Russian Law for Communication in English. Учебное пособие 9785998806582

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Russian Law for Communication in English. Учебное пособие
 9785998806582

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МИНИСТЕРСТВО ОБРАЗОВАНИЯ И НАУКИ РОССИЙСКОЙ ФЕДЕРАЦИИ МОСКОВСКИЙ ГОСУДАРСТВЕННЫЙ ЮРИДИЧЕСКИЙ УНИВЕРСИТЕТ ИМЕНИ О. Е. КУТАФИНА (МГЮА)

В. В. Пикалова, Е. И. Розанова, Л. Ф. Толубаева, Е. М. Черепахина

RUSSIAN LAW FOR COMMUNICATION IN ENGLISH УЧЕБНОЕ ПОСОБИЕ

Под редакцией кандидата филологических наук А. В. Дорошенко

Москва 2018

УДК 811.111(075.8) ББК 81.2Англ-923 R88

Электронные версии книг на сайте www.prospekt.org

Авторы: Пикалова В. В., кандидат филологических наук, доцент кафедры английского языка № 1 Института юридического перевода Московского государственного юридического университета имени О. Е. Кутафина (МГЮА) – гл. 2, 4, 5, 10, 15, 16, ключи, Приложение I, глоссарий; Розанова Е. И., доцент кафедры английского языка № 1 Института юридического перевода Московского государственного юридического университета имени О. Е. Кутафина (МГЮА) – гл. 1, 7 (ч. 1 и 2), 8, 9, ключи; Толубаева Л. Ф., старший преподаватель кафедры английского языка № 1 Института юридического перевода Московского государственного юридического университета имени О. Е. Кутафина (МГЮА) – гл. 11, 12, 13, 14, ключи; Черепахина Е. М., старший преподаватель кафедры английского языка № 1 Института юридического перевода Московского государственного юридического университета имени О. Е. Кутафина (МГЮА) – гл. 3, 6 (ч. 1–5), 17, 18, ключи, Приложения II и III. Рецензенты: Грачева Е. Ю., доктор юридических наук, профессор, первый проректор Московского государственного юридического университета имени О. Е. Кутафина (МГЮА); Шахназаров Б. А., кандидат юридических наук, доцент кафедры международного частного права Московского государственного юридического университета имени О. Е. Кутафина (МГЮА). Редактор: Дорошенко А. В., кандидат филологических наук, доцент кафедры английского языка № 1 Института юридического перевода Московского государственного юридического университета имени О. Е. Кутафина (МГЮА). Общая редакция пособия, разделы: От редактора и Введение.

R88

Russian Law for Communication in English : учебное пособие / под ред. А. В. Дорошенко. ‒ Москва : РГ-Пресс, 2018. ‒ 352 с. ISBN 978-5-9988-0658-2 Учебное пособие по юридическому английскому языку подготовлено коллективом авторов кафедры английского языка № 1 Института юридического перевода Московского государственного юридического университета имени О. Е. Кутафина (МГЮА). Пособие содержит тексты на английском языке и упражнения, отражающие юридические понятия и категории российского права. Учебное пособие рекомендовано к применению на практических занятиях по юридическому английскому в юридических вузах. Также данное пособие может оказаться полезным для магистрантов, аспирантов, сотрудничающих с транснациональными компаниями практикующих юристов-переводчиков и занимающихся научной деятельностью юристов при подготовке научных статей и аннотаций на английском языке.

УДК 811.111(075.8) ББК 81.2Англ-923 Изображение на обложке megastocker/Shutterstock.com

ISBN 978-5-99880658-2

© Коллектив авторов, 2016

ОТ РЕДАКТОРА Идея создания пособия по российскому праву на английском языке для студентов-юристов, готовящихся к деятельности в многоязычной среде, была высказана первым проректором МГЮА (Университета имени О. Е. Кутафина) доктором юридических наук Еленой Юрьевной Грачевой. По ее мнению, юристы при общении с иноязычными коллегами должны прежде всего уметь объяснять положение в российском праве, а также владеть умением проводить параллели, устанавливать сходство и различие между российскими и иноязычными правовыми институтами, категориями и понятиями. В настоящее время в системе подготовки юристов к деятельности на иностранном языке преобладает использование учебников и пособий, в которых текстовый материал отражает реалии зарубежных правовых систем. Не отрицая пользу таких учебных материалов при обучении юридическому английскому языку, следует отметить, что вследствие принадлежности российского и англо-американского права к разным правовым семьям (соответственно к континентальному и общему, или прецедентному, праву) у студентов возникают сложности с проведением аналогий при использовании английского языка в ситуациях профессиональной коммуникации, касающейся российского права. Предлагаемое пособие имеет целью снятие таких трудностей и обучение студентов и слушателей умению общаться на английском языке, затрагивая проблемы как англо-американского, так и российского права. Для этого требуется знание терминологии, наименований законов, ведомств, институтов, реалий, специфических именно для российского права. Пособие Russian Law for Communication in English имеет еще одну особенность. Для работы в иноязычной среде в России и за рубежом работодатели часто требуют предоставления результатов международных тестов в подтверждение языковой компетенции соискателей рабочих мест. В предлагаемом пособии система упражнений создана с учетом формата заданий, включающихся в международные тесты (IELTS, TOEFL, FIRST, ADVANCED, ILEC и др.), и это является сопутствующей целью данного пособия. Выполняя упражнения в формате международных тестов, студенты и слушатели приобретают навыки оперирования иностранным языком для решения профессиональных 3

правовых задач. Такой методический подход является новаторским по сравнению с традиционной системой упражнений и заданий в большинстве учебников по английскому языку. Пособие содержит богатый текстовый материал, охватывающий целый ряд отраслей российского права: конституционное, предпринимательское, финансовое, банковское, трудовое, энергетическое право, а также такие интересные правовые темы, как приватизация, языковая политика, банкротство (несостоятельность) должника, регулирование конкуренции и т. д. Таким образом, наряду с изучением английского языка студенты получают возможность приобрести обзорные знания в российском праве. Коллектив авторов и редактор надеются, что предлагаемое пособие Russian Law for Communication in English будет интересным и полезным для студентов-юристов, магистрантов, аспирантов и в целом для использующих английский язык в своей работе российских правоведов. А. В. Дорошенко

ВВЕДЕНИЕ Цель пособия Russian Law for Communication in English — научить юристов, изучающих английский язык, осуществлять устную и письменную коммуникацию с иноязычными коллегами о положении и проблемах российского права. В условиях глобализации и преодоления национальных границ во многих областях нашей жизни владение иностранным языком расширяет кругозор и повышает возможности трудоустройства юристов, дает им возможность работать как с российскими, так и зарубежными клиентами. Достижение цели пособия предполагает решение следующих образовательных задач: 1) ознакомить учащихся с терминологией российского права на английском языке; 2) ознакомить их с наименованиями российских законов, названиями правовых институтов и ведомств на английском языке; 3) продемонстрировать аналогии и различия российской и англоамериканской правовых систем; 4) выработать и развить навыки и умения профессиональной коммуникации по вопросам российского права; 5) познакомить с форматом заданий, включающихся в международные тесты по определению уровня владения английским языком; 6) обеспечить тренинг при выполнении тестовых заданий; 7) развить профессиональную коммуникативную компетенцию при решении проблем российского права и др. Структурно пособие разделено на три части. Первая часть содержит 18 обучающих уроков-юнитов; вторая включает приложения с объяснениями некоторых языковых реалий и трудностей, перечень наиболее часто использующихся в резюме, рефератах и презентациях речевых клише и коннекторов, дополнительные упражнения и текстовый материал; третья представляет собой алфавитный англо-русский словарь-глоссарий всех терминов, терминологических сочетаний и других лексических единиц, приведенных в качестве подлежащего активному усвоению словаря в каждом юните. Пособие снабжено ключами к упражнениям, введением, пояснительной запиской от редактора и списком использованных источников. Наличие словаря-глоссария и ключей 5

к упражнениям позволяет использовать пособие для самостоятельной работы учащихся, что соответствует задачам современной образовательной парадигмы, предполагающей активное индивидуальное вовлечение учащихся в образовательный процесс и автономию студента. Каждый юнит пособия является самостоятельным обучающим модулем и может изучаться независимо от других юнитов. В каждом юните (с незначительными вариациями) выделены следующие структурные части. 1. Discussion. В этой части юнита приводится «словарное облако» для стимулирования речевой деятельности учащихся, а также вопросы, вводящие в тему юнита. 2. Legal terms. Здесь даются основные термины и терминологические словосочетания с переводом на русский язык, подлежащие активному усвоению при изучении юнита. 3. Information about denominations of Russian laws and relevant authorities (ministries, agencies, services, departments). Приводятся наименования законов и других источников права, применимых в рамках изучаемой темы юнита, а также названия различных российских регулирующих органов в переводе на английский язык. Необходимость и польза данного раздела — в том, что в российском праве имеются реалии, за которыми в английском языке по традиции закрепились особые способы номинации, знание которых необходимо для эффективного межкультурного общения. 4. Reading. Это основная часть юнита, содержащая текстовый тематически ориентированный материал и упражнения на выработку навыков и умений чтения и сопутствующих языковых и речевых коммуникативных навыков. Упражнения преимущественно разработаны в формате международных тестов. 5. Key terms. Раздел юнита включает упражнения на закрепление терминологических, лексических единиц, словосочетаний и других языковых явлений (предлогов, синонимов, многозначных лексем и др.). 6. Use of English. В этот раздел включены упражнения на закрепление и активное использование в коммуникации как знаний по теме юнита, так и языковых структур. Иначе говоря, цель этой структурной части — обеспечить активизацию изученного материала. 7. Speaking. Сюда включены творческие коммуникативные задания, такие как презентации, дискуссии, проекты, составление обзоров по теме и сообщения на их основе и др. В этот раздел также входят в ряде юнитов так называемые competency-based questions (вопросы, направленные на формирование профессиональной компетенции). Студенты, обсуждая такие вопросы, получают возможность высказать свое видение проблем российского права, используя различные виды речевой модальности (критика, одобрение, поддержка, предложение своих путей решения проблем). 6

8. Summarizing. Задача этой части юнита — обеспечить практику для аннотирования, резюмирования и реферирования содержащегося в юните текстового материала. Упражнения на такие виды речевой деятельности предполагают использование речевых клише и коннекторов, характерных для производных текстов. Список частотных речевых связок (connectors) приводится в приложении I (Annex I). В большинстве юнитов в качестве основы для резюмирования приводится статья на английском языке, посвященная актуальным проблемам российского права или обсуждению какой-либо парадоксальной правовой ситуации. Статьи могут использоваться (на усмотрение преподавателя) и как основа для дискуссий. 9. Writing. Эта часть юнита предполагает написание студентами сочинения или изложения по теме c заданным объемом высказывания. Задание на письмо может объединяться с заданием на резюмирование текста. Отличительной чертой пособия является относительная простота и смысловая прозрачность отобранного материала наряду с репрезентативным охватом правовой тематики. Это позволяет использовать пособие со студентами разного уровня подготовки в английском языке, а также отбирать наиболее интересные для учащихся юниты. Представляется, что именно обсуждение проблем российского права на английском языке должно служить мотивацией для учащихся-юристов, так как в общении с англоязычными коллегами интерес представляет обсуждение особенностей российского права по сравнению с англоамериканской системой. Авторы надеются, что пособие Russian Law for Communication in English вызовет интерес у студентов и слушателей при его изучении и будет способствовать выработке навыков и умений в английском языке и формированию профессиональной коммуникативной компетенции юриста.

Unit 1. Constitutional Law of the Russian Federation Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is Constitutional law? 3. What Federal Constitutional laws do you know? 4. What is the Constitution?

Legal terms 1. 2.

body of law executive

совокупность правовых норм исполнительная власть

3.

legislature judiciary

законодательная власть судебная власть

4.

8

5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

statute law

право, выраженное в законах, законы, статутное право applicable law применимое право enact вводить закон, предписывать, устанавливать domestic law внутригосударственное право, национальный закон provide for предусматривать separation of powers принцип разделения властей be vested with быть облеченным широкими полномочиями extensive powers legislative veto вето, налагаемое законодательным органом fundamental rights основные права appoint and dissolve назначать и распускать правительство the government subject to подлежащий подтверждению confirmation amend вносить поправки в законодательство obtain majority достигать большинства submit a candidate выдвигать кандидатуру federal constituent федеральный избирательный округ entity be nominated быть назначенным enjoy a higher status пользоваться более высоким статусом contravene противоречить qualified majority квалифицированное, определенное большинство suspensory veto отлагательное вето (президента)

Study the titles of Federal Constitutional laws: The Federal Constitutional Law Федеральный конституционный No. 5-FKZ On the Referendum in the закон № 5-ФКЗ «О референдуме Russian Federation Российской Федерации» The Federal Constitutional Law No. 3-FKZ On the Emergency Situation

Федеральный конституционный закон № 3-ФКЗ «О чрезвычайном положении»

The Federal Constitutional Law No. 1-FKZ On the Military Regime

Федеральный конституционный закон № 1-ФКЗ «О военном положении» 9

The Federal Constitutional Law No. 2-FKZ On the Government of the Russian Federation

Федеральный конституционный закон № 2-ФКЗ «О Правительстве Российской Федерации»

Reading Exercise 1. Scan the texts A, B, C, D and E quickly and choose the right answer. 1. The Russian Constitution was enacted… a) In 1993 b) In 2008 c) In 1996 2. The main source of Russian law is…. a) the customs b) the precedent c) the statute law 3. The president of the Russian Federation is elected for a … a) twelve-year term b) six-year term c) five-year term 4. The executive branch consists of …. a) the President and the Parliament b) the President and the Government c) the President and the Judiciary 5. The power to appoint and dissolve the Government is vested in… a) the State Duma b) the Prime Minister c) the President 6. The Head of the Government is confirmed by … a) the President b) the State Duma c) the Federation Council 7. The Russian Constitution is … a) flexible b) rigid c) unenacted Constitutional Law of the Russian Federation A Constitutional law is the body of law which defines the relationship of different entities within a state, namely, the executive, the legislature, and the judiciary. Constitutional Law derives its validity from a country’s written constitution. It lays down and guides the duties and powers of the government and the duties and rights of its citizens and residents. 10

The statute law is the main source of Russian law. The structure of the statute law in the Russian Federation is very complex, because Russia is a federal state and has statute law both in the Russian Federation and in the subjects of the Russian Federation. The structure of the statute law is the following: • The Constitution • The Constitutions and the Charters of the subjects of the Russian Federation • Federal constitutional laws of the Russian Federation • Federal laws of the Russian Federation • Laws of the subjects of the Russian Federation • Laws of the former USSR and RSFSR. The Constitution of the Russian Federation B The Constitution of the Russian Federation has supreme legal ..1.., direct effect and is applicable on the entire territory of the Russian Federation. Laws and other legal ..2.., which are adopted in the Russian Federation, must not contradict the Constitution of the Russian Federation. The Russian Federation enacted the Constitution on 12 December 1993. The Russian Constitution, ..3.. by the state referendum, is the basis of the Russian constitutional law and the most important ..4.. of domestic law. The Constitution provides for a federal state and introduces the concept of separation of powers. The Constitution ..5.. that State power in the Russian Federation is exercised on the basis of the separation of legislative, executive and ..6.. powers. Organs of legislative, executive and judicial power are independent. The legislature is structured as a parliament. The main ..7.. body, the Federal Assembly, is composed of two chambers — the Federation Council (the upper house) and the State Duma (the lower house). The Constitution ..8.. with such matters as the national territory, the President, the Legislature, the Executive, the Judiciary of the Russian Federation and the fundamental rights stated in the Constitution. The executive branch consists of the President, elected directly by ..9.. for a six-year term, and the Government. However, the President of the Russian Federation stays separate to the executive power. The President is the guarantor of the Constitution and possesses some ..10.., legislative and judicial power. C Constitutionally, the President of the Russian Federation is ..1.. (election/elected/elects) for a six-year term limited to two terms in succession (the amendment of 2008 came into force on 31 December 2008 and extended the terms of the President of Russia and the State Duma from four to six and five years, respectively). The President is vested with extensive ..2.. (powers/rights/ might), serving as the head of state, the commander-in-chief of the armed forces, and the ..3.. (lowest/higher/highest) executive authority of the federation. The office of the President also includes the powers of decree, legislative veto, and the power to appoint and dissolve the Government. The President is primarily ..4.. (responsive/responsible/accountable) for domestic and foreign 11

policy and represents Russia in international relations. Furthermore, as of December 2004 the President was ..5.. (granted/given/provided) the authority to directly appoint Russia’s regional leaders, subject to confirmation from the regional ..6.. (legislation/legislature/executive). The procedure was amended in December 2008: according ..7.. (of/on/to) the new law, the political party that has obtained majority of mandates in the regional legislature submits 3 candidates for the President's consideration. D Legislative power is exercised by a bicameral Federal Assembly, which consists of the Federation Council (upper house) and the State Duma (lower house). Since January 2002 the Federation Council ..1.. (was/has) consisted of two representatives from each federal constituent entity, one from the executive branch appointed by the regional governor, and one from the legislature ..2.. (nominated/nominates) by the regional assembly. The State Duma consists of 450 members elected nationwide by proportional representation through party lists. Previously 225 of the 450 members ..3.. (are/were) elected in single member constituencies, however in December 2004 these seats were abolished. The first election under the new rules ..4.. (will/was) held in December 2007. In addition, new rules were introduced governing national political parties, increasing both the minimum number of party members ..5.. (required/requiring) for registration (from 10,000 to 50,000) and the threshold to secure Duma seats (from 5% to 7% of the national vote). The Government is responsible before the President and is headed by a Head of the Government (unofficially called a Prime-Minister), who is nominated by the President and confirmed by the State Duma. The Prime Minister ..6.. (oversee/oversees) the activities of the government and serves as the acting President if the President ..7.. (will/becomes) ill and is unable to carry out the functions of the office. The Prime Minister’s authority as acting President expires upon the election of a new President, which would normally be three months after the former President’s authority has expired. The Russian Constitution is a rigid Constitution as the provisions of the Constitution ..8.. (constitutes/constitute) the fundamental principles of the constitutional order of the Russian Federation and may not be changed except in accordance with the complex procedure established by this Constitution. The Statute Law E ‘Statute’ denotes the body of law enacted by the parliamentary process. Statutes are, as a source of law, subject only to the Constitution and always prevail in the event of a conflict with other normative acts of the Russian Federation. Federal Constitutional Laws Laws of the Russian Federation are divided into: • Federal constitutional laws and • Federal laws (not attached to the constitutional laws). 12

Federal constitutional laws cover issues that are directly foreseen by the Constitution. Federal constitutional laws are enacted in the most important areas of the constitutional law, such as referendum, government and human rights. According to the Constitution, constitutional laws enjoy a higher status than ordinary statutes, as it provides that federal laws may not contravene federal constitutional laws. The procedure for the adoption of federal constitutional laws is more complex than the procedure for the adoption of federal laws: federal constitutional laws request the adoption by the qualified majority of both the State Duma and the Federation Council. The following criteria distinguish Federal constitutional laws from federal laws: • Legal force • Competence • Procedure for adoption • Powers of the President of the Russian Federation on application of the suspensory veto1. Exercise 2. Read part A of the text again and decide which statements are true and which ones are false. Then say what you have learned about Constitutional law of the RF and its sources. 1. Constitutional law of the RF establishes three branches of power in the country. 2. The functions of the branches of power in the RF are set forth in Constitutional law. 3. Russia's written constitution ascribes validity to the country's Constitutional law. 4. Constitutional law only regulates obligations and authority of the Russian government. 5. The main sources of Russian law are custom and court decisions. 6. The structure of the statute law is complicated. 7. Laws of the RF subjects are part of Constitutional law. Exercise 3. Read part B of the text and fill in the gaps using the words form the box below. Then answer the questions and say what information about the Russian Constitution this part contains. people legislative force executive approved acts judicial source deals provides 1. 2. 3. 4. 1

What is the scope of authority of the RF Constitution? Can laws and other legal acts contradict the Constitution? How and when was the RF Constitution enacted? What does the Constitution provide for?

Shashkova A. V. Russian Business Law. М.: Анкил, 2004. С. 21, 23, 24.

13

5. How is the Russian legislature structured? 6. What kind of matters does the Constitution deal with? 7. What is the make-up of the executive branch in the RF? Exercise 4. Read part C of the text again and choose the appropriate word from the brackets to fill in the gaps. Then summarise the contents of this part working in pairs. Exercise 5. Read part D of the text, open the brackets and choose the required form of the verb. Then say what you have learned about the following issues. 1. The Federal Assembly. 2. The Federation Council. 3. The State Duma. 4. Former and new election rules to the State Duma. 5. The Prime Minister's functions. 6. Rigidity of the Russian Constitution. Exercise 6. Read part E and find out what information it contains about the following: 1. statutes; 2. federal constitutional laws; 3. the status of federal constitutional laws; 4. federal laws; 5. the difference between federal constitutional laws and federal laws. Exercise 7. Read the whole text again and answer these questions. Then summarize the contents of the whole text working in pairs. 1. What are the most important areas of the constitutional law? 2. What is the basis and the main source of the Russian Constitutional Law? 3. What does the concept of separation of powers mean? 4. What does the executive branch consist of? 5. Which extensive powers is the President vested with? 6. What power is exercised by the Federal Assembly? How is the Federal Assembly formed? 7. Who appoints the Head of the Government (Prime-Minister)? What are the functions of the Prime-Minister? 8. What do the provisions of the Constitution state? 9. In what way do federal constitutional laws differ from federal laws?

Key terms: Constitution of the Russian Federation Exercise 8. Match these concepts with their definitions: 1. statute law a) highest in the rank or authority, most powerful or important 14

2. domestic law

b) the body of principles and rules of law enacted by the parliamentary process

3. applicable law

c) existing or occurring inside a particular country, not foreign or international

4. suspensory veto

d) relevant or appropriate law

5. supreme law

e) lays down the duties and powers of the government and the duties and rights of its citizens and residents.

6. constitutional law

f) constitutional right of the president to reject a decision or proposal made by a law-making body

Exercise 9. Match the words to form collocations as they appear in the text and use them in your own sentences. 1. domestic

a) entity

2. enjoy

b) law

3. qualified

c) rights

4. fundamental

d) a higher status

5. constituent

e) majority

Exercise 10. Suggest Russian equivalents of the following word partnerships. Use some of them in your own sentences. body of law; to derive the validity of; supreme legal force; direct effect; source of domestic law; to provide for a federal state; to exercise power; to be composed of two chambers; two terms in succession; to be vested with extensive powers; subject to confirmation from; to submit for consideration; threshold to secure Duma seats; to oversee the activities of the government; acting president; to cover issues not foreseen by the Constitution; to enjoy a higher status Exercise 11. Suggest English equivalents of the following word partnerships. Use some of them in your own sentences. совокупность правовых норм; быть облеченным широкими полномочиями; квалифицированное большинство; выдвигать кандидатуру; законодательное вето; статутное право; применимое право; субъекты Российской Федерации; обладать исполнительной, законодательной и судебной властью; верхняя палата; нижняя палата; продлить срок; внести поправки в порядок назначения; федеральный избирательный округ; быть подотчетным президенту; исполняющий обязанности президента; исполнять должностные функции 15

Speaking: Exercise 12. Role–play. Study the Russian Constitution (Chapter 2) focusing on the main rights and duties of citizens. Students are divided into two groups: after the five-minute brain storm the first group will speak on the rights, the second — on the duties. Exercise 13. Prepare a short talk or a presentation on any of the following topics. Use speech connectors in Annex I. Federal constitutional laws: • on the government; • on the referendum; • on the emergency situation; • on the military regime.

Summarising Exercise 14. Summarise the text of the unit reducing it to 25% of the original volume. Make use of speech cliches and linkers given in Annex I.

Unit 2. Judicial System of the Russian Federation Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. How is the Russian court system arranged? 3. Why do people come to courts? 4. Give a few examples of the great volume of work the courts do.

Legal terms 1.

administer justice

отправлять правосудие

2.

judicial power

судебная власть

3.

legislative power

законодательная власть

4.

executive power

исполнительная власть

5.

civil proceedings

гражданский процесс 17

6.

justice of the peace

мировой судья

7.

constituent entity

субъект Российской Федерации

8.

Federation Council

Совет Федерации

9.

cassational instance

кассационная инстанция

10.

supervisory instance

надзорная инстанция

11.

district court

суд округа, районный суд

12.

handle a case

вести судебный процесс

13.

military court

военный суд

14.

entrepreneurial activity

предпринимательская деятельность

15.

adjudicate

рассматривать спор, выносить решение

16.

acquisition of the exclusive rights

приобретение исключительных прав

17.

invalidity

недействительность

18.

industrial design

промышленный образец

19.

vest

наделять (полномочиями, властью)

20.

judicial supervision

судебный надзор

21.

retain the power

удерживать полномочия

22.

bailiff service

служба судебных приставов

Study the titles of the principle legislative acts: The Federal Constitutional Law “On the Judicial System of the Russian Federation”

Федеральный конституционный закон №1-ФКЗ «О судебной системе Российской Федерации»

The Law “On Commercial Courts of the Russian Federation”

Федеральный конституционный закон №3-ФКЗ «Об арбитражных судах в Российской Федерации»

The Law “On the Russian High Court”

Федеральный конституционный закон «О Верховном Суде Российской Федерации»

The Law “On the Russian Public Prosecution Office”

Федеральный закон «О прокуратуре Российской Федерации» 18

Reading Exercise 1. Read the overview of the judicial system of the Russian Federation and decide whether the following statements are true of false. If they are false, correct them. Finally, say what you have learned about the judicial system of the Russian Federation. 1. There are two highest courts in the Russian Federation: the Supreme Court and the Supreme Commercial Court. 2. Judges of all courts are appointed by the President of the Russian Federation. 3. The Constitutional Court of the Russian Federation considers a great variety of cases — from ‘running-down’ actions to the complex commercial disputes. 4. The Supreme Court is the only court, competent to consider cases as a court of first, appellate, cassational or supervisory instance. 5. The commercial courts decide whether people are guilty of crime, and if so, how they should be punished. 6. The Intellectual Property Rights Court is a specialized court that considers property disputes with an amount of claims under 50 000 RUB. Overview of the Judicial System of the Russian Federation In the Russian Federation justice is administered only by courts. The judicial power acts independently from the legislative and the executive powers. Justice is administered in the forms of constitutional, civil, administrative and criminal proceedings. The judicial system of the Russian Federation is established by the Constitution of the Russian Federation and the Federal Constitutional Law “On the Judicial System of the Russian Federation” of December 31st, 1996. In February 2014, in order to strengthen public trust in the judiciary, modernize the judicial system and ensure a unified approach to the resolution of disputes between legal as well as private persons, a Law on the amendment to the Constitution of the Russian Federation “On the Supreme Court of the Russian Federation and the State Prosecutor’s Office of the Russian Federation” was adopted. As a result, the Supreme Court of the Russian Federation, heading the system of courts of general jurisdiction, was merged with the Supreme Commercial Court of the Russian Federation, heading the system of commercial courts, to form a new Supreme Court of the Russian Federation, which is now the highest court for civil, administrative, criminal cases, cases on the resolution of economic disputes and other cases. Currently, Russia’s judicial system is composed of the Constitutional Court of the Russian Federation, the Supreme Court of the Russian Federation, federal courts, constitutional courts and justices of the peace of the constituent entities of the Russian Federation. Judges of the Constitutional Court of the Russian Federation and of the Supreme Court of the Russian Federation are appointed by the Federation 19

Council of the Federal Assembly of the Russian Federation as proposed by the President of the Russian Federation. Judges of the federal courts are appointed by the President of the Russian Federation. Judges of the constitutional courts and justices of the peace of the constituent entities of the Russian Federation are appointed in accordance with the legislation of the respective constituent entities. The main task of the Constitutional Court of the Russian Federation is to resolve cases regarding the constitutionality of normative legal acts of all levels. Constitutional courts of the constituent entities of the Russian Federation check the adherence of the normative legal acts of the constituent entities of the Russian Federation to their constitutions. The Supreme Court of the Russian Federation heads the system of courts of general jurisdiction and the system of commercial courts. As a top judicial instance, the Supreme Court is the only court which has jurisdiction to consider cases as a court of first, appellate, cassational or supervisory instance. The Supreme Court of the Russian Federation exercises control over the activities of lower courts, gives them clarifications on issues of judicial practice in order to guarantee a uniform application of legislation. District courts are the basic element of the system of courts of general jurisdiction. These courts handle most civil, criminal and administrative cases. Some cases are handled at first instance by courts of the constituent entities of the Russian Federation. Moreover, such courts function as an appellate instance vis-а-vis the district courts. Depending on the category of a case, the presidium of a court of a constituent entity of the Russian Federation or a corresponding judicial chamber of the Supreme Court of the Russian Federation, acts as a court of cassation. There are specialized military courts within the system of courts of general jurisdiction. Commercial courts administer justice in the sphere of entrepreneurial and other economic activities. The system of commercial courts is composed of three elements: commercial courts of the constituent entities of the Russian Federation (first instance), appellate commercial courts (appellate instance) and commercial courts of circuits (cassational instance). There is a specialized court — the Intellectual Property Rights Court — within the system of commercial courts. Justices of the peace consider property disputes with an amount of claims under 50 000 RUB, criminal cases, in which the maximum possible punishment does not exceed 3 years of imprisonment and other cases of similar complexity. Appeals against the decisions of justices of the peace are considered by district courts. (Doing Business in Russia ) Exercise 2. Read the following text. Think of the best word to fill in each gap. Finally, say what you have learned about the IPR Court of the Russian Federation. 20

The IPR Court of the Russian Federation The IPR Court was ..1.. by the Federal constitutional law of 6 December 2011 № 4-FKZ that amended the Federal constitutional law “On the Judicial System of the Russian Federation”, and the Federal constitutional law “On Commercial Courts of the Russian Federation”. According to Article 26.1 of the ..2.. Federal constitutional law of 1 December 1996 № 1-FKZ “On the Judicial System of the Russian Federation” the court for intellectual property rights is a specialized commercial court that has jurisdiction to adjudicate cases related to the protection of intellectual property rights as a court of first instance and cassation instance. According to Article 43.3 of the amended Federal constitutional law of 28 April 1995 № 1-FKZ “On Commercial Courts in the Russian Federation”, as a court of first instance, the IPR Court will in particular ..3.. the following cases: I. Appeals against legal regulations of the Russian Patent Office related to intellectual property rights. II. Disputes concerning the registration or cancellation of intellectual property rights (except copyrights and related rights) including: • appeals against the decisions, actions or a failure to act of the Russian Patent Office; • appeals against decisions of the Federal Antimonopoly Service on recognition of actions concerning the acquisition of exclusive rights of means of individualisation of ..4.. entities, goods, works, services and enterprises as acts of unfair competition; • establishment of the patent ..5..; • declaration of invalidity of a patent on an invention, industrial design, unless other proceedings in consideration of invalidity are stipulated by the Federal Law; • cancellation of a trademark due to non-use. The IP Court will exclusively consider the above listed cases regardless whether the parties involved in a dispute are legal entities, individual entrepreneurs or ..6.. persons1. Exercise 3. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Finally, in pairs say what you have learned about the reformed Russian Supreme Court. Russian Law No. 2-FKZ of 5 February 2014 “On the Russian High Court and the Russian Public Prosecution Office” (the “Law”) provides for the ..1.. of the Russian Supreme 1. liquidate Arbitrazh Court (the “SAC”) and vesting its powers under the auspices of the new Russian High Court (the “HC”). 1 http://www.ip-watch.org/2013/03/01/russia-establishes-specialised-court-forintellectual-property-rights.

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The Russian SAC was fully liquidated at both the constitutional and legislative levels as the supreme judicial 2. economy authority for ..2.. disputes. A new unified supreme judicial authority was created as represented by the HC, which will perform judicial supervision over all Russian courts (general jurisdiction courts, arbitrazh* courts and military courts) considering all types of disputes (civil, economic, criminal, administrative and other cases that are under the jurisdiction of the mentioned courts). Henceforward, the HC will act as the supreme judicial authority, inter alia, in considering economic disputes. The HC Law sets the powers of the new HC and the competencies of the HC Plenum and Presidium, as well as the powers of the HC Chairman and his/her deputies. In particular, from now on, the HC Plenum will unify court practice for all types of disputes (including economic cases), while the 3. validate HC Presidium will consider cases under the supervisory procedure. In that regard, the previous Chapter 36 of the Russian Arbitration Procedural Code has been ..3.. and replaced by the new Chapter 36.1 that regulates the procedure for consideration of economic cases by the HC Presidium under the supervisory procedure. At the same time, the Russian Constitutional Court retained its powers as the supreme ..4.. judicial authority 4. depend to exercise constitutional control. Therefore, the supreme judicial authority in Russia is represented by the two following courts: The Russian Constitutional Court, acting as the supreme judicial authority responsible for constitutional proceedings, and The Russian High Court, acting as the supreme judicial authority for considering economic disputes, criminal, administrative and other cases (including labour, housing, land, ecological and other disputes) that are under the jurisdiction of general jurisdiction courts, arbitrazh courts and military courts. The reform does not imply any abolishment or changes 5. existence to the ..5.. system of arbitrazh courts. However, due to its liquidation, the Russian SAC was excluded from the list of federal courts (pursuant to the Court System Law) and from the structure of arbitrazh courts. Moreover, district federal arbitrazh courts have been ..6.. 6. name as district arbitrazh courts. (Doing Business in Russia) 22

*It should be noted that the name “arbitrazhniy court” is misleading as it does not relate to arbitration tribunals but is inherited from the Soviet Law. In the USSR any differences between state enterprises could be settled by the State Arbitrazh, which was a quasijudicial governmental body. Today the term “arbitrazhniy court” relates to a State court that is competent to hear disputes between commercial entities.

Exercise 4. Read the following text. Choose the best word to fill in each gap. Finally say what you have learned about the mediation procedure in the Russian Federation. Alternative Dispute Resolution and Mediation The “Law on Mediation” regulates dispute resolution procedures involving the ..1.. of a mediator on the basis of voluntary consent of the parties. The mediation procedure may be ..2.. to civil (including disputes arising out of economic relations), labor (except for collective employment disputes) and family law disputes. However mediation is not possible in the above-named disputes if they ..3.. public interests or the rights and legitimate interests of third parties that are not participating in the mediation procedure. (Doing Business in Russia ) 1.

A assistance

B help

C boost

2.

A practiced

B used

C applied

3.

A influence

B affect

C effect

Key terms and Use of English Exercise 5. Match the expressions (1–4) with the definitions (a-d). (1) commercial court

(a) the highest court which supervises inferior courts of general jurisdiction and sits as a court of first instance in cases where important interests of the state are at issue, the court of the last resort in Russian administrative, civil and criminal law cases (2) district court (b) a court within the judiciary of Russia held by a justice of peace (3) The (c) a court which operates independently of the other Constitutional courts and hears cases dealing with a wide range Court of of contractual issues, such as rights of ownership, the Russian performance of obligations, loans, bank accounts, Federation contract changes (4) The Supreme (d) a high court which is empowered to rule on whether Court of or not certain laws or presidential decrees are in fact the Russian contrary to the Constitution of Russia Federation 23

Exercise 6. Suggest English equivalents of the following word partnerships. мировой судья; субъект РФ; надзорная инстанция; предпринимательская деятельность; недействительность патента; арбитражный суд; Федеральное Собрание; принимать закон; споры по экономическим вопросам; назначать судей; конституционность нормативных актов; давать разъяснения; имущественные споры; защита прав интеллектуальной собственности; добровольное согласие сторон; трудовые споры Exercise 7. Complete the sentences with prepositions. Translate them. 1. Most claims subject ..1.. courts of general jurisdiction are heard ..2.. first instance ..3.. a district court. 2. The court of appeal reviews a judgment ..4.. the grounds stated in the appeal. 3. New evidence is accepted only when the party succeeds ..5.. proving it was unable to present such evidence to the trial court for reasons ..6.. its control. 4. The rulings of the court of appeal become effective immediately ..7.. issuance. 5. The cassation court may set ..8.. or modify court resolutions only when it finds material violations of substantive or procedural law rules that have affected the outcome of the case. 6. ..9.. contrast ..10.. courts of general jurisdiction, arbitrazh courts tend ..11.. rely primarily ..12.. documentary evidence rather than ..13.. witness statements. 7. Judgments of the Russian courts of general jurisdiction and of Russian arbitrazh courts are enforced ..14.. the state bailiff service. Exercise 8. Render the sentences into English. 1. Суд общей юрисдикции — это суд, осуществляющий правосудие по гражданским, уголовным делам и делам, возникающим из административных правонарушений, а также иным делам, подсудным судам общей юрисдикции. 2. 5 февраля 2014 года Президент РФ подписал закон, упраздняющий Высший Арбитражный Суд РФ. 3. В юридическом сообществе мнения по поводу реформирования судебной системы разделились. Одни считают, что это шаг к упразднению арбитражных судов в целом. Другие поддерживают изменения, надеясь, что объединение высших судебных органов наконец-то внесет единообразие в решение спорных вопросов судебной практики. 4. В обосновании необходимости принятия этой поправки к Конституции РФ указано, что реорганизация судебной системы позволит обеспечить единство подходов при отправлении правосудия как в отношении граждан, так и в отношении юридических лиц; исключить возможность отказа в судебной защите в случае спора о подведомствен24

ности дела; установить общие правила организации судопроизводства; добиться единообразия в судебной практике. 5. Несмотря на то что суды общей юрисдикции и арбитражные суды часто руководствуются одними и теми же нормами материального права, случается, что подход к решению определенных вопросов у них различен. 6. Вновь образованный суд осуществляет судебный надзор за деятельностью судов, рассматривая подведомственные ему дела в качестве суда надзорной инстанции, а также в пределах своей компетенции в качестве суда апелляционной и кассационной инстанции. 7. В целях обеспечения единообразного применения законодательства Верховный Суд РФ дает судам разъяснения по вопросам судебной практики на основе ее изучения и обобщения и осуществляет иные полномочия, предусмотренные ч. 7 ст. 2 Закона № 3-ФКЗ «О Верховном Суде РФ».

Speaking Exercise 9. Choose a topic related to the Judicial System of the Russian Federation and in pairs talk about it at length with follow-up questions. Practise using linkers to build a topic (See Annex 1). Namely; for example (instance); as well as; moreover; besides; in brief; in a nutshell; in short; firstly; lastly; because; since; as; due to the fact that; even though; as a result; in practice, etc. 1. Merger of Russia’s high courts: the pros and cons. 2. Commercial courts: a twenty-first century necessity or inefficacy. Exercise 10. Answer the competency-based questions. 1. Will the merger of the Supreme Court of the Russian Federation and the Supreme Commercial Court of the Russian Federation help to promote the quality of administering justice? 2. Why do foreign investors prefer resolving cases in the commercial courts of the Russian Federation to settling their disputes in the courts of general jurisdiction? Exercise 11. Make a full mindmap of the Judicial system of the Russian Federation 2016 and prepare a presentation on an aspect of the Background of the IPR Court of the Russian Federation.

Summarizing Exercise 12. Read the article about class actions in Russia and summarize it reducing to 25%. 25

When America’s meat is Russia’s poison Amendments to the Code of Arbitration Procedure that came into effect introduce class actions, the legal technique controversial even in the United States, the country of its origin. The changes were supposed to give a sword to the small and weak. Instead, they handed a shield to the strong and powerful. Yet, the peculiarities of the law — so paradoxical to be anything but a typing error — may trigger massive abuses and turn the resolution of corporate disputes into a mess. In an ordinary suit each litigant is a party in his own right. In a class action, one person, a representative plaintiff, starts a legal battle on behalf of other persons, those who have — or might have — a claim for the same or similar wrong. In the eyes of law only the representative plaintiff is a party. The others are the members of a ‘class’: they are bound by the outcome of the litigation even though they do not, strictly speaking, participate in the proceedings. The peculiarities of the law are too paradoxical to be anything but a typing error. By allowing one person to sue for an entire group, sometimes thousands of people, the law — it is often argued — opens the door to the actions that otherwise would have been too small and uneconomical to pursue by individual claimants. Thus, one of the most contentious legal techniques is favoured for lowering barriers to justice, and for the simple and efficient mechanism of dealing with a large number of similar claims. For the government, on the other hand, the class action laws are a way to dump the load of regulation from its shoulders onto the maze of private litigations. Yet, on the Russian soil the perceived benefits are being paid for by stretching the conventional view of a fair trial. The law appears to substitute the murky waters of defining who and how may decide other people’s rights for the rules of procedure. Do it the Russian way What a representative plaintiff does affects the members of a class. An important question, then, is how a claimant can get into the class, or stay out and proceed with their personal battle. International practice revolves around two basic choices, ‘opt in’ or ‘opt out’: should potential class members be automatically included in the class but given an opportunity to leave the proceeding, or should they be required to take a positive step in order to be included in the litigation? The choices vary from country to country. The ‘opt out’ solution, for instance, can be selected for it reduces social barriers to justice for vulnerable class members: they are automatically included but can leave and bring in their own actions. The ‘opt in’ approach can be justified if the intention is that only those are to be bound who want to be and to this effect have shown some minimal interest. 26

Whatever choice is adopted by the national legislation, the fundamental right of an individual claimant to stay out and pursue his or her own action is recognised and respected. It appears that Russian law follows the ‘opt in’ way. A closer look, however, suggests that an individual plaintiff does not have a choice: once a class action started an individual claimant is not allowed to file a separate claim relating to the same defendant but has to join the class action and throw himself on mercy of a representative plaintiff. Moreover, article 225.16 of the Сode of Arbitration Procedure, as in force from October 21, does not allow an individual claimant ‘who did not use his or her right to join the class’ to pursue a legal action if a similar claim to the same defendant had been resolved as a class action. This is so incredible, so against the Constitution and the common sense, that it cannot be true. But it is. Blind trade In the heart of a class action lies the delegation of rights by multiple claimants to a representative plaintiff; class members typically play a small role in the litigation. This ‘clientless’ litigation may lead to open or discrete abuses of law. The representative plaintiff is self-proposed and, in essence, self-appointed. It falls to the class members, who usually get involved in the proceeding at a later stage when the action has started and the representative has taken his post, to prove that he cannot represent their interests adequately and fairly. It is not that class members can’t dispose of the representative they don’t like but doing so is not easy. The law is remarkably brusque on the grounds for dismissal. The plaintiff, it says, can be discharged by court on the application of the majority of class members if it is proven that ‘he or she grossly neglects his or her duties or is not capable to represent the interests of the class’. Essentially, the law has traded good old rules of court representation for a wishy-washy jabber that might work — complemented by the mass of precedents — in the USA but in Russia it would mean an unbridled discretion of a judge. So far, the laws that left too much to a judge to decide have not worked. Where judges have a wide discretion, in appointing a receiver or corporate governance disputes for example, the level of corruption is somewhat too high. It is remarkable that conflict of interest does not appear as a reason for discharge of a representative plaintiff. Perhaps, it has something to do with a certain weakness of Russian law on affiliation. Why Class actions in Russia have limited scope: disputes from commercial relations, including those on corporate governance or those that originate from capital market transactions, can be heard under the new regime. The claims of general public, on the other hand, cannot. Social justice, therefore, is hardly the real beneficiary of the law. 27

It is not possible to say how many class actions will be considered in Russia. Yet, keeping in mind international statistics and underdevelopment of the national stock market, there won’t be many. The effect from the judicial economy, therefore, will be minimal and cannot excuse the door the law opens to abuse. Although the adoption of western legal institutions is usually enriching, sometimes what is good for Americans, is not so for Russians1.

Writing Exercise 13. Write a mini-composition on the topic Russian Courts in Practice developing the sentences below into a text. Use appropriate linking words to help structure a piece (See Annex I). particularly (focusing); even more so (contrasting); on the contrary (contrasting); on top of that (adding information); what is more (adding information); more/most importantly (ordering points); to some extent (generalizing); basically (generalizing); by and large (generalizing); mostly (generalizing); in other words (generalizing) Russian courts in practice Specific features / Russian court system / be mentioned. Obvious trait / among judges / tendency / contractual provision / literally. Court proceedings / other countries / tendency / like a chess game / in Russia / to send briefs / three days / hearing. Distribution of briefs / not common. Judges / not to take into account / arguments / not easy to explain. Litigation / other regions / Moscow / legal professionalism / level. Tendency / formalistic arguments / non-legal considerations / decisions.

1

http://russianlawonline.com/business.

Unit 3. Establishing a Legal Presence in Russia Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What kind of person do you have to be to engage in business? 3. What difficulties do you expect to face in running your own business? 4. What are the advantages and disadvantages of working for someone else? 5. Do you think specializing in corporate law may create good career opportunities? Why? Why not? 6. Would you like to be an in-house lawyer? Why? Why not? 29

Legal terms 1.

legal form of business organization

организационно-правовая форма бизнеса

2.

separate property

обособленное имущество

3.

corporate entities

корпоративные организации

4.

unitary entities

унитарные организации

5.

public joint stock company (PJSC) public stock company

публичное акционерное общество (ПАО)

6.

nonpublic joint stock company(NPJSC), nonpublic stock company (NPSC)

непубличное акционерное общество (НПАО)

7.

limited liability company (LLC)

общество с ограниченной ответственностью (ООО)

8.

charter (the Charter)

устав (общества — российского юридического лица)

9.

charter capital

уставный капитал с изменениями (фраза, которая присоединяется к названию закона, если он подвергался изменениям)

10. as amended

the RF Civil Code (as amended)

ГК РФ (с изменениями)

11. participatory interest, interest pl.: participatory interests, interests

доля (доли) (в уставном капитале общества с ограниченной ответственностью)

12. rouble / ruble

рубль

13. closed joint stock company (CJSC)

закрытое акционерное общество (ЗАО)

14. open joint stock company (OJSC)

открытое акционерное общество (ОАО)

15. liability

ответственность (как правило — материального характера)

be liable (for the obligations)

отвечать (по обязательствам)

bear liability

нести ответственность взнос (в устав общества)

16. contribution

вносить (взнос)

contribute 30

17. participant in a limited liability company

участник общества с ограниченной ответственностью

18. 100 times the minimum monthly wage

стократный минимальный размер оплаты труда

19. transformation (into)

преобразование (во что-либо)

20. right to withdraw

право выхода (из общества)

21. property on the books

имущество на балансе

22. pre-emptive right

преимущественное право покупки (акций)

23. existing shareholders

действующие акционеры

24. board of directors (the Board of Directors)

совет директоров

25. supervisory board

наблюдательный совет

26. management board (the Management Board)

правление

27. day-to-day management

оперативное управление

28. company’s constitutive documents

уставные документы компании

29. chief executive officer (the Chief Executive Officer, the CEO)

главный исполнительный директор

30. act on behalf of the company

действовать от имени компании

31. subsidiary liability

субсидиарная ответственность

32. entrepreneur

предприниматель

individual entrepreneur

индивидуальный предприниматель

entrepreneurial

предпринимательский

engage in entrepreneurial activities

заниматься предпринимательской деятельностью

33. be jointly and severally liable

нести солидарную ответственность

34. joint capital

складочный капитал

35. under the right of economic management

на правах хозяйственного ведения

36. under the right of operational management

на правах оперативного управления 31

Study the name of the Russian state information resource: • Unified state register of juridical persons (translated by W.E. Butler) • Single state register of legal entities (translated by Baker & McKenzie) • Single state register of legal persons (translated by P.B. Maggs)

Единый государственный реестр юридических лиц (ЕГРЮЛ)

Study the name of the Russian tax service: The Federal Tax Service of Russia

Федеральная налоговая служба

Study the titles of the legislative acts of the Russian Federation: The Civil Code of the Russian Federation

Гражданский кодекс Российской Федерации

The Russian Federation Federal Law «On Limited Liability Companies»

Федеральный закон Российской Федерации «Об обществах с ограниченной ответственностью»

The Russian Federation Federal Law «On Joint Stock Companies»

Федеральный закон Российской Федерации «Об акционерных обществах»

Federal Law № 99-FZ dated 5 May 2014 «On bringing amendments to chapter 4 of part one of the Civil Code of the Russian Federation and voiding certain provisions of the legislative acts of the Russian Federation»

Федеральный закон от 5 мая 2014 г. № 99-ФЗ «О внесении изменений в главу 4 части первой Гражданского кодекса Российской Федерации и о признании утратившими силу отдельных положений законодательных актов Российской Федерации»

Federal Law № 129-FZ dated 8.08.01 “On state registration of legal entities and individual entrepreneurs”

Федеральный закон от 8 августа 2001 г. № 129-ФЗ «О государственной регистрации юридических лиц и индивидуальных предпринимателей»

Reading Exercise 1. Read the text and note the vocabulary in bold. Answer the questions and then summarize the text. 1. What is the definition of a legal person in the RF? 2. How are legal entities classified in the Civil Code of the RF? 32

3. What kind of organizations / institutions are unitary entities represented by? 4. What two types of companies are corporate entities divided into? 5. What is the difference between public and nonpublic companies? 6. What forms can nonpublic companies take? 7. What forms of business organization ceased to exist under the revised Civil Code (2014)? Russian Legal Entities New System The legal person is an organization that has separate property in ownership, and that is liable for its obligations with this property, and that may in its own name obtain and exercise civil-law rights, bear civil-law duties and be a plaintiff and defendant in court. The Civil Code of the Russian Federation, amended in 2014, classifies legal entities into corporate entities, which have members (such as shareholders), and unitary entities, which do not. The latter category is mainly for state institutions and nonprofit organizations of various types. Corporate entities (corporations) include public and nonpublic companies as well as certain types of nonprofit organizations. A public stock company is a stock company whose shares are publicly traded or whose charter or name refers to it as public. The main forms of nonpublic companies include: • the limited liability company (LLC or OOO, using the Russian acronym), which is already widely used, and • the new nonpublic stock company. Under the newly revised Civil Code certain former types of entities will no longer be available, including open stock companies (whose Russian acronym is OAO) and closed stock companies (in Russian, ZAO)1. Exercise 2. Read the text and decide whether these statements are true or false. In case of false statements, correct them. Then summarize the text. 1. A limited liability company is a public company. 2. The LLC participants' liability is limited by their contributions to the company's capital. 3. An LLC must undergo the process of state registration. 1 Гражданский кодекс Российской Федерации. Часть первая = Civil Code of the Russian Federation. First Part / Исследовательский центр частного права, Российская школа част. права; пер. и науч. ред. А. Н. Жильцова, П. Б. Мэггса. 2-е изд., перераб. М.: Инфотропик Медиа, 2010. 568 с.; Гражданский кодекс Российской Федерации по состоянию на 10 ноября 2015 года. Части 1, 2, 3, 4; Strizh V. А., Zimbler B. L. Key Reforms of the Russian Civil Code for Legal Entities [Электронный ресурс] // Morgan Lewis [Сайт]. 2014. 07 Aug. URL: https://www.morganlewis.com/ pubs/bf_lf_keyreformsofrussiancivilcodeforlegalentities_07aug14.

