About Compliance
Anti-corruption compliance control. What is it and to what extent can it eliminate corruption?
The updated policy of Uzbekistan is based on such lofty ideas as raising the level of justice and the rule of law in society, introducing modern effective public administration, forming a spirit of strict intolerance to all manifestations of corruption among civil servants, and unconditionally ensuring the interests of the people. First of all, the priority idea put forward by President Sh.M. Mirziyoyev at the heart of these reforms is the mobilization of all opportunities in the interests of our people in accordance with the basic principle “The people should serve the state bodies, not the state bodies”.
In this regard, in order to achieve true effectiveness of the reforms, it is of particular importance to consistently ensure the effectiveness of the fight against corruption in every sphere of the state and society.
It is worth noting that ensuring the effective implementation of state policy in the field of combating corruption and eliminating the causes and conditions of corruption, rather than the consequences, requires the implementation of modern crime prevention measures widely used in international practice.
In this regard, one of the main tasks of the newly established Anti-Corruption Agency, established in accordance with the Presidential Decree No. PF-6013 dated June 29, 2020 “On additional measures to improve the anti-corruption system in the Republic of Uzbekistan”,
in 2020-2021, was determined to gradually introduce internal departmental anti-corruption control systems in all state and economic management bodies, state-owned enterprises and enterprises with a state share in the authorized capital, including banks.
Analysis of foreign practice has shown that in countries with a market economy based on laws, one of the important tools for ensuring the effective operation of state and private sector participants in the field of combating corruption in accordance with international standards, legislation and other modern methods is the organization of a compliance control system for combating corruption.
Compliance control against corruption is a preventive system that organizes the activities of state and economic management bodies, business entities in accordance with international standards, laws and other regulatory legal acts in the field of combating corruption, and includes the timely identification and elimination of corruption risks, conflicts of interest, and reporting on violations of the law and corruption-related offenses.
The compliance control system first appeared in the United States in 1906. The need for this is associated with the creation of companies and corporations aimed at ensuring security in the country’s economy.
From the second half of the last century to the present day, conflict situations with large companies (Volkswagen, Daimler, Siemens (Germany) Odenbrecht, Petrobras (Brazil), Samsung Group, Hyundai Motor Co. (Republic of Korea), BAE Systems (Great Britain), Baker Hughes Inc, Panalpina World Transport (USA) and others) have necessitated a fundamental reform of anti-corruption systems in the private sector.
Today, according to official data from the international law firm Baker and McKenzie for 2019, anti-corruption compliance control systems have been introduced in companies in more than 150 countries.
For example, in the UK alone, more than 800 corporations and banks with a capital of 1 billion pounds sterling, this system was established as a comprehensive measure to protect against various corruption risks and is currently being widely used due to its effective aspects.
In France, all corporations and banks with a capital of more than 800,000 euros are required to have implemented anti-corruption compliance control systems.
In accordance with the practice of countries with effective experience in implementing compliance control systems, the following two models of this service are most widely used:
1. The company and organization are focused on organizing their activities solely in accordance with existing domestic laws
and regulations. In this case, the implementation of the compliance service is limited to minimal rules.
2. The organization of the compliance control system is based on the recommendations of international organizations (recommendations of the Basel Banking Committee, the International Compliance Association) in assessing corruption risks, and in this model, the status, tasks, and scope of activities of the compliance service are based mainly on international standards and recommendations.
The difference between these two models is that in the first model, the company or organization that establishes the compliance control system itself
The organization is regulated by existing legal norms or internal regulations developed by it and is limited by minimum requirements for implementation.
In the second model, the organization of activities is implemented not only on the basis of national legislation, but also on the basis of international standards and recommendations of organizations. In this form, it is possible to introduce additional preventive rules that adapt the activity to the risks of corruption not provided for in domestic legislative norms.
This experience is distinguished by its effectiveness and mainly corresponds to the practice of countries with large economic potential, such as the USA, Great Britain, Germany, China.
