Legal expertise of compliance of transactions and trading operations with international requirements and restrictions

legal expertise of compliance of transactions and trading operations with international requirements and restrictions

The conclusion of transactions complicated by a foreign element and involving the movement of goods across the customs border of Russia and other states requires a special approach. This is due to the presence of a number of features of their legal regulation.

These features include the following areas for verifying the compliance of transactions:

  1. Verification of compliance with international anti-corruption requirements.
  2. Checking the risks of applying international sanctions.
  3. Compliance with industry standards and requirements.

Below we give some examples of legal check items in the framework of the above areas, in order to more clearly explain the specifics of the services provided by BRACE Law Firm to verify transactions and trade operations with international requirements and restrictions.

According to Art. 1 of the Federal Law of Russia dated December 25, 2008 N 273-FZ “On Countering Corruption”, corruption refers to abuse of office, giving a bribe, receiving a bribe, abuse of authority, commercial bribery or other unlawful use by an individual of his official position contrary to the legitimate interests of society and the state in for the purpose of obtaining benefits in the form of money, valuables, other property or property services, other property rights for themselves or for third parties, or the unlawful provision of such benefits to the specified person by other individuals, as well as the commission of the above acts on behalf of or in the interests of the legal entity.

However, the legal regulation within the framework of concluding contracts with foreign companies and other persons is not limited only to the specified laws. In particular, there are a number of legal acts that have a very broad effect and have a significant impact on a wide range of people.

For example, the Foreign Corrupt Practices Act (hereinafter - the FCPA) is the United States Anti-Corruption Act. A person is subject to the FCPA, including if it participates in corrupt payments through its agents, shareholders or other persons, as well as if there is a US citizen in its management body and/or a company is employed by a company - a US citizen who violates the requirements anti-corruption laws, and also if the company's securities are placed on American stock exchanges. This includes if a US enterprise, any of its officials, managers, employees, or representatives use or intend to resort to any actions or practices in violation of the provisions of subsection (a) or (i) of chapter 78dd-2 FCPA. In this case, the Minister of Justice may, at its discretion, file a civil suit in the relevant United States District Court to impose a ban on such action or practice, and after presenting convincing evidence, the court may impose an indefinite ban or issue a temporary ban without bail.

Also one of the most important international regulations in this area is the UK Bribery Act (The UK Bribery Act 2010). This legal act applies to companies established in the UK, as well as to foreign companies operating in a given country.

The importance of identifying the need to comply with the above anti-corruption laws is due to the presence of the practice of bringing foreign companies to justice for their non-compliance with the appointment of high penalties.

Given the current political situation, the sanctions imposed on the Russian Federation have various consequences for economic entities. In this regard, there is a need to verify the fact of falling under the sanctions of counterparties and the subject of the transaction. Otherwise, there are risks of serious losses by the parties to the transaction.

Despite the fact that the entry into force of bans on the import/export of goods into the territory of any state may be considered by the parties to the transaction as a force majeure circumstance, it is recommended to timely check for the presence of sanctions. At the same time, when concluding a transaction, it is advisable to determine the law applicable by the parties and at the same time analyze the legislation regarding the established prohibitions and restrictions.

Industry standards and requirements are important for compliance by sellers and / or manufacturers of the goods to which they apply. Typically, these standards are aimed at detailing anti-corruption measures, the procedure for conducting inspections and regulating the behavior of company employees. At present, the number of companies (associations of companies) applying these or other requirements is increasing, depending on the direction of activity of the economic entity.

For example, among large credit institutions, it is common to introduce requirements for compliance with the code of ethics of official conduct, which determines the procedure for settling conflicts of interest, working with clients, etc.

Some pharmaceutical companies apply the Code of Good Practice of the Association of International Pharmaceutical Companies (AIPM). This document governs the integrity of pharmaceutical companies and establishes some prohibitions. For example, the prohibition to offer, promise, provide or transfer to health care professionals the remuneration for the appointment or recommendation to patients of a certain pharmaceutical product, etc.

In connection with the above, in order to minimize the risks of loss of profit by economic entities when concluding transactions, compliance is recommended.

Law firm BRACE provides compliance services, within which the compliance of transactions and trading operations with international requirements and restrictions is checked.

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