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4. An LLC may have any number of participants. 5. The right to withdraw arises for an LLC participant by operation of law. 6. Most Russian companies are organized and registered as LLCs. Limited Liability Company (LLC) The formation and activities of limited liability companies are governed by the RF Civil Code (as amended) and the RF Federal Law №14-FZ of 1998 On Limited Liability Companies (as amended). An LLC may be founded by one or more individuals or legal entities, domestic or foreign. It is a private company whose charter capital is divided into participatory interests, which are not deemed to be a security under Russian law. The liability of the participants for the company’s debts is limited to the amount of their contributions to the company’s capital. The minimum amount of charter capital of an LLC is 10.000 rubles payable in cash. For an LLC, full payment of its charter capital is due within four months after the registration (by making an entry in the unified state register of juridical persons). An LLC may not have more than 50 participants. Otherwise it shall be subject to transformation into a stock company within the period of one year. An LLC may be founded by one person or may consist of one person. A participant in an LLC has the right to withdraw its participation if the charter specifically permits it. Interest in an LLC cannot be offered to the public and the existing participants have pre-emptive rights in relation to the transferred interests. Limited liability companies account for 85 percent of all Russia’s registered legal entities1. Exercise 3. Read the text and decide which answer: A, B or C best fits in the respective gap. Answer the questions below the text and summarize it. Joint Stock Company (JSC) A joint stock company (stock company) is a commercial organization whose charter capital is ..1.. into a fixed number of shares. Participants in a joint stock company (shareholders) are not ..2.. for its obligations and bear the risk of losses ..3.. with the company’s activities to the extent of the value of their shares. A JSC is a legal entity from the time of its state registration in accordance with the procedure established by the Federal Law On Joint Stock Companies 1 Doing Business in Russia 2014 [Электронный ресурс] // Baker & McKenzie [Сайт]. URL: http://www.bakermckenzie.com (дата обращения: 10.11.2014); Strizh V. А., Zimbler B. L. 2. Key Reforms of the Russian Civil Code for Legal Entities [Электронный ресурс] // Morgan Lewis [Сайт]. 2014. 07 Aug. URL: https://www.morganlewis.com/ pubs/bf_lf_keyreformsofrussiancivilcodeforlegalentities_07aug14; Гражданский кодекс Российской Федерации. Части 1, 2, 3. Civil Code of the Russian Federation. Parts 1, 2, 3 / пер. с англ. У. Э. Батлера. М.: ЮрИнфоР-Пресс, 2008. 926 с.; Гражданский кодекс Российской Федерации по состоянию на 10 ноября 2015 года. Части 1, 2, 3, 4.

34

(..4..). It owns such property as is included on its books. A JSC may be ‘public’ (which may be listed on a recognized stock exchange) or ‘nonpublic’ (which may not be listed). Public Joint Stock Company (PJSC) (the former open joint stock company) In a public joint stock company (PJSC) the number of shareholders is ..5.. and shares may circulate freely on the market, meaning that they are not subject to any pre-emption rights or similar restrictions. Shares may also be traded at stock exchanges. The minimum issued share capital for a public JSC is 1000 times the minimum monthly wage. Nonpublic Joint Stock Company (the former closed joint stock company) In a nonpublic stock company (NPSC), the number of ..6.. may not exceed 50. Shareholders in a nonpublic stock company have pre-emptive rights in ..7.. to transfers of shares by other shareholders. Open subscription is not available for this type of entity. The minimum issued share capital for a NPSC is 100 times the minimum monthly wage1. 1. A broken

B classified

C divided

2. A responsible

B liable

C obligated

3. A related

B associated

C common

4. A as amended

B as contributed

C as enacted

5. A limited

B undetermined

C unlimited

6. A shareholders

B partners

C participants

7.

B relation

C association

A connection

1. What is the structure of a JSC charter capital? 2. What kind of liability do the JSC shareholders bear? 3. What establishes the difference between public and nonpublic JSCs? 4. What is the minimum issued share capital for public and nonpublic JSCs, respectively? 5. Do NJSC shareholders have any pre-emptive rights? 1 Doing Business in Russia 2014 [Электронный ресурс] // Baker & McKenzie [Сайт]. URL: http://www.bakermckenzie.com (дата обращения: 10.10.2014); Strizh V. А., Zimbler B. L. 2. Key Reforms of the Russian Civil Code for Legal Entities [Электронный ресурс] // Morgan Lewis [Сайт]. 2014. 07 Aug. URL: https://www.morganlewis.com; pubs/bf_lf_keyreformsofrussiancivilcodeforlegalentities_07aug14; Гражданский кодекс Российской Федерации. Части 1, 2, 3. Civil Code of the Russian Federation. Parts 1, 2, 3 / пер. с англ. У. Э. Батлера. English translation by W. E. Butler. М.: ЮрИнфоР-Пресс, 2008. 926 с.

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Exercise 4. Read the text and fill in the gaps with the required prepositions. Then speak about the tiers in the management structure of Russian сompanies. Management Structure Depending ..1.. their constitutive documents, Russian companies can have a two-tier, three-tier, or four-tier management structure: General shareholders’ meeting (for JSCs) or general participants’ meeting (for LLCs) (‘sobranije aktsionerov / uchastnikov’). This is the principal management body that takes the most important decisions for the company, such as ..2.. establishment and liquidation, amendments ..3.. the charter, election of the board of directors, and where the charter so provides, election of the CEO of the company. The competence of the general shareholder’s meeting of a JSC is prescribed ..4.. law and cannot be changed ..5.. charter. Conversely, the competence of an LLC’s general meeting is not rigidly regulated, essentially allowing the parties to agree in the charter what they want. Board of directors (‘sovyet directorov’) (supervisory board) ('nabljudatelnyj sovyet'). Generally, the shareholders can decide freely whether to create a board of directors; only JSCs with 50 or more shareholders must have a board of directors. If a board is created, it must have ..6.. least five members. ..7.. contrast, nonpublic stock companies and LLCs enjoy greater flexibility, a board of directors is optional. Management board ('pravlenie'). Is a collegial executive body responsible ..8.. a day-to-day management. Shareholders (or LLC participants) are free to decide in a company’s constitutive documents whether to create a management board: there, they equally define its competence. The chairman of a management board is the chief executive officer (the CEO). CEO. Every company (whether JSC or LLC) has a chief executive officer. He can, ..9.. law, act ..10.. behalf of the company. Any individual other than the CEO needs a power of attorney executed ..11.. the CEO to act ..12.. behalf of the company1.

Key terms: Less Common Forms of Doing Business Exercise 5. Match the names of less common forms of business (1–6) with their definitions (a-f). Work with a partner and discuss each term: 1. Full (General) Partnerships 2. Limited Partnerships 3. Production Co-operatives 4. State and Municipal Unitary Enterprises 5. Individual Entrepreneurs a ___________________________ 1 Doing Business in Russia 2014 [Электронный ресурс] // Baker & McKenzie [Сайт]. URL: http://www.bakermckenzie.com (дата обращения: 10.10.2014).

36

a citizen who has obtained state registration certifying his right to engage in entrepreneurial activities; b ___________________________ this business combines the features of a full partnership and an LLC, having two categories of members: some members are jointly and severally liable for the obligations of the business, while others are only liable for the business’ debts within the amount of their respective contributions into the joint capital; c ___________________________ a commercial organization which has not been granted the right of ownership of the property assigned to it by the state or municipality, but operates that property under the right of economic or operational management; d ___________________________ this form of entity was inherited from the early post-soviet economy. It is still used in small business in certain economic sectors such as agriculture; e ___________________________ members of the business are jointly and severally liable for its obligations. Management decisions require a unanimous consent of all members. A member may not participate in more than one such business at any given time. Exercise 6. Complete the hierarchical classification scheme, showing the types of the legal entities in the Russian Federation. Use appropriate terms to fill in each gap:

Exercise 7. Answer the questions: 1. What criteria or circumstances should be taken into account while deciding on the legal form of business organization? 37

2. Which legal forms of business organization are more conducive to success in • trade in consumer goods ..................................................... • restaurant business ............................................................. • tourism and hospitality ...................................................... • legal counseling .................................................................. • civil construction ............................................................... • production of computers .................................................... • production of oil and gas? .................................................. Exercise 8. Complete the following chart summarizing the words for the participants, capital and equity units by type of business entity. Speak about one entity at your choice. Businesses

Members

Capital formed up at the foundation of the business

Equity units

Liability born by the members

1. limited liability company 2. full (general) partnership 3. limited partnership 4. public joint stock company 5. non-public joint stock company

Key Terms: Establishing a Legal Presence in Russia Exercise 9. Explain in English the meaning of the following expressions: • the right to withdraw • to circulate freely on the market • pre-emptive rights • existing shareholders 38

• • • • • • •

to be placed by open subscription collegial executive body day-to-day management to engage in entrepreneurial activities the right of economic or operational management to be jointly and severally liable unanimous consent

Exercise 10. Render the following phrases from Russian into English. Speak about each type of entity existing under Russian law using the English equivalents of the phrases in the respective section. New System 1. Обособленное имущество. 2. Корпоративные организации. 3. Унитарные организации. 4. Публичное акционерное общество. 5. Общество с ограниченной ответственностью. 6. С изменениями. 7. Непубличное акционерное общество. Limited Liability Companies (LLCs) 1. Доля в обществе с ограниченной ответственностью. 2. Ответственность ограничена размерами взносов в уставный капитал. 3. В противном случае. 4. Подлежит преобразованию. 5. Единоличный участник. 6. Не считается ценной бумагой. 7. Регистрация в Федеральной службе по финансовым рынкам. 8. Минимальный уставный капитал. 9. Стократный минимальный размер оплаты труда. 10. Право выхода из компании. 11. Если это особо оговорено в уставе. 12. Участники не отвечают по обязательствам компании. 13. Остальные участники имеют преимущественное право покупки. Joint Stock Companies (JSCs) 1. Нести риски убытков, связанные с деятельностью компании. 2. Процедура, установленная федеральным законом. 3. Имущество на балансе. 4. Компания, зарегистрированная на бирже. 5. Акции свободно обращаются на рынке. 6. Не регулируются нормой о преимущественном праве покупки. 7. Торговаться (продаваться и покупаться) на бирже. 39

8. Крупные акционерные компании. 9. Осуществлять права. 10. Размещены по открытой подписке. Management Structure of Joint Stock Companies 1. Уставные документы. 2. Общее собрание акционеров. 3. Изменения в уставе. 4. Жестко регулируется (законом). 5. Совет директоров. 6. Правление. 7. Коллегиальный исполнительный орган. 8. Ежедневное управление компанией. 9. Главный исполнительный директор. 10. Действовать от имени компании. 11. Доверенность, подписанная главным исполнительным директором. Less Common Forms of Doing Businesses 1. Полное товарищество. 2. Товарищество на вере. 3. Производственный кооператив. 4. Государственные и муниципальные унитарные предприятия. 5. Индивидуальный предприниматель. 6. Получил государственную регистрацию. 7. Заниматься предпринимательской деятельностью. 8. Солидарно отвечать по обязательствам. 9. Складочный капитал. 10. Управлять имуществом на правах хозяйственного ведения. 11. Управлять имуществом на правах оперативного управления.

Use of English Exercise 11. Render the following sentences from English into Russian, paying attention to the meanings of "subject to". Consult Annex II to this Unit. (Annex II also contains useful vocabulary notes as regards some Russian and English terms.) 1. Are preferred stocks subject to business risk? 2. Subject to any limitations in its Memorandum or Articles, a company may purchase, redeem or otherwise acquire and hold its own shares. 3. The Company may, subject to Articles 7 and 8, from time to time pass an ordinary resolution referring to this Article 6 and authorizing the board to exercise all the powers of the Company to allot relevant securities. 4. Subject to the articles of association, annual general meetings are held at such times and place as determined by the directors of the Company. The directors may also, when they think fit, convene other general meetings of the Company. 40

5. An annual general meeting needs to be called by not less than 21 days’ notice in writing. 6. Subject to obtaining shareholder approval on an annual basis, the Company may call other general meetings on 14 days’ notice. Exercise 12. Translate the sentences from Russian into English: 1. Вкладом в уставный капитал ООО могут быть деньги, ценные бумаги, другие вещи или имущественные права либо иные права, имеющие денежную оценку. 2. Участники общества c ограниченной ответственностью, внесшие вклады не полностью, несут солидарную ответственность по его обязательствам в пределах стоимости неоплаченной части вклада каждого из участников. 3. В случае банкротства ООО по вине его участников или по вине других лиц, которые имеют право давать обязательные для ООО указания, на указанных участников или других лиц в случае недостаточности имущества ООО может быть возложена субсидиарная ответственность по его обязательствам. 4. Участник ООО может в любой момент выйти из состава общества, потребовав выплаты стоимости своей доли в уставном капитале, без согласия других участников, если такое право предусмотрено уставом общества. 5. Поскольку акционер не вносил вклад в уставный капитал, а покупал акции, соответственно, он как собственник ценных бумаг вправе продать их тому, кто захочет их купить, но не вправе требовать от общества вернуть ему их стоимость. 6. Участники НПАО имеют преимущественное право покупки акций, продаваемых другими участниками. Это означает, что если акционер захотел продать свои акции третьему лицу, то он может сделать это только в том случае, если другие участники НПАО откажутся приобретать эти акции. 7. Поскольку акции могут продаваться свободно, ПАО обязано ежегодно публиковать для всеобщего сведения финансовые результаты своей деятельности.

Speaking Exercise 13. (optional task) 1. Speak about the liability of owners in various Russian businesses using English equivalents of the following words and expressions: • участники; • отвечают по обязательствам общества; • несут ответственность; • ответственность ограничена размером взноса в уставный капитал; 41

• отвечают по обязательствам общества собственным имуществом; • субсидиарная ответственность; • несут солидарную ответственность. 2. Speak about contributions into the capital of Russian businesses using English equivalents of the following words and expressions: • уставный капитал; • складочный капитал; • жестко регулируется законом; • делать взносы в уставный капитал; • стократный минимальный размер оплаты труда; • тысячекратный минимальный размер оплаты труда; • полностью оплатить зарегистрированный уставный капитал в течение… • подлежит перерегистрации. 3. Speak about interests and shares in Russian businesses using English equivalents of the following words and expressions: • доли; • акции; • не считается ценной бумагой; • не может предлагаться в открытой продаже; • зарегистрировано на бирже; • могут свободно обращаться на рынке, торговаться на бирже; • не регулируются нормой о преимущественном праве покупки; • осуществлять права; • размещены по открытой подписке.

Summarizing Exercise 14. Read the article submitted to russianlawonline.ru by N. Diatlova of KPMG in 2011. Summarize it reducing to 25 per cent. Say what you have learned about the expected amendments to the RF Civil Code. Have all of the changes described in the text been actually introduced? State registration of legal entities The state registration of all legal entities will be carried out by justice authorities rather than tax authorities. At present, the Justice Ministry is responsible for the registration of not-for-profit organizations only. The aim of the proposed changes is to make the registration of all legal entities the function of a single state authority. Readers may recall that justice authorities registered all legal entities until 2002. As part of the measures against fly-by-night companies, judicial authorities will examine the legality of the grounds for registration and the reliability of the information in the Unified State Register of Legal Entities, as well as 42

whether the legal entity's charter is legally compliant. This development, which represents a move away from the application-based registration procedure, will most likely mean that registering legal entities, amending charters and entering information into the Unified State Register of Legal Entities will take longer. The liability of a member of a company for its obligations Another new development is that the sole member of a sole member company will be jointly liable for the company's obligations arising out of the company's performance of the member's instructions. It will be recalled that in general members are not responsible for a legal entity's obligations, and vice versa. Currently, exceptions are made for companies are cases where a parent company is jointly and severally liable for transactions by its subsidiaries in performance of the parent company's mandatory instructions, or where a founder (or member) is jointly liable if the legal entity becomes insolvent (or bankrupt) where that liability arises out of the actions of a founder (or member) entitled to issue mandatory instructions to that legal entity. Reorganization and liquidation of legal entities To protect creditors' rights, converting for-profit organizations into notfor-profit ones will be prohibited. Reorganizing business partnerships and companies into not-for-profit and unitary organizations will also be banned. On the other hand, legal entities undergoing reorganization will be allowed to use a combination of methods at the same time (merger, consolidation, demerger, spin-off or conversion). A clause on the discovery of assets of a liquidated organization is being introduced. In the event of the discovery of assets of such an organization, interested parties and government authorities will have three years from the time when the organization's removal from the Unified State Register of Legal Entities was recorded therein to take legal action to have liquidation procedures against the organization resumed (or initiated). The priority of liquidation claims is being altered. At all phases, creditors' claims will be satisfied only after the liquidator's costs have been paid. In addition, Phase 4 (settlements with other creditors) is being merged with Phase 3 (settlements on mandatory payments to the budget and extra-budgetary funds)1.

Writing Exercise 15. Write an essay of about 200–250 words on one of the subjects below: 1. Types of entities under the Russian legislation. 2. The rules of withdrawal from different Russian business entities.

1 Diatlova N. KPMG: Expect Radical Changes in the Civil Code [Электронный ресурс] / N.A. Diatlova // Russian Law Online [Сайт]. URL: https://www.russianlawonline.com.

Unit 4. Language Policy in the Russian Federation Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is a language policy? 3. Why is language policy a major component in the formation of any state?

Legal terms 1.

state language

государственный язык

2.

language policy

правовое регулирование национально-языковых отношений, языковая политика

3. 4.

book-keeping tax reporting

ведение бухучета налоговая отчетность 44

5. 6. 7. 8. 9.

constituent entity operating mode trademark service mark enforcement

субъект (Федерации) режим работы торговая марка знак обслуживания обеспечение, правоприменение применимые нормы языка выдавать распоряжение

10. applicable language rule 11. issue an order

Study the principle legislative acts in the field of Language Policy in Russia: The Federal Law On the State Language of the Russian Federation

Федеральный закон «О государственном языке Российской Федерации»

The Federal Law On the Languages of the Nations of the Russian Federation

Федеральный закон «О языках народов Российской Федерации»

The Federal Law On Protection of Consumer Rights

Федеральный закон «О защите прав потребителей»

The Civil Code of the Russian Federation

Гражданский кодекс Российской Федерации

Reading Exercise 1. Read the text about the language policy in Russia. Eight sentences have been removed from the text. Choose from sentences A-I the one which fits the appropriate gap. There is one extra sentence which you do not need to use. Then answer the questions below the text. Under Article 68 of the Constitution of the Russian Federation, the state language throughout the territory of the Russian Federation is Russian. All official election materials, legislation, and other legal acts, must be published in the official state language. In addition, the Constitution upholds the rights of each of the individual republics within the Russian Federation to establish its own state language. 1________________. There are a few other principle legislative acts dealing with language policy in Russia, in addition to the Constitution. These are: the Federal Law On the State Language of the Russian Federation, the Federal Law On the Languages of the Nations of the Russian Federation, the Federal Law On Protection of Consumer Rights, and the Civil Code of the Russian Federation (Article 1473). 2_____________________. 45

All Russian state and municipal bodies, and all companies operating in Russia, including those owned by foreign investors, are required to use Russian in their activities, for example in book-keeping, tax reporting and office paperwork. Official paperwork in the national republics within Russia may also be conducted in those republics’ national language. The names of companies operating in Russia must be either in Russian or expressed in Russian transliteration. 3_________________________. The name of a legal entity in Russian and in the languages of the nations of the Russian Federation may comprise borrowed foreign words in a Russian transcription or in a transcription of the languages of the nations of the Russian Federation, except for the terms and abbreviations reflecting the legal entity’s legal form. A company whose name is inconsistent with the requirements of the law may be refused registration. The use of the word “Rossiya” (Russia) or “Rossiyskaya Federatsia” (Russian Federation) in Cyrillic in the name of a company requires a special permit from the Ministry of Justice of the Russian Federation, and exposes such company to certain tax consequences. 4_________________________. However, the use of words denoting ethnicity rather than the official country name, such as “Russkiy” or “Russkaya” in Cyrillic (translated into English also as “Russian”) does not require a permit. All advertising in the Russian Federation must be either in Russian or in the particular state language of the individual republic in which the advertising appears. Under the consumer protection regulations a consumer should be informed in a clear and accessible manner in the Russian language about the manufacturer (seller), the operating mode of its work and the goods (services) it produces or sells. Foreign languages or state languages of individual republics within the Russian Federation may be used in addition to the Russian language, in which case the communications in Russian and in the other language must be identical in their content, sound and form of presentation. 5__________________. For example, trademarks and service marks expressed in the original (non-Russian) language of the trademark and registered in Russia may be used without being accompanied by a Russian equivalent. In cases provided for in specific acts of Russian federal laws, a person who does not understand Russian is entitled to an interpreter. 6_________________________. There is no single state authority responsible for enforcement of the Russian language policy in the territory of the Russian Federation. The Russian Antimonopoly Service may penalize a company in violation of the applicable language rules with a fine and/or issue it an order requiring it to cease and desist from violating the law. (Doing Business in Russia ) A There are a few exceptions to the requirement of mandatory usage of the Russian language outlined above. B The abovementioned laws provide some rules for language policy in Russia. 46

C Only those companies that have branch and/or representative offices in more than half the constituent entities of the Russian Federation, companies which are qualified among the largest taxpayers, or companies in which more than 25% of the shares or of the charter capital is held by the Russian Federation, can apply for such a permit. D Thus, regional state bodies and local institutions of self-government within Russia’s 21 republics may conduct official state business in two languages: Russian and the republic’s national language. E For example, it is guaranteed for those foreigners who are subject to criminal proceedings in Russia to have a Russian interpreter free-of charge. F It is normally permitted to also have a company name in a foreign language and/or the state language of a national republic within the Russian Federation in addition to the mandatory Russian name. G Moreover these laws are designed to preserve and protect minority languages. 1. What does Article 68 of the Constitution provide? 2. What other legislative acts deal with the language policy? 3. What rules for language policy do these acts provide? 4. What is the difference between the concepts: “transliteration” and “transcription”? 5. What companies can apply for a special permit from the Ministry of Justice of the Russian Federation to use the word “Rossiya” or “Rossiyskaya Federatsia” in Cyrillic in the name of a company? 6. What do consumer protection regulations provide? 7. What are the exceptions to the requirement of mandatory usage of the Russian language throughout the territory of the Russian Federation? 8. Who is responsible for the enforcement of the Russian language policy in the territory of the Russian Federation? 9. Explain the following concepts: world language, official language, state language, ethnic language, native language.

Key terms and use of English Exercise 2. Read the text. Decide which answer A, B or C best fits each space. Then say what Article 68 provides for. The Russian language shall be a state language on the ..1.. territory of the Russian Federation. The Republics shall have the right to ..2.. their own state languages. In the bodies of state authority and local self-government, state institutions of the Republics they shall be used together with the ..3.. language of the Russian Federation. The Russian Federation shall guarantee to all of its peoples the right to ..4.. their native language and to create conditions for its study and development. (Doing business in Russia ) 47

1. A whole

B total

C all

2. A establish

B set up

C prescribe

3. A formal

B state

C official

4. A conserve

B preserve

C eliminate

Exercise 3. Translate the sentences. Mind the part of speech of the words permit, conduct, subject, increase, protest. Pronounce them correctly. 1. Regional state bodies may conduct official state business in two languages. 2. Official paperwork in the national republics within Russia may also be conducted in those republics’ national language. 3. It is normally permitted to have a company name in a foreign language and/or the state language of a national republic within the Russian Federation in addition to the mandatory Russian name. 4. Use of the word “Rossiya” in Cyrillic in the name of a company requires a special permit from the Ministry of Justice of the Russian Federation 5. It is guaranteed for those foreigners who are subject to criminal proceedings in Russia to have a Russian interpreter free of charge. 6. The riot police have repressed the protest march against a new law that boosts the status of the Russian language inside the former Soviet countries. 7. A lot of people took to the streets to protest against the law adopted in the Parliament late on Tuesday that gives Russian the status of a regional language, approving its usage in courts, schools and other governmental institutions. Exercise 4. Suggest English equivalents of the following word partnerships. защита и поддержка государственного языка; обязательное использование; иметь право воспользоваться услугами переводчика; национальное достояние; гарантия равноправия языков; отрицание прав; применимость закона; дорожные знаки; ответственность Exercise 5. Suggest Russian equivalents of the following word partnerships. to uphold the rights; local institutions of self-government; to conduct official state business; legal entity; be inconsistent with; to expose to tax consequences; a share; charter capital; consumer protection regulations; be entitled to; to be subject to criminal proceedings; penalize a company with a fine Exercise 6. Render the sentences into English. 1. Официальный язык — язык, имеющий привилегированный статус в государстве или международной организации. 2. Государственный язык в российском законодательстве — это юридическая категория, определяющая язык, который обязателен для 48

применения в случаях, установленных законом (законами) о государственном языке. 3. Закон устанавливает, что государственным языком РФ является русский; субъекты РФ вправе устанавливать дополнительно свои государственные языки. 4. Обязательность использования государственного языка Российской Федерации не должна толковаться как отрицание права на пользование государственными языками республик, находящихся в составе Российской Федерации, и языками народов Российской Федерации. 5. Закон строго устанавливает границы своей применимости. 6. Государственный язык должен применяться в деятельности органов власти, в судопроизводстве (конституционном, уголовном, гражданском и административном), на дорожных указателях. 7. Закон устанавливает меры поддержки, например предоставление переводчиков в судах, соблюдение прав граждан, ответственность за неисполнение. 8. РФ разрабатывает меры по защите и укреплению русского языка как языка межнационального общения на постсоветском пространстве, а также меры по совершенствованию соотношения степеней использования русского языка с государственными языками республик РФ.

Speaking Exercise 7. Answer the competency-based questions. 1. Do you consider that the Russian language preserves the integrity of the Russian Federation and consolidates the society? Why? 2. How does the Russian language stimulate the development of political, economic and cultural relations throughout the country? Exercise 8. Prepare a brief talk on an aspect of Language policy in Russia making use of the following phrases (See Annex I): I’ll be speaking about; I’m going to start with; speaking specifically about issues connected with; at this point I’d like to give you a short overview of; I’d like to tell you something about the topic I intend to cover; be particularly relevant for; first allow me to define... then I’ll deal with... after that I’ll discuss; I’ll move on to; I’ll be addressing the main issue; allow me to point out here that; generally, it’s also important to consider that; as I said, please note that; I want to stress that; I’d like to turn to; my next point has to do with; finally; generally speaking; the second type of... third... the fourth type of; a second thing to keep in mind is the fact that; I now come to; I’ll conclude with; my final point is; etc. Exercise 9. Make a presentation “Language policy and language planning in the context of multi-ethnic Russian society”. 49

Summarizing Exercise 10. Read the article and summarize it reducing to 50 per cent. Say what you have learned about the three ways of handling the multilinguism in different countries. Johnson: Different tongues, common homes Apr 2nd 2014, 16:45 BY R.L.G. | BERLIN IT’S not easy to be a multilingual country. GDP per person is roughly correlated with the proportion of a country’s citizens that speak the predominant language. With a few outliers, you’re more likely to be rich if your country lacks what is sometimes known as a “stateness” problem: the Icelands and Japans of the world have a very clear identity and a dominant language. If your country's citizens feel comfortable in its borders, your country is stable. If it is stable, it is more likely to be a functioning democracy, and if it is a decent democracy, it is more likely to be rich. This is all correlation. It is not clear which way the causation runs. It is possible that as a country industrialises and gets richer, the benefits flow to the biggest national/ethnic/language group, to the eventual cost (and perhaps even to the death) of other languages through assimilation. Or it could be that it is simply easier for a country to become a wealthy, stable democracy with just one language. At any rate, there are outliers on either side: mutilingual countries run from rich to poor (say Switzerland to India), as do monolingual countries (say Iceland to Haiti). Regardless of which way the causation arrow runs, and as much as everyone might like to live in a country with only their linguistic fellows, it won't do these days to let the majority simply trample the minority. The list of countries that have done so and created enduringly resentful minorities is sadly long: Franco’s Spain and Kemalist Turkey, just to name two examples in modern European history. Back to the post-Soviet region, Latvia’s language law has privileged Latvian, but has been criticised for alienating the country's large Russian-speaking minority. It is legitimate for a newly independent country with a good claim on nation-statehood to promote its language. Many such countries come out of multiethnic states where their language was repressed. To build the language up, making it official, requiring its teaching in schools, subsidising radio and television and so forth—these are all a part of healthy nation-building. The problems happen when this looks zero-sum, and a large minority speaking another language is told, in effect, to get with the programme or get out. Many people cannot or will not move to a friendlier country. And easy partition is rare: there’s a reason most people can name only one “velvet divorce” (Czechosolovakia) in which a multiethnic country peacefully becomes two monoethnic ones. National splits are usually much uglier. There are three ways to handle multilingualism besides squashing minority languages or splitting the country. The first is generous national 50

multilingualism. Canadian politicians routinely switch between English and French, and in Brussels absolutely everything is in both Dutch and French. This can be expensive and unwieldy: the visitor to Brussels must know that Rue de la Science is also Wetensschaapsstraat. But without this policy, Wallonia and Flanders would have long since gone separate ways. (They may yet.) The second method is linguistic federalism, also seen in Belgium, as well as Switzerland, India, Canada and today’s Spain. Local territories should be allowed latitude to make locally dominant languages official, for teaching, broadcasting, dealing with the local authorities and so forth. There is no surefire solution to language conflict: sometimes local authorities (Quebec and Catalonia come to mind) promote the regional language so aggressively that those that speak the national-majority but regional-miniority language (English and Spanish, in these examples) have their own cause for grievance. But done decently, linguistic federalism gives minorities in big and diverse countries a stake in the status quo. There is only one truly non-zero-sum way to ease the conflict between languages: to encourage, celebrate and teach multilingualism. Johnson has beaten this drum before, and also acknowledged its cost. It reduces the zerosum nature of conflict between languages, but is zero-sum with other educational priorities. So be it. The solutions here can all be cumbersome and costly. But compare them with the cost of instability or partition, and they start to look a bargain1.

Writing Exercise 11. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is The Russian Language Federal Programme (2011–2015).

1

http://www.mothertongue.com/wordpress/johnson-tongues-common-homes.

Unit 5. Privatization in Russia Discussion 1. Here is a “word cloud” that contains the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is the public-private distinction? 3. What does the term privatization mean? 4. When did the process of privatization in Russia take place? 5. Who is the most odious public figure whose name is firmly attached to the process of privatization? Why? 6. What were the main goals of this process? 7. What class of society appeared soon after the privatization? 52

Legal terms 1. “voucher-assisted privatization”

«ваучерная приватизация»

2. allocate vouchers

распределять ваучеры

3. joint stock company

акционерное общество

4. state-owned entity

государственное предприятие

5. be publicly tradeable

находиться в свободной продаже

6. liquid voucher market

рынок с высоким спросом на ваучеры

7. cash out

продать ради прибыли, перевести в наличные

8. bid

предлагать цену на аукционе

9. bundle the controlling stakes

объединять контрольные акции

10. holding company

компания-держатель

11. volatile political environment

нестабильная политическая среда

12. repayment secured by

выплаты, обеспеченные чем-либо

13. forfeit

потерять право на что-либо

14. bid rigging

мошеннический сговор на торгах, нечестное предложение цены

15. divvy up

распределять

16. consortium

синдикат

17. affiliate

филиал

18. enterprise stake

доля компании

19. large-scale investor

крупный вкладчик

20. “loans for shares” scheme

залоговая приватизация

21. “golden share”

«золотая акция»

22. public joint stock company

открытое акционерное общество

23. failure to abide by the privatization rules

несоблюдение правил приватизации

24. declare void

объявить недействительным

25. challenge and declare invalid

оспаривать и объявлять недействительным

26. statute of limitations

закон об исковой давности

27. buyout of leased state property by the lessees

выкуп имущества арендными предприятиями по договорам аренды 53

28. facilitate privatization 29. charter capital 30. state unitary enterprise 31. limited liability company 32. buy participatory interests 33. preemptive right 34. credibility of a prospective buyer

содействовать процессу приватизации уставный капитал государственное унитарное предприятие общество с ограниченной ответственностью приобретать долю участия преимущественное право покупки надежность потенциального покупателя

Reading Exercise 1. Read the text. Then answer the questions below the text and summarize the contents. In general, the privatization process in Russia can be roughly summarized as occurring in three progressive stages. The first stage (1988–1991) is so-called spontaneous privatization during which property rights over enterprises were transferred from the government to the employees and management. However, it was only a small part of the Soviet industry. The second stage of “voucherassisted privatization” lasted from 1992 to 1994 and included the privatization of state property on a massive scale. This privatization scheme allocated vouchers to state employees. These vouchers later were transformed into shares in the capital structures of newly established (privatized) joint stock companies. Although at this early stage the country lacked experience in all privatization matters, and the first Privatization Law of 3 July 1991 was perhaps inevitably undeveloped, the Government’s rush to privatize companies through the allocation of vouchers resulted in a very large percentage of state-owned entities being transferred into private hands. The third stage is referred to as “loans for shares” scheme1. 1. How many stages are there in the privatization process in Russia? 2. What is the timeframe of the first period? 3. What was the essence of the “voucher-assisted” privatization? Exercise 2. Read the text. Then answer the questions below the text. Finally think of the various ways the insiders could discourage others from bidding at the voucher auctions. In Russia, there was no political will or administrative capacity to force privatization on unwilling managers. The political solution was to bribe them 1

https://en.wikipedia.org/wiki/Privatization_in_Russia.

54

with enough cheap shares so that they would pursue privatization voluntarily. Employees were given large numbers of cheap shares. The result was that most privatized firms were majority owned by workers and managers. This ownership structure led to virtually complete manager control of most enterprises. The managers’ personal stake in their companies was often modest to begin with, but rose quickly. In Russia vouchers were publicly tradeable. This fostered a liquid voucher market, which let some citizens cash out, and made it easy for managers to buy vouchers that could be traded for shares in their own companies. Managers often got the funds to buy vouchers by illegally “privatizing” company funds. They continued to accumulate control after the voucher auctions were completed, by convincing or coercing employees to sell their shares. Some voucher auctions were marked by other irregularities, beyond the managers’ illegal use of company funds to acquire vouchers. The auction design meant that the fewer vouchers were bid for a particular company's shares, the more shares would be distributed per voucher. This gave insiders an incentive to discourage others from bidding at the voucher auctions. The larger the company, the more likely its managers were to use different tactics to discourage other bidders. Finally, perhaps 1,000 of the 15,000 mass-privatized firms were able to cut special deals of various sorts with the government. Again, the larger the company, the more likely its managers were to have the political clout to obtain special treatment. Finally, many of the largest enterprises were held out of voucher privatization. In several important industries, the government then bundled its controlling stakes in a number of major companies into a smaller number of holding companies, and sold controlling stakes in the holding companies. The government created seven large oil holding companies: LUKoil, Sidanko, Sibneft, Rosneft, Tyumen Oil, Yukos, and VNK (Eastern Oil Company), which each held stakes in several producing companies, and together owned most of Russia's oil reserves. Privatization of electric power companies (with United Energy Systems as the principal holding company) and telephone companies (with Svyazinvest as the principal holding company) followed a similar pattern1. 1. How did the managers’ personal stake in the companies rise quickly? 2. What ways did the managers use to accumulate control over the vouchers? 3. How did the government manage to create seven large oil holding companies? Exercise 3. Read the text. Then, complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and say what you have learned about the second stage of Russian privatisation. investors replenish bid never viable reservation investment enterprise value loan security pointless astonishingly explicit auction twice disqualify revenue wary artificially 1

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The second stage of the privatization process lasted from 1995 to 1996, and was focused on obtaining large payments for significant enterprise stakes. The principal objectives of this scheme were to ..1.. the state budget and to attract domestic and foreign investment into Russia. Unfortunately, these objectives were ..2.. achieved because: • most of the financially ..3.. and attractive businesses had already been privatized during the first stage of development; • domestically, large-scale investors did not yet exist; and • foreign investors were still ..4.. of large-scale capital injections into Russian entities (particularly due to the volatile political environment in the Russian Federation at the time). As a result of the difficulty in attracting ..5.. during this second stage, the “loans for shares” scheme was introduced. The outcome of these auctions was that a limited number of Russian businessmen were able to acquire state property at ..6.. low prices. "Loans-for-shares" was an audacious scheme to acquire Russia’s biggest companies for a fraction of their ..7.. The Russian Government wanted to raise ..8.. but found it politically difficult to sell its stakes in Russia's largest enterprises, which had also been excluded from voucher privatization. The banks proposed to ..9.. funds to the government for several years, with repayment secured by the government’s majority stakes in these enterprises. Everybody knew that the Government would never repay the loans, and would instead forfeit its shares to the banks that made the loans. Under loans-for-shares, the Government auctioned its shares in a number of major oil, metals, and telephone companies in return for loans, giving the shares (and accompanying voting rights) as ..10.. to whomever would loan it the most money. But the auctions were peculiar indeed. The right to manage the auctions was parceled out among the major banks, who contrived to win the auctions that they had been appointed to manage, at ..11.. low prices. The bid rigging that was implicit in divvying up the auction managing role became ..12.. in the actual bidding. The auction manager participated in two separate consortia (to meet the formal requirement for at least two bids), each of whom ..13.. the government’s reservation price or trivially above that. No one else bid at all. Foreigners were either excluded formally, or understood that it was ..14.. to try to bid. In the couple of cases when someone bid in an ..15.. intended to be won by someone else, the true nature of the “auctions” came to the fore, as pretexts were found to disqualify the high bidder. For example, Oneksimbank managed the Norilsk Nickel auction, with a ..16.. price of $170 million. It arranged three bids from affiliates, all at $170 or $170.1 million. Unexpectedly, Rossiiski Kredit Bank offered $355 million, over ..17.. as much. Oneksimbank found patently spurious grounds to ..18.. Rossiiski Kredit’s bid; Oneksimbank’s affiliate won the bidding at $170.1 million1. 1

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1. What were the principal objectives of the second stage of privatization? Why were they never achieved? 2. What is the “loans for shares” scheme? Why was it audacious? 3. What distinguished holding the auctions during the privatization period from the normal business practices? Give an example. Exercise 4. Read the following text and think of the best word to fill in each gap. Then answer the questions below the text and speak about the third stage of privatisation. The next Privatization Law of 21 July 1997 established a ..1.. right (“golden share”) of the relevant state authorities to participate in the management of those open joint stock companies where such a right was ..2.. during privatization. This right was realized by nominating representatives of the relevant state authorities to the ..3.. of directors and audit committee of such open joint stock companies, participation in general meetings of shareholders and veto rights on certain agenda issues of the general meetings of ..4.. Since that time there have been very few major developments within the sphere of privatization. The Privatization Law provided for a single fundamental sanction for the failure to abide by the privatization rules, i.e. that the corresponding transaction could be declared ..5.. and the property unlawfully acquired be returned to the state. Furthermore, the privatized ..6.. and the procedures relating to their privatization could be challenged and declared invalid for a period of up to ten years. Later, in July 2005, the statute of limitations to challenge a void transaction (including past privatization deals which it was still possible to challenge in July 2005 on the grounds of the deals’ alleged invalidity) was ..7.. from ten to three years1. 1. What is meant by a “golden share”? 2. What sanctions did the Privatization Law provide for the failure to abide by the privatization rules? Exercise 5. Decide whether these statements are true or false. If they are false, correct them. 1. Private ownership of enterprises and property was legal in the Soviet Union. 2. There are three stages in the privatization process: spontaneous privatization, voucher privatization, loans for shares. 3. Russia’s initial privatization legislation promised to distribute the national wealth among the former Soviet political and industrial elite. 4. The wealth gap increased in Russia because a group of business oligarchs (tycoons) concentrated enormous assets in their hands. 1

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Key terms: Privatization in Russia Exercise 6. Match these terms (1–6) with their definitions (a-f). Then, work with a partner and discuss each term. 1) share

a) a situation when the companies agree on the outcome of a tender process amongst themselves or decide in advance which company will bid

2) voucher

b) a part of the ownership of a company

3) auction

c) a public sale of goods or property, especially one in which prospective purchasers bid against each other until the highest price is reached

4) loan for share

d) a scheme whereby some of the largest state industrial assets are leased through auctions for money lent by commercial banks to the government

5) voucher privatization

e) a small printed piece of paper that entitles the holder to change it for goods or services

6) bid rigging

f) transferring the shares of state-owned enterprises to employees using vouchers, each corresponding to a share in the national wealth

Exercise 7. Suggest Russian equivalents of the following words and word partnerships. Then, use some of them in your own sentences. state-owned industrial assets; private ownership of enterprises; to transfer; to bribe with; to trade for shares; to discourage smb from doing smth; to hold out; oil reserves; to acquire smth for a fraction of its value; to repay the loan; metal company; reservation price; pretext; to arrange a bid; patently; to transform smth. into profit-seeking business; free transfer of shares to employees; to distribute the national wealth among the general public; to replenish the state budget; financially viable business; veto rights on certain agenda issues; corresponding transaction; to challenge a void transaction; charter provisions; to be acquired by managers; to be forced to manage the huge and insufficient state enterprise sector inherited from the Soviet economy; the State Committee for State Property Management of the Russian Federation; initial objectives; to cease subsidizing the inefficient enterprises Exercise 8. Suggest English equivalents of the following words and word partnerships. Then, use some of them in your own sentences. малые предприятия; крупные денежные вливания; привлечение иностранных инвестиций; приватизация через аукцион; приватизация через конкурс; совет директоров; преобразование унитарных предприятий в акционерные общества открытого типа; продажа акций на фондовых 58

биржах; потенциальный покупатель; нестабильная политическая среда; содействовать процессу приватизации; объединять контрольные акции; распродавать имущество; продолжать приватизацию добровольно; заставлять сотрудников продавать свои акции; дерзкая схема; ухитриться; всплывать; филиал; фальшивые основания

Use of English Exercise 9. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and summarise its contents. incommensurate with the assets “lease buy-outs” hire-purchase arrangement rigged auctions voucher privatization equitable distribution lack of cash a collectively-owned worker cooperative distributed for free national patrimony afflicted by corruption a limited liability company a fixed face value In voucher privatization, vouchers or coupons to buy assets being privatized are ..1.. (or for a nominal processing fee) to all citizens. The distribution might be equal or take into account age or years in the workforce. The vouchers may or may not have ..2.. It was often argued that voucher privatization was necessary because of the ..3.. The no-cash argument was that the free or almost-free distribution of vouchers was necessary since the citizens had no cash to buy shares. The savings of the Russians were in any case ..4.. to be privatized. The Russians developed a home-grown privatization method called the ..5... In the lease buy-out model, the company made lease payments to the government over a period of years and then could exercise the final buy-out clause, much like an individual ..6... The current workers were the members as in ..7.. or were the “shareholders”. But surely these lease buy-outs were “imperfect” and ..8... The early leasing models had a technical problem with “collective ownership” but this could be easily fixed with ..9... Before the “reformers” in Russia went on from voucher privatization to the loans-for-shares (where most of today's oligarchs were created by blatantly ..10.. of major Russian companies), everyone used to hear much about the ..11.. of the national patrimony1. Exercise 10. Render the sentences into English. 1. Самый быстрый доступ к акциям сотрудников компании был у менеджеров-инсайдеров. Они скупали их акции по смешным ценам, 1

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иногда прибегая даже к угрозам закрыть компанию, если те не согласятся на продажу. 2. Возможно, сотрудники не знали истинной стоимости акций. 3. Сторонники приватизации говорили о том, что, несмотря на коррупционную схему залоговой приватизации и другие махинации, этот процесс способствовал реструктуризации государственных предприятий: были устранены менеджеры, неспособные перейти к рыночной экономике, и произошло необходимое вложение денег для повышения производительности. 4. Приватизация — это процесс передачи государственного имущества в частную собственность. 5. Главная экономическая задача приватизации состоит в том, чтобы повысить эффективность экономики за счет создания института частной собственности. 6. Государственная программа по приватизации 1992 г. была направлена на создание конкурентной среды, привлечение иностранных инвестиций, содействие процессу финансовой стабилизации в РФ. 7. Согласно законодательно принятой программе малые предприятия должны были распродаваться на торгах или могли быть напрямую проданы частным лицам, работающим на этом предприятии. 8. Рыночная стоимость пакета акций, который можно было получить в обмен на один ваучер, колебалась в широких пределах в зависимости от компании, чьи акции приобретались в обмен на ваучер, а также от региона, где это происходило. 9. Массовым явлением стала так называемая спонтанная приватизация — захват контроля над предприятиями их директорами, настроенными не на развитие предприятий, а на быстрое получение прибыли.

Speaking Exercise 11. Choose the most exact and precise definition of privatization. Comment on it. 1. Privatization refers to activities that involve a genuine sale of assets and termination of a federal activity. 2. Privatization is the policy or process of making private as opposed to public. 3. Privatization refers to any shift of activities or functions from the state to the private sector. 4. Privatization might be defined as the use of the private sector in the provision of a good or service, the components of which include financing, operations (supplying, production, delivery), and quality control. Exercise 12. Answer the competency-based questions. 1. What are the main failures in the Russian privatization effort? 2. What outcomes did the Russian privatization lead to? 60

Exercise 13. Read the text about the ways of running business and answer the question: What general points does this example illustrate? The new owners had two ways to make money — increase the company’s value, or steal already existed value. The first way was difficult, perhaps beyond their ability, and uncertain in outcome. The second way was easy and it was sure to produce a handsome profit that could be tucked away overseas, beyond the reach of a future Russian government. Most of the kleptocrats chose the second, easy approach. For example, Yukos, a major Russian oil holding company, was acquired in 1995 by Bank Menatep (controlled by kleptocrat Mikhail Khodorkovski) as a part of the corrupt “loans-for-shares” privatization process. For 1996, Yukos’ published financial statements show revenue of $8.60 per barrel of oil — about $4 per barrel less than it should have been. One surmises that most of the missing revenue ended up in offshore bank accounts controlled by Mr. Khodorkovski and his accomplices. Khodorkovski skimmed over 30 cents per dollar of revenue, while stiffing his workers on wages, defaulting on tax payments by claiming that Yukos couldn’t afford them, destroying the value of minority shares in Yukos and its majority-owned production subsidiaries companies, and not reinvesting in Yukos' oil fields, which badly needed new investment. It’s doubtful that running Yukos honestly could have earned Mr. Khodorkovski a fraction of what he earned by skimming revenue, let alone offshore and tax-free. He made a rational, privately value-maximizing choice. Even if running Yukos honestly was the best long-run strategy, Khodorkovski might have preferred a quickly skimmed bird in hand to two long-run birds in the bush. Besides, skimming was a business that he knew and was good at, while running an oil company was a tough business that he didn’t know and might fail in1 . Exercise 14. Comment on the quotation. Pyotr Aven, the former head of Alfa Bank (controlled by kleptocrat Mikhail Fridman), candidly explained: “It is not necessary to have a good head or specialized knowledge to become a millionaire in our country. It is often enough to have an active support in the government, in the parliament, in the local power structures and in the law enforcement agencies. One fine day your insignificant bank is authorized, for instance, to conduct operations with budgetary funds. Or quotas are generously allotted . . . for the export of oil, timber, and gas. In other words, you are appointed a millionaire”2. 1

http://siteresources.worldbank.org/INTDECINEQ/Resources/black.pdf. http://www2.gwu.edu/~ieresgwu/assets/docs/demokratizatsiya%20archive/06-04_ bivens.pdf. 2

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Exercise 15. Make a full mindmap and prepare a presentation on an aspect of Privatization in Russia. Make use of the following words and word combinations: private ownership enterprise, to shift from the deteriorating planned economy towards market economy, to transfer property rights over enterprises from the government to the employees and management, to take control over industrial assets, to sell the assets out, free transfer of shares to employees, to feel deceived, to be controlled by favored insiders, a form of selling for a very low price, to increase the wealth gap, etc. Exercise 16. Choose a topic related to privatization. Prepare a brief talk, making use of the following sentence connectors: the question of … arises with regard to…; as far as smth. is concerned…; what is of importance is that…; clearly,…; probably this was due to the fact that…; on the strength of these basic principles…; as a consequence… 1. Types of privatization. 2. Legal consequences of privatization and mass response. 3. Arguments for and against privatization. 4. The current wave of privatization initiatives and recent developments. Exercise 17. (Optional) Use the articles in Annex IV (or find other materials on the Internet) to make presentations or do the project work about the state of affairs in Russian privatisation nowadays.

Summarizing Exercise 18. Read the article Privatization Loan Program Unveiled. Identify the main sentences. Express the key points in your own words. Discuss the article. Write a short summary of the main points in no more than 180 words. The Federal Property Management Agency is urging banks to give loans to investors to purchase government assets in a new scheme to stimulate privatization. The loans provided by the banks will be backed by the privatized companies’ shares, deputy head of the agency Ivan Aksenov told Vedomosti. He added that the agency was holding talks with top-20 banks on the details of loan agreements. The program is designed to be used for selling the state’s stakes in small and medium-sized businesses, Aksenov said. The agency controls 1,700 companies with an annual turnover of under 60 million rubles, out of which 1,100 are fully owned by the state. The agency will decide which ones are related to small and medium-sized business and suitable for sale in the next six months. “Our goal is not just to sell the assets at any price offered, but to attract long-term financing so that these companies see further growth and development”, Aksenov said in a statement. 62

Financial experts both in the banking sector and the Cabinet were skeptical that the program would be successful. “It’s one thing to give out loans to buy shares of public and financially stable companies — the interest rate in this case does not exceed 10 per cent — but it’s another matter to give out credit for the purchase of some unknown factory”, a banker told Vedomosti. There are many low-quality nontransparent companies in the privatization list and it would be very hard to persuade banks that they have any future, he added. “The banks are already giving out loans to purchase these assets if they like them but it would be impossible to arrange the sales on a mass scale without putting pressure on the banks, which is inappropriate,” a Cabinet source said1 .

Writing Exercise 19. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is The current wave of privatization initiatives and recent developments.

1 Panin A. The Moscow Times. 2013. July 19–21 // http://russialist.org/new-privatizationscheme-unveiled.

Unit 6 . Employment Law in Russia: Part 1 ARISING OF EMPLOYMENT RELATIONS Discussion 1. Here is a "word cloud" that comprises the words that will frequently appear in the texts of this unit. Generate ideas about each word.

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2. What are the most common ways to look for a job now? 3. Have you ever had a personal experience looking for a job? Describe it. Were there any attempts to violate your rights as an employee? How does it feel to be a job seeker? 4. Which knowledge and skills in the legal profession are most valued by the employers? 64

5. What businesses or state agencies might be interested in hiring a lawyer specializing in employment law? Do you think these are good job opportunities? Why? Why not? 6. What are the basic purposes and objectives of Russian labor legislation? 7. What are the basic principles of legal regulation of labor relations in Russia? 8. What is deemed to be discrimination and what is not discrimination under Russian law?

