Anti-Corruption and Conflicts of Interest in Public Procurement: The Antimonopoly and Litigation Landscape

 

June 21, 2026

BRACE Law Firm©

 

Contracts concluded for state needs (the "State Contracts") are highly attractive to many suppliers. Proper execution guarantees payment, small businesses receive benefits and preferences, and the mere fact of concluding such a contract positively impacts corporate reputation. Consequently, public procurement consistently remains a high-risk area for corruption.

Federal Law No. 44-FZ dated April 05, 2013, On the Contract System in the Sphere of Procurement of Goods, Works, and Services for Meeting State and Municipal Needs (the "Law No. 44-FZ") provides a comprehensive set of measures aimed at mitigating corruption factors. The parties must apply these mechanisms during both the procurement procedure and contract execution.

Article 13.3 of Federal Law No. 273-FZ dated December 25, 2008, On Anti-Corruption (the "Anti-Corruption Law") outlines the primary measures to prevent corruption:

• Designating individuals responsible for anti-corruption compliance within the organization;
• Cooperating with law enforcement authorities;
• Developing internal regulations aimed at ensuring the organization's business integrity (including a code of ethics and professional conduct);
• Requiring the Customer to prevent conflicts of interest during both the procurement process and contract execution;
• Prohibiting unofficial reporting and the use of forged documents.

This article analyzes how the anti-corruption mechanism operates under Law No. 44-FZ. We specifically focus on the issue of conflicts of interest and risk mitigation strategies, applicable not only during the procurement stage but also after contract execution. Furthermore, we examine the methods of anti-corruption compliance.

Conflict of Interest in Public Procurement

Law No. 44-FZ does not provide a definition for conflict of interest. The contract law included a description of this term until 2023, but the legislature removed it effective January 01, 2023. Currently, Article 10 of the Anti-Corruption Law establishes the concept of a conflict of interest, defining it as a situation where an individual's personal interest influences the proper, objective, and impartial performance of their official duties. Personal interest manifests as the potential to generate income (money, property, works or services, or any benefits or advantages). In a conflict of interest, the beneficiary may not only be the interested person themselves, but also:

• Their relatives (parents, spouses, children, brothers, sisters, as well as the spouses' relatives (their brothers, sisters, parents, children), and spouses of children);
• Individuals or organizations with which the interested person or their relatives have property, corporate, or other close relationships.

In the contract system, preventing a conflict-of-interest entails restricting the participation of interested parties in the procurement process (including the contract execution procedure). Measures to mitigate the risk of vested interests apply not only to Customers, Bidders, and suppliers, but also to engaged experts and specialized organizations.

First, the Customer must eliminate conflicts of interest when forming the procurement commission (Part 6, Article 39 of Law No. 44-FZ). The procurement commission cannot include:

• Experts who evaluated the procurement notice, procurement documentation, or competitive bids;
• Individuals with a personal interest in the procurement (e.g., a candidate for the contract award, as well as their employee or manager);
• Owners (shareholders), members of management bodies, or creditors of the Bidders;
• Officials of state authorities exercising control over procurement.

The commission members themselves must immediately notify the Customer of any emerging interests or other corruption risk factors (Parts 6 and 7, Article 39 of Law No. 44-FZ).

Second, a conflict of interest between the Customer and the Bidder during the procurement procedure is strictly prohibited (Clause 9, Part 1, Article 31 of Law No. 44-FZ). This refers to a scenario where interested parties representing both the Customer and the Bidder simultaneously participate in the procurement.

On the Customer's side, an interested person may include:

• An official (the head, a member of the procurement commission, the head of the contract service, or the contract manager);
• Relatives of the official, encompassing a broad circle (the "Relatives", "State of Kinship"): husband or wife, father, mother, grandfather, grandmother, children and grandchildren, brothers and sisters, as well as adoptive parents or adopted individuals.

Potential interested persons on the Bidder's side include:

• The Bidder itself, acting as an individual or sole proprietor;
• The head of the corporate Bidder, its founder, and members of its management bodies;
• For corporations, an individual owning more than a 10% participatory interest in the organization. The law accounts for both direct and indirect ownership (through other legal entities).

When the specified individuals on the Customer's side simultaneously coincide with the listed individuals on the Bidder's side, a conflict of interest exists, thereby generating corruption risks.

Third, eliminating conflicts of interest between the Customer and engaged experts, as well as specialized organizations.

