mean? Which enactments provide a definition? Is an appeal to the Public Chamber or a court complaint lodged against a Justice Ministry notification deemed an action aimed at ensuring that a state agency makes a policy-changing decision? Are holding news conferences, making comments to the media and issuing press releases actions aimed at molding public opinion?

    Will the Justice Ministry exclude from the register of foreign agents those NGOs that refuse to accept foreign funding? If so, which enactment specifies the procedure for this?

    The Justice Ministry was not available for comment. Agora leader Pavel Chikov told Kommersant that they have a multi-step system of responding to the law and these questions are one of the steps. He added that if the ministry refuses to answer their questions, it will be a violation of the constitutional principle of the rule of law. Chikov said that they would use a variety of methods in the regions, for example registering an NGO as a foreign agent to subsequently demand its formal removal from the register, or “provoking a ruling suspending the NGO’s operation for refusal to be registered as a foreign agent with the purpose of appealing against that decision.”

    As Kommersant wrote on July 14, human rights organizations, in particular the Russian branch of Transparency International, the SOVA Center for Information and Analysis, the Moscow Helsinki Group and the For Human Rights movement, said they would not register as foreign agents.


    No Industry Lobbying in State Duma

    United Russia has proposed forbidding members of parliament who own stakes in major companies from sitting on respective committees; analysts doubt the initiative will eliminate lobbyism.

    To avoid a conflict of interests and reduce lobbyism a State Duma deputy who controls a large industrial company or used to manage one before being elected to parliament should not be allowed to sit on a lower house committee on the same industry, said Sergei Neverov, secretary of the presidium of the ruling party.

    He told a news conference that he did not think parliament would become less professional if deputies involved in specific industries leave their respective committees. However, neither he nor the other party leaders present on the panel explained how they would implement their plan.

    As Gazeta.ru reported earlier, many United Russia deputies would have to leave their committees because they own major stakes in industrial companies according to their preelection declarations.

    Vladimir Pligin, who heads the Duma committee on constitutional law, is a senior partner at a law firm with a 20% stake; Alexander Petrov, a member of the health care committee, served as chief executive of a pharmaceuticals producer, and Alexander Profyev of the same committee controls 75% of a major pharmacy chain.

    Many United Russia members who own large chunks of agribusinesses sit on the agriculture committee. Millionaire deputy Nikolai Bortsov has been on the Forbes Golden 100 list for a long time: in 2011 he declared income from Pervomaiskoye, a large agribusiness.

    Neverov and his colleagues could not say how soon former corporate executives would be allowed to join an industry-specific committee. If the answer is never, a group of United Russia members will have to leave the culture committee, including film director Stanislav Govorukhin, singer Iosif Kobzon and even deputy speaker Sergei Zheleznyak, who used to manage the large advertising agency News Outdoor.

    The transport committee also stands a good chance of being plunged into a business conflict. Furthermore, five out of the nine United Russia members from the natural resources and the environment committee hold large chunks of businesses in this sector. Its deputy chairman, Mikhail Slipenchuk (another Forbes name), owns 95% of investment company Metropol, which invests in mining projects.

    Opposition deputy Ilya Ponomaryov warned that banning people with basic knowledge of how an industry works from respective committees would affect the quality of lawmaking.

    Kirill Kabanov, head of the National Anti-Corruption Committee said that if the Duma really wanted to eliminate lobbyism, it should have first adopted a lobbyism law and then imposed the bans. Otherwise, the existing lobbies will simply move into the shadows.

    “Instead of fighting the illegal commercial activities of Duma deputies, United Russia is inventing incomprehensible bills to spite its political opponent Gennady Gudkov and to proclaim on TV that they are fighting corruption,” said Georgy Alburov from Alexei Navalny’s anti-corruption foundation. “This initiative is aimed at distracting attention away from party members’ incomplete income declarations and reported illegal business activities.”


    Finance Ministry to Tax Bribes

    Paying bribes to foreign officials is not a legitimate write-off, the Finance Ministry warned.

    The Ministry posted a notice on its Web site saying that bribes paid to foreign officials (civil servants and private company employees) must be taken into account when calculating taxes. Deducting such expenses from taxable profits is now banned, the ministry explained. As a result, a standard 20% profit tax is to be levied on bribes.

    The notice was not a response to a specific company’s inquiry, the ministry spokesman said. It was a formality and follows Russia’s accession (since April 17) to the Convention against the Bribing of Foreign Officials in International Business Transactions, he explained.

    The issue is topical for Russian arms exporters and commodity multinationals that have assets in Third World countries, a source at the tax service said. With close ties to Rosoboronexport, the state-controlled arms exporter, he does not recall any instance when a bribe to a foreign Russian weapons buyer was officially written off. The tax officials interviewed by Vedomosti had no recollection of any such instance either. Bribes can be “weaved into” all kinds of expenses, for example, as to a consultant, says another tax official: in such cases an audit can prove that the spending was unwarranted but it does not specify if the money was used for graft or not.

    “If you try to include a bribe on an expense schedule, on the surface it could appear respectable,” Rustem Akhmetshin, a partner at Pepelyaev Group, says. Of course it’s true that it’s often difficult to sort out the legitimacy of some expenses in other countries until a court decision is made, he says. Ironically, just prior to being interviewed by Vedomosti, Akhmetshin was forced to pay a questionable fee at Tanzania Airport for unclear reasons.

    RIA Novosti is not responsible for the content of outside sources.



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