Legal terms 1. in the capacity in the capacity of the General Manager 2. undertake (to do smth) 3. remunerate remuneration 4. job seeker (job applicant) 5. State pension insurance certificate 6. military service registration documents 7. refusal to employ (denial of employment) 8. ungrounded refusal 9. cannot be superseded by an arrangement between the parties 10. be detrimental provisions that are not detrimental to the employee 11. impair provisions that impair the employee’s position provisions that are not 12. compliant with the Labor Code 13. applicable laws

в качестве в качестве генерального директора принимать на себя обязательство (сделать что-либо) выплачивать вознаграждение вознаграждение лицо, ищущее работу, соискатель на должность свидетельство государственного пенсионного страхования документы постановки на воинский учет отказ нанять (кого-либо) необоснованный отказ не может быть отменено по договоренности между сторонами ухудшать (чье-либо положение) положения (договора), не ухудшающие положение работника ухудшать положения (договора), которые ухудшают положение работника положения (договора), не соответствующие Трудовому кодексу применимые законодательные акты 65

14. null and void 15. job duties (job description) perform tasks outside the scope of one’s job duties 16. unilaterally 17. hold a second job 18. primary employment 19. open-ended contract (indefinite term contract) 20. fixed-term contract 21. substitution for a temporarily absent employee 22. internship 23. CEO (Chief Executive Officer) 24. Chief Accountant (CA) 25. deputy Deputy Chief Accountant Deputy Minister 26. internal order order on hiring the hiring must be documented by an order of the employer (directive) 27. transfer to a new job 28. grant vacation 29. discipline 30. an employee is terminated 31. (a document) is presented to the employee for countersigning probationary period (probation 32. period, trial period) 33. child under the age of 18 34. minors 35. graduates that are employed for the first time in their life

ничтожный и не имеющий юридической силы должностные обязанности выполнять работу, не входящую в должностные обязанности в одностороннем порядке работать по совместительству основное место работы бессрочный договор срочный договор заместительство временно отсутствующего работника стажировка главный исполнительный директор главный бухгалтер заместитель заместитель главного бухгалтера заместитель министра приказ (по организации) приказ о приеме на работу прием на работу оформляется приказом (распоряжением) работодателя перевести на другую работу предоставить отпуск привлечь к дисциплинарной ответственности с работником прекращен трудовой договор ознакомление работника (с документом) под роспись испытательный срок ребенок, не достигший 18 лет несовершеннолетние выпускники, впервые поступившие на работу 66

Study the names of Russian ministries, agencies, and departments: The Ministry of Labor and Social Protection of the Russian Federation

Министерство труда и социальной защиты Российской Федерации

Study the title of the legislative act of the Russian Federation: The Labor Code of the Russian Federation

Трудовой кодекс Российской Федерации

Reading Exercise 1. Read the text and note the vocabulary in bold. Answer the questions about the text and summarize it. 1. What is an employment relationship from the perspective of Russian Law? 2. What does the employee undertake under an employment contract? 3. What does the employer undertake to provide for the employee under an employment contract? 4. What documents are listed in the Labor Code that the employer has the right to request from a job applicant?

Arising of employment relations Recruitment From a Russian law perspective, an employment relationship is a contractual relationship based on the agreement between a legal entity or individual entrepreneur (the “Employer”) and an individual (an ”Employee”) under which the Employee undertakes to personally perform the work in the relevant professional or hierarchical capacity and observe the Employer’s internal policies and procedures regarding organization of labor and the Employer undertakes to provide the appropriate working conditions for the Employee and remunerate the Employee for the work performed. The general principle of recruitment is that the Employer does not have a right to request from the job applicant any documents other than those that are expressly listed in the Labor Code and other laws and regulations. In particular, the Labor Code provides that the Employee shall produce the following documents for execution of the employment contract: I. passport or other identity card; II. labor book (employment history — unless the employee enters into the employment contract for the first time or takes up the job as his/her second job); III. State pension insurance certificate; 67

IV. military service registration documents of the Employee who is obliged to do military service; and V. Degree certificate (diploma) and other qualification documents1. Exercise 2. Read the text, mind the vocabulary in bold and fill in the gaps with the appropriate forms of the words on the right. Answer the questions below the text and retell it. Ungrounded Denial of Employment Under the Labor Code, the Employer may not refuse to ..1.. a job seeker without a cause. The job seeker has the right to request the Employer to ..2.. a written explanation of the ..3.. for the refusal to employ him\her and the Employer is ..4.. to respond to such request. According to the established court ..5.. denial of employment may be based only on ..6.. professional qualities of a particular job seeker and not on any other ..7... Refusing to employ a woman on the grounds of her pregnancy or family ..8.. is prohibited. Ungrounded refusal to employ a pregnant woman or a woman with children below the age of three ..9.. a crime and is ..10.. by fines or community service of up to 120 hours1.

1. employee 2. provision 3. reasonable 4. 5. 6. 7.

obligation practitioner appropriation groundless

8. commit 9. constitution 10. punishment

1. How are employers restricted in giving denial of employment? 2. What is the only justified reason for the refusal to employ? 3. What does refusal to employ a pregnant woman or a woman with children under the age of three constitute? Exercise 3. Read the text, mind the vocabulary in bold and choose the word A, B or C to fill in the gaps. Summarize the text answering the questions given below it. Employment Contract A written employment agreement in Russian ..1.. the basic terms and conditions of the employment relationship must be ..2.. into with each employee working in Russia. Form and substance of employment contract are ..3.. regulated by legislation. The Labor Code provides all ..4.. with mandatory minimum guarantees, employment-related benefits and compensations, which cannot be superseded by an arrangement between the employer and the employee. 1 Doing Business in Russia 2014. Baker & McKenzie — CIS, Limited; Russian Business Law — Compendium № III /Clifford Chance CIS Ltd. 2013/2014.

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However, the parties are free to include any provisions that are not detrimental to the Employee into the employment contract. The provisions that ..5.. the employee’s position as compared with that set forth by mandatory minimum guarantees or not compliant with the Labor Code or other ..6.. laws and regulations are null and void. The employment contract must expressly define the employee’s relevant employment duties and obligations. It is important that these duties and obligations are defined broadly enough ..7.. an employee cannot be required to perform tasks outside the scope of his/her job duties ..8.. described in his/her employment contract. The employer cannot expand or otherwise modify them unilaterally without the written ..9.. of the employee. In general, employment terms and conditions that have been agreed upon by employer and employee can only be ..10.. by a written agreement of both parties. An employee cannot be prohibited from holding a second job in addition to his/her full-time ..11.. employment, with certain limited exceptions and restrictions provided by the Labor Code and other federal laws1. 1.

A mentioning

B setting out

C defining

2.

A entered

B concluded

C negotiated

3.

A closely

B tightly

C thoroughly

4.

A employers

B workers

C employees

5.

A worsen

B detriment

C impair

6.

A used

B applicable

C employed

7.

A for

B because

C since

8.

A expressly

B directly

C implicitly

9.

A consent

B agreement

C compliance

10. A added

B amended

C put in

11. A first

B initial

C primary

1. What are the essentials of the Russian legislation in respect of employment agreements/contracts? 2. How are the provisions impairing the employee's position treated by the Russian legislation? 3. What must an employment contract define? 4. How can employment terms and conditions be changed? 5. Can an employee have a second job? 1 Doing Business in Russia 2014. Baker & McKenzie — CIS, Limited; Russian Business Law — Compendium № III / Clifford Chance CIS Ltd. 2013/2014.

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Exercise 4. Read the texts and fill in the gaps with prepositions. Decide which headline relates to the respective paragraph A, B or C. Summarize the texts. Employment-related orders Probationary period Term of employment A As a general rule, employment contracts must be open-ended. Fixed-term contracts may be entered ..1.. in a limited number of cases that are explicitly listed in the Labor Code. ..2.. particular, a fixed-term employment contract may be entered into in cases where no open-ended employment relationship is possible (e.g., substitution for a temporarily absent employee, seasonal work, internship, etc.) or fixed-term employment is possible ..3.. agreement of the parties (e.g., employment contracts with CEO, Deputy, or Chief Accountant). B Employers in Russia are required to issue an internal order each time an employee is hired, transferred ..4.. a new job, granted vacation, disciplined or terminated, and in certain other cases. For example, Article 68 of the Labor Code expressly requires that the hiring is to be documented ..5.. an order of the employer (directive). The order on hiring is presented to the employee for countersigning no later than three days ..6.. the employee has commenced work. C A probationary period cannot exceed six months for the CEO, Deputy, CA, Deputy CA, and a head of a representative or branch office, and three months ..7.. other employees. Selected categories of employees such as pregnant women or women with a child ..8.. the age of 18, minors or graduates that are employed for the first time in their life may not be required to serve a probationary period1.

Key terms Exercise 5. Explain the meaning of the following expressions in English: • to perform the work in the relevant professional or hierarchical capacity; • documents that are expressly listed in the Labor Code; • execution of the employment contract; • to be closely regulated by legislation; • employment-related benefits; • guarantees cannot be superseded by any arrangement between the parties Exercise 6. Render the following phrases from Russian into English. Speak about important issues of Employment Law covered in the text using the English equivalents of the phrases in the respective section. I. Recruitment 1. В качестве генерального директора. 2. Выплачивать работнику вознаграждение. 3. Соискатель на должность. 1

Russian Business Law — The Current Issues / Clifford Chance CIS Ltd.

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4. Представить свидетельство государственного пенсионного страхования. 5. Представить документы постановки на воинский учет. II. Ungrounded Denial of Employment 1. Представить письменное объяснение причин отказа нанять работника. 2. Отказ в найме. 3. Необоснованный отказ нанять беременную женщину. III. Employment Contract 1. Не может быть отменено по договоренности между сторонами. 2. Положения (договора), не ухудшающие положение работника. 3. Положения (договора), ухудшающие положение работника по сравнению с установленными гарантиями. 4. Положения (договора), не соответствующие Трудовому кодексу. 5. Применимые законодательные акты. 6. Ничтожный и не имеющий юридической силы. 7. Выполнять работу, не входящую в должностные обязанности. 8. В одностороннем порядке. 9. Работать по совместительству. 10. Основное место работы. IV. Term of Employment 1. Бессрочный договор. 2. Срочный договор. 3. Заместительство. 4. Стажировка. 5. Главный исполнительный директор. 6. Главный бухгалтер. 7. Заместитель главного бухгалтера. V. Employment-Related Orders 1. Приказ (по организации). 2. Приказ о приеме на работу. 3. Прием на работу оформляется приказом (распоряжением) работодателя. 4. Перевести на другую работу. 5. Предоставить отпуск. 6. Привлекаться к дисциплинарной ответственности. 7. С работником прекращен трудовой договор . 8. Ознакомление работника (с документом) под роспись. VI. Probationary Period 1. Испытательный срок. 2. Ребенок, не достигший 18 лет. 3. Несовершеннолетние. 4. Выпускники, впервые поступившие на работу. 71

Read ANNEX III to this Unit for the commentary on essential vocabulary and alternative ways to convey Russian legal concepts in English in the field of Employment Law.

Use of English Exercise 7. Complete the sentences, using the verbs in the box in an appropriate form: to agree (2); agreement (2); consent (2) 1. The Wages Protection Act prohibits employers from deducting money from an employee’s pay without the employee’s written ..1.. . 2. Many employers ask employees to sign an arbitration ..2.. in which they give up their right to sue in court over job-related issues such as wrongful termination, breach of contract, and discrimination. An employee who signs an arbitration ..3.. promises to pursue any legal claims against the employer through arbitration, rather than through a lawsuit. 3. When you sign a contract, letter, handbook acknowledgment form, or any other document from your employer, you ..4.. to all the terms of the document — even the ones that you may not have read. 4. If the employer provides the most favorable condition for their employees, for example, reduced working hours, the advantage is incorporated into the employment contract and may only be amended with the ..5.. of both parties, as provided in article 468 of the Consolidated Laws Labor (CLL). 5. Many employers ..6.. a net wage with their nanny, which is a bad idea for many reasons. If your nanny has another part time job, it could end up costing you a lot more than you expected. Exercise 8. Complete the following sentences, using the verbs in the box in an appropriate form: to prohibit to supersede to impair to produce to undertake 1. 2. 3. 4. 5.

The Employer ..1.. to provide the appropriate working conditions. The Employee must ..2.. the following documents. The provision cannot be ..3.. by an arrangement between the parties. Provisions that ..4.. the employee’s position are null and void. An Employee cannot be ..5.. from holding a second job.

Exercise 9. Complete the sentences, using the words "to request / a request" or "to require" in an appropriate form. Consult a dictionary, if necessary. What are the Russian equivalents of these words? Explain the difference in usage. 1. The Employer may not __________ from the job applicant certain documents, necessary for the execution of an employment contract. 72

2. An Employee cannot be __________ to perform tasks outside the scope of his job duties. 3. The Employer is obliged to respond to the __________ of the Employee. 4. Employers in Russia are __________ to issue an internal order each time an employee is hired or transferred to another job. 5. The Employee may __________ the Employer to provide a written explanation of the reasons for refusal to employ. 6. Article 68 __________ that the order on hiring must be issued and presented to the employee for countersigning. 7. Selected categories of employees may not __________ to serve a probationary period. Exercise 10. Render the following sentences from English into Russian paying attention to the way you convey the meaning of the word "expressly": 1. The general principle of recruitment is that the Employer does not have a right to request from the job applicant any documents other than those that are expressly listed in the Labor Code and other laws and regulations. 2. Under Russian labor legislation the relevant employment duties and obligations must be expressly defined in the employment contract. 3. There is no general right to be paid while out sick but the contract can provide for it expressly or custom and practice of the industry/job can imply it but this may need to be proven if questioned. 4. The Employee expressly agrees to submit himself/herself to alcohol and drugs tests at the Company's discretion. 5. Note that common law implies a duty of loyalty in the employment contract; common law also protects confidential information and trade secrets in the absence of an express or written term in the contract covering this area. Exercise 11. Translate the sentences below from Russian into English. 1. Вознаграждения работникам включают в себя все формы возмещения, которые предприятие предоставляет работникам в обмен на оказанные ими услуги. 2. Для работы по совместительству согласия нанимателя по месту основной работы не требуется. 3. Временное заместительство оформляется приказом нанимателя. 4. Если суд признает отказ в приеме на работу необоснованным, то он обяжет работодателя заключить с работником трудовой договор. 5. Ранее КЗоТ 1971 г. установил в ст. 5, что условия, ухудшающие положение работника по сравнению с законодательством о труде, недействительны. 6. Прекращение срочного трудового договора в связи с истечением срока его действия не происходит автоматически. 7. В качестве заместителя главного бухгалтера г-н Иванов вел бухгалтерский учет хозяйственной деятельности своей организации. 73

Optional task 1. Временное заместительство оформляется приказом нанимателя. В таком приказе обязательно должен быть указан период, в течение которого работник будет являться заместителем. 2. Если суд признает отказ в приеме на работу необоснованным, то он обяжет работодателя заключить трудовой договор с работником в порядке, предусмотренном трудовым законодательством. 3. Ранее КЗоТ 1971 г. установил в ст. 5, что условия, ухудшающие положение работника по сравнению с законодательством о труде, недействительны, но не указал вида недействительности. На практике же они стали признаваться ничтожными. 4. Прекращение срочного трудового договора в связи с истечением срока его действия возможно не автоматически, а лишь в случаях, когда хотя бы одна из сторон выразит по этому поводу свою волю. 5. Работодатель принимает на себя обязательство обеспечить каждому работнику сохранение его рабочего места при условии соблюдения таковым своих обязанностей. 6. В качестве заместителя главного бухгалтера г-н Иванов осуществлял организацию бухгалтерского учета хозяйственно-финансовой деятельности и контроль над экономным использованием материальных, трудовых и финансовых ресурсов предприятия.

Speaking Exercise 12. Make a brief oral presentation on the important issues of Employment Law covered in the texts. Use the English equivalents of the terms and standard phrases which appear in the respective sections. Structure your presentation along the following lines: a. Start with a reference to the article of the RF Labor Code that stipulates the provision you are going to describe. b. Reproduce the ideas described in the text. c. Provide extra details of the respective article of the RF Labor Code where necessary. d. Comment on the issue or speak about the legal implications of the respective article. Example (for items a, b, & c): Article 15 of the Labor Code of the Russian Federation determines the concept of employment relations. It stipulates that an employment relationship is a contractual relationship based on the agreement between the Employer and an Employee. Under such an agreement the Employee undertakes to personally perform the work for a fee in the relevant professional or hierarchical capacity 74

and observe the Employer’s internal policies and procedures regarding the organization of labor. The Employer undertakes to remunerate the Employee for the work performed and provide the appropriate working conditions for the Employee provided for by labor legislation, collective contract, agreements, and employment contract. Exercise 13. Baker & McKenzie's joint Labor & Migration and Dispute Resolution team in Moscow has summarized several most interesting court judgments in the area of employment disputes. Read the case and explain the decision of the court. Use the patterns from the box to introduce the references to the provisions of the RF Labor Code. under article №xx the employer/employee … in compliance with article №xx the employer/employee… article №xx provides /stipulates /establishes /proscribes… An employee may be dismissed for poor performance during the trial period. Disciplining the employee is not a pre-requisite for dismissal based on poor performance during the trial period. R was employed as an Internet project manager with a Moscow-based LLC, Mora-Top. R's employment agreement provided for a 3-month trial period. R was dismissed before the expiry of the trial period for poor performance. R then challenged the employment termination in court. The court dismissed R's claims based on the following reasoning. The employer is entitled by law to dismiss an employee who did not pass the trial period, provided that the employee is notified at least three days in advance and given an explanation as to why the trial was not passed. It was established by the employer that R had not fulfilled her personal performance plan and played Internet games during office hours on several occasions. R's poor performance was sufficient basis for termination of her employment during the trial period. R's allegations that she had not been formally disciplined for poor performance were dismissed. The court held that disciplining was not required for the purposes of the termination (2011)1.

Summarizing Exercise 14. Read the article and summarize it reducing to 25 per cent. Say what you have learned about the measures to attract foreign employees to work in Russia: On 21 May 2010, Rossiyskaya Gazeta published Federal Law No. 86-FZ "On Amending the Federal Law 'On the Legal Status of Foreign Citizens in the 1 On Recent Employment Disputes [Электронный ресурс] // Russian Law Online [Сайт]. URL: http://www.russianlawonline.com.

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Russian Federation' and Other Legislative Acts of the Russian Federation." The amendments are aimed at creating a more favorable regime to attract foreign employees to work in Russia. Most of the amendments became effective from 1st July 2010. 1. Highly qualified foreign specialists The amendments introduce a special category of foreign employees — a highly qualified foreign specialist (“Specialist”). The main criterion for recognizing a foreign employee as a Specialist is a salary level of 2,000,000 roubles per year or more. Defining the required qualification level and the assessment of the competence of foreign employees as Specialists is left to the employers themselves. Specialists are subject to a simplified procedure for obtaining work permits and work visas. To receive work permits for Specialists their employers are not required to: • obtain a quota for work permits; • register vacancies with the employment authorities; • obtain permission to hire foreigners. Certain employers, in particular, representative offices of foreign legal entities, non-profit and religious organizations, and those employers who have been penalized for illegal employment of foreigners in Russia within the last two years, cannot use the simplified procedure for obtaining work permits for Specialists. A work permit for a Specialist may run for 3 years with the possibility of repeatedly extending it as long as the Specialist has a valid employment contract. The valid territory for the work permit may include more than one region in the Russian Federation. The Specialist's work permit constitutes a basis for him or her to obtain a permanent RF residency permit both for himself and for the members of his family. That said, the Specialist must request preparation of a residency permit. 2. Visa-free foreigners working for personal needs of Russian citizens Amendments to the Law introduce a new rule regarding hiring foreign citizens from countries with which Russia has established a visa-free regime ("visa-free foreigners") who come to work in Russia for the personal needs of Russian citizens. Now, such visa-free foreigner must obtain special permission — a "patent" (as distinct from a work permit). The patent is issued for a period of 1 to 3 months with the possibility of extension for up to 1 year. The patent provides a visa-free foreigner with the right to work in the RF region in which such patent was issued. 3. Preferential tax treatment In accordance with the amendments to the RF Tax Code, which came into force on 21 May 2010, the income of a Specialist paid by Russian organizations 76

(institutions) and branches of foreign organizations is taxed at a rate of 13% irrespective of the specialist's tax residency. Previously the Russian source income of foreign employees who were not tax residents of Russia (i.e., spent less than 183 calendar days in Russia over a period of 12 consecutive months) was taxed at 30%. Furthermore, the lowered 13% rate and the special procedure for paying taxes may also be applied to foreign citizens hired by Russian individuals to work for those individuals' personal needs. 4. Employment of foreigners in Russia without obtaining immigration permits In accordance with the amendments to the Law, accredited employees of the Russian representative offices of foreign legal entities are added to the list of employee categories which may be hired in Russia without the relevant immigration permits. However, immigration permits for such employees will not be required on the basis of the principle of reciprocity in accordance with international treaties concluded by Russia with a corresponding country. It should be noted that, at present, Russia has a very limited number of such international treaties with other countries and these treaties relate only to particular industrial sectors1.

Writing Exercise 15. Write an essay of about 200–250 words on one of the subjects below: 1. Proving ungrounded denial of employment 2. Probationary period for employees and for persons holding managerial positions 3. Legal status of foreign citizens in the RF as regards employment

1 Baker & McKenzie: Changes in Russian Immigration and Tax Legislation on Hiring Foreign Citizens [Электронный ресурс] // Russian Law Online [Сайт]. URL: http://www. russianlawonline.com.

Unit 6. Employment Law in Russia: Part 2 REMUNERATION AND WORKING HOURS ARRANGEMENT Discussion 1. There are ten criteria by which people rate their jobs. The table below shows how each individual criterion was rated by a public poll in Russia. Would you add anything to the list below? Comment on the information, obtained from the graph. Salary (Are you paid fairly?) Bonus/Raises (Do you get regular bonuses/raises?) Promotions (Do you get promoted easily?) Work load (Are you overloaded with tasks all the time?) Working hours (Do you have long working hours?) Stress (Do you feel stressed in your job?) Competition (Do you face a lot of competition?) Fun factor (How much do you enjoy your job?) Difficulty (How difficult is your job?)

0

50

100

150

200

250

300

350

2. Which factors or circumstances may influence the terms of employment and the amount of remuneration? 3. Why do employment legislations in various countries stipulate the minimum pay rates? 4. Why does Russia retain a per-month pay basis while many western countries have a per-hour wage? 5. Which basis of pay protects the employees better? Why? 6. Which basis of pay facilitates business better? Why? 78

Legal terms 1.

salary

2.

statutory minimum monthly pay rate (MROT)

index remuneration withholdings from salary in-kind remuneration additional payments supplemental increases business trip allowance (per diem) 10. relocation allowance 3. 4. 5. 6. 7. 8. 9.

11. incentives 12. performance bonus 13. sickness benefit 14. work on a reduced working time basis 15. hazardous working conditions (harmful and / or hazardous work conditions) 16. flexible working arrangements 17. unmeasured working time (open-ended working day) 18. flexible working hours 19. shift work 20. divided working hours (split working day) 21. part-time job 22. work at home home-worker

заработная плата; оклад, должностной оклад законодательно установленный минимальный размер оплаты труда (МРОТ) индексировать вознаграждение, плата удержания из заработной платы оплата труда в натуральной форме доплаты надбавки суточные (возмещение расходов, связанных со служебной командировкой) подъемные (возмещение расходов при переезде на работу в другую местность) меры стимулирования и (или) поощрения премия по итогам работы пособие по болезни работа в режиме сокращенной продолжительности рабочего времени вредные и (или) опасные условия труда организация труда в режиме гибкого рабочего времени ненормированный рабочий день работа в режиме гибкого рабочего времени сменная работа разделение рабочего дня на части (ст. 105 ТК РФ) неполный рабочий день; частичная занятость надомная работа надомник 79

23. exhaustive list 24. work in excess of normal working hours

исчерпывающий список работа за пределами установленной продолжительности рабочего времени

Study the title of the law of the Russian Federation: The Federal Law On Minimum Wage

Федеральный закон «О минимальном размере оплаты труда»

Reading Read the texts and note the vocabulary in bold. Exercise 1. Read the text and answer the question: What does the Federal law "On Minimum Wage" provide with respect to MROTs? Minimum Salary The Federal Law “On Minimum Wage” provides for minimum monthly pay rates (MROT) which are periodically indexed by the government. The federal statutory minimum monthly pay rate is currently RUB 5.205 per month (approx. USD 166). Regional minimum pay rates are always equal to or higher than the federal minimum pay rates and are tied to the regional minimum standard of living1. Exercise 2. Read the text, fill in the gaps with the required prepositions. Then answer the questions below the text and summarize it. Employee Remuneration Structure The system of fundamental State guarantees for employee remuneration includes: • amount of minimum wage payable in the RF; • measures ensuring increases ..1.. real salary; • limits ..2.. grounds ..3.. and amounts of withholdings from salary; • limits ..4.. in-kind remuneration; • full and timely payment of salary; • liability of employers ..5.. breaching the requirements of the Employment legislation. According to the Labor Code, employee remuneration consists ..6..: (I) a fixed monthly salary (II) additional payments, supplemental increases (III) compensational payments (for example, business trip allowance also known as ..7.. diem and relocation allowance); 1 Doing Business in Russia 2014 [Электронный ресурс] // Baker & McKenzie [Сайт]. URL: http://www.bakermckenzie.com (дата обращения: 10.10.2014); Russian Business Law — The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009. 392 с.

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(IV) incentives (e.g., performance bonus) and (V) social benefits (e.g., a sickness benefit)1. 1. What state guarantees for employee remuneration are provided for in the RF? 2. What is meant by limits on remuneration? 3. What does employee remuneration consist of under the Labor Code? Exercise 3. Read the text and choose the word A, B or C to fill in the gaps. Then answer the questions and summarize the text. Normal Working Hours Under the Labor Code, 40 hours a week is the normal working time. Some categories of employees must work on a ..1.. working time basis only. In particular, workers working under ..2.. working conditions may work a maximum working week of 36 hours a week and minors between 16 and 18 years are subject to a maximum working week of 35 hours. Flexible Working Time The Labor Code ..3.. for a wide range of flexible working arrangements. They include: • unmeasured working time or open-ended working day • flexible working hours • shift work • divided working hours • part-time job • work at home The Labor Code does not confine the list of flexible working ..4.. to those set out above and does not provide for an exhaustive list of scenarios when flexible working can be agreed to. Work in Excess of Normal Working Hours Work in excess of the normal ..5.. of working hours may be done on the initiative of either the employee (secondary job) or the employer (overtime). Overtime work may not ..6.. four hours in two consecutive days and 120 hours a year. To require an Employee to work overtime, the Employer is obliged to obtain the Employee’s written consent. Such consent is not ..7.. in a number of extraordinary cases such as accidents and other life or health threatening situations2. 1.

A minimized

B lowered

C reduced

2.

A hazardous

B dangerous

C harmful

1 Russian Business Law — The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009. 392 с. 2 Russian Business Law — The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009.

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3.

A envisages

B provides

C stipulates

4.

A arrangements

B conditions

C situations

5.

A length

B continuation

C duration

6.

A override

B exceed

C extend

7.

A demanded

B requested

C required

1. What are the normal working hours under the Labor Code of the RF? 2. What categories of employees enjoy reduced working hours and why? 3. What flexible working time scenarios are envisaged by the Labor Code? 4. What limits are imposed on overtime work? 5. Under what circumstances is the employee's consent to work extra hours not required?

Key terms: Extra Work Done by the Employee in the Russian Federation Exercise 4. Match the terms denoting various job categories from Box №1 (1–5) with their definitions below (a-e). Try to define the term in Box №2. Box №1 Box №2 1. secondary job 2. 3. 4. 5.

internal secondary job external secondary job combining occupations (job positions) performing the duties of a temporarily absent employee

primary job Syn.: principal job

a _________________________ a job under another employment agreement at the same organization in a different occupation, profession, or job position outside the normal duration of working hours; b _________________________ standing in for the temporarily absent employee; c _________________________ an employment agreement with another employer to hold an additional job d ________________________ doing an additional job for the same employer that requires skills in a different occupation (job position) e ________________________ another regular paid job performed by the employee under an employment agreement at a time when he is not occupied in his principal job 82

Exercise 5. Explain in English the meaning of the following expressions: • MROT is periodically indexed by the government • regional MROTs are tied to the regional minimum standard of living • hazardous working conditions • accidents and other life or health threatening situations Exercise 6. Explain in English the difference between close concepts of Russian law: 1. additional payments supplemental increases 2.

relocation allowance

business trip allowance

3.

flexible working hours

divided working hours

4.

work in excess of normal working hours

overtime

Use of English Exercise 7. Complete the sentences in the text with the words from the box. I. impair non-compliance harmful prohibited repeated disqualification hazardous administrative fines dismissal The general requirement of the Russian Labor Code is that employment can start once the individual is 16 years old. Specific rules apply for employees under 18 years old. Again, certain jobs are ..1.. to this age group. This includes work in ..2.. or ..3.. conditions, and work that might ..4.. their health or moral development. Employees under 18 years old are given additional guarantees such as a larger holiday entitlement and fewer lawful grounds for ..5.. . Civil liability for ..6.. with the age regulations can apply both to the company’s official and to the company itself as a legal entity. The sanctions for violation of the labor law (which prohibits age discrimination) are administrative fines for the company officials (plus possible ..7.. for ..8.. similar offence), ..9.. for the company itself or suspension of its operations for up to 90 days. II. part-time work night workload concessions under the age of three overtime

flextime

Other regulations focus on mothers with small children. These include protective legislation prohibiting the dismissal of pregnant women or women with children ..1.. , banning ..2.. work and..3.. for mothers of small children, stipulating ..4.. to pregnant women and mothers of young children, and pro83

viding ..5.. , ..6.. , nursing intervals, and additional paid and unpaid leave to mothers to care for sick children1. Exercise 8. Render the following phrases from Russian into English. Speak about important issues of Employment Law covered in the text using the English equivalents of the phrases in the respective section. I. Statutory minimum pay guarantees and labor remuneration 1. МРОТ периодически индексируется правительством. 2. Законодательно установленный минимальный размер оплаты труда в настоящее время составляет… 3. Региональный минимальный размер оплаты труда равен либо превышает федеральный минимум. 4. Вознаграждение. 5. Заработная плата, оклад. 6. Доплаты. 7. Надбавки. 8. Суточные. 9. Подъемные. 10. Меры материального стимулирования. 11. Поощрения за труд. 12. Премия по итогам работы. II. Normal working hours and working time arrangements 1. Работа в режиме сокращенной продолжительности рабочего времени. 2. Вредные и (или) опасные условия труда. 3. Организация труда / работа в режиме гибкого рабочего времени . 4. Неполное рабочее время. 5. Разделение рабочего дня на части. 6. Сменная работа. 7. Надомная работа. 8. Ненормированный рабочий день. 9. Трудовой кодекс не ограничивает возможные варианты организации труда. 10. Исчерпывающий список. III. Work in excess of the normal working hours 1. Работа за пределами нормальной продолжительности рабочего времени. 2. Сверхурочная работа. 1 Age Discrimination Internationally: Russia [Электронный ресурс] // agediscrimination. info [Сайт]. URL: http://www.agediscrimination.info/international/Pages/Russia.aspx; Russia — Social Welfare [Электронный ресурс] // Russia: A Country Study [Сайт]. URL: http://countrystudies.us/russia/54.htm.

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3. 4. 5. 6.

Ненормированный рабочий день. По инициативе работодателя. Дни подряд (ст. 99 ). В случае аварии согласие работника не требуется.

Exercise 9. Translate the following phrases from Russian into English. 1. Величина вознаграждения, получаемого сотрудниками от организации, влияет на способность организации привлекать и мотивировать персонал. 2. Все поощрения за труд оформляются соответствующим приказом (распоряжением) работодателя. 3. Общий трудовой стаж определяется как суммарная продолжительность работы по трудовому договору, иной общественно полезной деятельности и других периодов, указанных в законе.

Optional task 1. Характер и величина вознаграждения, получаемого сотрудниками от организации в качестве компенсации за свой труд, оказывают непосредственное влияние на способность организации привлекать, удерживать и мотивировать требуемый ей персонал. 2. На практике ненормированный рабочий день зачастую превращается в работу с постоянными сверхурочными работами без дополнительной оплаты и ограничения по размеру таких переработок, что, несомненно, нарушает все нормы по охране труда и права работников. 3. Все поощрения за труд оформляются соответствующим приказом (распоряжением) работодателя. 4. В тексте приказа указывается, за какие конкретные успехи в труде поощряется работник, и вид поощрения. 5. Приказ должен быть доведен до сведения всего коллектива работников. 6. Сведения о поощрениях вносятся в трудовую книжку работника после того, как был издан приказ (распоряжение) работодателя.

Speaking Exercise 10. Make a brief oral presentation on important issues of Employment Law covered in the text. Use the English equivalents of the terms and standard phrases which appear in the respective sections in Exercise 8. Structure your presentation along the following lines: e. Start with a reference to the article of the RF Labor Code that stipulates the provision you are going to describe. f. Reproduce the ideas described in the text. 85

g. Provide extra details of the respective article of the RF Labor Code where necessary. h. Comment on the issue or speak about the legal implications of the respective article. Exercise 11. Baker & McKenzie's joint Labor & Migration and Dispute Resolution team in Moscow has summarized several most interesting court judgments in the area of employment disputes. Read the case and explain the decision of the court. Use the patterns from the box to introduce the references to the provisions of the RF Labor Code. under article №xx the employer / employee … in compliance with article №xx the employer / employee… article №xx provides / stipulates / establishes / proscribes… A difference in salaries of people working in the same position is not discrimination. T worked with an insurance company as the head of a customer office. He filed a court claim against his employer with allegations of discrimination at work. In particular, T alleged that his salary had never been increased, although he was moved to a more senior position with different responsibilities. At the same time, people working in the same position at the same company receive larger salaries. T's employer denied the allegations of discrimination. The employer alleged that T performed a smaller scope of work than the other employees and caused losses for the company. The court dismissed T's claims based on the following reasoning. Under the Russian Labor Code an employee's salary depends on the qualifications of the employee, complexity of the job, quantity and quality of performance, conditions of work. Working in the same position means a similar type of responsibilities. However the same position does not necessarily entail the same scope of responsibilities and the same complexity. As a result, the same position with the same employer does not necessarily mean the same salary. T could make a claim of discrimination only if it was proven that the difference in salaries was not connected with his professional qualities. T however failed to do so. (2011).

Summarizing Exercise 12. Read the article and summarize it reducing to 50 per cent. Say what you have learned about remote work available under the Labor Code of the RF. 86

On April 19, 2013, a new chapter to the Russian Labor Code regulating remote work entered into effect. It is potentially applicable to numerous professions requiring employees to work away from their employer’s offices. Auditors, accountants, translators, programmers, designers, sales and medical representatives are among those who may be engaged in such work. The advantages of such work are obvious: the employee need not spend time commuting every day and enjoy certain flexibility in arranging the work day, while the employer enjoys economies on the arrangement of working process, office space, etc. Given Russia’s extensive territory, remote work arrangements are likely to become very popular. Remote work implies work away from the employer’s place of location, subject to communication between employer and employee through public networks, primarily through the internet. Virtually all other characteristic features of remote work, compared with regular work, are driven by the fact that employer and employee are unable to communicate in person on a daily basis. For example, when exchanging electronic correspondence or any other electronic documents, both parties are required to use encrypted digital signatures. The employer’s supervising function is decreased: remote employees are allowed to establish work and rest regime at their own discretion, while alternative forms of employee efficiency control may be fixed in the employment agreement, such as preparation by employees of regular status reports. Further, employer’s work safety obligations are substantially reduced compared with regular (i.e., not remote) employees. In principle, the bases on which employers may terminate their employees are listed in the Labor Code, but the new chapter provides that employers can introduce grounds for termination in remote work contracts that do not appear on the above mentioned list; employers will value this added flexibility. The new chapter of the Russian Labor Code offers employers new interesting possibilities of structuring employment relationships. Obviously, in a situation where the employee is physically located out of reach of the employer and where many issues are left to the parties’ discretion, the importance of the employment agreement increases1.

Writing Exercise 13. Write an essay of about 200–250 words on one of the subjects below: 1. Extra payments 2. Regulations for unmeasured working time

1 On Recent Employment Disputes [Электронный ресурс] // Russian Law Online [Сайт]. URL: http://www.russianlawonline.com.

Unit 6. Employment Law: Part 3 REST DAYS AND SOCIAL SECURITY Discussion 1. Here is a "word cloud" that comprises the words that will frequently appear in the texts of this unit. Generate ideas about each word.

2. What are express and implied statutory terms of an employment contract? Which terms are subject to negotiation? 3. What can be the source of implied terms? 4. Which legislative acts provide for social security rules? 5. What are the most common violations of social security rules? 6. Why do employees frequently act in concert with the employer committing such violations? 88

Legal terms 1.

consecutive days

последующие дни, «дни подряд»

2.

day off

выходной день

3.

subsequent day

последующий день

4.

non-working day

нерабочий день

5.

annual paid holiday (annual paid vacation)

ежегодный оплачиваемый отпуск

6.

recall from vacation

отозвать из отпуска

7.

payment in lieu of untaken annual paid holiday

компенсация вместо неиспользованного ежегодного оплачиваемого отпуска

8.

sick leave (sick leave certificate; certificate of incapacity to/for work)

больничный лист, листок временной нетрудоспособности

9.

be absent on sick leave

отсутствовать по болезни, отсутствовать по больничному

10. statutory sick leave compensation

предусмотренная законом компенсация за отсутствие по болезни

11. temporary disability (temporary incapacity to work/labour; temporary incapacity for work/labour)

временная нетрудоспособность

12. labor-related injury

производственная травма

13. occupational disease

профессиональное заболевание

14. average earnings

средний заработок

15. total term of employment (overall length of service)

общий трудовой стаж

16. maternity leave

отпуск по беременности и родам, декретный отпуск

17. maternity leave is to be provided cumulatively

отпуск по беременности и родам исчисляется суммарно

18. partially paid childcare leave

частично оплачиваемый отпуск по уходу за ребенком

19. retain the right to return to one’s job

сохранять за собой право на место работы (должность) 89

Study the names of Russian ministries, agencies, and departments: The Pension Fund of the Russian Federation

Пенсионный фонд Российской Федерации

The State Social Insurance Fund of the Russian Federation; the Russian State Social Insurance Fund

Фонд социального страхования Российской Федерации

The Federal Fund of Compulsory Medical Insurance; the Federal Fund of the Mandatory Health Insurance; the Federal Compulsory Medical Insurance Fund

Федеральный фонд обязательного медицинского страхования

Study the title of the law of the Russian federation: Federal Law No. 255-FZ On Obligatory Social Insurance in the Event of Temporary Disability and in Connection with Maternity

Федеральный закон № 255-ФЗ «Об обеспечении пособиями по временной нетрудоспособности, по беременности и родам граждан, подлежащих обязательному социальному страхованию»

Reading Read the texts and note the vocabulary in bold. Exercise 1. Read the text and answer the questions. 1. What constitutes the material basis of the social security system? 2. How are the payments to the respective funds contributed? Social Security The Employer is required to register with the Pension Fund, Social Insurance Fund, and Federal and territorial funds of Compulsory Medical Insurance. The Employer is obliged to pay contributions to these funds out of the Employee’s salary (within the so-called unified social tax). Social security benefits are funded through the obligatory contributions that the Employer regularly pays out of the Employee’s salary and funds of the relevant state budget1. Exercise 2. Read the text, mind the vocabulary in bold and fill in the gaps with the appropriate forms of the words on the right. Answer the questions below the text and retell it. 1 Russian Business Law — The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009. 392 с.

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I. Public Holidays Public holidays are days off in Russia. If a public holiday falls on a Saturday or Sunday, the subsequent ..1.. day is a non-working day. II. Annual Paid Holiday A paid vacation must be granted to an ..2.. annually. Employees are entitled to an annual paid vacation of at least 28 calendar days per year of ..3.. . An employee ..4.. the right to ..5.. his vacation for the first year of employment upon the expiry of the first six months of the employee’s continuous employment with the relevant ..6.. An Employer is ..7.. from refusing an annual paid holiday to an Employee during two consecutive years which means that the paid holiday theoretically may be ..8.. during one year by mutual ..9.. of the parties. An employee may be recalled from vacation only if he ..10.. . Payment in lieu of untaken annual paid holiday is possible in the case of termination of employment only1.

1. work 2. employ 3. employ 4. acquisition 5. use 6. organize 7. prohibit

8. withhold 9. agree 10. consent

1. What is the work regime on public holidays?1 2. What compensation is envisaged if a public holiday falls on Saturday or Sunday? 3. What are the rules of annual holiday entitlement? 4. In which cases can the annual paid holiday be terminated? 5. Can monetary compensation be offered for the untaken annual holiday? Exercise 3. Read the text and choose the word A, B or C to fill in the gaps. Then answer the questions and summarize the text. Sick Leave Employees are required to submit a doctor’s note for any absence only after their recovery and ..1.. to work. Generally, employees cannot be ..2.. by the employer while absent on sick leave, and are entitled to receive statutory sick leave compensation. Sick leave ..3.. for the first three days of the sick leave is covered by the employer, the rest of the term of ..4.. is covered by the Russian State Social Insurance Fund. Since 1 January 2007, sick leave compensation and maternity leave compensation have been regulated by Federal Law No. 255-FZ On Obligatory Social Insurance in the Event of Temporary Disability 1 Doing Business in Russia 2014 [Электронный ресурс] // Baker & McKenzie [Сайт]. URL: http://www.bakermckenzie.com (дата обращения: 10.10.2014); Russian Business Law – The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009.

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and in Connection with Maternity (as amended), dated 29 December 2006. Pursuant to this law, sick leave compensation must be ..5.. to an employee in the event of his/her illness or injury (labor-related or other) and when an employee is caring for a sick ..6.. as well as in some other instances. The duration of payment and amount of sick leave compensation varies ..7.. to the grounds for the sick leave. In cases of labor-related injury or occupational disease, the amount of sick leave compensation is 100% of the employee’s average earnings. In other cases sick leave compensation is determined on the basis of the employee’s average ..8.. and total term of employment1. 1.

A return

B get back

C reappear

2.

A sent away

B retired

C dismissed

3.

A compensation

B remuneration

C money

4.

A indisposition

B sickness

C absence

5.

A offered

B made available

C paid

6.

A children

B child

C family member

7.

A according

B in compliance

C in conformity

8.

A earnings

B pay

C salary

1. 2. 3. 4. 5.

What is accepted as a proof of an employee’s sickness? What protection does an employee enjoy while absent on sick leave? Who has the duty of paying sick leave compensation? How is it paid? Which law regulates sick leave compensations? How are the duration and amount of sick leave compensation determined?

Exercise 4. Read the text, fill in the gaps with the required prepositions. Then answer the questions below the text and summarize it. Maternity Leave A paid maternity leave consists of 70 calendar days prior ..1.. a birth, plus 70 calendar days ..2.. the birth. A further paid maternity leave is provided ..3.. the event of complications while giving birth or in cases of multiple births (86 and 110 calendar days after the birth respectively). A maternity leave is to be provided cumulatively; that is, the employee is entitled ..4.. the total amount of her maternity leave days even if she uses less than 70 days of maternity leave before birth. A child’s care provider (the employee who has given birth or who is the father, grandmother, grandfather or other relative who is taking care of the child) may request a partially paid childcare leave ..5.. the child is three years old. The employee retains the right ..6.. return to his/her job during the entire period of paid/unpaid leave, and the full leave period is included when calculating the employee’s length of service. 1 Doing Business in Russia 2014 [Электронный ресурс] // Baker & McKenzie [Сайт]. URL: http://www.bakermckenzie.com (дата обращения: 10.10.2014).

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The procedure for calculating the sick leave, maternity leave and child care leave allowances is rather complicated in Russia; it is highly recommended to verify the procedures and documentary requirements ..7.. a case-by-case basis1. 1. How long is a statutory maternity leave? 2. When shall an extended maternity leave be granted? 3. Who can request a partially paid childcare leave? 4. Which right does the employee retain during the childcare leave? 5. Is a childcare leave included into the overall length of service?

Key terms: Rest Days and Social Security Exercise 5. Explain the meaning of the following expressions in English. • continuous employment with the relevant organization • payment in lieu of an untaken annual paid holiday • temporary disability • labor-related injury • occupational disease • to be provided cumulatively Exercise 6. Explain in English the difference between the following close concepts of Russian law. 1. compensation — payment in lieu of 2. average earnings — average pay 3. labor-related injury — occupational disease Exercise 7. Render the following phrases from Russian into English. Public Holidays. Annual Paid Holiday 1. Праздники являются выходными днями. 2. Если праздник приходится на субботу или воскресенье, выходной день переносится на следующий после праздничного рабочий день. 3. Ежегодный оплачиваемый отпуск. 4. Быть отозванным из отпуска. 5. Предоставить отпуск. 6. Взять отпуск. 7. Отказать в предоставлении отпуска. 8. Не предоставить оплачиваемый отпуск. 9. Компенсация вместо неиспользованного ежегодного оплачиваемого отпуска. Social security. Sick leave 1. Пособия по социальному страхованию. 2. Обязательные взносы оплачиваются из оклада работника. 1 Doing Business in Russia 2014 [Электронный ресурс] // Baker & McKenzie [Сайт]. URL: http://www.bakermckenzie.com (дата обращения: 10.10.2014).

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3. Пособие по временной нетрудоспособности. 4. Предоставить справку от врача. 5. Отсутствовать по больничному листу. 6. Законодательно установленная компенсация по больничному листу. 7. Производственная травма. 8. Профессиональное заболевание. 9. Средний заработок. 10. Общий стаж. 1. 2. 3. 4. 5. 6.

Maternity leave Отпуск по беременности и родам исчисляется суммарно. Родственник, осуществляющий уход за ребенком. Частично оплачиваемый отпуск по уходу за ребенком. За работником сохраняется место работы (должность). Весь период оплачиваемого (неоплачиваемого) отпуска. Общий трудовой стаж.

Exercise 8. Complete the following sentences with the words from the box: consecutive

subsequent

next

1. In exceptional cases where the grant of vacation to an employee in a current year of employment may adversely affect the normal operations of the organization, the employee’s vacation, with his consent, may be postponed to the ..1.. year of employment. 2. It is prohibited to work two ..2.. shifts. 3. Employees will be subject to immediate corrective action for no call/ no show. Two or more ..3.. workdays of no call/no show will be considered job abandonment and result in termination of employment. 4. Vacation for the second and ..4.. years of employment may be granted at any time during the corresponding year in accordance with the order of priority for granting an annual paid vacation as established at the organization. Optionally: 5. Employees absent three or more ..5.. days due to illness or who are suspected of abuse of sick leave may be required to submit a proof of illness certificate issued by a health care provider and identifying when the employee was seen and treated. Failure to submit such proof upon request shall automatically disqualify the employee for sick leave pay and will result in the absences being counted as unscheduled absences. Exercise 9. Translate the following sentences from English into Russian. 1. Hours of work for those employees shown in Appendix "A" and "B" of this Agreement shall be scheduled so that regular full-time and seasonal full-time employees work forty (40) hours per week and eight (8) consecutive hours per day exclusive or inclusive of a meal period as indicated in the appropriate Appendix. 94

2. The Employer shall provide two (2) consecutive days of rest per week for liquor store regular employees employed at all liquor stores except Whitehorse. Whitehorse liquor store regular employees shall receive two (2) consecutive days of rest per week except between December 1 to December 31 and the week during which year-end inventory occurs. Optionally: 1. Except as otherwise provided in this Agreement, hours of work shall be scheduled so that regular full-time employees and seasonal full-time employees work thirty-seven and one-half (37Ѕ) hours from Monday to Friday inclusive and seven and one-half (7Ѕ) consecutive hours per day, exclusive of a meal period. 2. In every twenty-four (24) day period, employees work four (4) consecutive 12-hour days followed by four (4) consecutive days of rest, followed by four (4) consecutive 12-hour days of work followed by four (4) consecutive days of rest, followed by four (4) consecutive 8-hour days of work followed by four (4) consecutive days of rest. 3. Except as provided in paragraph (F) of this rule, a related disability that occurs before six months have passed since the employee's return to active work status shall be considered the same disability claim. Though a new waiting period shall not be served, benefits shall be payable from the first day of the subsequent disability provided the employee remains disabled and off work for at least fourteen consecutive calendar days. 4. An unplanned absence is a scheduled shift or series of consecutive scheduled shifts where the employee fails to report for work or when the employee is not at work more than one (1) hour after the start of the assigned shift or departs from work more than one (1) hour before the end of the scheduled shift and such time was not approved in advance by the supervisor.

Speaking Exercise 10. Speak about important issues of Employment Law covered in the texts in exercises 1–4 using the English equivalents of the phrases in the respective section of exercise 7. Exercise 11. Baker& McKenzie's joint Labor & Migration and Dispute Resolution team in Moscow has summarized several of the most interesting court judgments in the area of employment disputes. Read the case. Think of the arguments in support of the case that could have been brought by the claimant and the respondent. Use the patterns from the box to introduce the references to the provisions of the RF Labor Code. • article №xx provides /stipulates /establishes /proscribes… • under article №xx the employer/employee … • in compliance with article №xx the employer/employee… 95

An employee's heart attack at work was not regarded as an industrial accident. As a result, the employer was relieved from payment of compensation of 200 times the monthly salary. U., a security guardian at Sberbank, died from a heart attack at his workplace. U.'s spouse filed a lawsuit against Sberbank claiming compensation equivalent to 200 times the deceased's monthly salary (as provided in U.'s employment contract) and other sums. The trial court granted the lawsuit. However, the judgment was reversed at a cassation appeal. The cassation court gave the following reasoning for the reversal. The claimed compensation was payable in the event of death and injury in the course of fulfillment of U.'s job duties. Under U.'s job description, his job duties included protection of Sberbank's property from armed attacks, intrusion by strangers, fire, accidents. It was established that U. had died from a heart attack resulting from coronary heart disease. This is a general type of disease rather than a disease resulting from the fulfillment by U.'s of his job duties. As a result, Sberbank had no obligation to pay the compensation claimed1.

Summarizing Exercise 12. Read the article and summarize it reducing to 25 per cent. Say what you have learned about the legal implications of Federal Law 379-FZ. RUSSIA REFORMS SOCIAL SECURITY SYSTEM, AFFECTING RATES AND INDIVIDUALS COVERED International Executive Alert A Publication for Global Mobility and Tax Professionals by KPMG’s International Executive Services Practice January 23, 2012 In December 2011, a new federal law 379-FZ of 3 December 2011 introduced amendments to the Federal Law “On insurance contributions to the Pensions Fund of the Russian Federation, the Social Insurance Fund of the Russian Federation, and the Federal Mandatory Health Insurance Fund”, plus various other laws. The new regulations, which came into force on 1 January 2012, expand the scope of individuals considered “insured individuals” and will impact the application and collection of insurance contributions to the state pension, medical, and social security funds, potentially increasing the tax burden on Russian employers in respect of most categories of employees. The new law does not affect the mandatory contributions for insurance against occupational accidents and diseases. 1 On Recent Employment Disputes [Электронный ресурс] // Russian Law Online [Сайт]. URL: http://www.russianlawonline.com.

