Government and other officials’ expenditures control: new in legislation

The article “Government and Other Officials’ Expenditures Control: New in Legislation” is focused on the analysis of new legal regulations concerning officials’ expenditures control under Russian law. In accordance with the article 20 of the United Nations Convention against Corruption subject to its constitution and the fundamental principles of its legal system, each State Party of the abovementioned Convention shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, illicit enrichment, that is, a significant increase in the assets of a public official that he or she cannot reasonably explain in relation to his or her lawful income. On January 1, 2013 the Federal Law No 230-FZ of December 3, 2012 “On control over consistency of expenditures of government officials and of other individuals to their incomes” (hereinafter – the “Law No 230-FZ”) came into force. Aimed at the partial implementation of the article 20 of the UN Convention against Corruption, the Law No 230-FZ obliges federal and regional government officials (ministers, deputies, governors, etc.), municipal officials (mayors, other local public officials), government and municipal servants in accordance with special lists of offices (additional enactment required), specified employees of state-owned corporations, state non-budgetary funds, the Central Bank of Russia, some other officials (hereinafter – “Controlled Officials”) to declare their expenditures and their spouses and non-adult children expenditures related to acquisitions of fixed assets (including parcels of land), vehicles, securities and shares of corporate stock as well as the sources of income for purchasing these assets. If the amount of expenditures exceeds total income of Controlled Official and his or her spouse over a three-year period prior to the acquisition such transaction should be declared. Controlled Officials is required to report on their purchase and purchase of his or her spouse and non-adult children. The new legislation introduces the control procedure carrying out by the personnel or compliance control departments of the government agencies (or the other aforesaid entities). The Law No 230-FZ requires enacting some regulations and regional laws in order to define agencies and departments responsible for expenditures control, procedures, terms and forms of reporting, etc. According to the Law No 230-FZ if Controlled Official fails to prove legality of his or her revenue authorized agency or department refers a case to the public prosecutor’s office. Then, the prosecutor brings an action against the Controlled Official in order to appropriate the unlawful property for the benefit of the public treasury. In this article we also analyze some controversial points of the Law No 230-FZ, compare it with the previous expenditures control regulations for individuals. To our opinion, the Law No 230-FZ provides good opportunities to prevent corruption. However, we argue that abovementioned Law should be improved and offer recommendations for such improvement.