Experts are third-party individuals or organizations authorized by the Customer to verify the results of contract execution (goods, works, or services) during the acceptance process (Part 3, Article 94 of Law No. 44-FZ). Furthermore, the Customer may engage experts to evaluate the procurement notice, procurement documentation, or application for participation (Part 1, Article 41 of Law No. 44-FZ). The default function of an expert dictates that they must be disinterested and independent of both the Customer and the supplier. Therefore, the law establishes a list of prohibitions regarding the admission of experts (Part 2, Article 41 of Law No. 44-FZ).

Individuals cannot serve as experts:

• If they have served as officials or employees of the Customer or the supplier within the last 2 years;
• If the expert has a property interest in the contract under review;
• If the expert is a relative of the Customer's head, members of its procurement commission, the head of the contract service, or the contract manager, or is related to the officials or employees of the supplier;
• Under other circumstances where the Customer or supplier can influence the outcome of the expert review.

Organizations are prohibited from conducting an expert review:

• If the Customer or supplier owns more than a 20% participatory interest in the expert organization (voting shares, participatory interests in the charter or share capital);
• If the Customer or supplier can influence the outcome of the expert review in any way.

The aforementioned criteria are considered risk factors. An engaged expert must confirm in writing that they are authorized to conduct the expert review and lack grounds for disqualification. Should the Customer subsequently identify the circumstances, it must immediately replace the expert (Parts 3 and 4, Article 41 of Law No. 44-FZ).

The Customer may engage a specialized organization to assist with the procurement procedure. The Customer delegates specific functions to it, such as drafting procurement documentation, publishing the procurement on the Unified Information System (EIS), and analysing the Bidders' proposals (Part 1, Article 40 of Law No. 44-FZ). The specialized organization itself cannot act as a Bidder in such a procurement (Part 5, Article 40 of Law No. 44-FZ).

If it emerges that the head of the Customer, a procurement commission member, or the head of the contract service had a personal interest upon concluding the contract, a court may invalidate such a contract (Part 22, Article 34 of Law No. 44-FZ). This provision implies that the interested parties could have derived a benefit in such a scenario.

Clause 9 of the Review of Judicial Practice in Cases Related to the Resolution of Disputes on the Application of Clause 9, Part 1, Article 31 of Federal Law No. 44-FZ dated April 5, 2013, On the Contract System in the Sphere of Procurement of Goods, Works, and Services for Meeting State and Municipal Needs (approved by the Presidium of the Supreme Court of the Russian Federation on September 28, 2016) outlines the consequences of a contract concluded with a conflict of interest. Such a contract is void, as it violates the law, infringes upon public interests, and violates the rights of third parties (Clause 2, Article 168 of the Civil Code of the Russian Federation (the "Civil Code")). The general rules of bilateral restitution apply: each party must return to the counterparty everything received under the transaction.

The failed procurements by the Institute of Solar-Terrestrial Physics of the Siberian Branch of the Russian Academy of Sciences serve as a representative matter. The Ministry of Education and Science of Russia delegated the authority to conduct tenders to the Institute. However, the Institute not only administered the procurement procedures but also participated in them as a candidate. FAS Russia, expectedly, identified a violation due to the presence of a conflict of interest.[1]

Another notable case involves a series of enforcement actions by the Bryansk antimonopoly authority regarding road repair contracts. The housing and communal services committee of the Bryansk city administration acted as the Customer for the procurements. The same contractor consistently emerged as the winner. Upon reviewing the case, the authority identified a clear vested interest. The commercial director of the contractor organization turned out to be the mother-in-law of the committee chairman, while the chairman's spouse and father-in-law served as founders. Although the Customer was aware of the conflict of interest, it took no action and continued to admit the contractor to the procurements. Following the bidding, the Customer concluded contracts with the organization, which it subsequently modified (specifically, altering the schedule and cost of works). The violator attempted to argue that the law does not explicitly use the terms "son-in-law", "father-in-law", or "mother-in-law", but the Antimonopoly Authority rejected these arguments, as the violation was evident. FAS noted: "…affiliated parties can execute evidence of the performance of a civil law obligation so flawlessly on the surface, simulating its performance, that it becomes impossible for the controlling body to refute this circumstance. For this reason, the presence of a conflict of interest when conducting procurements for state (municipal) needs invariably implies a violation of public interests and is unacceptable for the legal order".[2] The Customer's actions constituted a violation of both contract and antimonopoly legislation; therefore, the concluded contracts were classified as anti-competitive agreements (Clause 1, Part 1, Article 17 of Federal Law No. 135-FZ dated July 26, 2006, On Protection of Competition).