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Background Insurance contributions to state pension, medical, and social security funds were introduced in 2010, replacing a unified social tax. The most significant change was that the amount of employee income subject to insurance contributions was capped. As a result, social security tax was not paid on amounts exceeding the limit. Also, employers were freed from paying insurance contributions for most foreign nationals who work in Russia (i.e., those who stay in Russia temporarily). The amendments to the social security regulations introduced by the new federal law overturn, to a large degree, the above rules. Main Changes 1. Cancelling Limitations on Employee Income Subject to Social Security In general, the new law maintains the cap on the amount of employee income subject to insurance contributions. However, during the next two years, this cap will not be applicable. The new law sets one rate for contributions that will be charged on employee remuneration within the established threshold and an additional rate that will be charged on employee income exceeding the threshold. The law implies that this additional rate will apply only in 2012 and 2013. For 2012, the government set the threshold of employee annual income at RUB 512,000. For 2013, the government will set the threshold in late 2012, but for budgeting purposes the state authorities used RUB 567,000. Social security contributions remain the employer's responsibility, and they remain payable at the employer’s expense. Employees continue not to have any social security contributions obligations. From a corporate perspective, the company can deduct for profit tax purposes the social security contributions that are paid. 2. Changing the Rate of Insurance Contributions In 2012 and 2013, different rates will apply, compared to 2011: employee remuneration within the threshold will be subject to contributions at a rate of 30 percent, and the amounts exceeding the threshold will be subject to a new additional contribution at a rate of 10 percent. The additional contributions are payable to the pension fund. The law establishes that payment of the 10-percent contribution should cease in 2014. Starting in 2014, the total general rate of insurance contributions should be 34 percent. The government announced a decrease of employers’ social security costs, changing the rate from 34 percent to 30 percent. However, the decrease will apply only to employees with annual remuneration below RUB 512,000 (i.e., RUB 42,667 per month). For employees with higher salaries, the employer costs will increase. Employers should take this into consideration when budgeting employee-related expenses. Although payment of the additional 10-percent contribution to the pension fund is made based on the employee’s remuneration, this should not lead to an increase of the employee’s future pension benefit. These additional contributions will go to a pool of funds used to pay base state pensions and to make similar payments. 97

3. Foreign Nationals’ Salaries Will Be Subject to Pension Insurance Contributions The new law expands the list of categories of individuals insured for state pension insurance purposes. Starting in 2012, the list will include many foreign nationals who work in Russia. Therefore, from January 2012, employers are liable for making insurance contributions on remuneration paid to foreign nationals who temporarily stay in Russia and have in effect Russian employment contracts of a duration of six months or longer. However, the overall rates for foreign nationals will be slightly lower than for Russian employees, since social and medical insurance contributions will not be applicable for them (rather, only the portion of contributions that is due to the pension fund will be payable). For expatriate workers, employers will be required to pay contributions at a rate of 22 percent, which will be charged on remuneration that is within the established threshold. The threshold amount is the same as for employees who are Russian nationals (RUB 512,000/year in 2012). Similar to Russian nationals, the additional 10-percent contribution would be payable to the pension fund on remuneration exceeding the threshold. Starting in 2014, the employer will pay insurance contributions at a rate of 22 percent on the remuneration of insured foreign national employees until the employee salary reaches the threshold. Foreign national employees who work in Russia under the regime for highly-qualified specialists are exempt from these rules. Such employees are not regarded as insured individuals for state pension insurance purposes. Previously, insurance contributions were not paid on the remuneration of foreign nationals who are temporarily staying in Russia. Employers were required to pay insurance contributions only on the salaries of foreign nationals who have temporary or permanent Russian residence permits. Based on the new legislation, many expatriates working in Russia would be regarded as insured individuals for pension purposes, as, in practice, local employment contracts with foreign employees are seldom concluded for less than six months. Although the salaries of certain foreign nationals are subject to insurance contributions, foreign nationals remain excluded from the list of individuals entitled to Russian state pension benefits. Foreign nationals temporarily staying in Russia also remain excluded from receiving other state social benefits, e.g., sick leave payment or maternity benefit1.

Writing Exercise 13. Write an essay of about 200–250 words on one of the subjects below: 1. Maternity leave regulations 2. Sick leave regulations 1 Russia Reforms Social Security System, Affecting Rates and Individuals Covered [Электронный ресурс] // KPMG [Сайт]. URL: http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/flash-international-executive-alert/Documents/flashinternational-executive-alert-2012-021-jan.pdf.

Unit 6. Employment Law: Part 4 INTERNAL WORK REGULATIONS Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is work discipline? What aspects of employees’ conduct at work does this concept encompass? 3. Which articles of the RF Labor Code regulate the respective aspects of work discipline? 99

4. What other documents may establish the rules of conduct at the workplace? 5. Why is work discipline important? What measures can be taken by the employer to maintain proper work and behavior of the employees? 6. Can the internal work regulations be challenged? Can an employee in breach of internal work regulations challenge their validity on the grounds of their unreasonableness or on any other grounds?

Legal terms 1. 2. 3.

internal work regulations Syn.: internal regulations with due regard for the opinion of discipline

discipline work discipline 4.

incentive

incentivize perform employment duties in good faith 6. public citation for efficiency 7. valuable gift 8. certificate of honor 9. disciplinary sanction(s) Syn.: disciplinary action impose disciplinary sanction(s) challenge a disciplinary sanction 10. commit a breach of discipline 5.

11. 12. 13. 14. 15.

трудовой распорядок с учетом мнения… дисциплина, порядок, дисциплинированность; дисциплинарное взыскание налагать дисциплинарное взыскание дисциплина труда, трудовая дисциплина мера поощрения, мера стимулирования поощрять добросовестно выполнять свои служебные обязанности объявление благодарности ценный подарок грамота дисциплинарное взыскание

наложить дисциплинарное взыскание обжаловать дисциплинарное взыскание нарушить дисциплину, совершить дисциплинарный проступок warning замечание reprimand выговор dismissal увольнение written explanation письменное объяснение request a written explanation затребовать от работника письменное объяснение 100

16. provide a written explanation предоставить письменное объяснение 17. announce disciplinary приказ о применении дисциплиsanction to the нарного взыскания объявляется employee against signed работнику под роспись acknowledgement 18. have a clean disciplinary не иметь дисциплинарных взыскаrecord ний

Study the title of the legislative act of the Russian Federation: The Decree of the Plenum of the Supreme Court of the Russian Federation dated 17.03.2004 No. 2 “On Application by the Courts of the Russian Federation of the Labor Code of the Russian Federation”

Постановление Пленума Верховного Суда Российской Федерации от 17 марта 2004 г. № 2 «О применении судами Российской Федерации Трудового кодекса Российской Федерации»

Study the names of Russian ministries, agencies, and departments: The State Labor Inspectorate The State Labor Inspection

Государственная трудовая инспекция

The Labor Dispute Commission

Комиссия по трудовым спорам

Reading Read the texts and note the vocabulary in bold. Exercise 1. Read the text and answer the questions: 1. What is the procedure for introducing internal work regulations? 2. What incentives are commonly practiced by the employers? 3. What disciplinary sanctions may be imposed on an employee? 4. How should misconduct of an employee be documented? 5. Is there a way to clean one’s disciplinary record? Internal Work Regulations The internal work regulations of an organization shall be approved by the employer with due regard for the opinion of the representative body of the employees. An employer incentivizes employees who perform their employment duties in good faith with a public citation for their efficiency, a certificate of honor, a bonus, a valuable gift. 101

Should an employee commit a breach of discipline by failure to perform or improperly performing his employment duties through his own fault, the employer may impose the following disciplinary sanctions: • warning; • reprimand; • dismissal on corresponding grounds. Before imposing a disciplinary sanction, an employer shall request a written explanation from the employee concerned. An employee’s refusal to provide an explanation does not prevent a disciplinary sanction from being imposed. Each breach of discipline may only be punished by a single disciplinary sanction. An employer’s order (directive) imposing a disciplinary sanction shall be announced to the employee concerned against signed acknowledgement and within three working days of its issue date. Should the employee refuse to sign the order (directive), a corresponding report shall be drawn up. An employee may challenge a disciplinary sanction through the State Labor Inspectorates. An employee is deemed to have a clean disciplinary record if he is not the subject of a new disciplinary sanction during a period of one year from the date on which the disciplinary sanction was imposed.

Key terms Exercise 2. Explain the meaning of the following expressions in English. • with due regard for somebody’s opinion • to perform somebody’s employment duties in good faith • to commit a breach of discipline through somebody’s own fault • public citation for efficiency • employee is deemed to have a clean disciplinary record Exercise 3. Explain in English the difference between close concepts of Russian law. 1. internal work regulations — work discipline rules 2. warning — notice Exercise 4. Render the following phrases from Russian into English. 1. трудовой распорядок 2. с учетом мнения 3. трудовая дисциплина 4. поощрять 5. мера стимулирования 6. добросовестно выполнять свои служебные обязанности 7. объявление благодарности 8. ценный подарок 9. грамота 102

10. наложить дисциплинарное взыскание 11. совершить дисциплинарный проступок 12. замечание 13. выговор 14. увольнение 15. затребовать от работника письменное объяснение 16. предоставить письменное объяснение 17. за каждый дисциплинарный проступок может быть применено только одно дисциплинарное взыскание 18. приказ о применении дисциплинарного взыскания объявляется работнику под роспись 19. обжаловать дисциплинарное взыскание 20. не иметь дисциплинарных взысканий

Use of English Exercise 5. Decide whether these statements are true or false. If they are false, correct them. Work with a partner and discuss the statements. 1. The employer shall request a written acknowledgement of the breach from the employee concerned before imposing a disciplinary sanction. The employer’s failure to request the explanation will render the disciplinary sanction imposed on him invalid. 2. An employer may impose a disciplinary sanction by issuing a respective internal order which shall be made available to the employee against his signature within three working days from the date of its issue date. 3. The employee’s disciplinary record is deemed to be clean if he does not commit a new breach within one year from the date of the first breach. Exercise 6. Read the following text, representing an example of a dismissal due to the employee’s repeated failure to fulfill his duties without good cause after being disciplined several times (2011). 1. Decide which answer A, B or C best fits each space. 2. Answer the questions below sections I, II, and III. 3. Speak about the employment dispute (I, II, and III) in detail. 4. Do you expect the employee’s demands would be upheld by the court? Why? Why not?

Legal terms and general vocabulary: 1.

forced absence

вынужденный прогул

2.

non-pecuniary damages

моральный ущерб

3.

floor personnel staff

служба дежурных администраторов 103

Dismissal as a Disciplinary Action (extracts) by Larisa Ryazantseva, Alinga Consulting Group I. Case materials show that, by order of a company’s general director of September 18, 2010, employee G., who had been employed with the company since December 1, 2004 as manager of the floor personnel staff, was ..1.. a warning about failure to fulfill his duties as stipulated in Point 3.8 of the ..2.. description in his ..3.. contract; specifically, he did not order his subordinates to provide an explanation regarding several instances of intrusion and theft in the business center, which he was ordered to do by the company’s management. 1.

A made

B given

C provided

2.

A work

B position

C job

3.

A labor

B work

C employment

1. 2. 3. 4. 5.

Which position did the employee disciplined hold? What kind of breach was that employee alleged of? What disciplinary measure was taken against the employee? How was this measure documented? What was the date of the order?

II. An order of the same day was also ..4.. to G., reprimanding him for failure to fulfill his duties stipulated in his employment contract and Point 5.1.3. of his job description; specifically, he did not fulfill the general director’s instructions to immediately come to the business center and ensure that the floor personnel were ..5.. increased security work, did not provide a replacement officer at his post, thus allowing his post to remain un-substituted, and did not ensure that his subordinates were prepared to strengthen the facility’s security regime. 4.

A issued

B handed in

C shown

5.

A conducting

B doing

C making

6. What disciplinary sanction was applied against the employee under the second disciplinary order? 7. Was he alleged of being in breach of the same provisions or was any different type of misbehavior revealed? 8. What wrongful actions of the employee caused disciplinary action by the second disciplinary order? 9. What was the date of the second order? 104

III. Subsequently, on September 20, 2010, the company’s general director ordered that G. be dismissed for failure to fulfill his job ..6.. taking into account the previously imposed disciplinary measures based on LC Article 81, Point 5 (employee’s repeated failure to fulfill his duties without ..7.. if he has already been disciplined). G. took the matter to court in order to defend his right to challenge the dismissal order and the orders to disciplinary action as unlawful, as well as to be reinstated in his position at work and receive pay for the forced absence and compensation for non-pecuniary damages1. (6) (7)

A obligations

B duties

C responsibilities

A justifiable reasons B reasonable excuse C good cause 1. What were the grounds of dismissing the employee? 2. How did the employee react and what were his demands in the lawsuit filed?

Exercise 7. Read the text about the Cassation Ruling rendered by St. Petersburg City Court as regards the case described in Exercise 5. Complete the sentences with the words from the box. Compare the decision taken with your own opinion. evidence partially

impose alleged

extreme in favor of the Plenum’s significant misconduct state fees

dismissed Plenum’s

The court’s decision ..1.. satisfied G.’s demands. The court ruled that the plaintiff’s dismissal was unlawful, ordered that he be reinstated in his position and ruled ..2.. granting pay for the forced absence and compensation for nonpecuniary damages. The rest of the plaintiff’s claim was ..3.. . ..4.. were also ordered to be collected from the defendant (employer). The only part not granted was the request to rule that the order to ..5.. the disciplinary action was unlawful. When reviewing the legality of the disciplinary action imposed on the plaintiff, the court, following the ..6.. instructions, studied all cases of ..7.. and imposed orders and determined that the employer brought G. to disciplinary responsibility on September 20, 2010 for misconduct ..8.. against him on August 7, 2010, after the time period for bringing the plaintiff to disciplinary responsibility had already expired. The court ruled that the case material did not give sufficient grounds to conclude that the plaintiff’s alleged misconduct was ..9.. enough to require the application of such ..10.. measure of disciplinary action as dismissal. The defendant did not provide ..11.. to the court that the violations indicated led to significant consequences for the working process. The result was a negative court ruling for the employer and additional expenses2. 1 Ryazantseva L. Dismissal as a Disciplinary Action [Электронный ресурс] // Alinga Consulting Group [Сайт]. URL: http://www.acg.ru/dismissal_as_a_disciplinary_action. 2 Ibid

105

Speaking Exercise 8. The web-site http://employment-lawexperts.com/ is an independent guide to employment law practitioners covering more than 50 jurisdictions. Read the US council’s answers to the questions asked by employers regarding discipline issues where Ebola was involved directly or indirectly. Say how these issues would have been decided in Russia. Refer to the relevant legislation. I. Question: Can we discipline a healthcare employee who is not involved in direct patient care and refuses to come to work because the employee has a generalized fear due to an Ebola patient who is being treated in the hospital? Answer: Yes. An employee’s duty to report to work on time and ready to perform his or her job duties is not excused based on a generalized fear of safety solely because an Ebola patient is being treated by the employer. The employee is not responsible for direct care of the Ebola patient and the presence of an Ebola patient does not change the healthcare employer’s normal attendance policies. The employee may utilize any discretionary leave subject to the normal leave policies. If the employee refuses to report to work, then the standard attendance policies that typically include progressive discipline should be followed. The same would remain true even if the employee has reported a perceived OSHA1 claim through internal or external complaint procedure. II. Question: Can we discipline an employee who fails to follow the safety protocols for treating Ebola patients? Answer: Yes. Any breach of safety protocols should be investigated and remediated and breach of the Ebola protocol should be handled like any other policy violation, which includes reporting to the appropriate regulatory authority if required. If there is an allegation or suspicion that an employee providing care to an Ebola patient has breached protocol, then the employee should be quarantined consistent with the protocol for a breach while the matter is investigated. When confirmation of the breach is determined, then discipline should be imposed consistent with the standard procedure for doing so. The employer’s duty to provide a safe workplace under OSHA requires that a breach in the safety protocol for Ebola patients be enforced and reported as dictated under the protocol and regulations, just as required with any potentially infectious disease. 1

The United States Occupational Safety and Health Administration (OSHA).

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Writing Exercise 9. Read the article and summarize it reducing to 25 per cent. Say what you have learned about the change of mind about voluntary resignation.

Legal terms: 1. absentee

работник, отсутствующий на рабочем месте

2. presented to the employee against acknowledgement of receipt

предоставляется работнику под роспись о получении

3. concomitant circumstances

сопутствующие обстоятельства

4. remove the disciplinary sanction снять дисциплинарное взыскание 5. suspension from work

отстранить от работы

Labor guide: disciplinary issues, liability issues, disputes (Chapters 15–17) by Jon Hellevig Disciplinary Sanctions The Labor Code expressly imposes an obligation on the employer to ensure the necessary conditions for discipline at work (Art 189 Labor Code). This includes the duty to have a separate written discipline policy or provisions regarding disciplinary issues in the internal working rules. The disciplinary system should provide for both rewards and penalties in accordance with the law. They range from written announcement of gratitude to warning, reprimand or dismissal. By law, the employer shall have the right to apply the following disciplinary sanctions (Art 192 Labor Code): • Warning; • Reprimand (or reproof); • Dismissal. Withholding of salary or a part of it (deductions) as a form of disciplinary sanction is not allowed. However, it is possible to make payment of incentives and bonuses dependent on the employee’s proper behavior. The application of any disciplinary measures is strictly monitored in regard to the labor contract, job description and other relevant documents. Before imposing a disciplinary measure, the employer has to show that the employee has violated his duties. 107

Before adopting a decision to impose a disciplinary sanction, a written explanation must be demanded from the employee. If the employee refuses to give an explanation within 2 days, a corresponding written document is drawn up (Art 193 Labor Code). The previous version of the Labor Code made it difficult to dismiss an employee who did not answer an employer’s request for written explanation, because without such explanation (or the worker’s refusal to give it) the dismissal would not be valid. However, the new version of the Code has facilitated the procedure because it enables the employer to dismiss those absentees who ignore its requests. Taking disciplinary actions is further restricted in time. In general, the time of reaction is limited to 6 months from the date of when the employee committed the violation and 1 month after discovery of the violation (periods of employee’s absence are not counted). When the violation has been detected as a result of an audit, the time for reacting is extended to 2 years (Art 193 Labor Code). Only one disciplinary sanction may be applied for each violation. Disciplinary actions are also restricted to form. They have to be made in writing (formalized by an order of dismissal) and presented to the employee against acknowledgement of receipt within three days from their issuance. Although the Labor Code no longer requires that the employer, when deciding whether to apply a disciplinary sanction or not, take into account the gravity of the violation and concomitant circumstances as well as his previous behavior and “attitude to work”, the Supreme Court insists that these requirements are still applicable (Decree dated March 17, 2004, item 53). Therefore, the employer is expected to prove that these facts have been actually considered in making the decision. The employee may appeal against disciplinary measures to the State Labor Inspection, the Labor Dispute Commission or the courts for consideration of individual labor disputes. The validity of the imposed disciplinary sanctions is restricted to one year. If, within a year from the date of imposing a disciplinary sanction, the employee is not subjected to a new disciplinary sanction, it is considered that his records are free of any such sanctions. The employer may also voluntarily remove the disciplinary sanction from the employee earlier (Art 194 Labor Code). Non-Admission to Work The employer has not only a right, but an obligation to refuse admission to the place of work for an employee in certain cases of misbehavior, omissions and similar circumstances (Art 76 Labor Code). Suspension from work may be imposed under the following circumstances: • Employee arrives at work in a state of alcoholic, narcotic or other intoxication. • Employee has not undergone required job safety training and tests. 108

• Employee has not undergone compulsory medical check and mandatory psychiatric evaluation. • Employee is not fit for the work due to health reasons according to a doctor’s certificate. • Employee loses (for a period of two months or less) a special right (driving license, etc.) which is essential for performance of his job duties. • Upon request of relevant labor protection authorities No salary is paid to the employee during the period of suspension from work (with some exceptions)1. Exercise 10. Write an essay of about 200–250 words on one of the subjects below: 1. Incentivizing employees 2. Documenting a breach of discipline

1 Hellevig J. Labor guide: disciplinary issues, liability issues, disputes (Chapters 15–17) [Электронный ресурс] / Awara [Сайт]. URL: http://www.awarablogs.com/labor-guidedisciplinary-issues-liability-issues-disputes-chapters-15-17.

Unit 6. Employment Law: Part 5 TERMINATION OF AN EMPLOYMENT AGREEMENT Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. Are the employees adequately protected by the law? 3. Is business adequately protected by the law? 4. Why did the lawmaker choose to provide an exhaustive list of the grounds for dismissal? 110

5. Which categories of employees are the most vulnerable? What defences does the law envisage for them? 6. Why does the law establish different rules for dismissing executives?

Legal terms 1. 2.

3.

4.

termination upon mutual agreement of the parties termination of an employment agreement on the employee’s own initiative (resignation) ‘at-will’ resignation (voluntary resignation, dismissal of one’s own accord) resign

8.

exhaustive list dismissal without cause redundancy the redundant be redundant

9.

make somebody redundant

5. 6. 7.

10. reduction in the workforce 11. professional incompetence

12. performance appraisal 13. repeated failure to discharge one’s duties without good cause 14. be disciplined 15. absence from work without good cause absenteeism

увольнение по соглашению сторон прекращение трудового договора по инициативе работника

увольнение по собственному желанию увольняться по собственному желанию; уходить в отставку (с военной службы); слагать с себя обязанности, полномочия исчерпывающий список увольнение без причины сокращение штата уволенные по сокращению штата быть уволенным по сокращению штата уволить кого-либо по сокращению штата сокращение численности работников недостаточная квалификация работника, профессиональная некомпетентность профессиональная аттестация неоднократное неисполнение работником своих трудовых обязанностей без уважительных причин получить дисциплинарное взыскание отсутствие на работе без уважительной причины (регулярное) отсутствие на работе 111

16. appearance at the workplace in the state of intoxication 17. disclosure of the employer’s confidential information 18. occupational safety requirements 19. work-related accident

появление на работе в состоянии опьянения разглашение конфиденциальной информации работодателя требования техники безопасности

несчастный случай на производстве представлять опасность для кого20. pose a danger (to) либо (чего-либо) проступок; ненадлежащее пове21. misconduct дение; нарушение дисциплины утрата доверия 22. loss of confidence lose confidence in the employee утратить доверие к работнику lose the employer’s confidence утратить доверие со стороны работодателя single material breach однократное грубое нарушение 23. предупреждение не позднее чем 24. at least three calendar days’ prior notice за три дня незаконное увольнение 25. unlawful dismissal Syn: unfair dismissal (Brit.) незаконное увольнение (связанное с нарушением норм закона) wrongful dismissal (Brit.) незаконное увольнение (связанное с нарушением положений трудового договора) выплаты при увольнении, выход26. severance compensation (severance benefit) ное пособие 27. dependant, dependent иждивенец правильно оформленное уволь28. properly formalized dismissal нение 29. re-instate in one’s position восстановить в должности 30. former job бывшее место работы 31. forced absence (forced absence вынужденный прогул, вынужденfrom work) ное отсутствие на работе выполнять нижеоплачиваемую 32. hold a job with lower pay работу формулировка 33. wording alter the wording of the ground изменить формулировку основаfor dismissal ния для увольнения 112

Study the name of the Russian inspectorate: The Federal Labor Inspectorate Federal Labor Inspection

Государственная инспекция труда (Трудовая инспекция)

Reading Exercise 1. Read the text about the termination of an employment agreement and answer these questions: 1. Who may initiate the termination of an employment contract? 2. The text mentions that an employment contract may be terminated on “several other reasons”. What are these reasons? 3. Why is dismissal without cause is prohibited? Why doesn't this rule apply to CEOs? Termination of an Employment Agreement The grounds for the termination of an employment agreement under the Russian Labor Code are: 1. mutual agreement of the parties; 2. expiry of the term of the employment agreement unless employment relations effectively continue; 3. termination of an employment agreement on the employee’s own initiative (resignation), which may take place at any time for any reason subject to the relevant notice requirements; 4. termination of an employment agreement on the employer’s initiative; 5. several other reasons. The RF Labor Code contains an exhaustive list of the grounds on which the employer may terminate an employment contract. Dismissal without cause is prohibited by the Labor Code except for the case of CEOs1. Exercise 2. Read the following text. Decide which answer A, B or C best fits each space. Answer the questions below the text. Grounds for Dismissal General Grounds for Dismissal are: 1. winding up of the employer; 2. redundancy (reduction in the workforce); 3. professional incompetence of the employee ..1.. by performance appraisal results; 4. the employee’s repeated failure to discharge their duties without good cause if the employee has been disciplined more than once; 1 The Labor Code of the Russian Federation as of May 2003 / unofficial translation provided by Baker & McKenzie. Baker & McKenzie, 2003; Russian Business Law — The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009; Трудовой кодекс Российской Федерации от 30 декабря 2001 г. № 197-ФЗ (ред. от 30 декабря 2015 г.).

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5. absence from work without good cause during the entire work day or more than 4 consecutive hours; 6. appearance at the workplace or other territory or ..2.. of the employer in the state of alcoholic, narcotic, or other states of intoxication; 7. disclosure of the employer’s confidential information or other employees personal data; 8. commission of theft, destruction of or damage to property in the workplace if these offences are certified by the relevant court ..3.. or administrative act; 9. violation of occupational safety requirements which has resulted in work-related accidents or catastrophe or has posed a danger of such ..4.. and 10. provision of false documents to the employer at the time of the conclusion of an employment contract. Specific Grounds for Dismissal are: 1. misconduct by an employee directly dealing with money and merchandises if this misconduct makes the employer lose their confidence in the employee (CA, cashier, etc.) 2. implementation of an ..5.. decision by the CEO, Deputy, and CA that had an adverse effect on the safety of the employer’s property, led to unlawful use of such property, or caused any other damage to the employer; 3. a single material breach by the CEO or the Deputy of their duties; 4. any grounds provided for by an employment contract with the CEO1. 1. A proved B confirmed C certified 2.

A office

B premises

C workplace

3.

A decision

B sentence

C ordnance

4.

A consequences

B follow-up

C outcome

5.

A unfair

B unjustified

C ungrounded

1. What categories do the grounds of dismissal fall into? 2. What are the distinctive features of each category? Exercise 3. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Then answer the questions below the text and summarise it. Notices If the employer decides to terminate an employment contract with: (i) an employee who has ..1.. probation, the employer must give at least three calendar days’ prior notice to

1 failure

1 Russian Business Law — The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009. 392 с.; Трудовой кодекс Российской Федерации от 30 декабря 2001 г. № 197-ФЗ (ред. от 30 декабря 2015 г.).

114

the employee; (ii) an employee working under a fixed-term ..2.. contract, the employer must give at least three calendar days’ notice; (iii) an employee who will be made redundant, the employer must give at least two months’ notice.

2 employ

Redundancy When dismissed by reason of redundancy employees are entitled to a statutory redundancy payment equal up to a five times the average salary of the relevant employee, depending on the circumstances. Higher amounts of severance compensation may be ..3.. to certain categories 3 payment of employees (e.g. employees working in difficult climatic conditions, etc.) When making employees redundant, an employer must give priority in respect of jobs to certain categories of staff such as employees with good ..4.., employees with two or more than 4 perform two dependants, employees who suffered from a work-related accident or ..5.. disease when working for the employer, etc. 5 occupy It is important to make sure that dismissal is properly formalized to negate the risk of employee lawsuits alleging wrongful dismissal. (Russian Business Law — Compendium № III /Clifford Chance CIS Ltd. 2013/2014) 1. 2. 3. 4. 5.

What is a period of notice for different dismissal situations? What is the amount of statutory redundancy payment? What circumstances make the severance payment greater? What employees have better chances to retain their jobs at redundancy? Why is it important to document the dismissal in a proper way?

Exercise 4. Read the following text and think of the best word to fill in each gap. Then answer the questions below the text and say what you have learned about unlawful dismissal. Unlawful Dismissal Compensation for unlawful dismissal (including in the course of redundancy procedure), as a general rule, amounts to the average salary of an unfairly dismissed ..1.. the period of unemployment until the employee gets another ..2.. or is re-instated in his position by the court. An employee who is re-instated in his position ..3.. entitled to the payment of his average earnings for the entire period of forced absence or the difference in salary ..4.. the period during which he held a job with lower pay. 115

If the dismissal of the employee is recognized as unlawful the body that reviews an individual employment dispute may decide to alter the wording of the ground for dismissal and represent it as the employee’s dismissal of his own accord. Where the wording of the ground for dismissal is deemed to be ..5.. or inconsistent with law, the court ..6.. the individual employment dispute must alter it and indicate in its judgment the reason and the ground for dismissal that would strictly comply with the wording of the Labor Code or another Federal law1. 1. What is the amount of compensation for unlawful dismissal? 2. How can the wording of the ground of dismissal be changed?

Key terms Exercise 5. Explain the meaning of the following expressions in English: • mutual agreement of the parties • employment relations effectively continue • good cause • personal data • to lose confidence in the employee • dependents • employees with good performance • properly formalized dismissal Exercise 6. Explain in English the difference between close concepts of Russian law: 1. redundancy — reduction in the workforce 2. professional incompetence — failure to discharge one’s duties Exercise 7. Render the following phrases from Russian into English. Speak about important issues of Employment Law covered in the text using the English equivalents of the phrases in the respective section. What are the grounds for terminating an employment agreement? 1. увольнение по соглашению сторон 2. прекращение трудового договора по инициативе работника 3. прекращение трудового договора по инициативе работодателя 4. увольнение по собственному желанию 5. исчерпывающий список 6. увольнение без причины What are the general grounds for dismissal? 1. уволить по сокращению штата 1 Russian Business Law — Compendium № III / Clifford Chance CIS Ltd. 2013/2014; The Labor Code of the Russian Federation text as of May 2003 / unofficial translation provided by Baker & McKenzie. Baker & McKenzie, 2003; Трудовой кодекс Российской Федерации от 30 декабря 2001 г. № 197-ФЗ (ред. от 30 декабря 2015 г.).

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2. сокращение численности работников 3. недостаточная профессиональная квалификация работника 4. аттестация 5. неоднократное неисполнение 6. должностные обязанности 7. получить дисциплинарное взыскание 8. отсутствие на работе без уважительной причины 9. появление на работе в состоянии опьянения 10. разглашение конфиденциальной информации работодателя 11. требования техники безопасности 12. несчастный случай на производстве 13. представлять опасность для кого-либо (чего-либо) What are the specific grounds for dismissal? 1. проступок 2. утратить доверие к работнику 3. однократное грубое нарушение What are the statutory provisions as regards notifying parties to an employment agreement about termination? 1. предупреждение не позднее чем за три дня 2. незаконное увольнение What are the statutory redundancy procedures? 1. выплаты при увольнении 2. выходное пособие 3. иждивенец 4. правильно оформить увольнение What are the ways to remedy unlawful dismissal? 1. восстановить в должности 2. вынужденный прогул 3. выполнять нижеоплачиваемую работу 4. изменить формулировку основания для увольнения

Use of English Exercise 8. Decide whether these statements are true or false. If they are false, correct them. Work with a partner and discuss the statements. 1. An employee may terminate the employment agreement on his/her own initiative, at any time for any reason subject to the payment of compensation for unused paid leave. 2. Professional incompetence of an employee, certified by performance appraisal results, is good cause for terminating an employment contract with that employee. 3. The employer may terminate an employment contract with an employee, if he/she commits violation of occupational safety requirements. 117

4. If the employer decides to terminate an employment contract with an employee who will be made redundant the employer must give at least two months’ notice.

Speaking Exercise 9. Prepare a presentation on one of the following topics. 1. Redundancy rules under the Labor Code of the RF 2. Misconduct of an employee which may result in dismissal 3. Dismissing executives Exercise 10. Baker & McKenzie's joint Labor & Migration and Dispute Resolution team in Moscow has summarized several of the most interesting court judgments in the area of employment disputes. Read the case below and substantiate the decision of the court. Use the patterns from the box to introduce the references to the provisions of the RF Labor Code. under article №xx the employer/employee … in compliance with article №xx the employer/employee… article №xx provides /stipulates /establishes /proscribes… Case №1. A failure to dismiss a redundant employee after the 2-month redundancy notice term does not lead to the extension of employment. M claimed wrongful termination by the employer. The trial court granted M's claim. The trial court found that M had received a 2-month redundancy notice. However, following the 2-month term M's employment was not immediately terminated. In the trial court's view, a failure to immediately terminate M and continuance of work by M led to a de-facto extension of her employment for an unspecified period of time. A new 2-month notice would be required for the employer to revive the redundancy termination. The upper court reversed the trial court's judgment. The court held that 2 months is only the minimum time period for notice. The employer does not give up its right to terminate the redundant employee some time following the 2-month term. A new 2-month notice is not required either. (Perm Krai Court Overview of Cassation and Supervisory Practice on Civil Disputes for the first half of 2011 (endorsed on Aug 12, 2011 by the Presidium of the Perm Krai Court)). Case №2. The former chief executive officer of a company is not entitled to reinstatement if the company has already appointed a new chief executive officer. D was employed as the general director at First Ural Housing Company. The company's board of directors issued a resolution to terminate D. However, this board resolution was later invalidated by an arbitrazh [commercial] court as the board members did not have the requisite authority to pass this resolution. D filed a claim for reinstatement in the position of general director of the company. 118

The court dismissed D's claims based on the following reasoning. The owners of the company are free to manage their company. This includes the owners' discretion to select a chief executive officer of the company. Where the owner legitimately appointed a new chief executive officer the court cannot interfere and order reinstatement of the former chief executive officer. In the case at hand, a new general director of the company was appointed after D's termination. The fact that the board resolution to terminate D was invalidated does not by itself make the resolution appointing the new general director invalid. Without a challenge of the resolution appointing the new general director, the court found no grounds to reinstate D at the company. (Sverdlovsk Oblast Court, Ruling of July 21, 2011, case No.33-10106/2011)1. Exercise 11. Read the text about a common breach of law and answer the questions after the text. Companies routinely abuse their position. A common trick is to demand signing a resignation letter with an open date together with the employment agreement. In its hire package instruction sheet the company states that the requirement of Russian law is that ‘when an employee leaves the employment regardless of the reason, they resign from their position through the ‘at-will’ resignation’ which future employees are asked to sign in advance. The letter, however, is not a technicality but a means to facilitate the lay off2. 1. What arguments could be brought by the applicant to oppose the employer’s request without being denied the job? 2. What counter measures could the employee undertake, if he feels that the employer might lay him off by using the resignation letter illegally requested from him at landing the job? Exercise 12. Complete the following sentences with the words from the box. Speak about the work of Federal Labor Inspectorate. Mention the facts shown in the table below that are not covered in the text. restore disciplinary work-related rectification supervise monitor premises without notice compliance irregularities demand regulatory body comply administrative Federal Labor Inspectorate The Federal Labor Inspectorate (FLI) is a ..1.. that ..2.. employers as regards their ..3.. with Russian labor legislation. The FLI is responsible for: • the investigation of ..4.. accidents; 1 On Recent Employment Disputes [Электронный ресурс] // Russian Law Online [Сайт]. URL: http://www.russianlawonline.com. 2 Istomina E. Sometimes they fight [Электронный ресурс] / E. Istomina // Russian Law Online [Сайт]. 2009. 07 Aug. URL: http://www.russianlawonline.com.

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• the consideration of ..5.. offence; • the violation of employee rights, etc. FLI inspectors have the right to conduct inspections of an employer's ..6.. at any time and ..7.. . The law also grants the FLI the right to request and receive from employers any documents or other pertinent information that enable it to conduct and ..8.. the inspection process. Employers are required to ..9.. with the requests of FLI inspectors. If any violation of Russian labor law is found during an inspection or investigation, the FLI inspectors will issue an order requiring ..10.. of such breaches by the employer and/or imposing fines on the employer and/or its executives in order to ..11.. employee rights. As stated in the Code, FLI directives may be appealed through the courts. These appeals deal with all kind of breeches of the Labor Code — from occupational safety violations to ..12.. in the payment of salaries. The complete FLI activity report is available on its official site. Following is a sample of the data available concerning the FLI’s activities over the past two years1:

1. 2. 3. 4.

Measures taken 2009 2010 Unjustified discharge orders withdrawn by demand of 633 387 the FLI (number of cases) Unjustified 13............ sanctions withdrawn by demand 832 541 of the FLI (number of cases) Issuance of employment contracts by 14......... of the FLI 9080 13325 Court orders for the termination of activity to meet 8 2 labor protection requirements:

Summarizing Exercise 13. Read the article and summarize it reducing to 25 per cent. Speak to each other about what an employee must beware of in case he changes his mind as to voluntary resignation. Use speech connectors in Annex I. Employee Withdrawal of a Letter of Resignation by I. Onikienko, A. Leksashova, Capital Legal Services The Moscow Times, Oct. 07 2009 The labor law of the Russian Federation is known to protect the interests of employees to a significant extent, as an employee is deemed the more vulnerable part of labor relations, including in issues pertaining to voluntary resignation. Unlike termination of employment at the initiative of the employer, which is allowed only on the grounds provided for by the Labor Code of the Russian Federation, all that is required from an employee desiring to resign is a written statement (i.e. a letter of resignation). 1 Schonenbach R. Labor laws [Электронный ресурс] / R. Schonenbach, Trestle Group // Software Russia [Сайт]. 2011. 20 June. URL: http://www.software-russia.com/business/laws.

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The only restriction in this case is the minimum term of notice established by the legislator. The general rule is that this term of notice must not be less than two weeks, though this may be reduced upon agreement of the parties. However, life is unpredictable and its twists and turns often change our plans and decisions which at one time seemed final to us. Thus, an employee who submitted a letter of resignation may change his or her decision to resign for whatever reason. In this case, there is no need for the employee to despair and assume that what is done cannot be undone. The Labor Code of the Russian Federation entitles employees to cancel their letter of resignation. This article will explain how to do so without the risk of the cancellation being denied by the employer. The cancellation of a letter of resignation should be done by submitting another letter where the employee requests the employer to consider his or her initial letter invalid. Cancellation of a letter of resignation seems to be rather simple but the following conditions must be met. Firstly, the time frame established for exercising the right to cancel a letter of resignation needs to be complied with. A letter of resignation may be cancelled only prior to the expiry of the resignation notice period and if the employee takes a vacation with subsequent resignation, then prior to the commencement date of the vacation. Upon expiry of the indicated time frame, the employer is released from its obligation to satisfy any cancellation and to continue labor relations with the employee. Since the time frame established for submitting a statement of cancellation of a letter of resignation is deemed the key one, the employee is obliged to ensure that the person who is in charge of making decisions on related questions, and who acts on behalf of the employer, receives his or her letter. To avoid disputable situations the employee is recommended to deliver the letter to the employer’s head office against a signature of the recipient (if the firm keeps records of incoming mail the employee’s copy should be marked with a reference number). In addition, it is mandatory for the employer to specify the date of receipt of the relevant letter. The letter may be sent to the employer in the mail by registered delivery, but taking into account that time frames for mail delivery are long and unpredictable, the employee may fail to comply with the established terms and have in actuality resigned upon expiry of the resignation notice period. Secondly, cancellation of a letter of resignation may be performed only if a written job offer for the employee’s position has not been sent to another employee with whom under the labor legislation of the Russian Federation conclusion of an employment contract cannot be denied. In such a case in the situation in question would be the invitation of another employee within the framework of his or her transfer to employment in the position of the resigning employee. In practice, employers often use such grounds in order to justify their refusal to satisfy the cancellation, since they simply do not wish to maintain labor relations with such an “unreliable” employee. In addition, they may refer to a written agreement with another employee which envisages the intention to conclude an employment contract approved by his or her employer. 121

Nevertheless, employees should be aware of the fact that the above mentioned circumstances and documents do not serve as sufficient grounds for refusal to satisfy the cancellation of a letter of resignation and such a refusal may be contested in court provided the invited employee within the framework of a transfer has not left his or her previous place of employment. The Labor Code of the Russian Federation imposes a ban on refusal to conclude an employment contract only with those employees who are invited in writing within the framework of a transfer from another employer within one month starting from the termination date of an employment contract with the former employer. Yet a voluntary obligation of the employer to hire another employee cannot serve as grounds for refusal to exercise the right to cancel a letter of resignation (Decision No.48-V08-6 of the Supreme Court of the Russian Federation dated July 11, 2008). As it pertains to the legal nature and purposes of introducing rules and regulations for the cancellation of a letter of resignation, employees should pay attention to the following circumstances. In practice, employees sometimes send to employers an application for changing the resignation date specified in the initial letter assuming mistakenly that they exercise their right to cancel the letter of resignation. This right is granted to employees by the Labor Code of the Russian Federation only for purposes of continuing their employment at the given employer. Submission of such an application with the aim of changing the date of termination is not allowed. Termination of employment both prior to and after expiry of a notification period specified in the employee’s letter of resignation is allowed only upon the agreement between the employer and employee. The term of an employment agreement may be extended even if the employer did not cancel the letter of resignation. In particular, in the event that upon expiry of a notification period the employment contract is not terminated and the employee does not insist on resigning, but rather continues with his or her work and duties. In conclusion, we would like to recommend to the employees who face such situations and have realized that their decision was premature, to exercise their rights granted by the Labor Code of the Russian Federation in full. Sometimes, the exercise of this right may become the only correct decision and the employer will be glad to keep the valuable worker1.

Writing Exercise 14. Write an essay of about 200–250 words on one of the topics below: 1. Redundancy rules under the Labor Code of the RF 2. Challenging a dismissal

1 Onikienko I., Leksashova A. Employee Withdrawal of a Letter of Resignation [Электронный ресурс] / I. A. Onikienko, A. V. Leksashova // The Moscow Times: электронное периодическое издание. 2009. 07 Oct. URL: http://www.themoscowtimes.com/article/ employee-withdrawal-of-a-letter-of-resignation/386844.html.

Unit 7. Property Rights in Russia: Part 1 PROPERTY RIGHTS IN GENERAL Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What does the concept property rights comprise? 3. What property rights do you know? 4. What laws of the Russian Federation uphold the right to own private property?

Legal terms 1. 2. 3.

real estate (property) land plot circulation of land plots

недвижимое имущество земельный участок оборот земель 123

4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

uphold the right right of ownership, proprietary right (interest) leasehold

защищать право право собственности, вещное право

недвижимость, купленная на правах аренды constituent entity субъект РФ municipality муниципальный округ, муниципалитет the right of perpetual право бессрочного пользования (indefinite) use участком the right of free fixed-term право (безвозмездного) свободного use срочного пользования the right of lifelong право пожизненного наследуемого inheritable possession владения easement (servitude) сервитут, право прохода по чужой территории transaction дело, сделка, соглашение embody реализовывать, осуществлять, заключать в себе disposal передача, управление, распределение title to real estate право собственности на недвижимое имущество federal treasury-owned федеральное казначейское предприenterprise ятие convert the right into lease преобразовать право в договор аренor ownership ды или в право собственности lease аренда, сдача внаем; договор аренды lessee арендатор, съемщик lessor арендодатель have a pre-emptive right to иметь преимущественное право переrenew the lease заключить договор аренды encumbrance закладная, обременение

Study the principle legislative acts in the field of property rights: The Land Code of the Russian Federation

Земельный кодекс Российской Федерации

The Housing Code of the Russian Federation

Жилищный кодекс Российской Федерации 124

The Cadastral Law of the Russian Federation

Федеральный закон «О государственном кадастре недвижимости» (с внесенными изменениями)

The Law “On the Circulation of Agricultural Land”

Федеральный закон № 171-ФЗ «Об обороте земель сельскохозяйственного назначения»

The Land Reclassification Law

Федеральный закон № 172-ФЗ «О переводе земель или земельных участков из одной категории в другую»

The Federal Law “On the Circulation Федеральный закон № 101-ФЗ of Agricultural Land” «Об обороте земель сельскохозяйственного назначения»

Reading Exercise 1. Read the following text and answer the questions. Then summarize the text. 1. What are the most common types of rights to real estate and land available for investors under Russian law? 2. What rights to land does the Land Code distinguish? 3. Why does Russian law treat land plots and buildings as separate objects of real estate? Both the Constitution of the Russian Federation and the Civil Code of the Russian Federation uphold the right to own private property. The Land Code, together with the Federal Law "On the Circulation of Agricultural Land" put an end to the political debate as to whether land ownership in Russia is possible. The Land Reclassification Law of 2004 came into force being a follow-up to the Land Code, it detailed the procedures for the reclassification of land and land plots from one category to another. The uniform mechanism instituted at the federal level to move land plots from one category to another marks a significant development in making the land market in Russia more transparent. For historical reasons, such as the fact that transactions with real properties (other than land plots) became possible earlier than the transactions with land plots, at present Russian law still treats land plots and buildings as separate objects of real estate. Despite this, however, there is a concept of a single object of real estate embodied through provisions that prohibit the disposal of a land plot and a building located on such land plot separately from each other when such properties are owned by one and the same owner. 125

Under Russian law, the most common types of rights to real estate available for investors are the right of ownership and leasehold. However, there are, for the moment, different regulations with regard to land plots and buildings. The Land Code distinguishes the following rights to land: the right of ownership (by the Russian Federation, constituent entities of the Russian Federation, municipalities, private individuals, and legal entities), the right of perpetual (indefinite) use, the right of free fixed- term use, leasehold, the right of lifelong inheritable possession, and easements (servitudes). Land plots are generally available for investors under the right of ownership and lease1. Exercise 2. Read the following text and decide if the following statements are true or false, if they are false, correct them. Then answer the questions below the text and summarize it. 1. The Constitution establishes the principle of private ownership of land and regulates land relations in detail. 2. All agricultural land is subject to the Agricultural Land Law. 3. Land plots in state ownership, free from any buildings and structures, are sold to individuals and legal entities upon request. 4. The Land Code contains provisions permitting foreigners to buy land. Right of Ownership The general principles of land ownership are set forth in the Constitution of the Russian Federation, adopted in December 1993. The Constitution establishes the principle of private ownership of land but does not regulate land relations in detail. The core legislative act governing land relations is the Land Code, which establishes fundamental terms and procedures for land use. It is further supplemented by other federal laws regulating land issues. For instance, the possession, use, and disposal of land plots in the category of agricultural land are regulated by the Agricultural Land Law. Agricultural land plots may be held by right of ownership, perpetual (indefinite) use, lifelong inheritable possession, or free fixed-term use, and such plots may also be leased. Not all agricultural land, however, is subject to the Agricultural Land Law. It does not extend, for example, to those land plots that were provided to individuals for the construction of individual homes or garages, or for a smallholding or dacha garden. The circulation of such land plots is governed by the provisions of the Land Code. Ownership of land plots in state or municipal ownership, where such land plots are free from any buildings and structures, is to be awarded to individuals and legal entities through bidding by tender or auction. 1

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Although there is no express provision permitting land ownership by foreigners, the Land Code may clearly be interpreted as allowing such ownership, except in cases where it is specifically prohibited. Foreigners have the right to acquire land plots under existing buildings, or for construction, into lease or ownership, subject to the restrictions set out in the Land Code. Foreigners are specifically prohibited from owning land plots in border areas or in other special territories of the Russian Federation pursuant to other federal laws. Foreigners are prohibited from owning agricultural land. The Agricultural Land Law further specifies the rights to agricultural land that may be granted to foreign nationals and foreign legal entities (and stateless persons). Other Rights to Land The right of perpetual (indefinite) use may be granted only to state and municipal institutions, federal treasury-owned enterprises, and state and local authorities. Legal entities that possessed land plots pursuant to the right of perpetual (indefinite) use before the introduction of the Land Code and which do not fall under the above categories of legal entities had to convert and re-register this right at their choice either into lease or ownership. As the civil circulation of land plots held on the right of perpetual (indefinite) use is restricted such land plots cannot be sold, leased, mortgaged, or assigned, the disposal of such land plots by legal entities (that do not fall under the above categories) will always require a prior conversion of the right of perpetual (indefinite) use into another title (e.g., for commercial legal entities — into lease or ownership). Ownership Russian legislation permits both Russian and foreign nationals and legal entities to own real estate (apart from land plots) such as buildings, premises (as parts of buildings), structures and other facilities. In general, the rules relating to the use, disposal, and sale of real estate are set forth in the Civil Code, which guarantees the freedom to sell, rent, and carry out other transactions with real estate. Title to real estate is usually acquired through a sale-purchase transaction or by means of a new construction. For legal entities formed in the course of privatization of Soviet era enterprises it is usual that title to buildings and structures was obtained as a result of such privatization. Common Property Until recently, the regime of common ownership (a situation where real estate properties belong to several owners) was applied only with regard to owners of premises in a multi-apartment building, while the situation with non-residential buildings remained unregulated. Considering disputes between owners of premises in non-residential buildings (i.e., office, warehouse, retail, administrative buildings, etc.) the courts frequently refused to apply the law by 127

analogy, and on this basis refused to recognize a claimant’s right of common ownership in non-residential buildings1. 1. 2. 3. 4. 5. 6.

What law sets forth the general principals of land ownership? What does the Land Code govern and establish? Who may be granted the right of perpetual (indefinite) use? What kind of land plots cannot be sold, leased, mortgaged or assigned? What are the ways to acquire title to real estate? What does the term ‘common ownership’ mean?

Exercise 3. Read the text, fill in the gaps with correct prepositions and answer the questions below the text. Then say what you have learned about leases in the RF. Lease Legal entities and individuals may be granted leases ..1.. land plots and other real properties. Leases of state or municipality owned land plots and leases of other real properties ..2.. state or municipal ownership are usually based ..3.. a standard local form. The Civil Code provides a lessee ..4.. certain basic rights. When a property is granted ..5.. lease it must be in the condition stipulated by the lease. Thereafter, unless the lease specifies otherwise, the lessor is liable ..6.. the repair of defects of the premises. If the lessor fails to carry out the necessary repairs, the lessee can opt either ..7.. the reduction of rent or termination of the lease and compensation of the losses incurred. A lessee that properly fulfills its obligations ..8.. a lease has a pre-emptive right to renew the lease (i.e., enter ..9.. a new lease for the same premises but not necessarily ..10.. the terms of the preceding lease) unless this right is expressly excluded by the lease contract. Leases for one year and longer must be state-registered and are deemed concluded ..11.. such state registration. Leases for less than a year (any 365 consecutive days) do not require state registration and become valid when signed2. 1. What type of lease agreement must be state-registered? 2. What rights does the lessee have if the lessor fails to fulfill its obligation? Exercise 4. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Then answer the questions below the text. Finally, say what you have learned about state registration of rights to real estate. 1 2

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State Registration of Rights to Real Estate The right of ..1.. and other proprietary interest to real properties, their ..2.. , encumbrance (e.g., mortgage, leasehold for a term of one year and longer, easement), transfer and termination are subject to state registration. In the absence of state registration, the rights to real estate are invalid. Registration of title is a prerequisite for the ..3.. and ..4.. of transactions involving real estate. Certain transactions (in addition to the rights or titles) with real estate are also subject to state registration, and become ..5.. only upon such registration. As a single source of information on real estate available in electronic format the State Cadastral Register has become ..6.. from 1 January 2012. The Cadastral Law provides for a unified system of state cadastral registration of all basic types of real estate, including land plots, buildings, premises, unfinished construction, complex ..7.. property objects, territorial and functional zones and zones with usage conditions. The Cadastral Law does not apply to forests, perennial plantations, bodies of water, subsoil resources, marine vessels and aircraft.

1. own 2. create

3. valid 4. enforce

5. effect

6. operate

7. movable

1. Why are the right of ownership and all the transactions with real property subject to state registration? 2. What does the Cadastral Law provide for? 3. Does the Cadastral Law apply to all property objects? Exercise 5. Read the following texts and think of the best word to fill in each gap. Then answer the questions below the text and summarize it. Classification of Real Estate There is no official legislative classification of real ..1.. in Russian law. In practice, real properties are classified on the basis of their intended ..2.. (e.g., residential or non-residential for buildings, agricultural or industrial for land plots, etc). Residential Real Estate Until the early 1990s most apartments in the Russian Federation had been state or municipally ..3.. . However, many (if not most) apartments have since been privatized and many new residential developments have been constructed by investors and most of these apartments are in private ..4.. . Relations arising in connection with residential real estate are ..5.. by the Housing Code. The Housing Code ..6.. categories of residential property, which include a residential house (cottage), an apartment in a multi-storey (multi-apartment) 129

building or a room in such an apartment, as well as various forms of rights to residential real estate. The Housing Code ..7.. the use of residential property for purposes other than residence by individuals1. 1. How is real estate classified under Russian law? 2. What categories of residential property does the Housing Code define? Exercise 6. Read the following text. Then complete the sentences with the words from the boxes. Finally, answer the questions below the text and retell it. in particular consent sets forth significantly to mortgage of particular significance apply to

to assign subject to

..1.., the provisions of the Civil Code, in so far as they apply to land leases, are supplemented by the Land Code in a number of areas. ..2.., the Land Code ..3.. a series of modified rights for land lessees. Their applicability will in part depend upon the precise drafting of a lease. For example, the presumption under Article 615 of the Civil Code that a lessee needs a lessor’s ..4.. to sublease has been reversed for lessees of land. ..5.. is the provision that lessees of state or municipally owned land under a lease exceeding five years term are free ..6.. their rights under the lease, ..7.. such rights or grant the land plots for sublease to third parties, ..8.. giving notice to the lessor. This rule will also ..9.. land leases for a period of more than 5 years with private lessors (in contrast to the prior consent requirement established under Article 615(2) of the Civil Code). The assignee of a land lease does not need to enter into a new land lease. in conjunction with designated purpose by mutual agreement constitutes grounds provided by failure a material deterioration

misuse

The lessor and the lessee may terminate the lease contract (1) ..10.., (2) unilaterally in the circumstances stipulated in the lease, (3) by a court order in circumstances ..11.. the Civil Code or the Land Code or in the lease. The Land Code contains provisions that deal with the termination of land leases ..12.. a court order. For example, the following ..13.. for termination of a land lease: • ..14.. of the land plot • use of the land plot that results in a decline in the fertility of agricultural land or, importantly for industrial users, ..15.. in the environmental situation; • ..16.. to correct a range of other intentional environmental violations of applicable land use regulations; and • where the designated purpose of the land plot is agricultural production or development — failure to use the land plot for its ..17.. for a period in excess of three years. 1

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1. What modified rights for land lessees does the Land Code set forth? 2. What constitutes grounds for the termination of a land lease?