It is also important that in most foreign countries the compliance control system is regulated by a separate legal act. For example, in the USA, the Foreign Corrupt Practices Act (1977), the Sarbanes-Oxley Act (2002), and the Dodd-Frank Act (2010) require any corporation or company operating in the US market to establish a compliance control system within its structure.
In this regard, the Slovenian legislation aimed at regulating this area is unique. In particular, the Slovenian Sovereign Holding Act (2014), adopted on April 26, 2014, defines the status and powers of the compliance control system.
The uniqueness of the law is that it addresses the issue of personnel in the compliance service (compliance officer) and provides clear rules and procedures for reporting corruption-related violations within the company (whistleblowing policy).
The introduction of the compliance control system into the anti-corruption legislation of our state is one of the main tasks set in this area in the Decree of the Republic of Uzbekistan No. PF-5729 dated May 27, 2019 “On measures to further improve the anti-corruption system in the Republic of Uzbekistan”, which established the task of introducing a compliance control system to combat corruption and systematically monitoring its effectiveness in order to strengthen countermeasures in enterprises and organizations with a state share in the authorized capital. These regulatory documents raise the issue of introducing a compliance control system at the national level for the first time.
Based on the decree, starting in 2019, as part of the implementation of the UNDP project “Fighting Corruption through Effective, Accountable and Transparent Governance Institutions in Uzbekistan”, in cooperation with the Prosecutor General’s Office, the Ministry of Justice and other interested departments, international tender processes were held with the participation of the international auditing companies “White and Case” (USA) and KPMG (Italy) to introduce a compliance control system as an experiment in the activities of economic entities whose state share in the authorized fund is 100% or more than 50%, and whose activities are integrated with the foreign market.
Today, the project implementation processes are underway in the system of “Uzbekneftegaz” and “Uzkimyosanoat” joint-stock companies and the Ministry of Justice of the Republic of Uzbekistan.
It is worth noting that, based on the effectiveness and effectiveness of the compliance control system, which is widely used internationally, in preventing corruption risks, the project is being piloted in state organizations such as the Ministry of Construction of the Republic of Uzbekistan, the Ministry of Higher and Secondary Specialized Education, the Ministry of Health, as well as the Tashkent City Khokimiyat, the Tashkent Regional Khokimiyat, the Mirzo Ulugbek District Khokimiyat and the Buka District Khokimiyat.
Also, on March 15, 2020, at the initiative of the Prosecutor General’s Office of the Republic of Uzbekistan, in cooperation with 9 state agencies, including the Ministry of Internal Affairs of the Republic of Uzbekistan, the Ministry of Transport, the Ministry of Preschool Education, the Ministry of Energy, the Ministry of Employment and Labor Relations, the Ministry of Agriculture, and the State Customs Committee, an order was agreed on for the phased introduction of a compliance control system in order to further improve anti-corruption effectiveness in these areas, and the “Roadmap for Further Improving the Fight against Corruption for 2020” was approved.
It should be noted that today, the phased introduction of a compliance control system in the public and private sectors demonstrates the relevance of studying this area in all respects.
From the above, it can be concluded that the fight against corruption in the activities of the public and private sectors serves a number of effective factors in the implementation of a “compliance control” system.
In particular, this system allows for the timely identification and elimination of corruption risks, their
The main results are: increasing the accountability and transparency of the activities of state bodies and organizations, strict adherence to the rules of professional ethics by employees and regulation of issues of reporting and resolving conflicts of interest in the performance of official duties, introduction of generally recognized international standards and positive foreign experience in the field of combating corruption, and other priority results.
Bakhodir ISMOILOV, Head of the Scientific Educational Center for Combating Corruption at the Prosecutor General’s Academy, Doctor of Laws
Mamanov Sardorjon, Master of Arts in the field of “Combating Corruption” at the Prosecutor General’s Academy