The Yakutsk OFAS invalidated a contract concluded between a district administration and its employee. The administration placed a well-appointed residential premises, a one-room apartment, up for bidding. An employee of the administration, the head of the economic division, participated in the Request for Quotations. On the electronic platform, she declared the absence of a conflict of interest, but simultaneously notified her employer, the Customer, of her intent to participate in the procurement. The Law on Protection of Competition explicitly prohibits Customer employees from participating in a Request for Quotations (Clause 4, Part 1, Article 17 of the Law on Protection of Competition). FAS noted that the specified prohibition is of a formal nature and constitutes a violation regardless of actual or potential negative consequences.[3]

Conflicts of interest frequently serve as grounds for unfounded complaints; therefore, the Antimonopoly Authority meticulously examines all arguments and circumstances. For instance, a customer rejected the bids of multiple Bidders, admitting only one. The dissatisfied Bidders appealed to FAS, alleging a conflict of interest between the Customer and the founder of the admitted organization. However, the case review revealed that this founder was neither the head of the Customer, nor a member of the procurement commission, nor the contract manager. The applicants provided no other evidence of a conflict of interest, prompting the dismissal of this part of their complaint.[4]

The Chelyabinsk OFAS reviewed a complaint regarding a procurement conducted by a state-owned institution subordinate to the Federal Road Agency. The complaint was based on the fact that the chairman of the Bidder's board of directors simultaneously served as a member of the public council under the Federal Road Agency. The Antimonopoly Authority pointed out that the Customer was not a structural subdivision of the agency, but an independent legal entity. Consequently, no conflict of interest arose.[5]

It is necessary to consider that corporate affiliation, in and of itself, does not constitute a conflict of interest. This implies that a subsidiary or controlled organization is not prohibited from participating in procurements conducted by the controlling legal entity. For instance, the Yakutsk OFAS reviewed a complaint regarding a procurement by a district administration. The winner was an organization whose shares were 100% owned by the Customer, i.e., the district administration. The OFAS noted that the law specifically refers only to an individual owning a 10% participatory interest. In this case, the administration, acting as a legal entity, held the controlling stake; thus, no conflict of interest arose.[6] In another example, the complainant alleged a conflict of interest based on corporate interconnections: the subcontractor of the winning organization was subordinate to an entity that, in turn, was controlled by the Customer. However, the Antimonopoly Authority found no evidence of vested interest in this scenario.[7] Nevertheless, the fact that corporate affiliation does not inherently create a conflict of interest within the meaning of Clause 9, Part 1, Article 31 of Law No. 44-FZ does not preclude the assessment of such relationships for compliance with the principle of ensuring competition (Article 8 of Law No. 44-FZ) and antimonopoly requirements for procurements (Article 17 of the Law on Protection of Competition).

Declaring the Absence of a Conflict of Interest

The Customer lacks the capacity to verify information regarding all familial and affiliated ties of the Bidder that could potentially trigger a conflict of interest. To address this, Law No. 44-FZ introduced a specific mechanism: the declaration of Bidder compliance.

During a competitive procurement (e.g., a tender or an electronic auction), the Bidder must declare its compliance with a list of mandatory requirements when submitting its application (Clauses 3-5, 7-11, Part 1, Article 31, and Subclause "o", Clause 1, Part 1, Article 43 of Law No. 44-FZ). This declaration is incorporated into the bid and must address all specified mandatory requirements (Clauses 3-5, 7-11, Part 1, Article 31 of Law No. 44-FZ). This encompasses Clause 9 of the aforementioned provision, meaning the Bidder formally warrants to the Customer that no circumstances creating a vested interest exist. The Customer must mandate the submission of this declaration in its procurement notice.

If the Bidder fails to declare the absence of a conflict of interest, or if the Customer independently discovers that this information is unreliable, the bid will be rejected, and the Bidder will be deemed non-compliant with the procurement requirements (Part 5, Article 48, and Part 12, Article 49 of Law No. 44-FZ).