Key terms Exercise 7. Match these terms (1–5) with their definitions (a-e). Suggest Russian equivalents. 1. encumbrance

a) a right or claim to the ownership of property

2. mortgage

b) a right to cross or otherwise use someone else's land for a specified purpose

3. lease

c) a mortgage, lease or other charge on property or assets

4. easement

d) a loan of money which you get from a bank or building society in order to buy a house

5. title

e) a contract by which one party conveys land, property, etc. to another for a specified time, usually in return for a periodic payment

Use of English Exercise 8. Suggest Russian equivalents of the following word partnerships. Then use some of them in your own sentences. circulation of agricultural land; transactions with real properties; to treat land plots and buildings as separate objects of real estate; disposal of land plots; be awarded through bidding by tender or auction; pursuant to federal law; federal treasury-owned enterprise; to convert the right into lease or ownership; have a pre-emptive right to renew the lease; proprietary interest to real properties; prerequisite for the validity and enforceability; common property (ownership) Exercise 9. Suggest English equivalents of the following word partnerships. Then use some of them in your own sentences. Обеспечить право владеть частной собственностью; положить конец политическим спорам; подробно описывать процедуру реклассификации земли; сделать рынок земли в России более прозрачным; за исключением случаев, когда это специальным образом запрещено; точно определять, устанавливать права; владельцы помещений в нежилых зданиях; находиться в состоянии, оговоренном условиями договора аренды; заключить новый договор аренды; подлежать государственной регистрации; считаться заключенным после государственной регистрации; единая система государственной кадастровой регистрации. 131

Exercise 10. Render the sentences into English. 1. Конституция определяет принцип частной собственности на землю, но детально не регулирует земельные отношения. 2. Владение, использование и распоряжение участками земли, относящимися к категории сельскохозяйственных земель, регулируется Законом о земле сельскохозяйственного назначения. 3. Оборот участков земли сельскохозяйственного назначения, которые были предоставлены физическим лицам для индивидуального жилищного строительства, строительства гаражей или дач, регулируется положениями Земельного кодекса. 4. Иностранным гражданам запрещается владеть землей в приграничных областях, а также землями сельскохозяйственного назначения в соответствии с федеральным законодательством. 5. Правовые нормы, касающиеся использования, распоряжения и продажи недвижимого имущества, изложены в Гражданском кодексе, который гарантирует свободную продажу, наем и осуществление других операций с недвижимым имуществом. 6. Если договор аренды не предусматривает иное, арендодатель несет ответственность за ремонт помещения. 7. Право собственности и другое право вещного характера в отношении недвижимого имущества, создание такого имущества, его обременение (например, ипотека (залог), аренда сроком на один год и более, сервитут), переход права собственности и прекращение такого права подлежат государственной регистрации.

Speaking Exercise 11. Choose a topic related to property rights and prepare a brief talk. Make use of the following sentence connectors (see Annex I): for historical reasons; despite this; however; for instance; unless … otherwise; although; until recently; in general; significantly; in particular Exercise 12. Prepare a short presentation on any of the following topics. Make use of the following phrases: My presentation will deal with; I would like to start with; I’d like to explain that in my jurisdiction; In our/this country we (don’t) distinguish; Moving to the next point; Turning to. 1. Under which circumstances foreigners are permitted to buy real estate in the Russian jurisdiction; 2. Recent changes in the Russian legislation with regard to common ownership in non-residential premises.

Unit 7. Property Rights in Russia: Part 2 MORTGAGE OF REAL PROPERTY Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is mortgage? How does it arise? 3. What types of real properties can be subject to a mortgage?

Legal terms 1.

be mortgaged

находиться в залоге

2.

mortgage agreement

договор об ипотеке

3.

mortgage certificate

закладная, закладной сертификат, ипотечное свидетельство 133

4.

mortgagee

залогодержатель, кредитор по ипотеке, закладной

5.

mortgagor

залогодатель, должник по ипотеке, закладной

6.

foreclosure

обращение взыскания, лишение права выкупа заложенного имущества, переход заложенной недвижимости в собственность залогодержателя

7.

out-of-court foreclosure

обращение взыскания во внесудебном порядке

8.

discharge the secured obligation

исполнить обеспеченные ипотекой обязательства

9.

event of default

факт несостоятельности, случай невыполнения обязательств

10. disposal of property

здесь: реализация имущества

11. occupancy rights

право пользования

12. vacate the property

освободить помещение (собственность)

Study the principle legislative act in the field of mortgage: The Mortgage Law

Федеральный закон № 102-ФЗ «Об ипотеке (залоге недвижимости)»

Exercise 1. Read the text and decide whether these statements are true or false. If they are false, correct them. Then say what you have learned about the regulation of mortgages in the RF. 1. Buildings and structures can only be mortgaged together with the land plots, or together with leasehold rights to such land plots. 2. A residential house or an apartment that was purchased or constructed with loans from banks or other credit companies is deemed to be mortgaged from the date of concluding the mortgage agreement. Introduction A mortgage arises either by virtue of law or the mortgage agreement. Mortgage rights must be state registered and are invalid without such registration. Registration is mandatory and in its absence a mortgage agreement is null and void. According to the Mortgage Law the following types of real properties can be subject to a mortgage: 134

• land plots (including agricultural land plots) and the land plots held by the state or municipalities; • enterprises registered as real estate; • buildings, structures, and other immovable property that are used for business activities; • residential houses, apartments and parts thereof, consisting of one or several separate rooms; • cottages, garages, and other structures for personal use; • aircraft, sea and river vessels; and • a lessee’s interest in leased real properties, which may be the subject of a “leasehold mortgage”. Buildings and structures can only be mortgaged together with the land plots, or together with leasehold rights to such land plots, on which such buildings and structures are located. The Mortgage Law provides that, unless otherwise provided in the mortgage agreement or by federal law, a residential house or an apartment that was purchased or constructed with loans from banks or other credit companies is deemed to be mortgaged from the date of state registration of the ownership right of the purchaser/investor of the house or the apartment. The Mortgage Law further provides that foreclosure by the mortgagee on a mortgaged residential house or apartment and disposal of such property constitutes grounds for termination of the occupancy rights of a mortgagor and the family members residing together in such residential house or apartment, provided that this residential house or apartment was mortgaged under a mortgage agreement. Such mortgage agreement is concluded to secure the return of a loan granted for the purchase or construction of such residential house or apartment, or a loan granted to refinance the previous construction / acquisition loan. The Mortgage Law has been significantly modified to improve the potential of mortgages as an instrument for securing investments1. Exercise 2. Read the text and complete the sentences with the words from the box. Then answer the questions below the text and retell it. be sold

provided that

is prohibited

enter into

to stipulate

acquire

Foreclosure on mortgaged property There are two types of foreclosure on mortgaged property: court and outof-court. With regard to an out-of-court foreclosure, before the amendments to the law, parties could ..1.. a contract for the transfer of the mortgaged property to the mortgagee. The aim was to discharge the secured obligation after an event of default under the secured obligation had occurred. In the absence of such contract, a mortgagee could not automatically ..2.. rights 1

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to the mortgaged property if an event of default occurred, and in most cases the mortgaged property must ..3.. at a public auction, with the proceeds then being used for the repayment of the debt. Now, the transfer of the mortgaged property to the mortgagee after an event of default is possible if the parties stipulate so in the mortgage agreement or in a separate agreement, that is done ..4.. a notarized consent of the mortgagor to such an out-of-court foreclosure on the mortgaged property has been obtained. In an agreement on out-of-court foreclosure the parties are required ..5.. , among other things, the method of out-of-court foreclosure (i.e., realization of the mortgaged property at an auction or the acquisition of ownership of mortgaged property by the mortgagee for itself or for third parties), initial sale price of the property or the procedure for the sale price determination. Out-of-court foreclosure on mortgaged property ..6.. with regard to residential properties held by individuals under the right of ownership and with regard to real properties owned by the state and municipalities1. 1. Under which circumstances does foreclosure constitute grounds for termination of the occupancy rights of a mortgagor and his family members? 2. With regard to what types of property is out-of-court foreclosure on mortgage property prohibited? Exercise 3. Read the text and answer the questions below. Summarize the answers. Mortgage certificates A mortgage certificate can be issued to the mortgagee at any time after the state registration of the mortgage and until the termination of secured obligation. Mortgage certificates can be transferred to a depositary for registration and custody, which is evidenced by the respective note on the document. Such a note should also disclose if the custody is temporary or obligatory. The type of custody can be chosen by the issuer or by a subsequent holder of the mortgage certificate. Mortgage agreement vs mortgage certificate If a mortgage agreement, on the basis of which a mortgage certificate is issued, stipulates that with the issuance of the mortgage certificate both the mortgage agreement and the principal agreement (obligations under which are secured by the mortgage) terminate, all relations between the mortgagor, the debtor, and the mortgagee become governed by the mortgage certificate2. 1. When is it possible to issue a mortgage certificate? 2. When does the mortgagee become governed by the mortgage certificate? 1 2

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Exercise 4. Read the following text. Complete the sentences with the verbs on the right in an appropriate form. The implications of these provisions of the Mortgage Law are that a mortgagee can now demand that a mortgagor ..1.. the mortgaged property if the mortgagee intends ..2.. it. However, this rule would apply only if the mortgaged property were mortgaged ..3.. repayment of a loan taken by a mortgagor to purchase or construct a property or ..4.. such previous construction / acquisition loan. It is also important to note that those individuals who ..5.. mortgaged property pursuant to a lease or a “hiring” agreement (under Russian law, a specific type of residential lease where the lessee is a private individual) cannot ..6.. foreclosure on the mortgaged property. Such a lease or a “hiring” agreement ..7.. prior to the mortgage agreement will remain in force and can ..8.. only under specific circumstances ..9.. by the Civil Code or applicable housing legislation.

1. vacate 2. foreclose on 3. secure 4. refinance 5. occupy

6. evict upon 7. conclude 8. terminate 9. provide for

Key terms: Mortgage Exercise 5. Match the English word combinations from the text with their Russian equivalents. Use them in your own sentences. 1. be null and void a) факт несостоятельности, случай невыполнения обязательств b) утративший законную силу, 2. by virtue of law ничтожный (о договоре) 3. termination of occupancy rights с) арендная закладная 4. event of default d) в силу закона 5. discharge the secured obligation e) быть переданным на депозитарный учет и хранение 6. be invalid without such registration f) обязательная регистрация g) исполнить обеспеченные 7. mandatory registration ипотекой обязательства 8. be sold at a public auction h) держатель закладной 9. be transferred to a depositary for i) не иметь юридической силы без registration and custody регистрации 10. holder of the mortgage certificate j) быть реализованным путем продажи с публичных торгов 11. leasehold mortgage k) прекращение права пользования 137

Use of English Exercise 6. Render the sentences into English. 1. Ипотека возникает в силу закона или по договору об ипотеке. Права залогодержателя подлежат государственной регистрации. 2. Договор об ипотеке считается заключенным и вступает в силу с момента его государственной регистрации, в случае отсутствия такой регистрации договор считается ничтожным. 3. Закон об ипотеке также предусматривает, что обращение залогодержателем взыскания на заложенные жилой дом или квартиру и реализация этого имущества являются основанием для прекращения права пользования ими залогодателя и любых иных лиц, проживающих в таких жилом доме или квартире, при условии, что такие жилой дом или квартира были заложены по договору об ипотеке в обеспечение возврата кредита, предоставленного на приобретение или строительство таких или иных жилого дома или квартиры, а также на погашение ранее предоставленных кредита или займа на приобретение или строительство жилого дома или квартиры. 4. До внесения поправок в законодательство в отношении обращения взыскания во внесудебном порядке стороны могли заключить соглашение о переходе заложенного имущества залогодержателю. 5. Способ реализации заложенного имущества может быть предусмотрен залогодателем и залогодержателем в договоре об ипотеке или отдельном соглашении об удовлетворении требований залогодержателя во внесудебном порядке при условии нотариально заверенного согласия залогодателя. 6. В случае если стороны предусмотрели в договоре об ипотеке условие о возможности обращения взыскания на заложенное имущество во внесудебном порядке, данное условие должно быть включено в закладную. 7. Закладной могут быть удостоверены права залогодержателя по ипотеке в силу закона и по обеспеченному данной ипотекой обязательству. 8. К закладной, удостоверяющей права залогодержателя по ипотеке в силу закона и по обеспеченному данной ипотекой обязательству, применяются положения, предусмотренные для закладной при ипотеке в силу договора, если иное не установлено настоящим Федеральным законом. 9. Закладная может быть передана в депозитарий для ее депозитарного учета и хранения, что подтверждается соответствующей записью на документе.

Speaking Exercise 7. Answer the questions on the text. 1. Should mortgage rights be state registered or may they be valid without any registration? 138

2. When is a residential house or an apartment deemed to be mortgaged if purchased or constructed with loans from the bank? 3. What are the two types of foreclosure on mortgaged property? 4. What should be stipulated in the mortgage agreement? 5. What is the difference between a mortgage agreement and mortgage certificate? Exercise 8. Prepare a short presentation on any of the following topics: 1. Mortgage of real property 2. The Mortgage Law 3. Recent changes to the Mortgage Law with regard to mortgage of real property Exercise 9. Write an essay on the topic “Real property law in Russia”.

Unit 8. Intellectual Property Rights in Russia Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What does the term “intellectual property” mean? 3. What intellectual property rights do you know? 4. What are the ways to protect intellectual property rights in the Russian Federation?

Legal terms 1.

infringement of intellectual property rights

нарушение прав интеллектуальной собственности

2. 3.

seek protection signatory (to)

4.

entail liability

добиваться защиты страна или лицо, подписавшее договор; участник договора влечь за собой ответственность 140

5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

invention patent industrially applicable date of the application payment of annuities obtain a patent patent application grant a patent meet the criteria utility model pertaining (to)

filing date industrial design outer appearance evince the creative character 20. distinctive feature

16. 17. 18. 19.

21. trademarks mark 22. service mark 23. by virtue (of) 24. public domain 25. appellation of origin of goods 26. generic

27. company name

изобретение патент промышленно применимый дата подачи заявки ежегодные выплаты получать патент заявка на получение патента выдавать патент соответствовать критериям полезная модель относящийся, имеющий отношение, свойственный дата подачи заявки промышленный дизайн внешний вид ясно показывать творческий характер обладающий различительной чертой (способностью) торговый знак знак обслуживания посредством чего-либо, на основании чего-либо публичная собственность, народное достояние наименование места происхождения товара обобщенный, общий, универсальный, непатентованный (о лекарствах), немарочный название компании

28. trade name (commercial designation)

фирменное наименование, название фирмы (не обязательно является официальным наименованием фирмы; может быть зарегистрировано в качестве товарного знака)

29. alienate a company name

отчуждать название компании 141

30. notoriety

здесь: известность

31. copyright

авторское право

32. neighboring rights

смежные права

33. moral (personal) right

личное неимущественное право

34. proprietary (economic, property) right

право собственности, имущественное право

35. perpetually

вечно, бессрочно

36. right to public disclosure

право на обнародование произведения

37. license agreement

лицензионное соглашение, лицензионный договор

38. trade secret

коммерческая тайна, производственный секрет

Study the principle legislative acts and services in the field of Intellectual Property Rights: The Civil Code of the Russian Federation (as amended up to 2014)

Гражданский Кодекс Российской Федерации (с изменениями, внесенными в 2014 г.)

The Federal Law on Amendments to Certain Legislative Acts of the Russian Federation concerning the Protection of Intellectual Rights in Information and Telecommunication Networks

Федеральный закон о внесении изменений в отдельные законодательные акты Российской Федерации по вопросам защиты интеллектуальных прав в информационно-телекоммуникационных сетях

The Federal Law on Trade Secrets

Федеральный закон о коммерческой тайне

The Federal Service for Intellectual Property (Rospatent)

Федеральная служба по интеллектуальной собственности (Роспатент)

Reading Exercise 1. Read the text and answer the questions. Summarize the answers. 1. What major international treaties on intellectual property rights is the Russian Federation a signatory to? 2. What kind of liabilities may the infringement of intellectual property rights entail? 142

Regulatory Environment Russian Intellectual Property legislation consists for the most part of the Civil Code of the Russian Federation, specifically its new Part Four dated December 18, 2006. Part IV of the Civil Code has replaced or amended all preceding individual Intellectual Property laws. Any legal entity or individual may use and seek protection for its/his/ her intellectual property rights in Russia, provided that the requirements of the law are satisfied. Russia is a signatory to major international treaties on intellectual property rights, including the Universal Copyright Convention, the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, the Madrid Agreement on the International Registration of Trademarks, the Protocol to the Madrid Agreement, WIPO Performances and Phonograms Treaty, and WIPO Copyright Treaty. Infringement of intellectual property rights may entail civil, administrative or criminal liability in accordance with the applicable legislation1. Exercise 2. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Then answer the questions below the text. Finally, say what you have learned about patents. Patents An invention is a technical solution in any field related to a product (inter alia, to a device, substance, cell culture of plants and animals) or a process. Patent protection is given to an invention if it is novel, ..1.. and industrially applicable. The maximum duration of patent protection for an invention is 20 years from the date of the application, subject to payment of annuities. The right to obtain a patent belongs to the inventor, his/her employer (in case of an employee’s invention) and their ..2.. . A patent application is filed with the Federal Service for Intellectual Property, Patents and Trademarks (“Rospatent”), which examines it and grants the patent if the invention meets the above-mentioned criteria. A utility model is a technical solution pertaining to a device. Utility model ..3.. is similar to that of inventions. A utility model is granted patent protection if it is new and industrially ..4.. . The term of a utility model’s patent protection is 10 years from the ..5.. date of the application. An industrial design is the artistic and construction solution, which determines the outer ..6.. of a product of industrial or handicraft origin. An industrial design is granted patent 1

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1. invent

2. assign

3. protect 4. apply 5. file 6. appear

protection if its essential features are new and original. An industrial design is deemed new if the 7. … of its essential 7. combine features does not comprise part of the information publicly available in the world before the priority date of the industrial design. An industrial design is considered original if its essential features evince the creative character of a product’s distinctive features. 1. What criteria should an invention meet to obtain patent protection? 2. How does a utility model differ from an invention? 3. Who has the right to obtain a patent? 4. What criteria should an industrial design meet to be deemed new? To be considered original? Exercise 3. Read the text. Then complete the sentences with the words from the box. Answer the questions below the text. represented deemed by virtue (2) registration with respect to granted a request thereof expires absence Trademarks, Service Marks, and Appellation of Origin of Goods Trademarks (service marks) are designations, individualizing goods or services of legal persons and individual entrepreneurs. Legal protection of trademarks and service marks is granted ..1.. of their registration with Rospatent or ..2.. of international agreements to which the Russian Federation is a party. A mark may be ..3.. by a word or words, pictures, three-dimensional signs and other designations or combinations ..4.. . The trademark and service mark protection is ..5.. for a period of 10 years from the filing date of the application. The trademark and service mark registration is cancelled when its term ..6.. without having been renewed. The trademark and service mark legal protection may be terminated upon ..7.. from an interested party in respect of all or part of goods and services due to non-use of the trademark or service mark during any continuous three-year period counted from the ..8.. date. Assignments and licenses of trademarks and service marks must be registered with Rospatent. In the ..9.. of such registration, they are deemed null and void. The appellation of origin of goods is a name containing a current or historical denomination of a country or other geographic unit or a derivative of such denomination that has become known as a result of its use ..10.. goods the specific features of which are mainly or exclusively determined by natural conditions or human factors which are characteristic of such geographic unit. The designation which represents or contains the name of a geographic unit, has entered in the Russian Federation into the public domain as a designation of goods of a certain kind (has become generic), which are not related to the place of their manufacture, may not be ..11.. to be the appellation of the origin 144

of goods. Legal protection is given to an appellation of origin of goods based on its registration with Rospatent1. 1. What are the ways to represent a trade (service) mark? 2. Why may legal protection of a trademark (or a service mark) be terminated? 3. When is the designation containing the name of a geographic unit not deemed to be the appellation of the origin of goods? Exercise 4. Read the following text and fill in the gaps with correct prepositions. Then answer the questions below the text and speak about the difference between company and trade names. Company Names and Trade Names (Commercial Designations) Company names are designations that identify or distinguish different legal entities when conducting their commercial activities. In the Russian Federation, a company name consists of two parts: the indication of a business legal structure and the distinctive name of the company (e.g. “OOO (Ltd) VimpelCom” where OOO — Limited liability Company and VimpelCom — name of the company). A company may use in its company name the official name of the Russian Federation or any words derived therefrom only ..1.. the assent of the Russian Government. The right to a company name arises ..2.. the moment of the state registration thereof along with the state registration of the legal entity. The owner of a company name is allowed to use its company name exclusively, and to prohibit others ..3.. its unauthorized use. The owner of a company name may not alienate its company name or grant the right to use it to another person. A legal entity illegally using the company name of another legal entity is obliged to cease its use ..4.. the request of the company name owner and to compensate ..5.. any incurred losses. A company name incorporated ..6.. a trade name or a trademark (service mark) is protected regardless of the protection of the trade name or the trademark itself. Trade names (so-called “commercial designations”) are designations which individualize trading, industrial or other types of enterprises owned ..7.. legal entities and individual entrepreneurs. Trade names are other than company names, they do not require registration. (e.g. “BeeLine” — trade name of the company VimpelCom Ltd.). The owner of a trade name enjoys an exclusive right to its trade name and may use it by any lawful means. The exclusive right ..8.. a trade name arises if the designation which is used as a trade name possesses sufficient distinctiveness and its use has gained notoriety ..9.. certain territory. An exclusive right to a trade name terminates if the owner of the trade name fails to use it ..10.. a continuous one-year period. A trade name owner may grant the right to use its trade 1

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name to another person ..11.. a lease of enterprise agreement or a franchising agreement1. 1. 2. 3. 4. 5.

What two parts does a company name consist of? Give an example. When does a company name arise? What rights does the owner of a company name have? When does the exclusive right to a trade name arise? When does the exclusive right to a trade name terminate?

Exercise 5. Read the following text, answer the questions below the text and say what you have learned about copyright. Copyright and Neighboring Rights Part IV of the Civil Code protects works of science, literature and the arts (copyright) and grants protection to rights of performers, phonograms, database compilers and publishers (neighboring rights). Copyright protection arises by virtue of the creation of a work of art without any registration requirements. An author enjoys personal (moral) rights (right of authorship, right to the name, right to public disclosure, right to protect the author’s reputation) and proprietary rights (right of reproduction, distribution, import, public demonstration, public performance, translation, modification etc.). The personal (moral) rights are inalienable from the author and cannot be assigned or transferred by agreement. The proprietary rights to a copyrighted object may be licensed or assigned by virtue of a copyright agreement. The term of copyright protection for all works, including software programs or databases, shall be the lifetime of the author, plus 70 years after his/her death. The author’s moral rights are protected perpetually. Software Programs and Databases Copyright protection also applies to computer programs and databases. Software programs are protected as literary works, while databases are protected as compilations. Although registration is not mandatory for protection, an author may optionally register and deposit software or a database with Rospatent. A software program or a database is protected for the lifetime of the author(s) plus 70 years after his/her (their) death(s). The right to use a software program may be granted under a software license agreement. Trade Secrets and Know-How According to the Civil Code (Part IV) and the Trade Secrets Law, information may be treated as a trade secret only if: (i) it has real or potential commercial value due to the fact that it is unknown to third parties; (ii) it is not freely accessible using lawful means; (iii) the owner has taken reasonable 1

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measures to protect its confidentiality, including legal, organizational, technical and other measures; and (iv) its confidentiality allows, under the existing or potential circumstances, the increase of revenue, the avoidance of unnecessary expenses or receipt of other commercial benefits. 1. 2. 3. 4.

What rights does an author enjoy? When does the copyright protection arise? How long does the term of copyright protection for all works last? What kind of information is treated as a trade secret?

Key terms Exercise 6. Match the words on the left with those on the right to form word partnerships and suggest Russian equivalents of these word partnerships. Use 5 of them in your own sentences. 1. to incur a) to an international treaty 2. license b) model 3. to entail c) of annuities 4. to file d) losses 5. to be a signatory e) appearance of a product 6. payment f) denomination 7. to meet g) agreement 8. utility h) rights 9. to be industrially i) liability 10. outer j) of origin of goods 11. distinctive k) applicable 12. to assign l) features 13. appellation m) criteria 14. historical n) a patent application

Use of English Exercise 7. Suggest English equivalents to the following word partnerships. Относящийся, имеющий отношение, свойственный; индивидуальный предприниматель; отчуждать название компании; смежные права; личное неимущественное право; право собственности, имущественное право; производственный секрет, засекреченная технология; применимое законодательство; среди прочего; изделие ручной работы; неотчуждаемое, неотъемлемое право; прекратить его (знака) использование; всеобщее достояние; литературное произведение; дата подачи заявки, когда устанавливается приоритет. 147

Exercise 8. Write as many word combinations with the word patent as possible. Exercise 9. Match the two halves of the definitions of key concepts. Work with a partner to discuss each concept. 1. An invention is a technical solution…

2. A utility model is a technical solution… 3. An industrial design is the artistic and construction solution … 4. Trademarks (service marks) are designations …

a) that is known, used, and kept secret by a particular firm, for example about a method of production or a chemical process. b) which determines the outer appearance of a product of industrial or handicraft origin c) pertaining to a device.

d) that identify or distinguish different legal entities when conducting their commercial activities. 5. A trade secret is information e) in any field related to a product, to a device, substance, microbial strain, cell culture of plants and animals or a process 6. Neighboring rights are … f) given to the author for a fixed number of years, to print, publish, perform, film, or record literary, artistic, or musical material 7. Company names are g) individualizing goods or services designations … of legal persons and individual entrepreneurs. 8. Copyright is the exclusive h) rights of performers, phonograms, and assignable legal right … database compilers and publishers Exercise 10. Render the sentences into English.

1. Интеллектуальные права на изобретения, полезные модели и промышленные образцы являются патентными правами. 2. Автору изобретения, полезной модели или промышленного образца принадлежат следующие права: исключительное право и право авторства. 3. Изобретению предоставляется правовая охрана, если оно является новым, имеет изобретательский уровень и промышленно применимо . 4. Интеллектуальные права на произведение науки, литературы и искусства являются авторскими правами. 5. Автору произведения принадлежат следующие права: 148

— исключительное право на произведение; — право авторства; — право автора на имя; — право на неприкосновенность произведения; — право на обнародование произведения. 6. Фирменное наименование или отдельные его элементы могут быть использованы правообладателем в принадлежащем ему товарном знаке или знаке обслуживания.

Speaking Exercise 11. Decide whether these statements are true or false or not complete. If they are false, correct them. Work with a partner and discuss the statements. 1. Infringement of intellectual property rights may entail administrative liability in accordance with the applicable legislation. 2. The right to obtain a patent belongs to the inventor, his/her employer (in case of an employee’s invention) and their assignees. 3. The term of a utility model’s patent protection is 20 years from the filing date of the application. 4. An industrial design is granted patent protection if its essential features are new. 5. Legal protection of trademarks and service marks is granted without any registration. 6. The owner of a company name may alienate its company name and grant the right to use it to another person. 7. A company name incorporated in a trade name or a trademark (service mark) is protected regardless of the protection of the trade name or the trademark itself. 8. Trade names are like company names and require registration. 9. Copyright protection arises by virtue of the creation of a work of art without any registration requirements. 10. The author’s rights are protected perpetually. 11. Software programs and databases are protected as literary works. Exercise 12. Prepare a brief talk on any aspect of intellectual property rights. Exercise 13. Discuss the article. Use speech connectors in Annex I. Russia: Two years of the Intellectual Property Court Operating in Moscow since July 2013, the Intellectual Property Court was expected to raise the level of professionalism in the resolution and adjudication of intellectual property disputes, increase transparency of the decision-making, 149

and boost confidence in the Russian IP system among domestic and foreign IP owners. It acts as a court of first instance, reviews regulatory acts of the Federal Service for Intellectual Property (Rospatent) and decisions of the Federal Antimonopoly Service, and handles disputes over the ownership of IP rights and claims to invalidate the registration of IP rights (except copyright and related rights). In its second role as a cassation instance, the court reviews cases of IP rights infringement between legal entities and individual entrepreneurs. An infringement lawsuit still has to be first filed in a regional commercial court (called an arbitrazh court). Decisions of the first instance can be appealed to arbitrazh courts of appeal. The IP Court, with its 18 specialist judges, only steps in if a further appeal is permitted and filed; a panel of three judges will review the appealed decisions. As a court of first instance, in 2014 it received 783 appeals, 40% of which were accepted and led to the appealed decision being reversed or modified. There were 293 appeals of Rospatent’s decisions relating to grant or cancellation of exclusive rights (28% of the appeals accepted) and 435 claims to cancel a trademark on the grounds of non-use (the trademark being cancelled in 52% of the cases). During the first half of 2015, the corresponding numbers were 365 (35%), 109 (14%) and 235 (46%). In 2014, a foreign party outside the Commonwealth of Independent States (CIS) region was involved in 207 of 783 appeals, and 46% of said appeals were accepted. During the first half of 2015, 143 of 365 appeals involved a foreign party outside the CIS region, and 34% of the appeals by the foreign party were accepted. It’s not very surprising that the majority of the claims in the IP Court concern trademarks, in particular cancellations of a trademark based on nonuse. These cases seem to keep the IP Court quite busy. As for patents, there were only 31 requests filed by a patentee in 2014 to review a Rospatent decision to revoke a patent and in only four of those cases (13%) was the decision overruled by the IP Court. In the first half of 2015, there were only eight such requests, and only one Rospatent decision was overruled. As a court of cassation, the IP Court received 1,820 appeals in 2014, 1,578 of which were accepted for a review while 1,390 appeals were actually reviewed during the same year. A foreign party outside the CIS region was involved in 221 of the 1,390 reviewed appeals and in 70 of those cases (32%) the appeal was accepted. In total, 1,096 decisions issued by the first instance courts and appeal courts were reviewed; as a result 336 decisions were cancelled (31%), in these decisions 249 cases were returned to the lower instance courts for a new consideration. Is not very surprising that the majority of the claims in the IP Court also reviewed 294 of its own earlier decisions, including 264 decisions issued as a court of first instance (cancelling 62 decisions, ie, 21%) and 30 decisions issued as a court of cassation (cancelling eight decisions, ie, 27%). 150

During the first half of 2015, 527 decisions issued by the first instance courts and appeal courts were reviewed, of these decisions 102 (19%) were cancelled. The IP Court also reviewed 189 of its own decisions, of which 163 decisions were issued as a court of first instance and 26 decisions issued as a court of cassation. The number of appeals involving a foreign party outside the CIS region was 83 and 17 of those appeals were accepted (24%). Allowing the possibility to appeal against Rospatent’s decisions to a competent independent body, the IP Court is no doubt a development for the better. Launching the IP Court and its web portal (http://ipc.arbitr.ru/) has also improved the transparency of official decision-making, as the decisions given by the IP Court can be easily accessed. The success rate in appeals seem to be similar for both domestic and foreign parties, which is a very encouraging sign for IP right owners, investors and importers from outside the CIS region1 .

Summarizing Exercise 14. Read the article and summarize it reducing to 25% of the original volume. Russia’s New IP Сourt February 2014 By Mrs. Lyudmila Novoselova, President of the Intellectual Property Court, Russian Federation The idea of establishing a specialized intellectual property (IP) court in the Russian Federation has been actively debated since the late 1980s. A strong commitment to fostering a more favorable environment for innovation, business and foreign investment and to improving the country’s IP protection system, culminated in the establishment of such a court in December 2011 when Federal Constitutional Law No. 4-FKZ was adopted. Russia’s new Intellectual Property Court (the IP Court) opened its doors for operation on July 3, 2013 — a significant milestone in the history of IP protection in the Russian Federation. The new IP Court will enable more efficient handling of the growing number of lawsuits related to IP. These cases are typically more complex than standard commercial disputes and their resolution generally requires not only legal but also specialist technical knowledge to ensure timely, accurate and consistent outcomes. A specialized IP court dedicated to handling such cases will also help minimize judicial errors, lower litigation costs and boost business confidence. An initiative of the Supreme Commercial Court of the Russian Federation, the new IP Court was established under Federal Constitutional Law No. 4-FKZ 1 Goussev E. Papula-Nevinpat, Rospatent, IP rights, infringement, trademark, CIS // http://www.worldipreview.com/contributed-article/russia-two-years-of-the-intellectualproperty-court.

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adopted on December 6, 2011 which amended Federal Constitutional Law No. 1-FKZ of December 31, 1996 on the Judicial System of the Russian Federation and Federal Constitutional Law No. 1-FKZ of April 28, 1995 on Commercial Courts of the Russian Federation. The IP Court will act as both a court of first instance and as a court of cassation with respect to IP-related matters. A court of first instance In its role as a court of first instance, the IP Court is mandated to adjudicate cases arising from: Legislative acts of federal executive authorities (such as the Federal Service for Intellectual Property (Rospatent)) that affect an applicant’s legitimate IP rights and interests in relation to patents, plant variety rights, the layout designs of integrated circuits, trade secrets and trademarks; The grant or invalidation of IP rights (with the exception of copyright and related rights and layout design of integrated circuits), including cases that contest non-regulatory legal acts, decisions and action or inaction of federal executive authorities (for example Rospatent and its officials, as the federal authority responsible for IP); Decisions of the federal antimonopoly authority (the Federal Antimonopoly Service) in relation to unfair competition and the improper use of trademarks and other identifiers related to goods, services, and enterprises; Determination of a patent holder; Invalidation of rights relating to inventions, utility models, industrial designs, plant varieties, trademarks and appellations of origin where the federal law does not provide for a different invalidation procedure; and Cancellation of a trademark on the grounds of non-use. All such cases fall within the competence of the IP Court irrespective of whether the parties to a dispute are organizations, individual entrepreneurs, or citizens. A court of cassation The IP court is also mandated to act as a court of cassation and as such plays a key role in ensuring consistent and transparent interpretation of the law as it relates to IP. In this capacity, it will review IP infringement cases decided upon by all state commercial courts of first and appeal instance within the Russian Federation. These courts are responsible for adjudicating disputes involving organizations, enterprises and individual entrepreneurs. It is further mandated to review the judgments it has adopted and which have acquired the force of law, in light of new or newly discovered facts. The IP Court may also apply to the Constitutional Court of the Russian Federation with a request to verify the constitutionality of a law applied or to be applied in a case pending before it. In this capacity, the Court examines and fine-tunes judicial practice; prepares proposals for improving existing 152

laws and associated regulations; and is well placed to gather and analyze IPrelated legal statistics. Access to specialist knowledge Given the growing complexity of IP laws and the rapid evolution of the technologies and products they protect, provision has been made to ensure that the highly trained judges appointed by the Court have access to the specialist technical knowledge required to effectively adjudicate the cases before them. To date, 15 court experts, with specialist knowledge in a variety of fields have been appointed to support the Court’s judges in this way. The Court may also call upon independent technical specialists to provide oral testimony during a trial to clarify specific technical case-related issues. To date, 16 judges have been appointed to the IP Court (including the Chief Judge, the Deputy Chief Judge, and chairpersons of two panels). The Court currently has a staff of 58 legal, paralegal and administrative staff to support its day-to-day work. Number of cases handled In the first four months of operation — from July 3 to November 29, 2013 — in its capacity as court of first instance, the IP Court received over 350 claims and in its capacity as a court of cassation it handled 390 appeals. While the IP Court is still in its infancy, it is already demonstrating that it is an efficient forum for handling IP-related disputes in a timely and effective manner. Its very existence is testimony to the government’s commitment to strengthening the national framework for IP protection. In light of the ever increasing economic importance and sophistication of IP and IP disputes, the Court will continue to play an important role in improving the country’s IP legal regime, boosting business confidence and supporting economic growth1 .

1

http://www.wipo.int/wipo_magazine/en/2014/01/article_0006.html.

Unit 9. Promoting Foreign Investments in Russia Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What laws of the Russian Federation provide the legal framework for trade and investment? 3. What do you know about the so-called Special Economic Zones?

Legal terms 1.

provide the legal framework

обеспечить правовую базу

2.

insurance company

страховая компания

3. 4.

non-commercial organization joint venture

некоммерческая организация совместное предприятие 154

5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.

22.

portfolio of government securities direct investment priority investment project

портфель государственных ценных бумаг прямая инвестиция приоритетный инвестиционный проект investment recoupment period срок окупаемости инвестиции special economic zone особая экономическая зона on a tender basis на основе тендера special preferential regime for особый режим ведения предприconducting business activities нимательской деятельности high technology industrial высокотехнологичные промышareas ленные районы health and recreational resorts санаторно-курортные зоны obtain the status of a resident получить статус резидента cargo sea and river ports and морские и речные грузовые порты airports и аэропорты constituent entity округ tax incentives (benefits) налоговые стимулы, льготы tax exemption освобождение от налогов reduced tax rate опущение налоговой ставки tax stabilization clause статья закона, гарантирующая налоговую стабильность tax credit налоговый кредит (разрешенный законом прямой вычет определенных расходов — обычно социально мотивированных или общественно важных — из общей суммы налоговых обязательств (в отличие от вычетов, уменьшающих налогооблагаемую базу) impose restrictive exemptions налагать ограничения

Study the titles of the principle legislative acts in the field of foreign investments: The Federal Law on Special Economic Zones

Федеральный закон «Об особых экономических зонах»

The Law on Foreign Investments

Федеральный закон «Об иностранных инвестициях» 155

Reading Exercise 1. Read the text and answer the questions. Relate the contents of the Law on Foreign Investments. 1. What foreign investments are not regulated by the Law on Foreign Investments? 2. What does the Law on Foreign Investments guarantee to foreign investors? 3. What is the most important feature of the Law on Foreign investments? 4. What legal entities does the tax stabilization clause apply to? 5. What project may be defined as a priority investment project? General Provisions Regarding Foreign Investments The Constitution of the Russian Federation, the Civil Code of the Russian Federation, and other legislation on joint stock and limited liability companies and their insolvency provide the general legal framework for trade and investment in Russia. Foreign investments are regulated by the Federal Law “On Foreign Investments in the Russian Federation”. However, the Law on Foreign Investments does not apply to the investment of foreign capital in banks, credit organizations, insurance companies or non-commercial organizations; foreign investments in such entities are regulated under different Russian legislation. The Law on Foreign Investments guarantees foreign investors the right to invest and to receive revenues and profits from such investments, and sets forth the terms for foreign investors’ business activity on the territory of the Russian Federation. The objective of the Law on Foreign Investments is to attract foreign materials, financial resources, and technology and management skills to improve the Russian economy, while providing stability for foreign investors. The Law on Foreign Investments stipulates that foreign investors and investments must be treated no less favorably than domestic investments, with some exceptions. Such exceptions may be introduced to protect the Russian constitutional system, the morality, health and rights of persons, or in order to ensure state security and defense. The Law on Foreign Investments permits foreign investment in most sectors of the Russian economy: portfolios of government securities, stocks and bonds, direct investment in new businesses, the acquisition of existing Russianowned enterprises, joint ventures, etc. Foreign investors are protected against nationalization or expropriation unless such action is mandated by a federal law. In such cases, foreign investors are entitled to receive compensation for any investment and other losses. One of the most important features of the Law on Foreign Investments is the tax stabilization clause set forth in Article 9. Under Article 9.1, the Law’s tax stabilization clause applies to i) foreign investors that are implementing “priority 156

investment projects”, ii) Russian companies with more than 25% foreign equity ownership, or iii) Russian companies with some foreign participation that are implementing “priority investment projects”. A priority investment project is defined as a project with foreign investment of at least one billion rubles (about USD 33 million at current exchange rates), or where a foreign investor has purchased an equity interest of at least 100 million rubles (about USD 3.3 million at current exchange rates); in either case, the investment project must also be included in a list of projects approved by the Russian Government1. Exercise 2. Read the text and decide whether these statements are true or false. If they are false, correct them. 1. A special economic zone (“SEZ”) is a territory in Russia selected by a foreign investor on a tender basis from proposals submitted by regional authorities. 2. The foreign investors participating in a SEZ should obtain the status of a SEZ resident. 3. Residents of SEZs are provided with the major tax benefits for the fifteen years after a property is acquired. Special Economic Zones In 2005, the Federal Law On Special Economic Zones in the Russian Federation was passed, which introduced new methods for the provision of investment benefits. Under the Law on Special Economic Zones, a special economic zone (“SEZ”) is a territory in Russia selected by the government on a tender basis from proposals submitted by regional authorities. The following types of special economic zones can be established in the Russian Federation: • industrial and production special economic zones; • engineering technical-implementation economic zones; • touristic and recreational special economic zones; • port special economic zones. A special preferential regime for conducting business activities is to be provided for 20 years to encourage development of high technology industrial areas and health and recreational resorts, and for 49 years to develop transport infrastructure (international cargo sea and river ports and airports). The Federal SEZ Management Agency was created by the Russian Government within the Ministry of Economic Development and Trade. Russian legal entities interested in participating in a SEZ (note — benefits apply to foreign investors only upon the creation of a Russian subsidiary) should obtain the status of a SEZ resident by entering into an agreement on technology implementation activities with a SEZ Administration. The application should be supported by a business plan. A Special SEZ Expert Council decides on whether the applicant 1

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qualifies to be a SEZ resident based on a score evaluation system, taking into account the prior expertise of the applicant (or the founder of the applicant) in the selected industry, calculation of the investment recoupment period, the markets for the developed products, competition and other business risk analysis, intellectual property rights issues, etc. Residents of SEZs will be provided with the major tax benefits, e.g. exemption from Corporate Property Tax, Transport Tax and Land Tax (the latter applicable only to the owners of land plots) for the first five years after a property is acquired1. Exercise 3. Read the extract from the article Restriction Associated with Particular National Importance of Certain Strategic Activities. Decide which answer A, B or C best fits each space. Answer the question below the text and retell it. The Law on Foreign Investments ..1.. restrictive exemptions for foreign investors and groups of persons, including a foreign investor with the share in the charter capital of business entities of strategic importance to national defense and national security, and (or) the transactions that ..2.. to control over the strategic companies. The companies are ..3.. to be strategic in case they carry out business in one or more areas specified in Article 6 of the Law on Restrictions of Foreign Investments, for example, the following types of activities are included into the list: • activities ..4.. to nuclear materials and radioactive technology; • activities associated with the manufacture, distribution and maintenance of encryption (cryptographic) facilities, as well as the provision of services for data encryption; • activities associated with weapons, military equipment and ammunition; • space activities etc. The total number of specific activities is 43. Transactions, ..5.. in the establishment of control over strategic companies by the foreign investors are ..6.. only upon resolution on preliminary approval of such transactions by the Government Commission for Control of Foreign Investment in the Russian Federation2. 1.

A provides

B imposes

C stipulates

2.

A lead

B exercise

C take

3.

A subjected

B implied

C deemed

4.

A concerned

B associated

C related

5.

A resulting

B concluding

C dealing

6.

A prohibited

B considered

C allowed

1 2

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What restrictive exemptions are imposed on foreign investors by the Law on Foreign Investments? Exercise 4. Read the following extract from The Law on Special Economic Zones and fill in the gaps with correct prepositions. Then answer the questions below the text and speak about the status of a SEZ resident. A private entrepreneur or a commercial entity registered ..1.. the statutory provisions ..2.. a territory of municipal district, ..3.. the borders of which a special economic zone is situated, and ..4.. the said entrepreneur or an entity have entered ..5.. agreement with the special economic zone administrative bodies relating to a specified business activity carried ..6.. in accordance with special procedures ..7.. conditions, may be deemed to be residents of a special economic zone. The residents enjoy various tax benefits, particularly their activities may be subject to tax exemption ..8.. income tax, value-added tax, excise tax, etc. The regime of a free customs zone is adopted ..9.. the territories of special economic zones meaning that, ..10.. conditions, the goods of foreign origin are placed and used ..11.. the territory of a special economic zone ..12.. paying tax duties and the value-added tax and no economic restrictions or prohibitions as provided for ..13.. the legislation relating to state regulation of foreign trade are applied ..14.. imported goods, and the Russian goods are placed and used in these economic zones ..15.. conditions that apply to export operations ..16.. the export customs regime with an excise to be paid but being free ..17.. export customs duties1. 1. Who is deemed to be a resident of a special economic zone? 2. What kind of tax benefits does a resident of a special economic zone enjoy? 3. What does the regime of a free customs zone mean? Exercise 5. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Then answer the question below the text and summarize it. Regional Legislation In addition to reviewing the ..1.. federal legislation prior to investing in a region, potential investors should also examine regional laws. One of the most distinctive features of the ..2.. climate in Russia has been the ..3.. among various regions of Russia in attracting investment, both foreign and Russian. ..4.. to attract as many investors as possible to their respective territories, and thus improve the social and economic conditions of their regions, the 1

1. apply

2. invest 3. compete 4. strive

Doing Business in Russia 2013. Baker & McKenzie — CIS, Limited.

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constituent entities of the Russian Federation have passed a large number of laws, ..5.., and other legal measures to encourage and regulate investment. The laws and regulations passed by the regions establish the legal framework for investment activities in the respective constituent entities, and envisage a number of incentives for investors, in particular: • financial support for investors, ..6.. within limits established by regional budgets; • tax incentives, including ..7.. tax rates and investments tax credits; • various forms of organizational and information support. Creation of Special Economic Zones in the Russian Federation may become a new means of ..8.. investors. The regulatory framework for such territories has already been established at both federal and regional levels. Within such framework, laws ..9.. for tax incentives for residents of Special Economic Zones have already been adopted in the Lipetsk, Moscow, Kaliningrad, Magadan, and Tomsk Oblasts (regions), in the Republic of Tatarstan, and in St. Petersburg.

5. regulate

6. provide 7. reduce

8. attract

9. provide

What incentives for foreign investors are envisaged by regional legislations?

Key terms: Promoting Foreign Investments in Russia Exercise 6. Match the words on the left with those on the right to form collocations and suggest Russian equivalents of these collocations. Then use some of them in your own sentences. 1. joint 2. legal 3. limited liability 4. to enjoy 5. value-added 6. special 7. to receive 8. to attract 9. to be mandated by 10. to impose restrictive 11. to encourage and regulate 12. investment recoupment 13. to envisage 14. priority investment

a) company b) projects c) investors d) venture e) exemptions f) investment g) frameworks h) tax i) tax benefits j) a number of incentives for investors k) economic zone l) a federal law m) period n) revenues and profits 160

Use of English Exercise 7. Decide which noun can go with all these verbs. Make all possible collocations and suggest Russian equivalents of these collocations. Think about more collocations with this noun. Then use them in your own sentences. apply to

permit

introduce

stipulate

mandate

pass

provide for

set force

Exercise 8. Render the sentences into English. 1. Федеральный закон «Об иностранных инвестициях» не распространяется на отношения, связанные с вложениями иностранного капитала в банки и иные кредитные организации, а также в страховые организации. 2. Приоритетный инвестиционный проект — инвестиционный проект, суммарный объем иностранных инвестиций в который составляет не менее 1 млрд рублей, или инвестиционный проект, в котором минимальная доля (вклад) иностранных инвесторов в уставном (складочном) капитале коммерческой организации с иностранными инвестициями составляет не менее 100 млн рублей, включенные в перечень, утверждаемый Правительством Российской Федерации. 3. Правовой режим деятельности иностранных инвесторов и использования полученной от инвестиций прибыли не может быть менее благоприятным, чем правовой режим деятельности и использования полученной от инвестиций прибыли, предоставленный российским инвесторам, за изъятиями, устанавливаемыми федеральными законами. 4. Изъятия ограничительного характера для иностранных инвесторов могут быть установлены федеральными законами только в той мере, в какой это необходимо в целях защиты основ конституционного строя, нравственности, здоровья, прав и законных интересов других лиц, обеспечения обороны страны и безопасности государства. 5. Иностранный инвестор имеет право на возмещение убытков, причиненных ему в результате незаконных действий (бездействия) государственных органов, органов местного самоуправления или должностных лиц этих органов, в соответствии с гражданским законодательством Российской Федерации. 6. Имущество иностранного инвестора или коммерческой организации с иностранными инвестициями не подлежит принудительному изъятию, в том числе национализации, реквизиции, за исключением случаев и по основаниям, которые установлены федеральным законом или международным договором Российской Федерации. 7. Особые экономические зоны создаются в целях развития обрабатывающих отраслей экономики, высокотехнологичных отраслей 161

экономики, развития туризма, санаторно-курортной сферы, портовой и транспортной инфраструктур, разработки технологий и коммерциализации их результатов, производства новых видов продукции.

Speaking Exercise 9. Answer the questions. Discuss your answers with a partner. 1. What is the objective of the Law on Foreign Investments? 2. What does the Federal Law On Special Economic Zones of 2005 introduce? 3. What types of Special Economic Zones may be established in the Russian Federation? 4. What is the way for a foreign investor to obtain a status of a SEZ resident? Exercise 10. Choose a topic related to foreign investments in Russia. Prepare a brief presentation, making use of the following phrases: I would like to start with; I am going to give you an overview of; this law deals with/regulates; according to this…; it’s important to stress/point out that; moving to the next point; to sum up; in conclusion. 1. The legislation provides for a wide range of guarantees in respect of foreign investors. 2. The Law on Restrictions of Foreign Investments. 3. Latest amendments to the Foreign Investment Law/On Special Economic Zones. 4. The investment climate and opportunities overview. Key advantages of investing in Russia.

Summarizing Exercise 11. Read the article and summarize it reducing to 25 percent. Say what you have learned about special economic zones in Russia. Special economic zones in Russia — which and where Today special economic zones (SEZ) are one of the most effective instruments of attracting investment to Russia. Now there are 28 special economic zones of 4 different types: — 6 industrial and production zones (in Republic of Tatarstan, Lipetsk, Samara, Sverdlovsk, Pskov and Kaluga regions); — 5 technology and innovation zones (in Moscow, Saint-Petersburg, Tomsk, Dubna (Moscow region) and Republic of Tatarstan); — 14 tourist and recreational zones (in Republic of Altai, Republic of Buryatia, Altai Territory, Stavropol Territory, Primorsky Territory, Irkutsk region, also there is a cluster in the Krasnodar Territory, Republic of Ingushetia, Republic of Dagestan, Republic of North Ossetia-Alania, Republic 162

of Adygeya, Kabardino-Balkar Republic, Karachi-Cherkess Republic and Chechen Republic); — 3 port zones (in Ulyanovsk, Murmansk regions and Khabarovsk Territory). SEZ in Russia are located in the most developed regions. There are hitechnology enterprises, scientific and research laboratories in the zones. By December 2013 there were 338 residents in the special economic zones, including leading foreign companies from 24 countries, among them there are the major transnational companies: Ford, Yokohama, 3M, Air Liquide, Rockwool, Hayat, Novartis, etc. The total volume of scheduled investments is more than US $12 billion. Residents of technology and innovation zones obtained 350 industrial patents. The world’s largest companies, such as Boeing, Airbus, Apple are among the consumers of SEZ residents' products, and such companies as Phillips, Samsung, IBM, etc. are their partners. The SEZ residents’ products are in demand, and this indicates the high potential of SEZ as a tool to support innovative companies, through which residents compete successfully in the global market. Currently we are working on building technological cooperation between companies and on clusters creation. For example, the largest cluster in the country is now being created in SEZ “Toliatti”. It will provide a full cycle of car production, including the production of engines and other high-tech components, presented by leading companies from Germany and Japan. Besides, there is a cluster on the production of automobile tires in SEZ in the Lipetsk region. There is a complete set of production from polymer additives to metal cord (Yokohama, Lanxess, Bekaert). The aviation cluster is now being created within the port SEZ “Ulyanovsk”, which provides establishment, repair and servicing aircraft equipment. “Ulyanovsk” residents are represented by such well-known companies as “Volga-Dnepr”, FLTechnics, Viking, AAR and others. There is also an application of “Rostekhnologii” and “Bombardier” joint project implementation on small aircraft production in SEZ “Ulyanovsk”. From 2005 the “industrial assembly” regime was established in Russia to attract investment from foreign automakers. “Industrial assembly” means gradual localization of automotive vehicles and components production in Russia with different benefits and preferences. However, in accordance with the commitments made by the Russian Federation during the WTO accession, further development of this regime became impossible. Thus, the mechanism of the SEZ is currently the only existing mechanism for attracting foreign investors, which allows potential investors to use preferential government support. The benefits of special economic zones can reduce the expenses of the investor up to 30%. 163

Special economic zones provide special conditions of doing business for the residents which is guaranteed by the Government of the Russian Federation: 1. Tax preferences: Income tax: for the SEZ residents the tax rate is 0–13.5% instead of 20%. The residents of technology and innovation and tourist and recreational special economic zones which are combined into a cluster are exempt from the income tax. Property and transport tax exemption is for 10–15 years. At the federal level investors are exempt from the land tax for 5–10 years. 2. Investors receive modern transport, social, customs and other infrastructure for business development created at the expense of the state budget. 3. Special custom regime — is a regime of a free customs area which means that investors in the special economic zones’ territory don’t have to pay a customs duty and value-added tax for foreign goods and it is also forbidden to use prohibitions and restrictions of economic character. 4. Reduced administrative barriers (the system of a “single window” simplifies the interaction with regulatory authorities). “Single window” means that investors submit all documents to one special agency and this agency assist in agreement procedures that reduce the time at the initial stage of the investment project. 5. Access to the qualified personnel resources. 6. There is a simplified migration regime for the highly qualified foreign staff, involved in the special economic zone. The process of obtaining the status of a SEZ resident is legally transparent and easy for an investor and consists of 4 major steps. 1 — company registration and business-plan making; 2 — handing in an application to the Ministry of Economic Development of the Russian Federation; 3 — application acceptance by the Expert Committee; 4 — signing a triangular agreement between the investor, the Ministry of Economic Development and the SEZ management company. Any company or individual entrepreneur, legally registered in the boundaries of a special economic zone can become the resident of SEZ. Now we are attracting professional management companies for operating in special economic zones in order to improve their efficiency. These companies have different guarantees from the Government and they are exempt from the real estate tax for 10 years. We already have experience in attracting foreign companies to manage special economic zones. An agreement to manage a special economic zone “Moglino” in the Pskov region was signed between the Singaporean company “Jurong” and the management company of JSC “SEZ Moglino” in Singapore on December 20, 2012. 164

Russian SEZs have proved themselves successful in the international arena. SEZ “Alabuga” in the Republic of Tatarstan was included in the “Foreign Direct Investment” magazine global rating of “Free Economic Zones 2012/2013”, and was the 40th in the rating (this rating takes into account more than 600 zones in 120 countries). Thus, special economic zones have already shown their effectiveness, especially in terms of attracting foreign direct investment1.

1 http://www.themoscowtimes.com/business/article/investment-in-russian-real-estateplummets-60/503112.html.

Unit 10. Issuance and Regulation of Securities in Russia Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What are securities from a legal point of view? What are securities from an economic point of view? 3. What is the purpose of issuing securities?

Legal terms 1.

security

ценная бумага

2.

issue securities

выпускать ценные бумаги

3.

Securities Law

Закон «О рынке ценных бумаг»

4.

financial disclosure

раскрытие информации о финансовом положении

5.

admit to placement

допускать к размещению

6.

custodian

здесь: орган исполнительной власти 166

7.

options on shares

опционы на акции

8.

corporate bonds

корпоративные облигации (долговые обязательства компании)

9.

issue shares by private placement

выпускать акции по закрытой подписке

10. secured bond

обеспеченная облигация

11. suretyship

поручительство, гарантия

12. pledge

залог на ценные бумаги

13. facilitate mortgage securitisations

способствовать проведению сделок по секьюритизации ипотеки

14. mortgage-backed bond

обеспеченная ипотекой облигация

15. mortgage-participation certificate

ипотечный сертификат участия

16. promissory note

простой вексель

17. bill of exchange

переводной вексель

18. debt financings

финансирование с привлечением заемного капитала

19. issuable security

эмиссионная ценная бумага

20. certify the right

удостоверять право

21. bearer securities

ценные бумаги на предъявителя

22. exchange bond

биржевая облигация

23. maturity of exchange bonds

срок погашения биржевых облигаций

24. investment unit

инвестиционный пай

25. on behalf of an issuer

от имени эмитента

26. dispose of the depositor’s securities

распоряжаться ценными бумагами депонента

27. applicable legislation

применимое право

28. eligible jurisdictions

приемлемые юрисдикции

29. debt and equity instruments

долговые и долевые документы

30. clear settlements under transactions with securities

четкие расчеты по операциям с ценными бумагами 167

Study the common abbreviations you may encounter in the field of issuance and regulation of securities: RTS (The Russian Trading System)

ОАО «Фондовая биржа РТС» (ныне — некоммерческое партнерство развития финансового рынка РТС)

OECD (The Organization for Economic Co-operation and Development)

Организация экономического сотрудничества и развития

FATF (The Financial Action Task Force)

Межправительственная организация разработки финансовых мер борьбы с отмыванием денег

MONEYVAL (The Committee of Experts on the Evaluation of AntiMoney Laundering Measures and the Financing of Terrorism)

Комитет экспертов Совета Европы по оценке мер борьбы с отмыванием денег

The MBS (Mortgage-Backed Securities) Law

Закон об ипотечных ценных бумагах

Reading Exercise 1. Read through the texts quickly and match these headings (A–D) with the sections they belong to (1–4). 1. Debt securities. 2. Russian Depository Receipts, Exchange Bonds, Investment Units. 3. Issuance and Regulation of Securities. 4. Secured Debt Instruments. Exercise 2. Read the introduction to Issuance and Regulation of Securities in Russia and answer the questions. Then summarize the contents. 1. What is the difference between the main groups of securities in the Russian Federation? 2. What is a “prospectus”? 3. What do abbreviations MICEX and FSFM stand for? A… Generally, all types of securities existing in the Russian Federation can be divided into two main groups: those which should be issued in compliance with a specific issuance procedure prescribed by the Securities Law and which require registration with the securities regulator (such securities are referred to as “emissionnyie”) and those which need not be registered (“neemissionnyie”). In certain cases the Securities Law also requires a prospectus to be registered simultaneously with the registration of the securities issue. 168

The Securities Law also provides for disclosure of certain financial and other information by issuers who have registered a prospectus. In general, foreign securities may be admitted to placement and/or public circulation in Russia by the decision of either MICEX or by the decision of the FSFM. The prospectus must be in Russian, signed by a Russian broker and in certain cases by a foreign issuer, and meet the disclosure requirements established by FSFM. Persons signing a prospectus are liable if any information contained in the prospectus is false, incomplete or misleading. Foreign securities admitted for public placement or public trading in Russia must be recorded with a Russian custodian licensed to provide depositary services by the FSFM. (Doing Business in Russia ) Exercise 3. Read the following text and think of the best word to fill in each gap. Then answer the questions below the text and summarize the text. B… Russian joint-stock companies (JSCs) may issue shares, options on shares, corporate bonds, and other ..1.. . Open joint-stock companies may raise capital either by ..2.. shares to the public or by private placement. Shares of closed joint-stock companies may not ..3.. offered to the general public. Shares in a limited liability company are not ..4.. to be securities and cannot be used for raising capital from the general public. C… This legislation introduced the concept of secured and unsecured bonds. Secured bonds must be fully ..5.. with a third-party guarantee or suretyship, or with a pledge (or a mortgage) over the issuer’s and/or third party’s securities or ..6.. property. Two specific types of securities were introduced in 2003 to facilitate mortgage securitisations. Pursuant to the MBS Law, Russian banks and certain other ..7.. may issue mortgage-backed bonds and mortgage-participation certificates. Such securities must be backed by loan receivables secured by ..8.. over real estate. Besides bonds, some Russian companies use promissory notes and bills of exchange for debt financings. Under Russian law, promissory notes and bills of exchange are ..9.. as securities. (Doing Business in Russia ) 1. What are the requirements for foreign securities to be admitted to placement in the Russian Federation? 2. How can different companies raise capital? 3. What are secured bonds? 4. What bonds are deemed to be unsecured? 5. What two specific types of securities were introduced in 2003? Why? 6. What other ways of raising capital do Russian companies use? 169

Exercise 4. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Then answer the questions below the text and say what you have learned. D… An RDR is a registered ..1.. security without a nominal value, which certifies both the right to a specified amount of shares or bonds of a foreign or Russian issuer of RDRs and the provision of services in connection with the ..2.. of rights by a Russian ..3.. of an RDR. RDRs are documented bearer securities and are stored centrally by the issuer. Exchange bonds differ from ordinary bonds. They can be issued through a ..4.. procedure. Maturity of exchange bonds may not exceed 36 months. The ..5.., prospectus and placement report do not need to be registered. However, some conditions must be set out. Mutual ..6.. funds are considered to be a property complex and not legal entities. Mutual investment funds are managed by a management company, which acts on behalf of the founders ..7.. to a trust agreement. An investment unit is a registered security issued by a management company certifying the share of its holder in the ..8.. right to the property composing an investment fund and property coming about through the management. (Doing Business in Russia ) 1. 2. 3. 4.

1. issue

2. realize 3. hold

4. simplify 5. issue

6. invest

7. pursue 8. own

What is an RDR? What is the difference between exchange bonds and ordinary bonds? What are mutual funds? What is understood by investment units?

Key terms: Issuance and Regulation of Securities in Russia Exercise 5. Match these terms (1–9) with the definitions (a–i). Then, work with a partner and discuss each term. 1) issuer a) a certificate attesting credit, the ownership of bonds or stocks, or the right to ownership connected with tradable derivatives 2) depositary

b) a document that gives details about a new issue of shares and invites the public to buy shares in the company

3) bond

c) an interest in property created as a security for a loan or payment of a debt and terminated on payment of the loan or debt 170

4) security

d) an entity issuing a security

5) prospectus

e) a person to whom something is lodged in trust

6) mutual fund (unit trust)

f) an investment fund shared by a large number of different investors

7) mortgage

g) a security with a redemption date over a year later than its date of issue (a security under which the issuer owes the holders a debt, and is obliged to pay them interest, and to repay the principal at a later date than its date of issue)

Use of English Exercise 6. Complete the descriptions of the types of professional participants involved in the securities market using the words in the box. Work with a partner and discuss the main functions these professional participants perform. registrars

clearing organizations trust managers depositories organizers of trades brokers dealers

1. ... are professional participants of the securities market who perform transactions with securities on behalf of and at the expense of their clients (investors or issuers), or on their own behalf and at the expense of a client. 2. … are defined as professional participants of the securities market who perform transactions with securities on their own behalf and for their own account by publicly declaring bid/ask prices with the obligation to buy and/ or sell securities at such prices. 3. … of securities are professional participants of the securities market who manage the securities of their clients under a trust management agreement. 4. … are professional participants of the securities market who are charged with maintaining registers of securities owners. 5. … are professional participants of the securities market who hold certificates of securities and/or record the transfer of rights to securities. 6. … are professional participants of the securities market who render services that directly facilitate the conclusion of transactions with securities among the participants of the securities market. 7. … are professional participants of the securities market that clear settlements under transactions with securities. Exercise 7. Suggest Russian equivalents of the following word partnerships. Then use some of them in your own sentences. issuance procedure; prospectus; a foreign issuer; to provide depositary services; to issue shares; to raise capital; limited liability company; mortgage; debt financings; provision of services; trust agreement; security market; on 171

behalf of an issuer; trust manager; to dispose of the depositor’s securities; applicable legislation; organizer of trades; clearing organization Exercise 8. Suggest English equivalents of the following word partnerships. Then use some of them in your own sentences. Издавать ценные бумаги; регулятор рынка ценных бумаг; допускать к публичному обращению; нести ответственность; акционерное общество; корпоративные облигации (долговые обязательства); закрытое акционерное общество; акционерное общество с ограниченной ответственностью; необеспеченная облигация; залог на ценные бумаги; залог на недвижимое имущество; ипотечный сертификат участия; простой вексель; переводной вексель; эмиссионная ценная бумага; номинальная стоимость; оказание услуг; погашение биржевых облигаций; договор об учреждении траста; право собственности на имущество; рынок ценных бумаг; совершать сделки с ценными бумагами; за счет инвесторов; договор доверительного управления; депозитарий; открытый депозитарный счет; фондовая биржа; четкие расчеты по операциям с ценными бумагами. Exercise 9. Complete the sentences with appropriate prepositions. Translate them into Russian. 1. Trust management may be exercised ..1.. securities, money for investment in securities, or assets and securities derived ..2.. such management activities. 2. The depositary has no right to dispose ..3.. the depositor’s securities, to manage them, or to perform any actions with securities ..4.. the depositor, except ..5.. those performed ..6.. the demand of the depositor in cases provided ..7.. by the depository contract. 3. In December 2011, two Federal Laws, coming ..8.. effect ..9.. 1 January 2012 and 1 July 2012, were passed promoting the long-planned establishment of a central depositary in Russia. 4. The FSFM is to assign the role of the central depositary to a licensed Russian depositary that complies ..10.. the certain requirements ..11.. applicable legislation. 5. It would also have the exclusive rights to open accounts ..12.. foreign central depositaries or entities conducting settlement and clearing on regulated markets included in the list published by the FSFM. 6. MICEX is a leading Russian stock exchange ..13.. both debt and equity instruments. 7. RTS, the second largest Russian stock exchange, has recently merged ..14.. MICEX. Exercise 10. Render the sentences into English. 1. Ценная бумага — это документ, удостоверяющий имущественные права, осуществление или передача которых возможны только при его предъявлении. 172

2. В проспекте эмиссии содержатся следующие данные: сведения о категории выпуска, форме выпуска, номинале, права, предоставляемые ценной бумагой ее владельцу, наименования регистраторов, дата начала и окончания размещения и т. д. 3. Ценными бумагами признаются права на ресурсы, отвечающие следующим требованиям: обращаемость, доступность для гражданского оборота, ликвидность, риск, доходность и т. д. 4. Ценные бумаги можно классифицировать по форме обращения — эмиссионные и неэмиссионные, по регистрируемости — регистрируемые и нерегистрируемые, по виду эмитента — государственные и корпоративные, др. 5. Стоимость ценной бумаги может быть номинальной и рыночной.

Speaking Exercise 11. Working with a partner, explain these phrases in your own words. Consult a dictionary if you are not sure what certain words mean. Discuss in what way these concepts relate to Issuance and Regulation of Securities. • regulatory agencies • mass-issued and non mass-issued securities • revocation of licenses • option on shares • depository Exercise 12. Make a full mindmap and prepare a presentation on an aspect of Issuance and Regulation of Securities. Exercise 13. Prepare a presentation on any of the following topics related to Issuance and Regulation of Securities. 1. Types of securities. 2. The central Bank of the Russian Federation and its monetary policy. 3. The development of the national securities market in Russia.

Writing Exercise 14. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is Securities as the most flexible financial instruments.

Unit 11. Banking in Russia Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. Central banks such as Bank of England, the Federal Reserve System of the US, Central Bank of Russia function for the government and other banks, not for private customers. Your ideas — what role does a central bank play in any country? 3. What kind of banking problems can you think of? 4. If you encounter banking problems, what ways will/do you use to solve them?

Legal terms 1. 2.

monetary policy CBR (Central Bank of Russia)

денежно-кредитная политика Центробанк России 174

3.

pursuant (to)

в соответствии с чем-либо, согласно чему-либо

4.

be entitled (to)

иметь право, быть уполномоченным

5.

joint–stock company

акционерная компания

6.

limited liability company

общество с ограниченной ответственностью

7.

grant permission

давать разрешение

8.

criterion (pl. criteria)

критерий (критерии)

9.

supervisory control

оперативное руководство, наблюдение

10. on–demand deposit

бессрочный вклад, депозит до востребования

11. term deposit

срочный вклад, вклад на определенный срок

12. precious metals

драгоценные металлы

13. promissory note

долговое обязательство, простой вексель

14. bill of exchange

переводной вексель

15. settlement documents

расчетные документы

16. lending

кредитование, предоставление займа

17. counterparty

контрагент, противная сторона

18. contractual relationships

договорные правоотношения

19. collateral

залоговое обеспечение

20. nomination

назначение на должность

21. resignation

сложение полномочий

22. money in circulation

деньги в обращении

23. capital adequacy

уровень достаточности капитала

24. liquidity

ликвидность

25. charter capital

уставный капитал

26. compliance (with)

соответствие (с чем-либо)

27. revocation of a banking license 28. dissolution

аннулирование, отзыв банковской лицензии

29. treasury bills

казначейские векселя

здесь: роспуск (организации)

175

30. 31. 32. 33. 34. 35. 36. 37.

assets and liabilities standby facility discount bills current account withdrawal lender of last resort draw a check interest rate

активы и пассивы резервный кредит дисконтировать, учитывать векселя текущий счет снятие средств со счета кредитор последней инстанции выписать чек процентная ставка

Study the title of a legislative act: Federal Law No. 177-FZ “On the Insurance of Deposits of Individuals in the Banks of the Russian Federation”, dated 23 December 2003 (the Deposit Insurance Law)

Федеральный закон № 177-ФЗ «О страховании вкладов физических лиц в банках Российской Федерации»

Reading Exercise 1. Read the introduction to the Banking system of the Russian Federation and answer the questions. Summarize the answers. 1. What is the major sector of any modern monetary system? 2. What are banks and non-banking credit organizations responsible for? The Central Bank of the Russian Federation (the Bank of Russia) is the key regulatory authority for banking and is also in charge of monetary policy. The primary pieces of banking legislation are the Civil Code of the Russian Federation, Federal Law No. 395-1 On Banks and Banking Activities (the Banking Law). Pursuant to the Banking Law, there are two main types of credit organization: banks and non-banking credit organizations. A bank is a credit organization that has the right to carry out such banking operations as opening and maintaining the bank accounts of legal entities and individuals, attracting deposits from legal entities and individuals and placing those funds in its own name and at its own cost and expense. Conversely, a non-banking credit organization is an entity that is allowed to perform a limited number of specified banking operations as set forth in its license. Both banks and non-banking credit organizations are entitled to carry out banking operations from the moment of receipt of a banking license issued by the Bank of Russia. Both types of credit organization may participate in banking groups (when the controlling company is a credit organization) and banking holdings (when the controlling company is a non-credit organization). (Doing Business in Russia ) 176

Exercise 2. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and retell it. cancel

entity

criteria renewed establish discretion supervisory control grant permission

revoked

Foreign Participation in the Banking sector Foreign banks may ..1.. a local subsidiary or a representative office in the Russian Federation. A foreign bank may establish a subsidiary in Russia in the form of a Russian legal ..2.. (a joint-stock company or a limited liability сompany). Representative offices of foreign banks are accredited by the Bank of Russia for a term of three (3) years. Accreditation can be ..3.. an unlimited number of times. The Bank of Russia may ..4.. to open a representative office to a foreign bank that meets all the following ..5.. : (i) the foreign bank has been operating in its country of incorporation for at least five years; (ii) the foreign bank has a good reputation in the banking system of its country; and (iii) the foreign bank has a stable financial position. Representative offices of foreign banks are subject to the ..6.. of the Bank of Russia, which may close the representative office of a foreign bank at any time at its ..7.. (Doing Business in Russia ) 1. What is the procedure for establishing a legal presence of foreign banks in the RF? 2. What are the main criteria for granting permission to open a representative office of a foreign bank in Russia? Exercise 3. Read the following text. Decide which answer A, B or C best fits each space. Answer the questions below the text. Then say what you have learned about banking activities. Banking Activities Under the Banking Law only credit organizations holding the respective ..1.. are allowed to carry out certain activities, which are called “banking operations”. The list of banking operations includes the following: • Attraction of monetary funds for on-demand and term deposits and ..2.. of such funds in the name and at the expense of the relevant credit organizations; • ..3.. deposits and placement of precious metals; • Opening and maintaining bank ..4.. for individuals and legal entities; • ..5.. money, promissory notes and bills of exchange, payment and settlement documents; • Providing cash services to individuals and legal entities; • Exchanging foreign currency; • Issuing bank guarantees; and • ..6.. money (including e-money) with or without opening bank accounts. (Doing Business in Russia ) 177

1. A patent

B permission

C license

2. A placement

B accommodation

C withdrawal

3. A detaining

B holding

C withholding

4. A deposits

B services

C accounts

5. A collecting

B clearing

C issuing

6. A relocating

B transferring

C transmitting

1. What banking operations are allowed under the Banking Law? 2. Have you dealt with opening and maintaining bank accounts for individuals? legal entities? Exercise 4. Read the following text. Choose an appropriate preposition to complete the sentences. Answer the questions below the text and retell it. Lending Of course one of the major activities of a credit organization in Russia is lending. While lending ..1.. Russian corporate entities, a number of issues should be taken into account. The parties ..2.. a transaction with a foreign element (i.e. a foreign counterparty) may generally choose foreign law as the law governing their contractual relationship. Thus, if financing is provided ..3.. a Russian company by a foreign bank the loan agreement is usually governed ..4.. foreign law (usually English law). The choice of governing law ..5.. security documents however is generally determined by where the proposed collateral is situated or created. (Doing Business in Russia ) 1. in, on, to 2. of, to, in 3. to, with, in 4. by, with, under 5. on, to, for 1. What is meant by the сhoice of governing law? 2. What should be taken into account where financing is provided to Russian entities by a foreign bank? Exercise 5. Read the following text paying special attention to the underlined legal terms. Answer the questions and say what you have learned from it. 1. What are the functions of the Central Bank of Russia? 2. What is the Bank of Russia responsible for? Legal Framework and Regulatory Authorities The foundations of the Russian banking system are provided in the Banking Law and Federal Law No.86-FZ On the Central Bank of the Russian 178

Federation, dated 10 July 2002 (the “Bank of Russia Law”). The primary regulatory body governing the banking sector of the Russian Federation is the Bank of Russia. The Bank of Russia is one of the few institutions under the control of the Russian legislative (rather than executive) branch. The State Duma must not only approve the nomination of the chairman of the Bank of Russia, but also approve the resignation of the chairman. The Bank of Russia and the Government share authority over monetary policy. The Bank of Russia is responsible for circulating monetary funds and ensuring the stability of the Russian ruble. As part of its regulatory role, the Bank of Russia establishes state registration, accounting, reporting and licensing rules for credit organizations, sets minimum reserve requirements for lending operations, mandatory ratios (capital adequacy, liquidity, etc.) and requirements on the amount of charter capital. The Bank of Russia maintains regional offices throughout the Russian Federation. (Doing Business in Russia) Exercise 6. Read the following texts. Choose the correct word in brackets. Sum up the information. Licensing and Banking Supervision A credit organization must be registered in the Russian Federation further to a specific procedure and must be licensed by the Bank of Russia. Newly established banks can receive licenses permitting a limited scope of operations. A bank that has held a license for a period of two years or more is ..1.. (deprived, entitled, added) to apply for licenses permitting an extended scope of operations. The Bank of Russia has ..2.. (controlling, expanding, limiting) powers over Russian Banks: it approves the appointment of the senior management of all credit organizations, holds ..3.. (additional, non mandatory, mandatory) reserves placed by credit organizations, and monitors credit organizations’ compliance with applicable requirements. If a credit organization fails to ..4.. (admit, comply, submit) with these requirements the Bank of Russia is entitled to exercise various sanctions, which range from a warning and fine to ..5.. (suspension, cancellation, annihilation) of certain banking operations and ..6.. (permutation, variation, revocation) of its banking license, which triggers the dissolution or bankruptcy of the credit organization. Deposit Insurance Federal Law No. 177-FZ On the Insurance of Deposits of Individuals in the Banks of the Russian Federation, dated 23 December 2003 (the Deposit Insurance Law) establishes an insurance system for the deposits of individuals. It ..7.. (acts, circulates, stipulates) that all banks accepting individual deposits must be members of the deposit insurance system. Member banks have to make contributions to a special deposit insurance fund. These contributions are calculated as a percentage of the average daily ..8.. (section, balance, share) of individual deposits maintained with a particular bank, and beginning 179

from the 4th quarter of the year 2008 are subject to an upper limit of 0.1%. All individual depositors with deposits in member banks are entitled to 100% ..9.. (tendency, compensation, inclination) for aggregate amounts up to RUB 700,000 (approx. USD 23,000) for each bank. However, the deposit insurance would not cover e-money deposits. (Doing Business in Russia )

Key terms: Banking in Russia Exercise 7. Match these terms (1–7) with their definitions (a-g). Then work with a partner and discuss each term. 1) on–demand deposit

a) funds held in an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution; demand deposits can be "demanded" by an account holder at any time

2) term deposit

b) the ability or ease with which assets can be converted into cash

3) promissory note

c) the maximum amount of share capital that the company is authorized by its constitutional documents to issue (allocate) to shareholders. Part of the authorized capital can (and frequently does) remain unissued. This number can be changed by shareholders' approval

4) bill of exchange

d) a money deposit at a banking institution that cannot be withdrawn for a certain "term" or period of time (unless a penalty is paid). When the term is over it can be withdrawn or it can be held for another term

5) charter capital

e) a written promise to pay a specified sum of money to a designated person or to his or her order, or to the bearer of the note, at a fixed time or on demand.

6) liquidity

f) the termination of a formal or legal relationship, such as a business enterprise or corporation, or union

7) dissolution

g) a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, without conditions in addition to payment imposed on the payer

Use of English Exercise 8. Suggest Russian equivalents of the following word partnerships. Then, use some of them in your own sentences. 180

interest rate; lender of last resort; issue coins and bank notes; pursue moderate monetary policy; deposit a certain amount of money with the central bank at zero interest; liquidity ratio; treasury bill; interbank market; exchange control; assets and liabilities; cash settlement center; credit rating; standby facility Exercise 9. Suggest English equivalents of the following word partnerships. Then use some of them in your own sentences. Текущий счет; предоставлять сейфовые услуги; снятие средств со счетов; выписывать чеки; осуществлять операции с иностранной валютой; коэффициент ликвидности; депозитный счет; казначейский вексель; управление инвестиционным портфелем; слияние банков; учет векселей. Exercise 10. Complete the sentences with the appropriate words and word combinations from the box. supervises and regulates monetary policy inflation interest rates circulation printing

bank accounts

1. Central banks are usually responsible for ..1.. and distributing banknotes. 2. There will be low and stable ..2.. if monetary policy is successful. 3. ..3.. including setting interest rates, is designed to maintain financial stability. 4. In many countries, the central bank ..4.. the banking system and the whole financial sector. 5. Most money exists on paper ..5.. than in notes and coins. 6. The attempt to control the amount of money in ..6.. or the rate of inflation is called monetary policy. 7. The greater the risk for the bank of not being repaid, the higher ..7.. they charge. Exercise 11. Render the sentences into English. 1. Центральный банк РФ, контролируя работу коммерческих банков, стремится обеспечить надежность и стабильность банковской системы. Он выдает и отзывает банковские лицензии, устанавливает резервные требования, оказывает в случае необходимости помощь банкам, имеющим проблемы с ликвидностью. 2. Российские банки в определенной степени защищены от конкуренции с иностранными банками, хотя иностранные банки имеют свои филиалы и представительства в Москве. 3. Российские банки предлагают достаточно широкий спектр услуг: они принимают и оплачивают чеки, осуществляют учет векселей, предоставляют ссуды, производят операции с иностранной валютой, предоставляют сейфовые услуги. 181

4. Банки должны более активно заниматься управлением своими портфельными инвестициями, сделками с иностранной валютой, расширять сеть своих филиалов в условиях возрастающей конкуренции в банковском бизнесе. Exercise 12. Answer the competency-based questions. 1. What is monetary policy? 2. Why is monetary policy necessary? 3. What credit organisations exist in Russia? 4. How does the CBR ensure the banking system stability? 5. What monetary policy does the CBR pursue? 6. What are the shortcomings of the financial system in Russia? 7. What happens when a country pursues a "tight" or an "easy" monetary policy? 8. How can money supply be regulated? 9. Why do many countries experience banking problems?

Summarizing Exercise 13. Read the article. Write a summary reducing the article to the main information items it contains. Optionally, discuss the pros and cons of Islamic banking for Russia. You may need to study what Islamic banking is using Internet resources. RUSSIA LOOKS TO REPLACE WESTERN LOANS WITH ISLAMIC FINANCE June 18, 2015 ALEXEI LOSSAN, RBTH Islamic finance will help Russian companies make up for their credit shortage, which was in large part caused by the cooling of relations between Russia and the West. Russian banks are already showing interest in this alternative form of credit. Islamic finance could help Russian companies hit by Western sanctions to gain access to credit, Rustam Minnikhanov, President of the predominantly Muslim-populated Russian republic of Tatarstan, said at the Kazan Summit Forum. “Muslim countries did not join attempts to isolate our country on the international arena, and the latest events in the world economy have shown that Islamic banks help counter world crises and supplement the world financial system”, Minnikhanov said. He added that this Islamic finance could not completely substitute Western credit, but instead could provide Russian companies with an important financial instrument. According to IMF's latest calculations, by the end of 2015 the volume of Islamic finance around the world will amount to $3.4 trillion. An alternative scheme Islamic finance could help Russian companies hit by Western sanctions to gain access to credit, Rustam Minnikhanov, President of the predominantly 182

Muslim-populated Russian republic of Tatarstan, said at the Kazan Summit Forum. “Muslim countries did not join attempts to isolate our country on the international arena, and the latest events in the world economy have shown that Islamic banks help counter world crises and supplement the world financial system”, Minnikhanov said. He added that this Islamic finance could not completely substitute Western credit, but instead could provide Russian companies with an important financial instrument. According to IMF's latest calculations, by the end of 2015 the volume of Islamic finance around the world will amount to $3.4 trillion. “Against the backdrop of world crises, the importance of Islamic finance only increases, because all the operations in this scheme are backed up by real money, while investments become secure and do not carry any risks”, said Qatar’s Undersecretary of Economy and Commerce Sultan Al-Khater. According to the requirements of Islamic banking, it is prohibited to charge interest while lending, while receiving credit essentially implies exchanging one commodity for another. Ahmad Mohamed Ali Al-Madani, President of the Islamic Development Bank, said, “Islamic finance is by nature tied to real economic activity, which is why such a scheme allows the optimization of the internal resources”. He added, “The concept of dividing risk in Islamic banking stimulates healthy financial practices. In Islamic finance, the transactions are tied to real investments, which helps avoid speculation and the instability related to it”. Al-Madani suggested that Tatarstan could be promoted as “an Islamic finance hub in Russia”. Russian banks open to Islamic finance According to Rustam Minnikhanov, Russian banks, including the country’s largest bank Sberbank, are currently showing an interest in Islamic finance. One of the advocates of the development of Islamic banking in Russia is the head of Sberbank, former Russian Minister of Economic Development, German Gref. “There are still problems with taxation and the lack of qualified personnel, but with the help of our colleagues in the Russian government, we will be able to make this process more dynamic”, Minnikhanov said. One example is Tatarstan's largest bank, AK Bank, which has already attracted financing in accordance with Sharia regulations. In January 2015, the local Alliance Insurance Company started selling an Islamic insurance product called Khalal Invest. Minnikhanov also told RBTH that the development of Islamic banking in Russia should be done on a federal level and that there is no talk of creating a unique financial zone in Tatarstan. “Today the Kazan Summit is a platform that must change the attitude that Russians and Russian regions have towards Islamic finance, and this is our mission”, he said. Elvira Nabiullina, Chairwoman of the Central Bank of Russia, met Ahmad Mohamed Ali Al-Madani this week.

Writing Exercise 14. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is The monetary policy currently pursued by Russia.

Unit 12. Currency Regulation in Russia Discussion 1. Here is a “word cloud” that comprises words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. Imagine you are currency analysts. Discuss the reasons for recent increases or falls in our national currency — the ruble. 3. What kind of events can cause currencies to fluctuate?

Legal terms 1.

export/import transactions

экспортные/импортные сделки

2.

settled in rubles

расчеты производятся в рублях

3.

foreign securities

внешние ценные бумаги (ценные бумаги иностранных эмитентов) 184

4.

abolish

отменять, упразднять

5.

consent

согласие

6.

permit

разрешение

7.

remit

переводить, пересылать валюту на счет

8.

proceeds

выручка, доход

9.

repatriation of currency proceeds

репатриация валютной выручки

10. notify

уведомлять

11. tax authorities

налоговые органы

12. cash flow

движение, поток денежных средств

13. in accordance (with)

в соответствии с чем-либо

14. payments due

срок совершения платежей, платежи в обусловленный срок

15. supplier

поставщик

16. aggregate book value

совокупная балансовая стоимость

17. assign

уступить право требования

18. set-off / offsetting a claim

зачет требования

19. reinsurance contract

договор перестрахования

20. counterparty

контрагент

21. comply (with)

соответствовать чему-либо

22. lender

кредитор

23. file

предоставлять (информацию)

24. submit

представлять, подавать (документы)

25. transaction passport

паспорт сделки

26. acceptance certificate

акт о выполнении работ

27. bank statements

банковские выписки, выписки с банковских счетов

28. customs declaration

таможенная декларация

29. receipt

получение; квитанция

30. envisage

предусматривать

31. securities market

рынок ценных бумаг 185

32. entail liability

влечь за собой ответственность

33. impose

назначать, устанавливать

34. revocation

отзыв (лицензии)

35. fluctuate

колебаться, изменяться

36. currency intervention

валютная интервенция

37. currency control

валютный контроль

Study the principal legislative act, service and organizations in the field of currency regulation: The Federal Law On Currency Regulations and Currency Control

Федеральный закон № 173-ФЗ «О валютном регулировании и контроле»

FATF: The Financial Action Task Force

Международная организация по борьбе с финансовыми злоупотреблениями

OECD: The Organization for Economic Cooperation and Development

Организация по экономическому развитию и сотрудничеству

The Federal Service of Financial and Budgetary Oversight

Федеральная служба финансовобюджетного надзора

CBR: Central Bank of Russia

Центральный банк России

Reading Exercise 1. Read the introductory text to the unit and answer the questions. Then summarize the contents. 1. What spheres does the Currency Law regulate? 2. According to the RF Civil Code what is permitted, prohibited and stated relating to the national currency? The Civil Code states that the ruble is the national currency of the Russian Federation. Although agreements may refer to the ruble value equivalent of foreign currency, all transactions conducted inside the Russian Federation must, as a general rule, be settled in rubles. The Civil Code, however, permits the use of foreign currency in cases provided for by law. Federal Law No. 173FZ “On Currency Regulations and Currency Control”, dated 10 December 2003, as amended (the Currency Law) establishes the basic rules of currency regulation and control. 186

Currency Operations The Currency Law regulates a broad range of currency operations including: • payments made in a foreign currency; • transfer of foreign securities; • ruble transfers between a Russian resident and a non-resident or between two non-residents; • transfer of domestic securities between a resident and a nonresident or between two non-residents; • the import and export of rubles and securities; • transfer of funds and securities from the overseas account of a resident into a domestic account, and vice versa; • transfer of rubles and securities between the domestic accounts of a nonresident. (Doing Business in Russia ) Exercise 2. Read the following texts. Choose the correct word in brackets. Then answer the questions below the texts and summarize the answers. Special Currency Control Rules On 1 January 2007, the Russian currency control regime was significantly relaxed and a number of previously existing requirements were ..1.. (applied, abolished, implemented). As of today, there are no substantive currency control requirements (in the form of “consents, authorizations or permits”, etc.) that apply to foreign transactions. However, certain requirements still apply to Russian residents: • Russian companies must ..2.. (remit, submit, exceed) all foreign currency export proceeds to their Russian bank account(s) (“repatriation of currency proceeds”), subject to certain exceptions; • “transaction passports” are required for certain transactions (external trade, loans) at Russian banks; • most Russian residents are ..3.. (permitted, prohibited, engaged) from performing foreign currency transactions (the currency law provides some exceptions); • the purchase and sale of foreign currency may only be performed at ..4.. (any, local, authorized) Russian banks; • cash exports are subject to restrictions; • when a Russian company or individual opens an overseas bank account in OECD/FATF member countries they must ..5.. (deny, notify, satisfy) the tax authorities and present regular reports on the cash flow in such accounts; and • the operation of an overseas bank account by a Russian resident is subject to certain restrictions. 187

Repatriation of Currency Proceeds In accordance with Article 19 of the Currency Law, Russian companies must collect the full amount of payments ..6.. (due, exempt, taxed) under a foreign trade contract on their accounts with Russian banks in accordance with the terms of the relevant foreign trade contract (the so-called “repatriation rule”). Article 19 of the Currency Law does not expressly allow a Russian ..7.. (individual, supplier, respondent) to assign or set-off its claims against a foreign buyer under a foreign trade contract. The ..8.. (objections, exceptions, additions) to this rule allow for offsetting claims only in limited instances, including for Russian transport and fishing companies as well as under reinsurance contracts. (Doing Business in Russia ) 1. 2. 3. 4.

What currency control regime applies to non-residents? What requirements must Russian residents meet? What is meant by the term “repatriation”? What are the rules for special currency control aimed at?

Exercise 3. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and retell it. remit submitted are listed file settlements customs declarations envisaged amended receipt lender transaction under Transaction Passport A Russian counterparty (that is not a bank) must comply with certain procedural requirements in connection with payments to a foreign ..1.. or other counterparty (export/import transactions), including: • to open a transaction passport with its Russian authorized bank; and • to ..2.. certain information, including a separate “certificate on currency transaction identification”. The main requirements in relation to transaction passports ..3.. in the Currency Law and Instruction of the Central Bank of Russia No. 117-I dated 15 June 2004 (“Instruction No. 117-I”). In particular, Instruction No. 117-I stipulates a list of documents that must be ..4.. to an authorized Russian bank by a Russian company in order to open a transaction passport. The documents should be provided to the bank before the first currency operation under the relevant ..5.. . The banks generally require all documents to be translated into Russian. The documents to be filed typically include a certified copy of the agreement documenting the transaction. 188

Furthermore, under Article 23 of the Currency Law, banks may request other supporting documents, such as acceptance certificates, bank statements, ..6.., etc., although, in practice, only the basic documents are usually required. After ..7.. of the documents the bank reviews them and opens the transaction passport. The identification certificate requirement is applicable to ..8.. between Russian residents and non-Russian residents under various types of financing transactions, including loans. For each payment ..9.. the relevant transaction, the resident company has to provide a separate “certificate on currency transaction identification” indicating the transaction passport details (if applicable) and the details of the currency operation, as ..10.. by Instruction No. 117-I. (Doing Business in Russia ) 1. What is meant by a Transaction Passport? 2. What are the main requirements in relation to transaction passports? Exercise 4. Read the following text. Match the key terms (1–5) with their definitions (a-e). Then answer the questions below the text. 1) entail

a) have as a necessary consequence

2) impose

b) the act of referring a document, etc, for the consideration of someone else

3) revocation

c) establish as something to be obeyed or complied with; enforce; impose a tax on the people

4) violation

d) the cancellation or annulment of a legal instrument, the withdrawal of an offer, power of attorney, etc.

5) submission

e) breaking, disregarding, or infringing (a law, agreement, etc.)

Liability for Violation The currency control system is supervised by the CBR, the Government, and the Federal Service of Financial and Budgetary Oversight. Currency control is executed through agents of the currency control regime, including: authorized banks, professional participants of the securities market, and governmental agencies. Violation of Russian currency control requirements may entail civil, administrative, or criminal liability. Administrative penalties for violation of Russia’s currency control requirements include various fines, which may be imposed on individuals, legal entities, and company executives. The amount of a fine may be as high as the entire value of a transaction performed in violation of the currency control requirements. Other sanctions include the revocation of licenses (primarily applicable to banks), and imprisonment. 189

Violation of currency control requirements includes non-compliance with the terms for submission to a Russian authorized bank of reports on currency operations. Recent changes to the currency control legislation introduced differential fines ranging from RUB 5,000 (approx. USD167) to RUB 50,000 (approx. USD 1,667) for legal entities depending on the term of the violation. (Doing Business in Russia ) 1. What is the currency control regime in Russia like? 2. What is your attitude to Liability for Violation in the Russian Federation? Do you consider it effective?

Use of English Exercise 5. Suggest Russian equivalents of the following word partnerships. Then use them in your own sentences. devaluation of national currency; entail criminal liability; broad range of currency operations; domestic account; substantive requirements; repatriation rule; reinsurance contract; remit; receipt; revocation of licenses; imposed on legal entities; currency restrictions; purchase and sale of foreign currency; decline in dollar; supporting documents Exercise 6. Suggest English equivalents of the following word partnerships. Then use them in your own sentences. Устанавливать основные правила валютного регулирования и контроля; перевод денежных средств; зарубежный счет; распространяться на резидентов РФ; уведомить налоговые органы; расчеты между резидентами и нерезидентами РФ; предусматривается правилами; экспортно-импортные операции. Exercise 7. Complete the sentences with the words from the box. Then translate them from English into Russian. operations

regulation

currency

decline

restrictions

violation

1. Currency exchange control measures and currency ..1.. are being taken for stabilization of the exchange rate of the ruble. 2. Exchange control is a special measure monitoring compliance with the currency legislation, for the ..2.. of which definite criminal or administrative liability is assumed. 3. The main task of currency restrictions is setting certain limits for ..3.. with currency values in international payments, investments, purchase and sale of foreign currency. 4. According to the recent financial reports the speed of ..4.. in the dollar is significant enough to worry about. 190

5. The interest rates were kept high throughout the whole year, however, the government allowed the ..5.. to find its true level. 6. Unofficial talks and official statistics show that changes in currency ..6.. can cause the process of devaluation of the national currency. Exercise 8. Render the sentences into English. 1. В Российской Федерации термин «валютная интервенция» обычно употребляется в связи с задачей поддержания российского рубля, его стабильного курса по отношению к доллару США, когда Центральный банк РФ продает доллары, чтобы не дать упасть рублю на валютном рынке. 2. Валютные ограничения распространяются прежде всего на импортные операции. Органы валютного контроля определяют приоритетные направления, на которые может быть направлена валюта. Таким образом, импортеры получают лицензию (разрешение) на покупку у банков иностранной валюты, необходимой для оплаты импорта. 3. Экспортеры обязаны продавать иностранную валюту уполномоченным банкам — иногда Центральному банку — часто по фиксированному официальному курсу. В зависимости от степени нехватки в стране иностранной валюты в законодательных актах устанавливается процент подлежащей обязательной продаже валюты экспортерами. 4. К специальным правам заимствования (SDR — Special Drawing Rights) относят эмитированные Международным валютным фондом международные резервные активы, находящиеся на счете государства в МВФ.

Speaking Exercise 9. Answer the competency-based questions. 1. In what situations is currency intervention applied? 2. What do you know about the consequences of foreign exchange restrictions? 3. Currency control is a legal term. What principles related to the term are defined in the Currency Law? 4. What is the structure of foreign exchange reserves? 5. The IMF defines three principal types of the exchange–rate regime. What are their main characteristics?

Summarizing Exercise 10. Read the article and summarize it reducing to 25% of its original volume. 0% key rate in Europe may lure investors to Russian market 191

March 14, 2016 ALEXEI LOSSAN, RBTH Due to the low cost of money in the EU, Western investors are more and more interested in markets with high capital costs. The Russian market, where it is practically impossible to get a loan with less than an annual 11 percent interest rate, meets such requirements, though politics remains an obstacle. Russian analysts believe that the European Central Bank's recent decision to zero the key interest rate could lead to a growth in EU investments in Russia. The March 10 decision to lower the key rate — the parameter that private banks use to give loans — by an annual 0.05 percent to 0 percent makes developing markets, which are interested in cheap financing, even more attractive for EU investors. “The ECB's decision concerning the key rate will increase the attractiveness of related markets, as it was in Japan, the UK and the US. The Russian market can also obtain additional injections of capital”, said Sergei Kozlovsky, chief analyst at Grand Capital. In his words, this advantage is likely to be offset only by general negative attitudes towards Russian assets based on political grounds. European Central Bank representatives explain that the decision to zero the key rate should keep economic growth in Europe at 1.4 percent in 2016, as well as reduce unemployment. Mutual benefits Unlike the EU, which now has a key interest rate of 0 percent, in Russia it is currently 11 percent. This leads to high credit costs both for enterprises and individuals. For example, the preferential rate for buying a home through Russia's largest bank, state-owned Sberbank, is an annual 12.5 percent. In such a situation Russian borrowers would be interested in inexpensive European financing, while EU investors would be tempted by high percentage rates on their loans. “The decision to lower the rates indeed makes the Russian debt instrument market more attractive, just like other markets with high rates”, said Artyom Zvyagilsky, head analyst at MFX Broker. According to Bogdan Zvarich, an analyst at Finam Invest, this decision should support the markets and stimulate demand for high-risk assets, which could lead to their growth — and it is precisely these assets toward which the Russian market is oriented. Moreover, the ECB's actions will support oil prices and the currencies of developing countries, including the ruble, remarked chief economist at ING Group Russia and CIS countries Dmitri Polevoi in an interview with the Vedomosti business newspaper. Politics the main obstacle The primary impediment for the growth of European investment in Russia is political risks. “When making their decisions European investors are oriented not only towards the level of rates in the countries of their interest”, said Artyom Zvyagilsky. He noted that in Russia's case investors must consider the sanctions against Russia, the possibilities of their cancelation or tightening, credit ratings, oil prices and many other factors. For example, at the beginning 192

of March 2016 the Russian government invited 25 foreign banks to buy Russian Eurobonds for $3 billion. In response, according to The Wall Street Journal, the U.S. government asked a series of large American banks not to gamble on potentially profitable but politically risky deals with Russian obligations since such an arrangement may undermine the sanctions against Russia. Another hindrance for the growth of investment in Russia is the difficult situation in Europe itself. Bogdan Zvarich says that the ECB's actions point to the fact that the European economy is much worse than was earlier thought. "This also demonstrates that all the previous incentives that the European regulator developed did not have the right effect on the region's economy”, he said.

Writing Exercise 11. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is What are the main instruments of currency policy?

Unit 13. Taxation in Russia Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. Governments finance most of their expenditure by taxation. If they spend more than they levy or charge in taxes what will they have to do? 3. What high-profile criminal cases related to failure by individuals or legal entities to pay taxes do you know? Express your attitude to them.