Consequently, a Bidder submitting a declaration for a procurement application must explicitly state the absence of any conflict-of-interest indicators. In practice, however, such declarations frequently present challenges. The provision outlining the conditions for conflicts of interest between the Customer and the Bidder existed in a different wording prior to 2023. Effective January 01, 2023, the legislature amended the phrasing of Clause 9, Part 1, Article 31 of Law No. 44-FZ (Clause 2, Article 2 of Federal Law No. 160-FZ dated June 11, 2022, On Introducing Amendments to Article 3 of the Federal Law On Procurement of Goods, Works, and Services by Certain Types of Legal Entities and the Federal Law On the Contract System in the Sphere of Procurement of Goods, Works, and Services for Meeting State and Municipal Needs). Notably, the term "conflict of interest" itself was excised from the statutory language.

Many Bidders, unaware of the statutory amendments or disregarding their significance, incorporate the text from the outdated version of Law No. 44-FZ into their declarations. Such a declaration is deemed non-compliant, compelling Customers to reject it on formal grounds.[8] These rejections frequently precipitate complaints to antimonopoly authorities. Defending their position, some applicants argue the absence of procurement rules demanding verbatim reproduction of statutory texts. Furthermore, despite the semantic alterations, the core intent of the provision remains intact, which is to disclaim any conflict of interest between the Customer and the Bidder. However, the Antimonopoly Authority consistently sides with the Customers, validating the rejection of such bids as a lawful decision.[9]

It is crucial to consider that information confirming the absence of a conflict of interest is not always publicly accessible to the Customer. For example, verifying familial ties between corporate officials is inherently constrained. Consequently, the Antimonopoly Authority rejects Bidders' arguments that such data is publicly available and thus exempt from declaration requirements; Subclause "n", Clause 1, Part 1, Article 43 of Law No. 44-FZ is inapplicable here and does not relieve the Bidder of the duty to declare.[10]

Another prevalent error occurs when Bidders unilaterally alter, supplement, or edit the current wording of Clause 9, Part 1, Article 31 of Law No. 44-FZ. This is equally impermissible: the declaration text must strictly align with the statute, even if the Bidder views it as redundant or inapplicable to its specific context. For example, the Sverdlovsk OFAS reviewed a complaint from a Bidder whose application was rejected due to a non-compliant declaration. Because the Bidder was a business entity, it edited the statutory language regarding the absence of a conflict of interest, presenting it in an abridged format. From the statutory list of "conflict scenarios", it extracted only those pertaining to a corporate entity (Subclause "v" of the cited article). The Bidder omitted the remaining subclauses ("a" and "b"), assuming they applied solely to other Bidder types (individuals, sole proprietors, and unitary enterprises). The OFAS upheld the Customer's decision to reject this tailored declaration.[11] Similarly, the Ivanovo OFAS received a complaint from a Bidder that employed a succinct phrasing in its declaration: "No conflict of interest exists between LLC 'M' and the Customer".[12] Such a declaration fails to satisfy both the statutory requirements and the procurement notice.

It should be noted that stringent requirements apply not only to Bidders but also to the Customers themselves. The Customer drafts the procurement notice, outlining the declaration requirements therein, and the wording of these stipulations must reflect the current version of the law.[13]

Reputation as a Corruption Risk Factor

If an individual has previously faced administrative or criminal liability for corruption-related offenses, the law treats this as an elevated corruption risk factor (Clauses 7 and 7.1, Part 1, Article 31 of Law No. 44-FZ).

First, an individual Bidder, as well as the head and chief accountant of a corporate Bidder, must satisfy integrity criteria:

• Possessing no unexpunged or outstanding criminal convictions for economic crimes, illegal participation in entrepreneurial activity, or any offense involving the giving or receiving of a bribe (Articles 289, 290, 291, and 291.1 of the Criminal Code of the Russian Federation (the "Criminal Code"));
• Holding no prohibition against engaging in specific activities or holding specific positions within the sector relevant to the subject matter of the procurement (referring to a prohibition imposed as a criminal penalty);
• Having no history of administrative penalties in the form of disqualification.

Second, the corporate Bidder must not have incurred administrative liability under Article 19.28 of the Code of Administrative Offenses of the Russian Federation (the "CAO RF") within the preceding two years. This article addresses illegal remuneration, essentially constituting commercial bribery within the business sphere.

The absence of the specified restrictions is also subject to mandatory declaration. Upon submitting the bid, the Bidder warrants its compliance with these requirements and affirms the absence of elevated risk factors concerning prior administrative or criminal liability (Subclause "o", Clause 1, Part 1, Article 43 of Law No. 44-FZ). The procedure for reviewing the declaration and rejecting bids applies uniformly across all its clauses; thus, the process aligns with that used for declaring conflicts of interest.

For instance, the Irkutsk OFAS of Russia reviewed a complaint from an applicant barred from a procurement for submitting inaccurate information. The Bidder had declared an absence of administrative and criminal liability. However, the Customer verified the data and discovered that the Bidder's head had been convicted under Article 291 of the Criminal Code. Consequently, the Customer rejected the bid. The Bidder contested this rejection as unlawful, arguing that at the time of the procurement, the executive duties had been delegated to another individual with no liability record. Nevertheless, the Antimonopoly Authority determined that the transfer of executive authority was improperly formalized, thereby validating the Customer's actions as lawful.[14]

Importantly, these safeguard mechanisms operate not only during the procurement process but also following contract execution. The Customer is obligated to terminate the contract during its performance (Clause 1, Part 15, Article 95 of Law No. 44-FZ):

• If the supplier ceases to meet the mandatory declared requirements after concluding the contract (i.e., incurring administrative liability or a criminal conviction during contract performance);
• If it emerges that the supplier furnished inaccurate information in its declaration during the procurement process.

Under these circumstances, the Customer issues a notice of unilateral withdrawal from the contract to the supplier, and the relevant data is submitted to the Register of Unscrupulous Suppliers (the "RNP") (Part 2, Article 104 of Law No. 44-FZ).[15] However, inclusion in the RNP is not automatic. The Customer files an appeal with the controlling body (Part 4, Article 104 of Law No. 44-FZ; filing deadlines are set forth in Parts 16 and 22.2, Article 95 of Law No. 44-FZ). Subsequently, the controlling body (FAS Russia) reviews the facts presented in the appeal within five business days and issues a ruling on whether to add the information to the register (Part 7, Article 104 of Law No. 44-FZ). Despite the strictness and clarity of these rules, the Antimonopoly Authority applies a tailored approach regarding RNP inclusions. For instance, the Murmansk OFAS reviewed a scenario where an individual entrepreneur supplier, post-contract execution, faced criminal liability for fraud under Part 4, Article 159 of the Criminal Code (an economic crime). Upon discovering this, the Customer declared a refusal to perform the contract, asserting the supplier no longer met the requisite criteria. The Antimonopoly Authority ruled that this circumstance did not constitute non-performance or improper performance of the contract terms, and the Customer should have allowed the supplier to proceed with the execution.[16] A ruling by the Ulyanovsk OFAS serves as another example. After the supplier had executed the contract, the Customer declared a unilateral withdrawal and withheld payment. The Customer justified its actions by citing that, at the time of bid submission, the supplier's head had been sentenced under Article 291 of the Criminal Code, despite the supplier submitting a compliance declaration. The OFAS refused to add the supplier to the RNP because the verdict had not entered into legal force as of the bid submission date; thus, the declaration was factually accurate. Following the contract execution, the supplier replaced its head. Furthermore, the supplier had performed its contractual obligations in good faith and derived no economic profit, as the Customer had not paid for the works.[17]

It is essential to emphasize that the mere fact of a criminal conviction or administrative liability for an owner, director, or chief accountant does not constitute an insurmountable barrier to concluding a State Contract. If an organization intends to participate in a procurement, it may replace the executive or accountant prior to the commencement of the procurement procedure. Therefore, if the inappropriate individual is removed from their post and replaced before the bid submission, the Customer will lack formal grounds to refuse the contract execution.[18] If the executive replacement occurs after the bid submission (and particularly after contract execution), the Customer retains the obligation to terminate the contract. A ruling by the Amur OFAS corroborates this. At the time of bid submission, the Bidder's director held a conviction under Article 159 of the Criminal Code. Following the successful conclusion of the contract, the supplier appointed a new executive with no criminal record. The OFAS found the supplier's actions culpable and unscrupulous, as they precipitated adverse consequences: the Customer was forced to terminate the contract, state interests were compromised, and the targeted and efficient use of budgetary funds was thwarted. [19] Occasionally, the Antimonopoly Authority, rather than the Customer, identifies the contract's illegitimacy during an audit. For instance, following an audit, the Tula OFAS discovered that a supplier had submitted inaccurate information during the procurement phase, concealing an unexpunged conviction for fraud. The Customer declared a refusal to proceed with the contract. The OFAS emphasized that providing false information constitutes a material breach of the law, as it taints the supplier selection process and inherently undermines the prospect of proper contract performance. Concealing criminal records deprives the Customer of an objective assessment regarding the Bidder's reliability and compliance with established criteria. The authority also noted that the supplier offered no objections or explanations, implying consent to contract termination and confirming the submission of false data.[20]

Anti-Corruption Clause

State Contracts frequently feature a so-called "anti-corruption clause", which stipulates the parties' mutual obligation to adhere to anti-corruption regulations. Law No. 44-FZ does not mandate the inclusion of this clause; it does not qualify as a material term, and its omission is not a legal violation.[21] In practice, however, state Customers almost universally incorporate it when drafting agreements.