Legal terms 1. personal income tax 2. VAT

налог на доходы физических лиц, НДФЛ налог на добавленную стоимость, НДС 194

3. excise taxes

акцизы

4. corporate profits tax

налог на прибыль организаций

5. mineral extraction tax

налог на добычу ископаемых

6. state duty

государственная пошлина

7. corporate property tax

налог на имущество организаций

8. social security contributions

отчисления в Фонд социального страхования

9. taxable permanent establishment

постоянно работающее налогооблагаемое предприятие

10. tax authorities

налоговые органы

11. audit

проводить аудит, аудиторскую проверку, ревизию камеральный аудит выездной аудит

chamber audit on-site audit 12. simultaneously

одновременно

13. tax rate

налоговая ставка

14. be exempt (from)

быть освобожденным от (уплаты) налогов

15. flat rate

единообразная ставка

16. interest free loan

беспроцентная ссуда

17. excessive bank interest

чрезмерный процент

18. tax incentives

налоговые стимулы, льготы

19. levy

облагать налогом, взимать налог

20. tax return complete a tax return file a tax return

налоговая декларация, НД заполнять НД подавать НД

21. mitigate

смягчать, уменьшать

22. tax base

налоговая, налогооблагаемая база

23. tax loophole

налоговая лазейка

24. prosecution

преследование

25. tax haven

налоговое убежище

26. enforcement measures

принудительные меры

27. tax evasion

уклонение от уплаты налогов противозаконными методами 195

Study the names of the principal legislative instrument, treaty and organization in the field of taxation: The Tax Code of the Russian Federation

Налоговый кодекс Российской Федерации

The Double Tax Treaty

Договор об исключении двойного налогообложения

OECD: The Organization for Economic Cooperation and Development

Организация по экономическому развитию и сотрудничеству

Reading Exercise 1. Read the Introduction to the tax system of the Russian Federation and answer the questions. Retell the text. 1. What measures softened the tax burden in the RF? 2. Comment on the structure of the tax system. Do you know how this compares with other countries? Over the past 14 years Russia has been engaged in a significant reform of its tax system, which has been implemented in phases. This reform has improved procedural rules and made them more favorable to taxpayers, has reduced the overall number of taxes, and has reduced the overall tax burden in the country. The Tax Code sets forth three levels of taxation: federal, regional and local. Currently, federal taxes include VAT, excise taxes, profits tax, personal income tax, mineral extraction tax, state duty, special tax regimes, and several other taxes. Regional taxes include corporate property tax, transportation tax, and gambling tax, while local taxes include land tax and individual property tax. Social security contributions are payable to the State Pension Fund, Social Security Fund, and Federal Medical Insurance Fund. (Doing Business in Russia ) Exercise 2. Read the following text. Decide which answer A, B or C best fits each space. Answer the questions below the text and summarize the answers. Tax audits The Russian tax authorities may ..1.. chamber and on-site tax audits of taxpayers. Amendments that came into effect starting from 1 January 2009 clarified certain procedural aspects for both types of tax audits. The tax authorities may audit several different ..2.. simultaneously as part of an on-site tax audit. However, ..3.. in cases of a liquidation or reorganization, when a higher tax authority inspects the activities of a lower tax authority that conducted an on-site ..4.. , or when a taxpayer files an amended tax return 196

claiming a lower level of taxation, a tax for a given period may only be audited once. (Doing Business in Russia ) 1. What are the rules for tax audits in the RF? 2. Do you know how this compares with other countries? 1. A accompany

B conduct

C attend

2. A taxes

B tariffs

C customers

3. A exclusion

B exception

C except

4. A audit

B monitoring

C audition

Exercise 3. Read the following texts. Choose the correct word in brackets. Answer the questions below the texts and retell them. Corporate profits tax Starting ..1.. (from, with, in) 1 January 2009, the maximum tax ..2.. (index, rate, rating) for all companies was reduced to20% — Chapter 25 of the Tax Code, which is currently ..3.. (pay, payable, payment) at a rate of 2% to the federal budget and 18% to regional budgets. The regional authorities may, at their discretion, ..4.. (increase, deduct, reduce) their regional profits tax rate to as low as 13,5%. Taxation of foreign companies Russian legislation taxes profits derived from a “permanent establishment” in Russia, as well as certain other types of ..5.. (income, profit, earnings) derived without a permanent establishment in Russia. Importantly, whether a permanent establishment exists under Russian tax law is ..6.. (related, unrelated, associated) to whether a foreign company’s office has been registered in Russia. A permanent establishment may exist even if the office is not registered, and the existence of a registered office may not necessarily give rise to a taxable permanent establishment. Profit derived by foreign legal entities from their permanent establishments in Russia is generally ..7.. (released, taxed, exempt) at the same profits tax rates applicable to Russian taxpayers. As of 1 January 2012, a new rule was included in the Tax Code requiring that the income of a permanent establishment be ..8.. (determined, included, excluded) taking into account the functions performed in Russia, the assets used and commercial risks ..9.. (summed up, assumed, totaled) which is generally in line with the OECD approach. (Doing Business in Russia ) 1. Do you know how a corporate profits tax compares with those in other countries? 2. What is meant by ‘permanent establishment’ relating to the rules of taxation in the RF? 197

Exercise 4. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and summarize it. added

transactions entities imposes situations

exempt subject

applied

VAT VAT is imposed on all goods imported into Russia and is also ..1.. to the sale of goods, work and services. According to the recent amendments to the Tax Code the same VAT regime applies to goods and services that are sold in or imported into territories under the Russian jurisdiction, e.g., artificial islands and drilling platforms on the continental shelf. Current legislation ..2.. a VAT rate of 18% on the sale of most goods, work and services. A lower 10% rate is applied to limited types of goods, such as pharmaceuticals, medical equipment, and certain food products and periodicals. The export of goods is ..3.. to 0% VAT. In addition, certain types of goods, work, and services are ..4.. from VAT (for example, land plots, dwelling houses and apartments, lease of office space to accredited representative offices and branches of foreign legal ..5.. from jurisdictions which apply reciprocal benefits, certain medical goods and services, the sale of shares, derivatives and repo ..6.. (Doing Business in Russia ) 1. According to the recent amendments to the Tax Code what types of goods, work, and services are exempt from VAT? 2. Do you consider a VAT rate of 18% high? Exercise 5. Read the following text and translate the names of the principal state funds. Social security contributions Effective as of 1 January 2010, the Unified Social Tax, which previously combined payments to the various Russian social funds, was replaced by separate contributions to the State Pension Fund, the Social Security Fund, the Federal Medical Insurance Fund and the Territorial Medical Insurance Funds (the latter were excluded from the list of recipients as of 1 January 2012). (Doing Business in Russia ) Exercise 6. Read the following texts and choose the correct form of the word in the singular/plural. Then answer the questions below the text and retell the text. Personal income tax Individuals who are defined as “Russian tax residents”, i.e. those who have been in the country for 183 days or more during any 12 consecutive months, are subject to personal income ..1.. tax/taxes on all their income, 198

both that earned in Russia and that earned elsewhere. Individuals who do not meet this ..2.. criterion/criteria are subject to tax on any ..3.. income/incomes received from Russian sources. From 1 January 2001, Russia has enacted various income tax rates, including: a 13% flat ..4.. rate/rates applicable to most types of income; a 9% rate applicable to dividend income; a 35% rate applicable to income from gambling, lottery prizes, deemed income from low-interest or interest-free loans (except loans directed at new construction or acquisition of a residence) and excessive bank ..5.. interest/interests; and a 30% rate applicable to Russian-source income received by non-residents. Regional and local taxes Regional and local legislative bodies may, at their ..6.. discretion/discretions, introduce various tax ..7.. incentives/incentive and credits with regard to regional and local taxes. Regional taxes currently include corporate property tax, transportation tax, and gambling tax. Local taxes currently include property tax on individuals and land tax. Although these taxes are set regionally and locally the federal legislature has enacted limits on their overall ..8.. rates/rate. (Doing Business in Russia) 1. Who is defined as a“Russian tax resident”? In your opinion, is a 13% flat rate applicable to most types of income fair or unfair? 2. Is regional and local tax collection satisfactory in the RF at the moment?

Key terms: Taxation Exercise 7. Match these terms (1–7) with their definitions (a-g). Then work with a partner and discuss each term. 1) excise taxes a) from the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution 2) corporate profits b) a tax on the sale, or production for sale, of tax specific goods or a tax on a particular good produced for sale 3) personal income c) every business organization, set up for gain or tax profit carrying on business activity within the state is subject to this tax 4) VAT d) a tax on individual earnings (income) that is paid to the national government 5) state duty e) a tax that is levied on documents. Historically, this included the majority of legal documents such as checks, receipts, military commissions, marriage licenses and land transactions 199

6) transportation tax 7) corporate property tax

f) a tax that always produces the required revenue for municipalities' tax levies. Values are determined by local officials g) a tax applied to amounts paid for transportation and used to improve and maintain transport systems

Use of English Exercise 8. Suggest English equivalents of the following word partnerships. Then use some of them in your own sentences. Согласно последним поправкам; подлежать налогообложению; облагать налогом; постоянно работающее налогооблагаемое предприятие; договор об избежании двойного налогообложения; по своему усмотрению; в отношении (что касается); налоговая декларация; собирать налоги; юридические лица; единообразная ставка налога; подоходный налог; налоговые льготы; ставка налога; налоговые органы; применимый; подвергаться аудиторской проверке. Exercise 9. Suggest Russian equivalents of the following word partnerships. Then use 10 of them in your own sentences. implement in phases; favorable to taxpayers; amendments came into effect; chamber audit; tax rates applicable to; enact various income tax rates; acquisition of a residence; current legislation imposes the rate of; reciprocal benefits; repo transactions; derive from; corporate property tax; a tax for a given period; social security contributions; file a tax return; lower tax authority; lower tax rate Exercise 10. What are the standard names for the tax or taxes paid on the following? 1. alcoholic drinks and tobacco products 2. company profits 3. goods bought in stores 4. salaries and wages Exercise 11. Complete the sentences below using the words from the box. tax havens VAT tax evasion

tax burden tax avoidance income tax corporation tax taxed excise duties

tax

1. Individuals pay ..1.. on their wages or salaries, and most other money they receive. 2. Companies pay ..2.. on their profits. Business profits are generally..3.. twice, because after the company pays ..4.. on its profits, the shareholders pay income tax on any dividends received from these profits. 200

3. In most European countries, companies pay ..5.., which is levied in each stage of production, based on the value added to the product at the stage. The whole amount is added to the final price paid by the consumer. In Canada, Australia, New Zealand and Singapore, this tax is called Goods and Services Tax or GST. 4. Governments also levy ..6.. — additional sales taxes on commodities like tobacco products, alcoholic drinks and petrols. 5. Multinational companies often register their head offices in ..7.. — small countries where income taxes for foreign companies are low. 6. Using legal methods to minimize your ..8.. the amount of tax you have to pay — is called ..9.. 7. Using illegal methods — such as not declaring your income, or reporting it inaccurately — is called ..10.. and can lead to big penalties. Exercise 12. Render the sentences into English. 1. Уклонение от уплаты налогов — проблема, с которой сталкиваются многие страны. Недостаточное налоговое законодательство и слабый контроль за его соблюдением дают возможность налогоплательщикам находить лазейки в законе, чтобы не платить налоги. 2. Территория государства или ее часть, в пределах которой для компаний-нерезидентов действует особый льготный режим регистрации, лицензирования при условии, что их предпринимательская деятельность осуществляется вне пределов этого государства, называется «налоговое убежище», или «налоговый рай». 3. Для того чтобы снизить налоговое бремя на товаропроизводителя, необходимо снижать налоговые ставки и увеличивать налоги, взимаемые с физических лиц, а также отменить многие налоговые льготы, которые лишают бюджет значительных налоговых доходов. 4. Договоры об избежании двойного налогообложения призваны не допустить неограниченное налогообложение одного и того же дохода в нескольких государствах. Договоры, как правило, заключаются в целях поощрения экономического сотрудничества между разными странами.

Speaking Exercise 13. Answer the competency-based questions. 1. What are taxes? Why are they necessary and expedient? 2. What taxes are paid to the federal budget? 3. What bodies collect taxes? 4. What is usually taxed? 5. What is an excise duty? Why were excise duties introduced? 6. What is the difference between tax evasion and tax avoidance? 201

7. What causes tax evasion and why is it a criminal offense in many countries? 8. In what situations can incomes be taxed twice? 9. What is the attitude towards taxes in Russia? Exercise 14. Prepare a presentation on any of the following topics related to Taxation. 1. What taxes provide the bulk of budget revenues in Russia? 2. Is there a need to soften the burden of taxation in the RF? 3. What measures, in your opinion, can improve tax collection in Russia? 4. What enforcement measures can be taken against defaulting taxpayers? 5. What’s the attitude of government officials towards tax deferment? Exercise 15. Read the article and summarize its contents reducing the original volume of the article to 25%. Shedding light on Russia’s tax system EVGENY BASMANOV, SPECIAL TO RBTH Why the country’s tax system is more trustworthy than those in most European countries. At the end of last year, celebrated actor Gerard Depardieu, unhappy with the high rate of tax in his native France, decided to move to Russia and change his citizenship. The tax system in Russia is indeed far more dependable than in most European countries — and not just for individuals, but for legal entities, too. However, despite the attractive rates, its reputation abroad could be better. The reason is controversial media coverage in Russia, according to Russia Consulting CEO Ulf Schneider. Yet foreigners who have lived in Russia don't complain on the country's tax system. “As regards the letter of the law, the Russian tax system looks good. Officials are beginning to demonstrate an understanding of the economic aspects of doing business”, says Schneider. Today, profit tax in Russia is 20 percent, while, in most Western European countries, it is more than 30 percent. Income tax for individuals in Russia is 13 percent, compared with 50 percent in Germany, while France had plans to up the rate even further until the country's Constitution Court rejected the bill. Nevertheless, Schneider argues that foreign companies need to attach great importance to tax planning, and the preparations should begin in advance, before entering the Russian market. After selecting a particular tax regime, changing it is practically impossible. For companies, the so-called simplified system of taxation is highly beneficial, since it exempts them, for example, from VAT. Yet Russian tax inspectors can sometimes contradict common sense as understood by European business — requiring, for instance, that only the cost of economy flights be deducted from the tax base, but not business class. However, all is not lost. In such cases, Russian courts are able to promptly 202

resolve any dispute.“In Russia, tax disputes get sorted out fast. There are three instances, and they can all be gone through in less than a year. Moreover, statistics show that about 70 percent of all court decisions are made in favor of the taxpayer”, says Schneider. At the same time, the consultant admits that there is no ideal tax system. For instance, one of the banes of the Russian tax system, in his view, is bureaucracy. “Tax liabilities in Russia have a major impact on how the accounting system is run, as many documents need to be filled out. Here's an example: In the West, people are used to the fact that an invoice is a self-sufficient document. Meanwhile, in Russia, it is just a piece of paper with no particular value, and represents only an offer to pay, nothing more”, Schneider says. “You cannot use an invoice to adjust the balance sheet or deduct expenses from the tax base. Additional documents are always required, such as an acceptance statement or a bill of lading. That's not the case in the West. Therefore, Western businesses need first to examine the list of documents required for tax deductions”, says the expert, advising businesses to employ the services not only of a local accountant, but of a consulting company, as well. “Chief accountants in Russia are very important people in their respective companies, and CEOs here spend twice as much time with them as their EU counterparts. But, sometimes, accountants are not sufficiently forwardthinking in tax matters, so the most effective way to apply local laws is through an outside consultant”, says Schneider. Such specialists can advise on how to avoid paying a large slice of tax when the company is opened, how to lower the tax rate on dividends, or how to reduce the tax base through accelerated depreciation of assets. Incidentally, in comparing the Russian and French tax systems, Schneider frequently favors the former — and not just because of the low rates and court system. “There is one aspect in which Russia far outstrips many EU countries: The well-established system of electronic documents”, says Schneider. “In Russia, documents for all types of tax refunds — be it VAT or profit tax — are sent online, not by mail or courier, and the system has been in operation for five years”. “It is very efficient”, he added. “In this regard, Russia can truly be described as a hi-tech society. Moreover, the country recently introduced a law requiring all document workflow between corporate taxpayers to go digital. That is a very positive step”1.

Writing Exercise 16. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is The tax climate in Russia. The recent changes in the tax legislation.

1 http://rbth.com/business/2013/04/24/refuting_myths_about_russias_unreliable_tax_ system_25387.html.

Unit 14. Insurance in Russia Discussion 1. Here is a “word cloud” that comprises words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is the aim of insurance? 3. How many different insurance policies do you or your family have? 4. Are there any risks you cannot insure yourself against?

Legal terms 1.

envisage

предусматривать, рассматривать

2.

insurance license

лицензия на страховую деятельность

3.

in compliance (with)

в соответствии с чем-либо

4.

applicable regulation

применимые законы

5.

pursuant (to)

согласно чему-либо, с соответствии с чем-либо 204

6.

insurance policy

страховой полис

7.

in accordance (with)

в соответствии с чем-либо

8.

reinsurance

перестрахование, вторичная страховка

9.

intermediation

посредничество

10. insurance agent

страховой агент

11. insurance broker

страховой брокер

12. insurer

страховщик

13. insured

страхователь; застрахованный

14. restriction

ограничение

15. access

доступ

16. subsidiary

дочерняя компания

17. charter capital

уставный капитал

18. mandatory

обязательный (к исполнению)

19. liability insurance

страхование ответственности

20. state insurance

государственное страхование

21. affiliate

аффилированное лицо; родственная компания; сопряженная компания

22. compulsory terms

обязательные условия

23. beneficiary

бенефициар, выгодоприобретатель

24. termination of insurance

прекращение действия страхового договора

25. premium

страховой взнос, страховая премия

26. tax shelter

налоговое убежище

Study the name of the essential legislative service in the field of insurance: FSFM: The Federal Service for Financial Markets

Федеральная служба по финансовым рынкам

Reading Exercise 1. Read the introductory text and answer the questions. Then say what you have learned about the regulation of the insurance business in the RF. 205

1. What is the legal basis of the insurance business? 2. What is the procedure of supervision and regulation of the insurance market? The insurance business and distribution of life insurance products in Russia is mainly regulated by Federal Law No. 4015-1 “On the Organization of the Insurance Business in the Russian Federation” dated 27 November 1992, as amended (the “Insurance Law”) and the Civil Code of the Russian Federation (the “Civil Code”). In the cases envisaged by the Insurance Law, federal executive authorities may adopt further regulatory acts governing insurance procedures. The insurance business is supervised by the Federal Service for Financial Markets (the “FSFM”), which is responsible for issuing insurance licenses and supervising the compliance of insurers with applicable regulations. There is a tendency towards consolidation of the insurance market, pursuing the FSFM policy, which is aimed at strengthening the financial stability of domestic insurers and decreasing the number of providers of “false” insurance or insurers not in compliance with the law. (Doing Business in Russia ) Exercise 2. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and summarize the text. intermediation

performance insurers insured in accordance allowed requires

may

must

Licensing Requirements Conducting insurance activities ..1.. a license in Russia. Pursuant to the Insurance Law, ..2.. must be legal entities incorporated ..3.. with Russian legislation and need a Russian license in order to conduct insurance business. Reinsurance services may be provided by foreign reinsurers not licensed locally. ..4.. in the Russian insurance market can be conducted by insurance agents and/or brokers. Under Russian law the difference between insurance brokers and agents is that a broker is not ..5.. to act in the name and on the instructions of an insurer, and an agent is not allowed to act in the name and on the instructions of the insured. In addition, brokers should be licensed by the FSFM whereas agents do not need a license. Brokerage and agency activities ..6.. not be combined under Russian law. The activity of agents and brokers connected with the entry into and ..7.. of insurance policies (save for reinsurance policies) with foreign insurance organizations or foreign insurance brokers is not permitted in the territory of the Russian Federation. (Doing Business in Russia ) 1. What activities are prohibited and allowed under the Insurance Law? 2. What is understood by brokerage and agency activities? 206

Exercise 3. Read the following text. Choose the correct word in brackets. Then answer the questions below the text and summarize it. Restrictions on Foreign Investments Foreign investors may ..1.. (access, adopt, intervene) the Russian market via their Russian subsidiaries. Russian law places ..2.. (bans, restrictions, conditions) on insurance companies that are subsidiaries of foreign investors or where more than forty-nine percent (49%) in their charter capital belongs to foreign investors (with an exception discussed below). They cannot ..3.. (preclude, construe, conclude) personal insurance contracts in relation to property interests connected with citizens surviving until a certain age or date, death, or other events in citizens’ lives (i.e., life insurance). They cannot provide ..4.. (mandatory, additional, non mandatory) liability insurance, mandatory state insurance or property insurance policies related to the performance or delivery of work under a contract for state needs as well as insurance of the property interests of state and municipal organizations. There is a ..5.. (limit, quota, taboo) on the foreign capital present in the aggregate capital of insurance companies operating in Russia. At present this quota is set at twenty-five per cent (25%) and is far from being exceeded. Should the amount of foreign capital invested into the sector ..6.. (equal, exceed, proceed) this quota, the regulator must stop issuing licenses to insurance companies that are affiliates of foreign insurers or which are more than forty-nine percent (49%) foreignowned. According to various sources there are legislative initiatives planned to allow foreign insurance companies to directly open branches in Russia. Incorporation and operation of such branches would be supervised by the FSFM, and they would need to be permanent establishments for ..7.. (tax allowances, tax exemptions, tax purposes). However, it is not clear when such legislation may be adopted. (Doing Business in Russia ) 1. What are the rules for foreign investors in the Russian insurance market? 2. What activities are supervised by the FSFM? Exercise 4. Read the following texts. Use your language instinct and complete the missing words. Then retell the texts. Regulation of the Insurance Market and Products The Insurance Law contains a general description of the organization of the Russian insurance market, licensing r..1.., operation and liquidation of insurance b..2.., as well as regulation of other participants of the Russian insurance market, such as insurance b..3.. and dealers. The Civil Code establishes the types of insurance, the concept and c..4.. terms of insurance contracts, the rights and duties of parties to such contracts, rules for the change of parties and b..5.. to insurance contracts, rules for t..6.. of insurance contracts, as well as other fundamental insurance-related regulations. In particular, 207

Article 934 of the Civil Code establishes the basis for personal (life and health) insurance and Article 929 the basis for property insurance (property insurance, liability insurance and business r..7.. insurance). Types of Insurance in Russia Russian law provides for two basic types of insurance: p..8.. insurance (such as life and health) and property insurance (property insurance, liability insurance and business risks insurance). Life insurance activity may not be c..9.. with other types of insurance activities, i.e. an insurer may only offer either life insurance, or health and property insurance. (Doing Business in Russia )

Use of English Exercise 5. Suggest Russian equivalents of the following word partnerships. Then use some of them in your own sentences. intermediation in the insurance market; insured; to conduct insurance business; to adopt regulatory acts; to govern insurance procedure; to act in the name and on the instructions of an insurer; to place restrictions; charter capital; to conclude a contract; in relation to; far from being exceeded; tax purposes; compulsory terms; beneficiary; termination of insurance; amount of foreign capital Exercise 6. Suggest English equivalents of the following word partnerships. Then use some of them in your own sentences. Отвечать за выдачу лицензии на страховую деятельность; направлять усилия на укрепление финансовой стабильности; страхование осуществляется на основании российского законодательства; действовать от имени; за исключением; квота устанавливается в размере; законодательные инициативы; устанавливать различные виды страхования. Exercise 7. Complete the sentences below using the words from the box. Translate the sentences into Russian. investors invest insured insurer loss protection tax shelters premiums damage reinsurance 1. Insurance is the … against possible financial losses. 2. Individuals, organizations can make regular payments, called … to an insurance company which accepts the risk of loss. 3. When you buy insurance you make a contract with the insurance company also known as the … . 4. The contract promises that the company will pay you if you suffer … or damage. 208

5. If property is stolen or damaged, the person or company who is … makes a claim to request compensation from the insurer. 6. Life insurance policies are … …; you do not have to pay income tax on life insurance premiums. 7. Insurance companies have to … the money they receive from premiums. 8. Like pension funds, they are large institutional … that invest huge sums in securities. 9. A company that will receive some of the premium and also bear or take some of the risk is called a … company. 10. Natural disasters are expensive for insurance companies because they cause a lot of … to buildings and their contents. Exercise 8. Render the sentences into English. 1. Договор страхования — это соглашение между страхователем и страховщиком, в соответствии с условиями которого страховщик обязуется выплатить страхователю или выгодоприобретателю определенную денежную сумму при наступлении предусмотренного договором страхового случая взамен уплаты страхователем страховой премии. 2. Как страхователь, так и страховщик должны обладать правоспособностью и дееспособностью для вступления в страховые правоотношения. Для страховщика это прежде всего наличие лицензии и соответствующих учредительных документов, зарегистрированных надлежащим образом. Для страхователя — общие правила правоспособности и дееспособности согласно ГК РФ. 3. Договор страхования может быть признан недействительным судом, если он заключен после страхового случая или если объектом страхования является имущество, подлежащее конфискации на основании вступившего в законную силу соответствующего решения суда. 4. Для заключения договора страхования страхователь представляет страховщику письменное заявление по установленной форме либо иным допустимым способом заявляет о своем намерении заключить договор страхования. Exercise 9. Answer the competency-based questions. 1. What is the mechanism of an insurance policy? 2. What are the basic legal requirements to an insurance policy? 3. What do you know about the history of insurance? 4. What are the main functions and categories of insurance? 5. What principal forms of insurance do you know? 6. How do insurance companies raise funds to pay the insured? Exercise 10. Make presentations on the following topics: 1. The scope of authority of the FSFM in the RF. 2. Revocation of licenses to practice the insurance business. 209

3. Participation of foreign investors in the insurance business in the RF. 4. Court cases involving insurance companies in the RF and other countries. Exercise 11. Discuss the reasonableness of the terms of insurance policies from the perspective of the insurance companies, on the one hand, and the insured, on the other. Exercise 12. Read the article and summarize its contents to 25% of its original volume. Decision to freeze pension funds will cost Russian economy $15.2 billion August 22, 2014 MARIA KARNAUKH, SPECIAL TO RBTH For the second year running, Russia has blocked contributions into pension investment funds in order to finance current pension payments. While the move appears to have been made to cover a hole created by the demographic situation in the country, the decision will be costly for Russia’s investment market. For the second year in a row, the Russian government has decided to freeze the portion of pension contributions allocated for investment. According to the Ministry of Labor and Social Protection, these funds will be used to finance current pension payments. Contributions for 2013, amounting to some 550 billion rubles ($15.2 billion), have already been frozen, with the government intending to do the same with a further 700 billion rubles' worth of pension savings for 2014. The move, which the Ministry of Labor and Social Protection says is necessary in order to finance current pension payments, will leave major Russian companies without investment and will force banks to raise interest rates. Current system The current pension system, which was introduced in Russia in 2003, gives citizens an opportunity to manage part of their pension savings, thereby influencing the size of their future pensions. Employers contribute 22 percent of a worker's salary to the Pension Fund, 16 percent of which forms the insurance segment of the pension and the payment of the current pensions, while 6 percent goes into an accumulation fund that can be used for investment. "In 2014, and now also in 2015, the accumulative part is being redirected to the distribution component. This means that all the money collected from employers goes on payments to current retirees", explained a spokesperson for the Ministry of Labor, the initiator of the move. Sergei Khestanov, an economist for the ALOR Group, explains that the deficit in the Pension Fund has occurred because of the country’s demographic decline. The population is aging, and while 20–30 years ago there were 6 workers to one pensioner, now there are fewer than two, and their contributions do not cover current needs. The first moratorium on the so-called ‘accumulative part’ of pension contributions was introduced in the second half of 2013. As a result, 550 billion 210

rubles’ worth of contributions never reached non-state pension management funds and Vnesheconombank, an absence that “the banking sector and corporations have already felt” on the market, according to deputy head of the Pallada Asset Management investment company Alexander Baranov. “The ‘cost’ of money has risen: Internal refinancing has become more expensive”, says Baranov. This has resulted in a devaluation of the ruble and a sharp rise in foreign exchange rates. The negative effects are already being felt by ordinary Russians: At the end of last year, minimal interest rates for individuals started at 8 percent, whereas in 2014 loans have become 2 percent more expensive, with interest rates starting at 10 percent. This year's situation will be further exacerbated by the departure of foreign investors, Baranov adds.

Who will miss out on pension investment? The mechanism for investing pension contributions envisages that the money, via asset management firms, is invested mainly in equity in major Russian companies, government and corporate bonds, or is deposited with major banks. The segment of pension contributions destined for accumulation funds formerly went to the state development institute — Vnesheconombank (VEB), which acts as the state management company — and non-state pension funds in nearly equal parts. At the start of the year, VEB had some 1,000 billion rubles ($27,7 billion) in pension contributions, with a further 1,100 billion rubles ($30,5 billion) managed by non-state pension funds (NPFs). The main difference between these two options is that VEB invests pension savings into the most reliable instruments, which do not offer a very high yield, whereas NPFs can invest in less reliable instruments (see infographic). “Unlike the state management company, an NPF can afford greater risks and therefore get a higher yield”, explains Alexander Baranov. Between 2009 and 2013, NPFs' return on pension assets was almost twice as high as that achieved 211

by VEB. The list of companies that non-state pension funds invest in includes Russia's major energy holding company RusHydro, the state nanotechnology corporation Rosnano, and mobile phone retailers Evroset and Svyaznoy. Now the government intends to extend the moratorium on the accumulative segment of pension savings to 2014 contributions too. In other words, the financial market will suffer a total investment shortfall of 650–700 billion rubles, or nearly 1 percent of Russia's GDP. “This will result in the cost of loans and debt refinancing growing in 2015 for banks and corporations, for the federal and regional finance ministries. It is hard to estimate the exact figure that they will have to pay extra, but it will be comparable with the amount of frozen funds, i.e. the very same 700 billion rubles or maybe even more”, Baranov says, predicting the potential consequences. The freezing of transfers into pension funds has been undertaken in other countries in the past. For example, Hungary opted out of the accumulative system in 2011, while in 2010–2011 there were no payments into the accumulative segment of pensions in Estonia, and in Slovakia the amount of accumulative payments was reduced from 9 to 4 percent. There is also a practice of voluntarily funded programs in which the employer and the employee independently form a pension accumulation fund. The Ministry of Labor confirmed to RBTH that the decision had taken global experience into account. The ministry also noted that non-government funds had proven themselves not to be a particularly effective instrument: Interest earned on investments was, on average, below the rate of inflation. The accumulative segment is to be made voluntary in the future, says the Ministry of Labor1.

Writing Exercise 13. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is Principles of Insurance in the Russian Federation.

1 http://rbth.com/business/2014/08/22/decision_to_freeze_pension_funds_will_cost_ russian_economy_152_billi_39241.html.

Unit 15 . Insolvency in Russia Discussion 1. Here is a “word cloud” that gives greater prominence to words that will appear frequently in the texts below. What are these words associated with? Generate ideas about each word.

2. What are insolvency practitioners? What matters do they deal with? 3. Have you considered practising in this area of the law? Why? Why not? 4. What sort of person would make a good insolvency practitioner? What skills and experience do they need?

Legal terms 1.

insolvency regulation

2.

“sham insolvency”

законы, регулирующие процедуру банкротства фиктивное банкротство 213

3. 4.

standstill agreement satisfy creditors’ claims

5. 6. 7. 8. 9.

effect payments supervision financial rehabilitation external management liquidation

10. amicable settlement 11. assign rights 12. issue bonds 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

joint venture incur debt provide suretyship financial health discharge debts wind up challenge transactions undervalued transactions infringe rights invalidate apply restitution owe severance pay

25. 26. 27. 28. 29. 30.

owe royalty fees secured creditors be secured by pledge levy execution pledged property reinstate the debtor’s solvency waive the right controlling person be liable for monetary obligations subsidiary liability

31. 32. 33. 34.

35. falsification of the debtor’s accounting statements

соглашение о сохранении статус-кво удовлетворять требования кредиторов по денежным обязательствам производить платежи надзор, наблюдение финансовое оздоровление внешнее управление прекращение хозяйственной деятельности компании мировое соглашение передавать права (другому лицу) выпускать долговые обязательства, облигации совместное предприятие оказаться в долгу предоставлять поручительство стабильное финансовое положение выплачивать долги ликвидировать (предприятие) оспаривать сделки сделки по заниженной стоимости нарушать права признавать недействительным применять реституцию быть обязанным выплатить выходные пособия быть обязанным выплатить гонорары кредиторы, обеспеченные залогом быть обеспеченным залогом взыскать по исполнительному листу заложенное имущество восстановить платежеспособность должника отказаться от права контролирующее лицо нести ответственность по денежным обязательствам субсидиарная ответственность (право кредитора после предъявления иска основному должнику взыскать недополученную часть долга с другого обязанного лица) фальсификация бухгалтерской отчетности должника

214

Reading Exercise 1. Look through the texts A-K and match these headings with the sections they belong to (1–11). 1. Supervision. 2. Financial rehabilitation. 3. Liquidation. 4. Procedure. 5. Amicable settlement. 6. Liability of controlling persons. 7. External management. 8. Insolvency. 9. Invalidated transactions. 10. Priority of claims. 11. Levy treatment of secured creditors. Exercise 2. Read the introduction to Insolvency Law in Russia and answer the questions below the text. Then summarize it. 1. A ... Russia has a series of insolvency regulations and laws. Russian insolvency law provides several options including reorganization and rehabilitation of an insolvent company as an alternative to liquidation. Creditors often view it as a process used by debtors to transfer assets and avoid creditors; hence the concept of “sham insolvency” is addressed in the legislation as well as the concepts of suspicious and preferential transactions of a debtor, which may be challenged during insolvency proceedings. Under the current legal framework, Russian insolvency law applies only to individuals who are registered as sole entrepreneurs, and legal entities. Separate rules are applied with respect to the bankruptcy of developers. Insolvency and restructuring in Russia is governed by Part I of the Civil Code of the Russian Federation (Article 64) and by the Federal Law. There are also several draft laws pending in the State Duma and the Russian Ministry of Economic Development aimed at improving the legislation and resolving various issues. In particular, it is proposed to introduce the concept of a standstill agreement. (Doing Business in Russia) 1. What does insolvency law deal with? 2. What is insolvency and restructuring in Russia governed by? 3. Who does Russian insolvency law apply to under the current legal framework? 4. What does the concept of “sham insolvency” mean? 5. Guess what the concept of “standstill agreement” means. Exercise 3. Read the following text. Decide which answer A, B or C best fits each space. Answer the questions below the text and say what you have learned about the insolvency procedure. 215

2. B ... Insolvency procedure may be ..1.. against a debtor in case it fails to satisfy creditors’ claims or to effect obligatory payments (tax payment, duty payment, etc.). The Russian insolvency procedure can be initiated either by creditors, authorized state bodies, or by the debtor itself. Creditors can ..2.. a petition to begin insolvency proceedings only after obtaining a ..3.. judgment that a debtor owes them a particular sum of money. ..4.. the petition for insolvency has been filed, the debtor enters the first phase of the procedure, which is called supervision. There are other 4 phases: financial rehabilitation, external management, liquidation and amicable settlement. (Doing Business in Russia) 1. A begun B launched C initiated 2. A file B charge C fill 3. A forum B court C trial 4. A While B Whereas C Once 1. Who can initiate the Russian insolvency procedure? 2. When can creditors file a petition? 3. What are the stages of the insolvency procedure? Exercise 4. Read texts C and D. Then, complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the texts and summarize it. avoid appointed approval liquidations triggered securing loans obtain creditors guarantees ventures 3. C ... The main activities during this phase include securing and valuing the debtor’s assets, and compiling a list of ..1.. . During the supervision stage, business proceeds more or less as usual for the debtor, as the court ..2.. temporary administrator has only limited authority over the debtor’s activities. During supervision the temporary administrator’s ..3.. is required to purchase or sell assets totaling more than 5% of the debtor’s assets, to assign rights or transfer debts and to grant and receive loans or ..4.. The debtor is prohibited from buying shares from its shareholders, issuing bonds or paying dividends and from making major decisions regarding reorganizations, ..5.. and establishment of branch offices or participation in joint ventures, associations and companies. 4. D ... This phase is ..6.. if the creditors and the court believe there is a reasonable chance the debtor can ..7.. insolvency. The administrator’s authority is broadened, and prior approval is required to increase accounts payable, to sell the debtor’s assets, to raise ..8.. or to incur debt. In addition, the debtor should ..9.. consent of creditors in order to grant loans, to provide suretyship or guarantee, etc. (Doing Business in Russia) 216

1. What are the main activities during the supervision stage? What are the powers of a temporary administrator? What actions are the debtors prohibited from? 2. When is the phase of financial rehabilitation triggered? What are the powers of an administrator at this stage? Exercise 5. Read texts E, F, G, H. Complete them with prepositions. Then, answer the questions below the texts and retell them. 5. E ... External Management is aimed ..1.. restoring the debtor to financial health. In external management the debtor’s management is dismissed and a court-appointed administrator manages the debtor according ..2.. an external management plan drawn ..3.. by the administrator and approved by the creditors’ meeting. In this phase the administrator has the authority to embark ..4.. radical restructuring in an attempt to satisfy creditors’ claims and restore the debtor’s financial health, provided this is agreed to by the creditors’ meeting. ..5.. the end, the court may terminate the insolvency procedure or, should the debts have not been discharged, proceed ..6.. liquidation. 6. F ... ..7.. this stage all the debtor’s assets are liquidated to pay creditors’ claims in the order prescribed by law. Once the liquidation is completed, the debtor is wound ..8.. and ceases to exist. 7. G ... The creditors and the debtor are allowed to sign a settlement agreement at any stage of insolvency proceedings, subject ..9.. the court’s approval. 8. H ... Suspicious and preferential transactions of the debtor may be challenged ..10.. the Insolvency Law. Two types of transactions are defined as suspicious, namely undervalue transactions and transactions that are deemed to infringe the rights of the debtor’s creditors. If a transaction is invalidated ..11.. the specific grounds, the court will apply restitution and all assets transferred under such transaction will be returned ..12.. the debtor and form part of its insolvency estate. The claims of the counterparty under the invalidated transaction infringing creditors’ rights and certain types of preferential transactions, may only be satisfied ..13… satisfaction of all claims of creditors of all priorities. (Doing Business in Russia) 1. What are the main aims of external management? 2. When is the stage of liquidation triggered? What actions are carried out? 3. What is a amicable settlement? 4. What are the grounds for challenging the transactions of a debtor? 5. When are transactions deemed to be suspicious? 6. What does the concept of restitution mean? Exercise 6. Read texts I, J, K and think of the best word to fill in each gap. Then answer the questions below the texts and retell them. 9. I ... All creditors’ claims are divided into three ranks. The first rank of creditors is individuals owed compensation for physical injury or moral ..1.. The second 217

rank of creditors is employees owed severance pay and/or salaries, as well as authors or inventors owed royalty ..2.. for intellectual property. All other creditors are treated as being in the third rank — to be paid after both of the preceding creditor ranks have been satisfied in full. Secured creditors enjoy special treatment during ..3.. proceedings. 10. J ... Creditors whose claims are secured by pledge of the debtor’s assets may claim to levy execution over the pledged ..4.. . The court is allowed to prohibit levy of execution over the pledged assets if this will entail inability to reinstate the debtor’s solvency. If the ..5.. creditor chooses not to exercise, or waives the right to levy execution on the pledged assets prior to the debtor being declared bankrupt, such assets will be sold at a public ..6.. in the course of liquidation. 11. K ... The Insolvency Law ..7.. for the concept of a controlling person, which is broadly defined as a person that can control the debtor’s activity and give mandatory instructions to it. If a controlling person ..8.. the rights of the debtor’s creditors by its actions or instructions to the debtor, such controlling person may be liable for the monetary obligations of the debtor if the debtor’s assets are insufficient to satisfy all the creditors’ claims. The Insolvency Law also introduces subsidiary liability for the chief executive officer of the debtor for the loss or falsification of the debtor’s accounting statements prior to the initiation of insolvency ..9.. (Doing Business in Russia) 1. What ranks are all creditors divided into? 2. What can secured creditors claim? When is the court allowed to prohibit levy of execution? 3. What is a controlling person? When can a controlling person be liable for the monetary obligations of the debtor? 4. What is subsidiary liability?

Key terms: Russian Insolvency Law Exercise 7. Match these terms (1–7) with the definitions (a-g). Then, work with a partner and discuss each term. 1) controlling person 2) external manager 3) debtor 4) secured creditor 5) creditor

a) a person or a commercial enterprise to whom money is owed b) a person or a commercial enterprise that owes a financial obligation c) a person who sets up a business and attempts to make profits d) a person legally appointed by court to manage the estate of a debtor or an insolvent company e) a person appointed by court to draw up a plan aimed at restoring the debtor to financial health 218

6) entrepreneur

f) a creditor who holds a fixed or floating charge over the assets of a debtor

7) court appointed administrator

g) a person that can control the debtor’s activity and give mandatory instructions to it

Use of English Exercise 8. Complete the sentences by choosing the correct word or phrase. Then, translate the sentences. 1. Creditors whose claims are secured / vested with pledge(s) over the debtor's assets enjoy priority over other creditors in satisfying their claims from the proceeds of the sale of pledged assets. 2. Court expenses, remuneration to bankruptcy managers, on-going expenses, creditors' claims that arose after the filing of the bankruptcy petition, and other expenses associated with the bankruptcy liquidation of the debtor are satisfied ahead / beforehand of any other claims. 3. A deal may be considered void / valid on the grounds that it puts a particular creditor in a more favorable position. 4. From the moment of introduction of financial rehabilitation, the insolvent company is relieved / rescued from paying financial sanctions for non-performance or overdue performance of its obligations that became due prior to the introduction of financial rehabilitation. Exercise 9. Suggest Russian equivalents of the following words and word partnerships. Then, use some of them in your own sentences. rehabilitation; insolvent company; liquidation; to transfer assets; preferential transactions; to challenge; pending; to initiate the insolvency procedure against a debtor; to effect obligatory payments; to secure and value the debtor’s assets; to assign rights; to issue bonds; participation in joint ventures; to increase accounts payable; to incur debt; to provide suretyship; a court-appointed administrator; to embark on radical restructuring; to satisfy creditors’ claims; to terminate the insolvency procedure; to proceed to liquidation; to pay creditors’ claims; to sign a settlement agreement; suspicious transaction; undervalued transactions; to invalidate; insolvency estate; physical injury; to owe royalty fees; to satisfy in full; pledged property; to entail liability; to be declared bankrupt; to be liable for the monetary obligations; insufficient Exercise 10. Suggest English equivalents of the following word partnerships. Then, use 10 of them in your own sentences. Правовые рамки; индивидуальный предприниматель; строительная компания; разрабатывать законопроекты; соглашение о сохранении статускво; удовлетворить требования кредиторов по денежным обязательствам; обращаться с ходатайством; начать процедуру банкротства; получить реше219

ние суда; задолжать определенную сумму денег; наблюдение; финансовое оздоровление; внешнее управление; ликвидация; мировое соглашение; составлять реестр кредиторов; назначать временного управляющего; скупать активы; передавать долги третьим лицам; предоставлять кредиты; создание филиалов; холдинг; стабильное финансовое положение; освободить от обязанностей правление компании-должника; составлять план; собрание кредиторов; выплатить долги; ликвидировать предприятие; оспаривать сделки; нарушать права; применять реституцию; контрагент; сделка, признанная недействительной; преференциальная сделка; моральный ущерб; быть обязанным выплатить заработную плату при увольнении; быть обеспеченным залогом; взыскать по исполнительному листу; восстанавливать платежеспособность должника; отказываться от права; быть проданным с аукциона; контролирующее лицо; указания, обязательные для исполнения; субсидиарная ответственность; главный исполнительный директор компании; фальсификация бухгалтерской отчетности должника. Exercise 11. Render the sentences into English. 1. Несостоятельность — признанная уполномоченным государственным органом неспособность должника удовлетворить в полном объеме требования кредиторов по денежным обязательствам. 2. Процедура банкротства, применяемая по отношению к должнику, направлена на оценку его финансового состояния, выработку мер по улучшению финансового состояния должника, а в случае, если применение таких мер будет признано нецелесообразным или невозможным, — на наиболее равное и справедливое удовлетворение интересов кредиторов несостоятельного должника. 3. Для контроля над проведением процедуры банкротства создается собрание кредиторов и — при определенных условиях — комитет кредиторов, а также назначается арбитражный управляющий. 4. Процесс банкротства завершается либо ликвидацией должника — юридического лица, либо удовлетворением требований кредиторов. 5. Преднамеренное банкротство или фиктивное банкротство в Российской Федерации является преступлением. 6. В отношении должника может быть введена одна из предусмотренных законом процедур, а именно: надзор, финансовое оздоровление, внешнее управление, конкурсное производство, мировое соглашение.

Speaking Exercise 12. Working with a partner, explain these phrases in your own words. Consult a dictionary if you are not sure what individual words mean. Discuss in what way these concepts relate to Insolvency Law. 1) to rescue a business 2) the viability of business 220

3) the debtor’s monetary obligations become due and payable 4) to comprise the bankruptcy estate 5) “sham insolvency” Exercise 13. Decide whether these statements are true or false. If they are false, correct them. 1. Insolvent individuals may be subject only to administration and arrangements with creditors. 2. An insolvent company may be subject to supervision, administration and winding up. 3. If the court determines that the debtor’s solvency cannot be restored, it appoints a temporary manager who is responsible for reviewing the debtor’s financial position, drawing up a claim register, etc. 4. If there are not enough assets to satisfy all creditors of the same priority, payments are made on a pro rata basis. 5. Under external management, the debtor may issue new shares and incorporate new open joint-stock companies by contributing the debtor’s assets to such companies. Exercise 14. Answer the competency-based questions. 1. Do we need any changes and amendments to the legislation on bankruptcy for individuals? Give your reasons. 2. Why are separate rules applied to the bankruptcy of developers under the current legal framework? 3. Think about positive and negative effects of liquidation on different groups: owners, employees, creditors, debtors, customers. Exercise 15. Make a full mindmap and prepare a presentation on an aspect of Insolvency Law. Exercise 16. Prepare a presentation on any of the following topics related to Insolvency Law. 1. Supervision. 2. Financial rehabilitation. 3. Administration. 4. Winding up. 5. Suspicious and preferential transactions. 6. Amendments to the Russian insolvency legislation.

Summarizing Exercise 17. Read the article and summarize it orally or in writing reducing to 50 per cent. Use appropriate speech linkers (see Annex I). Say what you have learned about the legal regulation of bankruptcy for individuals in Russia. 221

In late December 2014, Russia adopted major changes to its insolvency (bankruptcy) law. Critically, the changes introduced the long-awaited regulation of individual insolvency (personal bankruptcy), with the aim of closing the regulatory gap and supporting individual debtors struggling during Russia's economic downturn. Some time has passed since the initial draft law on individual insolvency (personal bankruptcy) was first delivered to the Russian Parliament back in 2012. However, recent developments have prompted Russian lawmakers to dust off and adopt the law in an exceptionally short time period. The most notable of these developments was the combination of Western sanctions and the slump in world oil prices which caused the first contraction in Russia's GDP since 2009. The value of the ruble has literally plummeted compared to the euro — the ruble lost half its value in 2014. This has hit some borrowers hard, particularly those who had opted for forex-denominated mortgages (which traditionally offered more attractive interest rates) over ruble mortgages. At the same time, Russians' overall consumption level did not drop in real terms in 2014. And inflation is predicted to soar in 2015. The cost of borrowing has also climbed, as Russia's Central Bank took steps to shore up the ruble by increasing the refinancing rate to 17% at year-end 2014. It is likely therefore that 2015 will witness an explosive growth of retail default. To support Russia's citizens, the government intensified its work on developing a legal framework for individual bankruptcies. Federal Law No. 476-FZ, On Amendments to the Federal Law on Insolvency (Bankruptcy) and Separate Legislative Acts of the Russian Federation with Respect to Rehabilitation Procedures Applicable to an Individual Debtor dated 29 December 2014 (the Amendments Law), introduced special tools to enable individual debtors to effectuate an orderly discharge their debts through bankruptcy under one of three basic procedures. These include (1) restructuring, (2) sale of assets, and (3) amicable settlement. Upon the court order implementing the relevant procedure, the individual debtor's debts will generally be deemed discharged in full, so that (s)he may continue life with a clean slate. We outline below the new rules introduced to the Insolvency Law by the Amendments Law (the Amended Insolvency Law). When may an individual be declared bankrupt? The Amendments Law establishes the following entry criteria for involuntary and voluntary bankruptcy petitions: (a) A creditor may file a bankruptcy petition in court against an individual if the claims against that individual: (i) are at least RUB 500,000; and (ii) have been overdue for at least three months (unless otherwise provided in the Amended Insolvency Law). (b) An individual: (i) must file a bankruptcy petition in court if: 222

(A) satisfaction of the claims of one or more of his/her creditors will result in non-performance of the individual’s obligations and/or in full performance of obligations under mandatory payments (e.g., tax obligations) before other creditors; and (B) the amount of those obligations is at least RUB 500,000; and (ii) may file a bankruptcy petition in court if circumstances demonstrate that the individual is unable to perform his/her obligations (and/or obligations on mandatory payments (e.g., tax obligations)) on time, provided (s)he satisfies the criteria for bankruptcy and/or insufficiency of property. An individual cannot be declared bankrupt if there are sufficient grounds to consider (in view of forthcoming expected cash flow, including his/her income and repayment of claims of the individual by third parties) that such individual within a short period will be able to fully perform his/her overdue monetary obligations and/or mandatory obligations. The Amended Insolvency Law treats an individual's bankruptcy as the inability to perform obligations where at least one of the following conditions is satisfied: (a) suspension of payments due to creditors; or (b) more than 10% of the total amount of overdue monetary obligations and/or mandatory payments have remained unpaid for over one (1) month; or (c) the individual's total indebtedness exceeds his/her total property (including his/her claims against third parties); or (d) there is a court order on termination of executory court process due to insufficiency of the individual's property. What is the procedure for filing a bankruptcy petition? A bankruptcy procedure against an individual may generally be initiated in a court of general jurisdiction at the place of his/her residence. If the individual is an entrepreneur (including one who has de-registered, but claims against whom arose during his/her business) then the petition must be filed in the relevant state (arbitrazh) commercial court. To file a bankruptcy petition, a creditor must attach inter alia an effective court ruling justifying the claim, save for cases where the claim, inter alia: (a) is confirmed by a notary's executory note; (b) is admitted, but not performed by the individual; (c) is based on a notarized transaction; or (d) arose out of a loan agreement executed between the individual as debtor and a credit organization as lender. The court must consider the petition within no less than fifteen (15) days and no more than three (3) months from the date the petition is accepted. Information on commencement of a bankruptcy procedure against an individual (including certain personal data of such individual) as well as information on the termination and extension of such procedure must be officially published. Note especially that creditors must submit their claims for registration within two (2) months from the date of publication. In particular, even if 223

a creditor does not file its claim by the two (2) month deadline it may still do so later on in the bankruptcy proceedings, within the timeframe set out for the completion of debt restructuring. However, such late creditors will lose the right to participate in the first meeting of creditors. Should all creditors (including retail bank lenders) give up their claims filed against the individual within the bankruptcy proceedings, the court is obliged to dismiss the bankruptcy case. At the same time, the dismissal of a bankruptcy case does not deprive a creditor from using its right to initiate a future bankruptcy proceeding against an individual debtor. What are applicable bankruptcy procedures? Under the Amended Insolvency Law there will be three (3) types of procedures in individual bankruptcies: · restructuring of debts; · realization (sale) of property; and · conclusion of a settlement agreement. A so-called ‘financial manager’ is charged with administration of each bankruptcy procedure. The manager’s remuneration is paid at the end of the proceeding in a lump sum of RUB 10,000 plus 2% of the aggregate value of the individual’s property1. Exercise 18. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is New insolvency regime for Russian individuals to launch in July 2015.

1

New Insolvency Regime for Russian Individuals to Launch in July 2015. Dentons.

Unit 16. Competition Protection Law in Russia Discussion 1. Here is a “word cloud” that comprises words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is competition? 3. Is competition wholesome for an economy? Why? Why not? 4. Why do governments tend to impose restrictions to prevent companies from becoming too powerful within a particular market? Why do the biggest companies have a strong incentive to fight any restrictions?

Legal terms 1.

antitrust matters

вопросы антимонопольного права

2.

concerted actions

согласованные действия

3.

mergers and acquisitions

слияния и поглощения

4.

quotation request

запрос цены (документ, направляемый покупателем потенциальному поставщику с просьбой сообщить цену и возможные условия продажи)

5.

entity’s market share

доля хозяйствующего субъекта на рынке 225

6.

set monopolistically high prices

устанавливать монопольно высокие цены

7.

withdrawal of goods from circulation

изъятие товаров из обращения

8.

imposition of contractual terms

введение договорных условий

9.

subject matter of the contract

предмет договора

10. produce on a profitable basis

производить на прибыльной основе

11. barriers to market entry

барьеры при выходе на рынок

12. participatory share

пай

13. main production assets

основные производственные активы

14. intangible assets

нематериальные активы

15. aggregate asset value

совокупная стоимость активов

16. aggregate book value

совокупная балансовая стоимость

17. balance sheet value

балансовая стоимость

18. acquisition of assets

приобретение активов

Study the principle legislative act and service in the field of competition: The Federal Law on Protection of Competition

Федеральный закон «О защите конкуренции»

FAS: The Federal Antimonopoly Service

Федеральная антимонопольная служба

Reading Exercise 1. Read the introduction to Competition Law and answer the questions. Then say what you have learned. 1. What is the definition of antitrust law? 2. What does this area of law deal with? 3. What is it regulated by in Russia? Antitrust matters in Russia are regulated by the Federal Law on Protection of Competition and fall under the auspices of the Federal Antimonopoly Service (“FAS”). The Competition Law regulates competition in both the 226

commodities market and financial services markets, and includes the following main areas of particular interest to foreign investors: • abuse of a dominant position; • agreements and concerted actions limiting competition; • state preferences; • establishment of companies; • mergers and acquisitions; • unfair competition; • requirements for tenders and quotation requests. (Doing Business in Russia ) Exercise 2. Read the following text. Decide which answer A, B or C best fits each space. Answer the questions below the text and summarize it. Abuse of a Dominant Position Dominant entities are subject to certain restrictions on their activities. Determining whether a particular entity enjoys a dominant position involves a complex ..1.. of various factors, the most important of which is the entity’s market share. For entities with a market share of 50% or greater there is a ..2.. of market dominance. In addition to the term “dominant position” the Competition Law has a concept of “collective dominant position”, i.e. the collective domination of the market by between three and five independent companies. For those in a dominant position, the Competition Law prohibits ..3.. of the following activities: • setting and/or maintaining monopolistically high or low prices; • withdrawal of goods from circulation if the result of such a withdrawal is a rise of the price of the goods; • imposition of contractual terms that are disadvantageous to the other party or do not ..4.. to the subject matter of the contract; • discontinuance or reduction of the production of goods for which there is a consumer ..5.. if it is possible to produce them on a profitable basis; • creation of barriers to market entry or exit for other business entities; etc. (Doing Business in Russia) 1. A appraisal

B rating

C evaluation

2. A presumption

B supposition

C assumption

3. A some

B any

C many

4. A pertinent

B relate

C cover

5. A quest

B request

C demand

1. What is meant by dominant entities? 2. What activities are prohibited for such entities under the Competition Law? Why? 227

Exercise 3. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Then answer the questions below the text. Finally, say what you have learned about the actions prohibited by the Competition Law in Russia. Agreements, Concerted Actions The Competition Law prohibits cartels, i.e. agreements concluded between ..1.. acting on the same market. The Competition Law prohibits vertical agreements (i.e. agreements between firms at different levels of the supply chain). The Competition Law prohibits the so-called “coordination of economic activities” by ..2.. entities if such coordination may lead to restriction of competition. “Coordination of economic activities” is understood as a coordination of the actions of economic entities by a third person who does not belong to the “group of persons” of such economic entities and does not act on the market where such coordination is taking place. At the same time the Competition Law provides certain ..3.. from the above restrictions. The Competition Law prohibits concerted actions made by competitors acting on the same market. Under the Competition Law “concerted actions” are understood as actions carried out by economic entities without agreement, if such actions meet the specific criteria. State Preferences State and municipal ..4.. were introduced by the Competition Law in 2006. They consist of granting an economic entity certain privileges over other market participants, ensuring more ..5.. conditions for its activity in the relevant market by transferring property and civil rights, preferences or state (or municipal) guarantees.