At the industry and ministerial levels, as well as in specific regions, authorities may approve special standard contract templates that integrate this clause. For example, standard contracts issued by the State Corporation Roscosmos for space industry services, Rosgvardia contracts for security services, contracts for the special assessment of working conditions, and State Contracts for all Customers in St. Petersburg contain an anti-corruption clause.[22]

While the wording of this clause may vary, its core tenets generally entail the following:

• Prohibiting the giving and receiving of bribes, as well as any other payments capable of influencing decision-making related to contract performance. This prohibition extends to the contracting parties, their representatives, employees, and affiliates;
• Mandating the parties to implement measures to prevent conflicts of interest or other vested interests during contract execution;
• Obligating a party to formally notify the counterparty in writing upon the emergence of a conflict of interest or other corruption-related violation, attaching supporting evidence;
• Granting a party that uncovers a conflict of interest or corruption-related violation the right to report it to the competent authorities.

Anti-Corruption Compliance

In 2020, the Ministry of Labor and Social Protection of the Russian Federation (the "Ministry of Labor of Russia") developed the Methodological Guidelines for Identifying and Minimizing Corruption Risks When Procuring Goods, Works, and Services to Meet State or Municipal Needs for state Customers, approved by Letter No. 18-2/10/P-9716 dated September 30, 2020 (the "Risk Assessment Guidelines"). These guidelines assist in evaluating corruption risks and effectively proactively mitigating violations.

Evaluating corruption risks under this methodology constitutes a complex, phased endeavor. The assessment can occur regularly, with the Customer defining the frequency, though conducting it every two to three years is advised. An unscheduled assessment is warranted when circumstances impacting risks shift (e.g., changes in the organizational staffing structure or core activities, redistribution of authority, shifts in the format and nature of procurements, or legislative amendments) (Clause 2.1 of the Risk Assessment Guidelines).

The primary phases of risk assessment are as follows:

• Preparatory phase: drafting and approving an internal corporate policy (order or directive) to conduct the assessment. The organization designates an individual responsible for the assessment, sets deadlines, formulates a schedule or plan, defines stages, and specifies the documentation to be generated;
• Analysing the procurement process: reviewing the procurement methods utilized by the organization, the structuring of the contract service, the procedures for forming and operating the procurement commission, and the personnel responsible for contract execution. Identifying the pool of potential Bidders is also recommended;
• Identifying corruption risks: evaluating each employee involved in the procurement procedure for risk factors. This necessitates analysing the employee's authority and their opportunities for interaction with potential counterparties, thereby enabling the prediction of specific vested interests (Clauses 3.12-3.14 of the Risk Assessment Guidelines);
• Analysing corruption risks: delineating the potential violation. This stage forecasts the likelihood of violations, probable corruption schemes, participants and involved parties, extracted benefits, and prevention strategies (Clauses 3.17-3.19 of the Risk Assessment Guidelines). Special attention is directed toward corruption indicators, namely elevated risk factors. These indicators encompass the excessive use of non-competitive procurement methods, a low number of participants in competitive bids, the routine award of contracts to the same supplier, the unexplained mass withdrawal of bids, and atypical contract terms. Furthermore, during Bidder selection, conducting a "counterparty due diligence" check is advised to uncover risk factors: low charter capital, recent corporate registration, or a lack of qualified specialists, property, or equipment (Clause 3.26 of the Risk Assessment Guidelines);
• Ranking corruption risks: evaluating their significance. While ranking methods vary, utilizing two core criteria is recommended: the probability of risk materialization and the magnitude of potential damage. Based on these two criteria, a corruption risk matrix is formulated. The matrix establishes a "tolerance boundary", which isolates the most critical vulnerabilities and dictates priority mitigation measures (Clauses 3.32-3.33 of the Risk Assessment Guidelines);
• Designing specific interventions to lower risk factors. These measures include refining the procurement mechanism (including strict procedural regulation), expanding the volume of competitive procurements, enhancing employee qualifications, preventing the concentration of official authority in a single individual (distributing functions where feasible), minimizing unilateral decisions, and tightening oversight of contract execution;
• Endorsing the risk assessment results. Upon concluding all procedures, it is advisable to draft an assessment summary report, compile a register of corruption risks, and formulate a mitigation plan. The Customer's management formally approves these deliverables (Clauses 3.43-3.45 of the Risk Assessment Guidelines).

To implement the Anti-Corruption Law, the Ministry of Labor of Russia developed another regulatory framework: the Methodological Guidelines for the Development and Adoption by Organizations of Measures to Prevent and Combat Corruption (approved on November 08, 2013) (the "Methodology"). This Methodology constitutes a comprehensive anti-corruption compliance program targeting the organization's entire operational and administrative framework (rather than solely procurements). Consequently, any organization can adopt it, irrespective of its ownership structure or its subjection to procurement legislation (this includes Customers under Law No. 44-FZ, Bidders, or contracted suppliers).

Organizations are encouraged to formulate their own anti-corruption policies, comprising a suite of preventive measures, specifically (Clause 1, Section IV of the Methodology):

• Approving an internal code of ethics and professional conduct (including protocols for business gifts);
• Drafting a corporate conflict of interest policy, inclusive of reporting protocols for violations and emerging vested interests;
• Upgrading contractual templates, particularly the integration of an anti-corruption clause;
• Bolstering financial and accounting controls and monitoring cash flows. Alongside internal audits, the regular engagement of external independent experts or auditors is recommended.

The human resources elements of the anti-corruption policy are of particular significance (Clauses 4 and 6, Section IV of the Methodology):

• Incorporating anti-corruption provisions into employment agreements and job descriptions;
• Implementing a declaration procedure for organizational staff (applicable to medium and large enterprises). This involves personnel regularly completing declarations confirming the absence of a conflict of interest (employers must ensure confidentiality and personal data protection);
• Appointing an individual (or department) accountable for the organization's anti-corruption efforts;
• Introducing specialized reporting formats to oversee the decision-making process;
• Rotating or redistributing the functions of officials occupying roles with a heightened corruption risk profile;
• Imposing disciplinary sanctions on employees who commit violations;
• Conducting awareness campaigns among employees, including methodological training sessions and briefings on liability for corruption offenses.

Thus, the Methodology serves as a detailed roadmap for corporate and HR anti-corruption interventions. Customers operating under Law No. 44-FZ should integrate its provisions alongside the Risk Assessment Guidelines during procurements. It is worth noting that state authorities and their subordinate entities are legally obligated to publish their internal anti-corruption documents on their official websites. These documents include the anti-corruption plan, the anti-corruption policy, minutes of the anti-corruption commission meetings, and the order designating the anti-corruption compliance officer. Furthermore, public sector Customers routinely submit anti-corruption performance reports to their supervising regulatory bodies.

Concluding Remarks and Strategic Guidance

The public procurement system operates to serve the state's interests, with State Contracts funded via budgetary allocations. Consequently, Law No. 44-FZ's protective mechanisms are designed to ensure that, in the event of a conflict of interest, a contract with an interested party is either thwarted entirely or subject to immediate termination.

The legislature recognizes that the Customer cannot verify the vested interests of every Bidder, trace all familial connections, or access personal data indiscriminately. To resolve this, the procurement procedure employs a targeted tool: "declaration". To secure access to the bidding process, a candidate must declare the absence of vested interests and conflicts of interest. The Customer is not obligated to audit this information (although it reserves the right to do so). The phrasing pertaining to the declaration of the absence of a conflict of interest must rigorously track the statute; this applies equally to the Customer's procurement documentation and the Bidder's declaration.

If the declaration is proven false post-contract execution, the contract is subject to termination. If corruption risk factors materialize during contract performance (e.g., an executive faces criminal charges, or a vested interest relationship develops between the Customer and the Bidder), the Customer remains bound by a strict obligation to terminate the agreement.

The framework for avoiding conflicts of interest applies not only to the Customer and the Bidder (supplier), but also to experts and specialized organizations retained to facilitate the procurement or audit contract performance.

Customers are advised to embed an anti-corruption clause into their contracts, codifying the parties' obligations to uphold anti-corruption protocols.

All organizations operating within the public procurement ecosystem are strongly urged to implement robust anti-corruption compliance – an internal matrix of preventive measures. This entails drafting localized regulations (such as an anti-corruption policy), appointing an anti-corruption compliance officer, conducting routine corruption risk assessments, and executing strategic HR interventions, including the effective delegation of official duties, periodic rotation, and structured employee training.

____________________________

References

[1] Decision of FAS Russia dated October 16, 2023, in Case No. 28/06/105-2320/2023; Decision of FAS Russia dated October 19, 2023, in Case No. 23/44/93/323.

[2] Decisions of the Bryansk OFAS of Russia dated November 01, 2025, No. 032/01/17-699/2025, dated November 21, 2024, No. 032/06/99-1268/2024, dated November 22, 2024, No. 032/06/99-1279/2024, and dated November 22, 2024, No. 032/06/99-1280/2024.

[3] Decision of the Yakutsk OFAS of Russia dated September 17, 2024, in Case No. 014/01/17-1467/2024.

[4] Decision of FAS Russia dated August 04, 2017, in Case No. K-997/17.

[5] Decision of the Chelyabinsk OFAS of Russia dated June 28, 2024, in Case No. 074/06/99-1362/2024(81-VP/24).

[6] Decision of the Yakutsk OFAS of Russia dated January 27, 2026, in Case No. 014/06/49-124/2026.

[7] Decision of FAS Russia dated July 17, 2017, in Case No. K-877/17.

[8] Decision of the Ivanovo OFAS of Russia dated July 26, 2024, No. 037/10/99-528/2024(07-03/2024-012); Decision of the Leningrad OFAS of Russia dated August 22, 2023, in Case No. 047/06/42-2388/2023; Decision of the St. Petersburg OFAS of Russia dated July 13, 2023, in Case No. 44-2830/23.

[9] Decision of the Komi OFAS of Russia dated January 26, 2026, regarding Complaint No. 011/06/105-38/2026.

[10] Decision of the Tomsk OFAS of Russia dated April 13, 2026, in Case No. 070/06/105-305/2026.

[11] Decision of the Sverdlovsk OFAS of Russia dated June 26, 2023, regarding Complaint No. 066/06/106-2263/2023.

[12] Decision of the Ivanovo OFAS of Russia dated May 16, 2023, No. 037/06/49-243/2023(07-15/2023-130).

[13] Decisions of the Chelyabinsk OFAS of Russia dated September 01, 2023, No. 074/06/99-2025/2023, in Case No. 91-SO-VP/2023, and dated August 29, 2023, No. 76-VP/2023, in Case No. 074/10/99-1975/2023.

[14] Decision of the Irkutsk OFAS of Russia dated March 17, 2026, regarding the complaint against procurement notice No. 1034500002226000004.

[15] Decision of the Ulyanovsk OFAS of Russia dated December 23, 2025, in Case No. 073/10/104-901/2025.

[16] Decision of the Murmansk OFAS of Russia dated April 09, 2026, in Case No. 051/06/104-281/2026.

[17] Decision of the Ulyanovsk OFAS of Russia dated March 25, 2026, in Case No. 073/10/104-247/2026.

[18] Decision of the Krasnoyarsk OFAS of Russia dated March 25, 2026, No. 024/10/104-797/2026.

[19] Decision of the Amur OFAS of Russia dated October 16, 2025, in Case No. 028/06/104-778/2025.

[20] Decision of the Tula OFAS of Russia dated October 06, 2025, in Case No. 071/10/104-975/2025.

[21] Decision of the Kursk OFAS of Russia dated August 20, 2019, in Case No. 046/06/83.2-453/2019.

[22] Section 12 of the standard contract template annexed to the Order of the State Corporation Roscosmos dated April 22, 2021, No. 106, On the Approval of Standard Contracts for the Provision of Services in the Sphere of Space Activities; Section 10 of the standard contract template annexed to the Order of Rosgvardia dated June 01, 2020, No. 149, On the Approval of the Standard Contract for the Provision of Security Services and the Information Card of the Standard Contract for the Provision of Security Services; Section 9 of the standard contract template annexed to the Order of the Ministry of Labor of Russia dated December 24, 2018, No. 834n, On the Approval of Standard Contracts for the Provision of Services for Conducting a Special Assessment of Working Conditions and Training Employers and Employees on Occupational Safety Issues, as well as their Information Cards; standard contract templates annexed to the Directive of the St. Petersburg Committee on State Orders dated December 20, 2013, No. 113-r, On the Approval of Methodological Guidelines for St. Petersburg Customers.