1. compete

2. economy

3. exempt

4. prefer

5. favor

Establishment of Companies The founders must obtain consent from FAS prior to the ..6.. of a new company (be it Russian or foreign) 6. establish provided its charter capital is paid in kind with the shares and/or property of a Russian legal entity and the new company acquires (as payment of its charter capital) more than ⅓ / 50% / ⅔ of such participatory shares, or where the company acquires more than 20% of the main ..7.. (fixed) assets and (or) ..8.. assets located in Russia of 7. produce another legal entity, and where the thresholds set in the 8. tangible Competition Law are met. (Doing Business in Russia) 228

1. 2. 3. 4. 5. 6.

What kind of arrangement are cartels? What is understood by vertical agreements? What is coordination of economic activities? How does Competition Law define concerted actions? What do state preferences provide for? What matters does FAS deal with?

Exercise 4. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and speak about mergers and acquisitions in Russia. target

approval acquires

entities assume

property share assets relevant

value

Mergers and Acquisitions Mergers The consolidation or merger of legal entities is subject to the prior ..1.. of the FAS if the aggregate asset value of these ..2.. and their group of persons exceeds 7 billion rubles or the aggregate revenue earned by the entities and their “group of persons” from the sale of goods during the past calendar year exceeds 10 billion rubles or if either of the entities is included in the FAS register of entities with a market ..3.. exceeding 35% in the relevant market.

Acquisition When an individual, legal entity or group of persons ..4.. more than 25%/50%/75% of voting shares or more than ⅓ / 50% / ⅔ of participatory shares in a Russian entity, such persons, entities or groups must receive prior approval from FAS if: • the aggregate book value of the ..5.. of the acquirer and its “group of persons” plus the ..6.. and its “group of persons” exceeds 7 billion rubles and the balance sheet value of the total assets of the target and its group exceeds 250 million rubles; • the aggregate revenue earned by the acquirer and its “group of persons” plus the target and its “group of persons” from the sale of goods over the past calendar year exceeds 10 billion rubles and the balance sheet ..7.. of the total assets of the target and its group exceeds 250 million rubles; • either the acquirer, or any of the entities belonging to its “group of persons”, or the target, or any of the entities belonging to its “group of persons”, is included in the FAS register of entities with a market share exceeding 35% in the ..8.. market. Practically the same rules are true for acquisition of assets located in Russia and acquisition of rights in a Russian Company. (Doing Business in Russia) 229

1. What thresholds must be met for the founders to establish a company? 2. When is the merger of legal entities subject to prior consent of the FAS? 3. What are the rules for the acquisition of entities? Exercise 5. Read the following text and think of the best word to fill in each gap. Then answer the questions below the text and speak about unfair competition. Unfair Competition Unfair competition, namely any actions by commercial entities aimed at acquiring a ..1.. advantage in commercial activity in contravention of the Competition Law, business customs, the requirements of good-faith, reasonableness and ..2.., which may or have caused losses to other competing legal entities, or damage their business ..3.., is prohibited in Russia. Some types of activities that constitute unfair competition include: • distribution of false, inaccurate or distorted information that may cause ..4.. to a commercial entity or damage this entity’s business reputation; • ..5.. consumers about the nature, methods and place of production, as well as consumer properties and quality of goods; • incorrect ..6.. by a commercial entity of goods produced or sold by this entity with the goods of other commercial entities; Requirements for Tenders and Price Quotations The Competition Law ..7.. a list of actions in conducting tenders and requesting for price quotations (including governmental tenders) which are ..8.. if they lead to a restriction of competition (for example, the creation of preferential conditions for participation in tenders, violation of the ..9.. for determining the winner, etc). (Doing Business in Russia) 1. What competition is deemed unfair? 2. What types of activities constitute unfair competition? 3. Under what conditions are conducting tenders and requesting for price quotations prohibited?

Key terms: Competition Protection Law in Russia Exercise 6. Match these terms (1–6) with their definitions (a-f). Then work with a partner and discuss each term. 1) cartel

a) a situation when one company buys another, it can be either hostile or friendly

2) barriers to entry

b) actions carried out by economic entities without agreement, if such actions meet the specific criteria 230

3) concerted actions

c) a group of similar independent businesses who agree to join together to control prices and limit competition

4) merger

d) policy that makes it difficult to penetrate the market

5) acquisition

e) the joining together of two or more companies

6) unfair competition

f) business practice complained of by firms whose rivals offer prices or use methods with which they are unable or unwilling to compete

Use of English Exercise 7. Suggest Russian equivalents of the following word partnerships. Then use some of them in your own sentences. fall under the auspices of; financial services market; state preferences; dominant entity; collective dominant position; charter capital; aggregate revenue; acquire voting shares; good-faith; conduct tenders; preferential conditions; antitrust matters; mergers and acquisitions; entity’s market share; withdrawal of goods from circulation; subject matter of the contract; barriers to market entry; main production assets; aggregate asset value; balance sheet value Exercise 8. Suggest English equivalents of the following word partnerships. Then use some of them in your own sentences. Рынок товаров; злоупотребление доминирующим положением; недобросовестная конкуренция; презумпция доминирования на рынке; потребительский спрос; реестр ФАС; приобретение права; искаженная информация; ограничение конкуренции; согласованные действия; запрос цены; устанавливать монопольно высокие цены; введение договорных условий; производить на прибыльной основе; пай; нематериальные активы; совокупная балансовая стоимость; приобретение активов. Exercise 9. Complete the phrases below using the nouns from the box. Suggest their Russian equivalents. Use the expressions in your own sentences. cartel procedure practices access

market position

1) to suspect an entity of abusive pricing … 2) to abuse one’s dominant … 3) to participate in an illegal … 231

4) to limit … to the market 5) entry into the … 6) violation of the … Exercise 10. Render the sentences into English. 1. Антимонопольное право — это совокупность правовых норм и нормативных актов, направленных на ограничение свободы предпринимательской деятельности и свободы договора экономически влиятельных компаний. 2. Наиболее часто ограничения затрагивают создание картелей, крупные слияния и действия, которые могут существенно увеличить возможность продавца влиять на цену. 3. Для субъектов, занимающих доминирующее положение на рынке, запрещается установление и поддержание монопольно высокой или монопольно низкой цены товаров, а также создание препятствий для доступа на товарный рынок других субъектов. 4. По мнению сторонников антимонопольного права, оно защищает экономические интересы потребителей и способствует экономическому развитию. 5. По мнению критиков антимонопольного права, оно нарушает права человека, в частности право собственности и свободу контракта. Exercise 11. Render the sentences into Russian. 1. Certain transactions (including mergers, acquisitions, establishment of new companies, purchase and sale of shares and assets) are subject to antimonopoly control. 2. The prior approval or post-transaction notification of the Federal Antimonopoly Service is required if certain thresholds are reached in terms of balance sheet value of the assets or revenue or market share of the companies involved in the transaction. 3. The FAS is entitled to inspect the compliance of any business entity with antimonopoly regulations. 4. Russian legislation sets certain limits for foreign investments in specified areas of the Russian economy, which, according to the state, have strategic significance and therefore require a special regime of protection. 5. A number of rules and regulations of great importance for business and law enforcement practice have been recently introduced into antimonopoly legislation by Federal law.

Speaking Exercise 12. Decide whether these statements are true or false. If they are false, correct them. Work with a partner and discuss the statements. 232

1. Mergers and acquisitions are always successful because they are aimed at improving profits, reducing expenses of a company and productivity of a company. 2. It is forbidden to distribute false or inaccurate information that can damage other companies' reputations or mislead customers. 3. The FAS does not have any power to approve and control any company mergers. 4. Inaccurate comparison of own goods with the goods of other producers or traders is not allowed. Exercise 13. Answer the competency-based questions. 1. What is the difference between a merger and an acquisition? 2. Who does the process of mergers and acquisitions affect? In what way? Exercise 14. Make a full mindmap and prepare a presentation on an aspect of Competition Protection Law. Exercise 15. Choose a topic related to Competition Policy. Prepare a brief talk, making use of the following phrases: I’ll be speaking about, I’m going to start with, speaking specifically about issues connected with, at this point I’d like to give you a short overview of, I’d like to tell you something about the topic I intend to cover, be particularly relevant for, first allow me to define, then I’ll deal with, after that I’ll discuss, I’ll move on to, I’ll be addressing the main issue, allow me to point out here that, generally, it’s also important to consider that, as I said, please note that, I want to stress that, I’d like to turn to, my next point has to do with, finally, generally speaking, the second type of, third, the fourth type of, a second thing to keep in mind is the fact that, I now come to, I’ll conclude with, my final point is, etc. 3. Types of acquisitions. 4. Types of mergers. 5. Benefits of mergers and acquisitions. 6. Barriers to entry.

Summarizing Exercise 16. Go to www.thelawyer.com, read the GRATA Law Firm article ‘Fourth Antimonopoly Package: the first edition adopted’ and make an overview of the principal amendments to the Federal Law ‘On Protection of Competition’. The introduction is given below. Fourth Antimonopoly Package: the first edition adopted 7 November 2014 233

On 22 October 2014, the State Duma of the Russian Federation approved in the first reading the draft federal law “On Introducing Changes to the Federal Law “On Protection of Competition” and some Legislative Acts of the Russian Federation” — the so-called “Fourth Antimonopoly Package” (hereinafter the “Bill”), devised by the Federal Antimonopoly Service (FAS) to execute the road map for developing competition and antimonopoly regulation and in accordance with the recommendations of the Organization for Economic Cooperation and Development (OECD). In comparison with the first version of the Bill, devised by FAS more than a year ago, following public and inter-departmental discussions the Bill has undergone significant amendments (in particular, it does not include provisions regarding applying antimonopoly legislation to intellectual property), but at the same time covers many aspects of antimonopoly regulation, including abuse of a dominant position, agreements of economic entities, control over tenders, liability for breach of Federal Law ‘On protection of Competition’ and FAS Russia liabilities1. Exercise 17. Read the articles and summarize the state of affairs as regards competition between Google and Yandex in the Russian enviroment. (Another two articles devoted to competition in Russia can be found in Annex IV.) Google accused of breaking Russian anti-monopoly laws September 15, 2015 ROMAN ROZHKOV, KOMMERSANT The Russian Federal Antimonopoly Service has accused Google of violating the law on competition by only allowing access to its Google Play apps store on certain conditions that exclude rivals such as Russian internet giant Yandex. Russia’s Committee of the Federal Antimonopoly Service (FAS) has accused Google of violating the country’s laws on competition, according to the director of FAS's information technology department, Vladimir Kudryantsev. A decision and injunction to stop Google abusing its dominant market position is to be prepared within 10 working days and sent to the parties. “We have determined that actions of Google Inc. and Google Ireland Limited violate Part 1, Article 10 of the On Competition Protection Law”, explained Kudryantsev on Sept. 14. “The violations occurred when contractors — producers of mobile devices destined for sale in Russia — were given the Google Play apps store only on certain conditions”. The conditions include the mandatory pre-installation along with Google Play of a series of Google applications, their positioning in priority locations on the screen, a mandatory installation of the Google search 1 http://www.gratanet.com/en/news/recent_publications/Client_Alert_4th_antimonopoly_package.

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engine by default, and a ban on the pre-installation of applications from other companies. Besides the above-mentioned conditions, there were also agreements on the producers being banned from pre-installing competitors' applications. In particular, there is a suspicion that Russian search engine giant Yandex was directly indicated in the agreements1. Yandex shut out by Google conditions In February, based on a claim from Yandex, FAS initiated proceedings against Google for having violated the antimonopoly legislation by promoting Google Play, Google Maps and YouTube services for Android. Yandex confirmed on many occasions that mobile device producers had refused to pre-install its services due to demands from its competitor. In particular, companies such as Fly, Explay, and Prestigio (which all work on the Android operating system) refused to collaborate with Yandex, citing Google's conditions. Now Google is being threatened with a fine from 1 to 15 percent of its turnover on the market in 2014, the year in which the violation took place, according to FAS. “This means the market of pre-installed apps stores”, explained Kudryantsev, who said the case contains 200 volumes of documents and a large quantity of information consists of commercial secrets2.

Writing Exercise 18. Write an essay not exceeding 200–250 words. The problem to be addressed in the essay is Russian New and Improved Antitrust and Merger Control Rules.

1 http://rbth.com/business/2015/09/15/google_accused_of_breaking_russian_antimonopoly_laws_49265.html. 2 http://rbth.com/business/2015/09/15/google_accused_of_breaking_russian_antimonopoly_laws_49265.html.

Unit 17. Corporate Compliance in Russia Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What is corruption? Why is it said to cause damage to national economy? 3. Why is it so difficult to investigate corruption cases and to bring the corrupt official to conviction? 4. Which corruption cases have recently been brought to public knowledge? What is special about these cases? 5. Do you know of any examples of people or companies opposing bribe solicitation? 236

Legal terms 1.

compliance

выполнение, соответствие (правовым нормам)

2.

comply (with)

3.

comply with the current legislation corporate compliance

выполнять, соблюдать (правила), подчиняться (правилам) соответствовать действующему законодательству соблюдение принципов честного ведения бизнеса взяточничество антикоррупционное законодательство вступление, присоединение (в/к международный/ому договор/у ) примыкать, присоединяться присоединиться к договору (на правах подписавшей стороны) денежная или имущественная ценность действие или бездействие в качестве должностного лица квалифицировать что-либо как преступление административные штрафы неофициальная отчетность посредник в сговоре с другими лицами совершение незаконного деяния

4. 5. 6.

bribery anti-bribery laws (anticorruption laws) accession (to)

7.

accede (to) accede to a treaty

8.

pecuniary value

9. action or omission to act 10. in (the) official capacity 11. criminalize administrative fines off-the-record reports intermediary in conspiracy with others commission of an unlawful act 17. forced labor

12. 13. 14. 15. 16.

18. fine from 15 to 30 times the amount of the bribe 19. be relieved of criminal liability 20. report oneself

принудительные работы штраф в размере от пятнадцатикратной до тридцатикратной суммы взятки освобождаться от уголовной ответственности сообщить о своем правонарушении (соответствующему органу) 237

21. voluntarily report the bribe добровольно сообщить о взятке (соответствующему органу) 22. be subject to bribe solicitation

подвергнуться вымогательству взятки со стороны должностного лица

23. criminally obtained property

имущество, полученное незаконным путем

24. obtaining an advantage

извлечение выгод и преимуществ

25. proceeds from the use of property

доходы от использования имущества

26. commingle

смешиваться, соединяться

27. if criminally obtained property commingled with other property…

если имущество, добытое незаконным путем, приобщено к другому имуществу…

28. confiscation will be proportional to the value of property

конфискация будет пропорциональна стоимости собственности

29. commercial bribery

коммерческий подкуп

30. abuse of authority

злоупотребление полномочиями

31. a person who performs managerial functions

лицо, выполняющее управленческие функции

32. expand the reach of this Article (beyond...)

действие данной статьи распространяется (на лиц за пределами круга …)

33. prohibition from holding certain positions

лишение права занимать определенные должности

34. prohibition from engaging in certain professional activity

лишение права заниматься определенной деятельностью

35. aid

содействовать, способствовать

36. abet

подстрекать, способствовать, соучаствовать в совершении преступления соучастие, подстрекательство (к совершению чего-либо) (как правило, используется в составе выражения “aiding and abetting”; самостоятельное использование ограничено)

abetting

37. aiding and abetting

пособничество и подстрекательство 238

Study the names of international agencies: OECD: The Organization for Economic Cooperation and Development

Организация экономического сотрудничества и развития (ОЭСР)

The Council of Europe

Совет Европы

Study the titles of the legislative acts of the Russian Federation: The Code of Administrative Offences

Кодекс об административных правонарушениях РФ

The Criminal Code

Уголовный кодекс РФ

Federal Law #273-FZ “On Combating Corruption”

Федеральный закон № 273-ФЗ «О противодействии коррупции»

Study the titles of international instruments: The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (21 November 1997) adopted by OECD

Конвенция ОЭСР по борьбе с подкупом иностранных должностных лиц при осуществлении международных коммерческих сделок (21 ноября 1997 г.)

The UN Convention against Corruption (31 October 2003)

Конвенция Организации Объединенных Наций против коррупции от 31 октября 2003 г.

The Criminal Law Convention on Corruption (27 January 1999) adopted by the Council of Europe

Конвенция об уголовной ответственности за коррупцию от 27 января 1999 г., принятая Советом Европы

Reading Read the texts and note the vocabulary in bold. Exercise 1. Read the text and answer the questions: 1. What substantial changes brought the Russian law in line with international anti-bribery standards? 2. Which major changes have recently been made to the Code of Administrative Offences and the Criminal Code of the RF? General Comments The year 2011 brought substantial changes to Russian anti-bribery laws to make them resemble generally recognized international standards in this area. These changes have largely been a result of Russia’s joining the Organization 239

for Economic Cooperation and Development which required accession to OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 21 November 1997. In addition, Russia is a party to the UN Convention against Corruption of 31 October 2003, and the Criminal Law Convention on Corruption adopted by the Council of Europe on 27 January 1999. The Code of Administrative Offences was amended to hold legal entities liable for any unlawful provision, offer or promise of any valuables (cash, property, services, etc.) to a Russian or foreign public official, an official of a public international organization as well as officers in a commercial company in exchange for any actions or omissions to act in their official capacity in the interests of this legal entity. The Criminal Code has also been changed to criminalize bribery of foreign public officials and officials of public international organizations1. Exercise 2. Read the following text. Decide which answer A, B or C best fits each space. Answer the questions below the text and summarize it. In Russia, there is no criminal liability for legal ..1.. . When a legal entity is held responsible for unlawful conduct, such an entity is ordinarily subjected to administrative liability, such as administrative fines. With effect from 1 January 2013, Federal Law # 273-FZ “On Combating Corruption” (the “Anti-corruption Law”) was ..2.. to introduce requirements that companies implement anti-corruption measures. Article 13.3 of the Anti-corruption Law requires organizations to ..3.. and implement anti-corruption measures such as • appointing a specific department or an official to ..4.. preventing corruption and related offences; • cooperating with enforcement authorities; • developing and implementing standards and procedures for ethical business practices; • establishing an ethical code of conduct for personnel; • preventing and ..5.. conflicts of interest; and • preventing the filing of false or off-the-record reports and the use of ..6.. documents. This list of measures is not exhaustive2. 1. A organizations

B entities

C entrepreneurs

2. A amended

B changed

C modified

3. A offer

B suggest

C develop

4. A be in charge of

B be responsible for

C handle

1

Doing Business in Russia 2013. Baker & McKenzie — CIS, Limited. Doing Business in Russia 2013. Baker & McKenzie — CIS, Limited; Russian Business Law — Compendium № III / Clifford Chance CIS Ltd. 2013/2014. 2

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5. A settling

B resolving

C consenting

6. A forged

B fake

C made up

1. Are legal entities subject to criminal liability? What kind of responsibility is imposed in cases of their unlawful conduct? 2. Why was the Anti-corruption Law # 273-FZ amended? 3. What anti-corruption measures does Article 13.3. stipulate? Exercise 3. Read the following text. Use the words in the box to the right of the text to form one word that fits in the gap. Then answer the questions below the text and say what sanctions are envisaged for bribery in Russia. Criminal Offenses Russian criminal law prohibits active and passive bribery in both public and private sectors. Article 291 of the Criminal Code prohibits ..1.. of a bribe to 1. provide Russian public officials, foreign public officials and officials of public international ..2.. . This Article also covers provision 2. organize of a bribe through intermediaries. Sanctions The sanctions under Article 291 of the Criminal Code vary depending on (a) whether the person giving a bribe has ..3.. alone or in 3. action conspiracy with others, (b) whether the bribe is given for the commission of a ..4.. or 4. law an unlawful act (omission) and (c) the amount of the bribe. The minimum sanction — for a bribe less than RUB 25,000 (approx. USD 833) — is: • a fine from 15 to 30 times the amount of the bribe, or • forced labor for the period of up to 3 years or • ..5.. for up to 2 years with a fine of 10 times the amount 5. prison of the bribe. The maximum sanction — for a bribe exceeding RUB 1 million (approx. USD33,000) — is: • a fine from 70 to 90 times the amount of the bribe or • imprisonment for from 7 to 12 years and a fine 70 times the amount of the bribe. A person who has given a bribe may be relieved of criminal liability if he ..6.. aids detection and prosecution of the crime 6. activity or reported himself after the ..7.. of the crime to the criminal 7. commit law enforcement authorities or was solicited by a particular public official to give a bribe. 241

Confiscation According to Article 104.1 of the Criminal Code, property obtained as a result of a criminal offense and any property into which such criminally obtained property has been ..8.. 8. sequence transformed as well as any proceeds from the use of such property may be subject to confiscation. If criminally obtained property or proceeds from its use have been commingled with other property, confiscation will be proportional to the value of the ..9.. obtained property and the proceeds from its use. 9. crime1 1. What does the criminal law generally provide as regards bribery?1 2. What circumstances influence the harshness of sanction applicable within the scope of Article 291 of the Criminal Code? 3. What minimum and maximum sanctions does this article establish? 4. What is confiscation? 5. What property may be subject to confiscation according to Article 104.1 of the Criminal Code? Exercise 4. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and summarize it. conduct bribe persons position enforcement managerial anything offense organization period purpose Active Commercial Bribery Article 204 of the Criminal Code defines commercial bribery as unlawful provision of ..1.. which has pecuniary value (including property rights, services, etc.) to a person who performs managerial functions in a commercial or other organization for an act or omission in connection with such person’s official position in the interests of the provider. Moreover, the same ..2.. may be prosecuted under Article 201 of the Criminal Code which prohibits abuse of authority, i.e. the use by a person who performs managerial functions in a commercial or other ..3.. of his authority contrary to the lawful interests of this organization for the purpose of obtaining an advantage not only for himself but also for other ..4.. as well as for the purpose of causing damage to other persons. As a practical matter, it should be noted that Article 204 of the Criminal Code also covers conspiracies to engage in commercial bribery which expands the reach of this Article beyond the persons with ..5.. functions. The maximum sanctions under Article 204 are 1

Doing Business in Russia 2014. Baker & McKenzie — CIS, Limited.

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• a fine from 40 to 70 times the amount of the ..6.. and prohibition from holding certain positions or engaging in certain professional activity for a ..7.. of up to 3 years, or • forced labor for a period of up to 4 years, or • an arrest for a period from 3 to 6 months, or • imprisonment for a period of up to 6 years A person who has committed the ..8.. provided by Article 204 of the Criminal Code, regardless of whether that person has provided or received a bribe, may be relieved of criminal liability if he actively aided in detecting or prosecuting this offense, or he was subject to bribe solicitation, or he voluntarily reported the bribe to criminal law ..9.. authorities1. 1. How does Article 204 of the Criminal Code define commercial bribery? 2. What is abuse of authority as per Article 201 of the Criminal Code? 3. How does the Criminal Code treat conspiracies to engage in commercial bribery? 4. What are the sanctions as per Article 204? 5. In which instances may a person prosecuted under Article 204 be relieved from responsibility? Exercise 5. Read the following text and think of the best word to fill in each gap. Then answer the questions below the text and retell it. Aiding and Abetting Public Bribery Article 291.1 of the Criminal Code makes aiding and abetting public bribery a separate criminal offense. Aiding and abetting is defined ..1.. the physical ..2.. of a bribe on the instructions of the person either giving or receiving a bribe as well as any other assistance to either of these persons in reaching or executing an agreement between them to give and take a bribe. This Article ..3.. only to bribes with a value exceeding ..4.. 25,000 (approx. USD 833). This Article also applies to offers or promises of assistance in public bribery regardless of the ..5.. of the bribe. The sanctions are comparable to those for active public bribery2. 1. Which actions qualify as aiding and abetting bribery according to Article 291.1 of the Criminal Code? 2. Which bribe amounts does Article 291.1 apply to? What makes this article applicable irrespective of the amount of the bribe? 3. What are the sanctions under Article 291.1? Exercise 6. Read an extract from the note "Improving Action against Solicitation," prepared by the OECD on the request of the G20 Anti-Corruption 1 2

Doing Business in Russia 2014. Baker & McKenzie — CIS, Limited. Ibid

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Working Group (G20 ACWG). Fill in the gaps with the required prepositions and say what you have learned from the text. Introducing risk mitigation measures in public procurement G20 countries have also increasingly taken measures to address the specific risk of bribery ..1.. public procurement because of the heightened risks ..2.. this major interface between the public and private sectors. These risk mitigation measures targeted ..3.. public officials have taken different forms, such as specific standards of conduct, financial disclosure, or rotation mechanisms for procurement officials. ..4.. instance, with the view ..5.. promoting high standards of conduct to procurement-related situations, countries such as Canada, Italy and the Republic of Korea have developed a specific code of conduct ..6.. procurement officials. In India, a Code of Integrity for the procuring entity and the bidders was introduced together with the Public Procurement Bill ..7.. May 2012 to promote integrity, transparency, efficiency and competitiveness in the procurement process. To prevent conflict ..8.. interest ..9.. procurement, an increasing number of countries are also requiring procurement officials to disclose their financial assets. ..10.. example in Mexico, procurement officials are required to disclose their financial assets ..11.. the public to enhance public scrutiny and reinforce public trust. Restrictions for receipt of gifts are often more stringent than for other public officials because ..12.. the risks involved1.

Key terms: Corporate Compliance Exercise 7. Explain the meaning of the following expressions in English: • to criminalize bribery • no criminal liability for legal entities • active and passive bribery • provision of a bribe through intermediaries • to act alone or in conspiracy with others • whether the bribe is given for the commission of a lawful act • to actively aid detection and prosecution • to be solicited by a particular public official to give a bribe • this expands the reach of this Article beyond the persons with managerial functions • public bribery Exercise 8. The United Nations Convention against Corruption (UNCAC), to which Russia is a signatory criminalizes several types of corrupt behavior 1 Improving Action Against Solicitation — G20 ACWG Note prepared by the OECD [Электронный ресурс] // Stolen Asset Recovery Initiative [Сайт]. URL: http://star. worldbank.org/star/sites/star/files/note_on_solicitation.pdf.

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which are not mentioned in the text. Study the table below, which provides a list of terms for some of these offences and match these terms (1–6) with their definitions (a-f). Complete the box under each term with its Russian equivalent. Work with a partner and discuss each term. 1. embezzlement

2. misappropriation 3. diversion of property

4. trading in influence 5. abuse of functions or position

6. illicit enrichment

a) the performance of or failure to perform an act, in violation of laws, by a public official in the discharge of his or her functions, for the purpose of obtaining an undue advantage for himself or herself or for another person or entity b) misapplication or misuse of property entrusted to an official c) the solicitation or acceptance by a public official or any other person or the promise, offering or giving to a public official or any other person, of an undue advantage in order that the public official or the person abuse his or her real or supposed influence with a view to obtaining from an administration or public authority of the State Party an undue advantage for the original instigator of the act or for any other person d) 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 e) fraudulent appropriation of money by someone entrusted with its care on behalf of others, but who uses it for his/her own purposes. This offence typically occurs in the employment and corporate settings. It is a crime that may involve small sums or very large sums of money f) intentional, illegal use of the property, ideas, or funds of another person for one's own use or other unauthorized purpose, especially by a public official or by any person with a fiduciary duty to care for and protect another's assets. It is a felony, punishable by a prison sentence)

Exercise 9. Render the following phrases from Russian into English and use some of them in your own sentences. General Comments 1. внес существенные изменения в антикоррупционное законодательство 245

2. 3. 4. 5. 6. 7. 8.

действие или бездействие в качестве должностного лица квалифицировать взяточничество как уголовное преступление административные штрафы кодекс этики и служебного поведения работников неофициальная отчетность поддельные документы

Criminal Offenses 1. дача взятки и получение взятки 2. дача взятки через посредника Sanctions 1. действовал в одиночку или в сговоре с другими лицами 2. за совершение законного либо незаконного действия (бездействия) 3. сумма взятки 4. штраф от пятнадцати- до тридцатикратного размера взятки 5. принудительные работы 6. лицо может быть освобождено от уголовной ответственности 7. сообщил о своем правонарушении (в органы) Confiscation 1. имущество, приобретенное преступным путем 2. доходы от использования такого имущества 3. если имущество, добытое преступным путем, приобщено к другому имуществу 4. конфискация будет пропорциональна сумме взятки Active Commercial Bribery 1. коммерческий подкуп 2. материальная ценность 3. злоупотребление властью 4. лицо, выполняющее управленческие функции 5. вразрез с законными интересами 6. распространяет действие данной статьи за пределы круга лиц, выполняющих управленческие функции 7. запрет занимать определенные должности 8. запрет заниматься определенным видом профессиональной деятельности 9. принудительные работы 10. может быть освобожден от ответственности 11. у которого вымогали взятку 12. добровольно сообщил властям о взятке 246

Aiding and Abetting Public Bribery 1. оказывать пособничество и подстрекать к взяточничеству

Use of English and Speaking Exercise 10. Find the words collocating with the nouns 'bribe' and 'bribery' to complete the tables below. I. Verb+ BRIBE 1. to give a bribe 2. 3. 4. 5.

Methods or circumstances of giving a bribe 1. 2.

II. Verb+ BRIBERY 1. to combat bribery 2. 3. 4. 5.

Types of bribery Adjective+ BRIBERY 1. 2.

Exercise 11. Make up your own sentences with the English equivalent of the expressions «способствовать взяточничеству» and «вымогать взятку». Exercise 12. Translate the following sentences into English. 1. Взятка — это материальные ценности, такие как деньги и предметы, имущественная выгода (pecuniary values) или услуги, принимаемые должностным лицом за действия, предпринимаемые (undertaken) в интересах взяткодателя. 2. Дача взятки осуществляется за действия или бездействие должностного лица. 3. Такие действия или бездействия могут иметь законный и незаконный характер. 4. Законные действия основываются на возможности должностного лица в силу действующего (current) законодательства и его должностных обязанностей способствовать решению проблемы взяткодателя. 247

5. Незаконные действия связаны с нарушением действующего законодательства, нормативных актов, предписаний и др. 6. Передача и прием взятки в российском законодательстве являются противозаконными и караются в соответствии с Уголовным кодексом. 7. Термин «взятка» распространяется только на подкуп государственных служащих, тогда как подкуп сотрудника любой коммерческой структуры носит название «коммерческий подкуп». Exercise 13. (Optional) Translate the following article from Russian into English in writing. Suggest possible English equivalents for the words and phrases in bold in Part 2. Retell Part II in English. Part I 1. Довольно распространен миф, согласно которому Россия не ратифицировала ст. 20 Конвенции ООН против коррупции, так как власть не хотела осложнять жизнь влиятельным коррупционерам. На самом деле Россия ратифицировала Конвенцию ООН против коррупции еще в 2006 г. Конвенция была ратифицирована целиком, без исключения каких бы то ни было статей. 2. Статья 20 Конвенции «Незаконное обогащение» звучит следующим образом: Article 20. Illicit enrichment Subject to its constitution and the fundamental principles of its legal system, each State Party 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. 3. При этом, хотя ст. 20 и была ратифицирована Россией в составе Конвенции, она все же не применяется — по причине отсутствия у России правовых оснований ее применять . 4. При ратификации Конвенции ООН в Законе № 40-ФЗ были прямо перечислены статьи, по которым у России есть необходимые карательные механизмы. 5. Российская Федерация обладает юрисдикцией в отношении деяний, признанных преступными согласно ст. 15, п. 1, ст. 16, ст. 17–19, 21 и 22, п. 1 ст. 23, ст. 24, 25 и 27 Конвенции, в случаях, предусмотренных п. 1 и 3 ст. 42 Конвенции. 6. Статья 20 в этот список не входит, потому что она противоречит российскому законодательству. 7. Эта ситуация в Конвенции OОН предусмотрена: в ст. 20 прямо указано, что государство должно применять эту статью лишь «при условии соблюдения своей Конституции и основополагающих принципов своей правовой системы». 8. Однако в России есть ст. 49 Конституции, в которой сказано, что «обвиняемый не обязан доказывать свою невиновность», — таким 248

образом, преследование граждан за незаконное обогащение противоречило бы нашей Конституции. Part II 9. Есть и другие чисто юридические сложности на пути внедрения ст. 20 конвенции в наше законодательство. 10. В России не существует юридического определения незаконного обогащения. 11. В правоприменительной практике было бы весьма непросто определять понятия вроде «значительное увеличение активов», «законные доходы» и «разумным образом». 12. Также много проблем было бы с доказыванием умысла, особенно в связи с установлением причинно-следственной связи. 13. Таким образом, если бы даже состав преступления «незаконное обогащение» и был бы введен в наш УК, применять его на практике было бы крайне сложно и неудобно. 14. В нашем УК уже есть гл. 30, которая позволяет работать почти по всем коррупционным составам: злоупотребление должностными полномочиями, нецелевое расходование бюджетных средств, превышение должностных полномочий и т. д., включая даже ст. 287 «Отказ в предоставлении информации Федеральному Собранию Российской Федерации или Счетной палате Российской Федерации». 15. Объединение множества конкретных статей из этой главы УК в одну мутную статью «Незаконное обогащение» никак не помогло бы работе правоохранительных органов1.

Summarizing Exercise 14. (Optional) Read the text below and summarize it in English. Современное международное уголовное право не ограничивает понятие коррупции злоупотреблением государственной властью, но включает неправомерные действия должностных лиц коммерческих организаций, а также относит к коррупционным преступлениям помимо взяточничества (подкупа) ряд преступных деяний, связанных со злоупотреблением служебным положением. Так, Конвенция Организации Объединенных Наций против коррупции, принятая Генеральной Ассамблеей ООН 31 октября 2003 г., классифицирует все виды коррупции на две группы: коррупция в публичном секторе и коррупция в частном секторе. 1 Статья 20 Конвенции ООН против коррупции [Электронный ресурс] // Руксперт [сайт]. URL: http://ruxpert.ru/%D1%F2%E0%F2%FC%FF_20_%CA%EE%ED%E2%E5 %ED%F6%E8%E8_%CE%CE%CD_%EF%F0%EE%F2%E8%E2_%EA%EE%F0%F0% F3%EF%F6%E8%E8; United Nations Convention Against Corruption [Электронный ресурс] // United Nations Office on Drugs and Crime [Сайт]. URL: https://www.unodc.org/ documents/brussels/UN_Convention_Against_Corruption.pdf.

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К числу коррупционных преступлений в публичном секторе относятся: • подкуп национальных публичных должностных лиц; • подкуп иностранных публичных должностных лиц и должностных лиц публичных международных организаций; • хищение, неправомерное присвоение или иное нецелевое использование имущества публичным должностным лицом; • злоупотребление влиянием в корыстных целях; • злоупотребление служебным положением; • незаконное обогащение. Коррупция в частном секторе представлена двумя деяниями: подкуп и хищение имущества. На основании этой классификации коррупция определяется как злоупотребление должностными полномочиями в целях получения личной или корпоративной выгоды. Все перечисленные выше формы проявления коррупции чрезвычайно широко представлены в современной России, создавая реальную угрозу экономической безопасности страны1. Exercise 15. Read the article and summarize it reducing to 25 per cent. Say what you have learned about the measures to combat corruption under 273-FZ. Russian Law Amended to Require Compliance Programs Companies have an express statutory duty to develop and implement measures to prevent bribery Baker& McKenzie — CIS, Limited Russia's first comprehensive anti-corruption law, Federal Law No. 273 “On Combating Corruption”, has been amended to require companies to have compliance officers and programs. Specifically, new Article 13.3 requires all organizations to develop and implement measures to prevent bribery, including: (1) designating departments and structural units and officers who will be responsible for the prevention of bribery and related offenses; (2) cooperating with law enforcement authorities; (3) developing and implementing standards and procedures designed to ensure ethical business conduct; (4) adopting a code of ethics and professional conduct for all employees; (5) means for identifying, preventing and resolving conflicts of interest; (6) preventing the creation and use of false and altered documents. This provision is in force with effect from 1 January 2013. 1 Коррупция [Электронный ресурс] // Зачетка.рф [Сайт]. URL: http://hghltd. yandex.net/yandbtm?fmode=inject&url=http%3A%2F%2Fxn--80aatn3b3a4e.xn--

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Implications for Companies in Russia Before Article 13.3, Russian law provided that organizations could be held liable for “failing to take all measures within their powers” to prevent bribery. Thus, an organization could point to its compliance program as evidence of its efforts to take measures to prevent bribery. However, there was no affirmative duty to create a compliance program or any legislative guidance as to what such a system should contain. With Article 13.3, this has changed and companies are now legally required to create compliance programs which meet the standards of this Article, and failure to do so will be evidence of non-compliance with established Russian laws. Moreover, dealing with agents and third parties lacking compliance programs within their organizations may also be viewed as failure to take all possible measures to prevent corruption. Recommended Action In light of Article 13.3, companies should: 1) assess their existing compliance programs to determine whether they satisfy the standards of article 13.3; 2) supplement existing programs to ensure compliance with article 13.3; 3) specifically, companies should ensure that they have: a. designated compliance personnel and functions; b. procedures for conducting internal investigations; c. procedures for cooperating with law enforcement in the event that a serious violation is discovered; d. a code of corporate compliance and ethics that clearly addresses conflict of interest; e. a system for conducting regular risk assessments both within the company itself and among its business partners and third party agents; f. regular training for employees on anti-corruption compliance, business ethics and conflict of interest; 4) Companies should also make sure that their counterparties are aware and comply with this requirement1.

Writing Exercise 16. Write an essay of about 200–250 words on one of the subjects below: 1. Administrative liability for bribery 2. Criminal liability for bribery

1 Russian Law Amended to Require Compliance Programs [Электронный ресурс] // Baker & McKenzie Legal Alert [Сайт]. URL: https://create.org/wp-content/ uploads/2013/04/al_moscow_russianlawamended _feb13.pdf.

Unit 18. Energy Law in Russia (Natural Resources) Discussion 1. Here is a “word cloud” that comprises the words that will frequently appear in the texts below. What are these words associated with? Generate ideas about each word.

2. What does the Constitution of the Russian Federation provide in regard to subsoil resources? 3. What are the ways to discontinue Russia’s dependence on the resource rent? 4. How do you feel about the idea voiced by certain foreign politicians who demand that Russia’s natural resources should belong to the whole world? 252

Legal terms: 1.

subsoil resources

недра; полезные ископаемые

2.

land plot

земельный участок

strategic subsoil plots

стратегические участки недр

3.

subsoil plots of federal significance

участки недр федерального значения

4.

extract

извлекать, добывать

extract subsoil resources

извлекать полезные ископаемые

the extraction sectors

добывающие отрасли

5.

production sharing agreement (PSA)

соглашение о разделе продукции

6.

license

лицензия

subsoil license

лицензия на пользование недрами

geological survey license

лицензия на геологическое изучение недр

exploration and production license

лицензия на разведку и добычу полезных ископаемых

combined license

совмещенная лицензия

hold a license

владеть лицензией

obtain a license

получить лицензию

grant a license

предоставить лицензию

issue a license

выдать лицензию

suspend a license

приостановить действие лицензии

extend a license

продлить лицензию

revoke a license

отозвать лицензию

7.

license holder

держатель лицензии

8.

off-shore field (offshore field)

шельфовое месторождение (расположенное в пределах внутренних морских вод, территориального моря и континентального шельфа)

9.

deposit

месторождение

onshore deposit

материковое месторождение

strategic deposit

стратегическое месторождение

develop a deposit

разрабатывать месторождение 253

10. spin-off

11. split-off 12. tax regime establish a tax regime

спин-оф; выделение с пропорциональным распределением (акций вновь образованной компании между акционерами материнской компании) выделение налоговый режим установить налоговый режим

13. precious metals 14. gem stones

драгоценные металлы

15. native metals 16. refine metals

самородные металлы, самородки

17. enjoy a right of first refusal 18. continental shelf

пользоваться правом преимущественной покупки

19. customs territory 20. hydrocarbons

таможенная территория

21. be exempt from import duty

драгоценные камни заниматься переработкой, очисткой металлов

континентальный шельф углеводороды быть освобожденным от импортной пошлины

Study the names of Russian ministries, agencies, and departments: The Federal Agency for Subsoil Use (Rosnedra)

Федеральное агентство по недропользованию (Роснедра)

Study the titles of the laws of the Russian Federation: The Russian Federation Law On Subsoil Resources dated 21 February 1992

Закон Российской Федерации от 21 февраля 1992 г. «О недрах»

The Federal Law On Production Sharing Agreements dated 30 December 1995

Федеральный закон от 30 декабря 1995 г. «О соглашениях о разделе продукции»

The Federal Law On Precious Metals and Gem Stones dated 26 March 1998

Федеральный закон от 26 марта 1998 г. «О драгоценных металлах и драгоценных камнях» 254

The Federal Law № 187-FZ “On the Continental Shelf of the Russian Federation” dated 30 November 1995

Федеральный закон от 30 ноября 1995 г. № 187-ФЗ «О континентальном шельфе Российской Федерации»

The Federal Law № 268-FZ “On introduction of amendments to parts one and two of the Tax Code of the Russian Federation and separate laws of the Russian Federation in connection with measures on tax and customs tariffs stimulation of activity in the sphere of hydrocarbon production at the continental shelf of the Russian Federation” dated 30 September 2013

Федеральный закон от 30 сентября 2013 г. № 268-ФЗ «О внесении изменений в части первую и вторую Налогового кодекса Российской Федерации и отдельные законодательные акты Российской Федерации в связи с осуществлением мер налогового и таможенно-тарифного стимулирования деятельности по добыче углеводородного сырья на континентальном шельфе Российской Федерации»

The Federal Law № 57-FZ “On Procedures for Foreign Investments in Commercial Entities of Strategic Importance for Russian National Defense and Security” of 29 April 2008

Федеральный закон от 29 апреля 2008 г. № 57-ФЗ «О порядке осуществления иностранных инвестиций в хозяйственные общества, имеющие стратегическое значение для обеспечения обороны страны и безопасности государства»

Reading Read the texts in exercises 1–4 and note the vocabulary in bold. Exercise 1. Read the introduction to Energy Law and answer the questions. Then say what you have learned from the text. 1. How does Russia differ from foreign countries in terms of the rights to subsoil resources? Who do ownership rights in subsoil recourses belong to? 2. Who can hold subsoil licenses under the law? 3. What are the rules for strategic deposits? Off-shore fields? 4. Which strategy do foreign companies usually prefer in respect to obtaining subsoil licenses? Ownership of Subsoil Resources Russia differs from other countries where the private ownership of minerals in the ground exists and where land owners have title to all mineral resources located below their land plots. All Russian subsoil resources in the ground, including oil, gas, gold and other minerals, unless extracted, are owned by 255

the Russian state, irrespective of who holds the title to the relevant land plot or holds the relevant subsoil license. Rights to extract subsoil resources can be granted under subsoil licenses which, as a rule, provide that ownership rights to the extracted resources belong to the holder of the relevant license. Subsoil Users Under the Russian Federation Law "On Subsoil Resources" dated 21 February 1992, (the “Subsoil Law”) both Russian and foreign companies may hold subsoil licenses in the Russian Federation, save for licenses for strategic deposits, which may be developed by Russian companies only. The user of offshore fields may only be a Russian company that is at least 50% state-owned and which has at least five years’ experience of development of off-shore fields. Although foreign companies are allowed to hold subsoil rights in respect of nonstrategic deposits, in practice they usually hold subsoil rights to Russian deposits indirectly through their Russian subsidiaries1. Exercise 2. Read the following text. Decide which answer A, B or C best fits each space. Answer the questions below the text and summarize it. Licenses Russia, similarly to many other countries, has adopted a licensing system. Subsoil licenses in Russia include: 1. geological survey licenses; 2. exploration and production licenses; and 3. combined licenses (geological survey, exploration and production licenses). A geological survey license may be granted for a maximum period of 5 years (10 years for off-shore fields) and may be extended if needed for completion of the works. They are ..1.. without a tender or auction based on an application of the interested party. Exploration and production licenses and combined licenses can be issued for a term equal to the life of the ..2.. . They can be granted only through a tender or auction. Subsoil licenses are issued by the Federal Agency for Subsoil Use (Rosnedra). Rosnedra is ..3.. granting subsoil rights with respect to all onshore deposits, except for strategic deposits. Rights to strategic deposits may only be granted based on a decision of the Government of the Russian Federation. Transfer of Subsoil Rights Subsoil rights in Russia are not ..4.. transferable. However, the Subsoil Law permits the transfer of subsoil rights in certain instances, which makes such rights transferable to a limited extent. Such instances include: 1 Doing Business in Russia 2013. Baker & McKenzie — CIS, Limited; Russian Business Law — The Current Issues / Clifford Chance CIS Ltd. M.: Волтерс Клувер, 2009.

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i. transfer of subsoil rights from a parent company to its subsidiary and vice versa and transfer between the subsidiaries of the same parent company; ii. transfer following a merger of the license holder with and into another company; iii. transfer following a consolidation of the license holder with another company; iv. transfer following a spin-off or split-off of a new company. Any such ..5.. of subsoil rights requires a special decision of Rosnedra. Rights to strategic deposits are not transferrable to companies with foreign participation unless otherwise determined by the Russian Government for a specific deposit1. 1. A given

B issued

C made available

2. A project

B mine

C company

3. A responsible for

B in charge of

C authorized to

4. A for free

B easily

C freely

5. A transfer

B delegation

C assignment

1. What kinds of subsoil licenses does Russian law provide for? 2. What is the term of a geological survey license? How are these licenses issued? 3. What are the rules of issuing exploration and production licenses? Which licenses are issued under the same terms? 4. What issues are within the scope of Rosnedra? 5. Why are certain subsoil rights considered to be transferable to a limited extent? 6. How many situations that may give rise to transfer of a license does the law envisage? What are they? 7. Which bodies are authorized to approve the license transfers? Exercise 3. Read the following text and think of the best word to fill in each gap. Then answer the questions below the text and summarize it. Strategic Deposits In 2008 Russia introduced a long-discussed set of restrictions for ..1.. investors in respect of strategic subsoil plots (subsoil plots of federal significance). The list of subsoil plots of federal significance is published by the Federal Agency for Subsoil Use and includes approximately 1,000 strategic deposits and is updated on a regular ..2.. . It is noteworthy that the list is not ..3.. and any deposit that meets the above criteria will be deemed strategic irrespective of whether it is included into the list or not. 1

Doing Business in Russia 2013. Baker & McKenzie — CIS, Limited.

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Production Sharing Agreements The main objective of the Federal Law on Production Sharing Agreements dated 30 December 1995 (the PSA Law) is to provide investors in the extraction sectors with greater stability in fiscal and regulatory areas over the long term. ..4.. the PSA Law since 2003 subsoil plot development has been available only if the subsoil plot was put to auction and the auction failed. Therefore the best deposits are distributed under subsoil licenses and the PSA regime is not very attractive to subsoil users. Due to the above and to the PSA tax regime established at the same time, PSAs have become largely ineffective in terms of attracting foreign ..5.. into Russia. Precious Metals and Gem Stones The Federal Law On Precious Metals and Gem Stones dated 26 March 1998 provides exhaustive lists ..6.. precious metals and gem stones. Precious metals, with the exception of native metals, may be refined by organizations included on a special list of companies authorized to do so, which is maintained by the Russian ..7.. The Russian authorities enjoy a right of first refusal to purchase precious metals and gem stones from mining companies. The prices for precious metals in such instances are based on ..8.. market prices1. 1. What is the role of the Federal Agency for Subsoil Use in regulating extraction on strategic subsoil plots? 2. What is the purpose, advantages and disadvantages of Production Sharing Agreements? 3. What are the major provisions of the precious metals and gem stones legislation? Exercise 4. Read the text. Then complete the sentences with the words from the box. Two options are odd ones. Finally, answer the questions below the text and retell it. mainland development decisions customs territory measures continent Latest Developments The forecasted decline in oil production from existing reserves beyond 2020 catalyzed a discussion about the ..1.. needed to support the ..2.. and production of new reserves. For that purpose Law №268 amended provisions of both tax and customs legislation. The amendments to the customs legislation clarify that artificial islands, structures, and installations on the continental shelf are to form part of the customs territory of the Russian Federation, with the amendments to the Law on the Continental Shelf requiring their registration. The “import” of hydrocarbons to the Russian ..3.. from such structures will 1

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therefore be exempt from import duty as it constitutes delivery between two parts of ..4.. of the Russian Federation1. 1. What are the purposes of Law №268? 2. What customs provisions does it introduce? Exercise 5. Fill in the gaps with the phrases from the box. Speak about the importance of each law mentioned in the text. Give a brief explanation of a law at your choice. core legal act other principal law principal piece of legislation to provide the general legal framework (2) to set forth the legal framework to cover almost all principal issues to have competence over to fall within the joint competence of Subsoil Legislation The Constitution of the Russian Federation stipulates that subsoil-use legislation ..1.. the federal and regional state authorities. However, in practical terms the regional authorities ..2.. deposits of certain commonly occurring mineral resources and insignificant subsoil plots. The ..3.. in the mining and oil and gas domain is the Russian Federation Law On Subsoil Resources dated 21 February 1992, as amended (the “Subsoil Law”). The Subsoil Law ..4.. for the use of subsoil resources in Russia and ..5.. connected with geological survey, exploration and production/mining of underground resources. The ..6.. governing the use of subsoil resources in Russia is the Federal Law On Production Sharing Agreements dated 30 December 1995, as amended (the “PSA Law”). The PSA Law ..7.. for Russian and foreign investments in the geological survey, exploration and production of subsoil resources. The ..8.. regulating operations with precious metals and gem stones in Russia is the Federal Law On Precious Metals and Gem Stones dated 26 March 1998, as amended (the “Precious Metals Law”). The Precious Metals Law ..9.. for the processing, use and disposal of precious metals and stones, and has specific provisions on geological survey, exploration and mining of such metals and stones2.

Key terms: Energy Law Exercise 6. Explain the meaning of the following expressions in English: 1 2

Russian Business Law — Compendium № III / Clifford Chance CIS Ltd. 2013/2014. Doing Business in Russia 2013. Baker & McKenzie — CIS, Limited.

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• • • • • • •

a company that is at least 50% state-owned; combined licenses can be issued for a term equal to the life of the project; subsoil rights are not freely transferable; the list of plots is updated on a regular basis; subsoil plot was put to auction and the auction failed; exhaustive lists of precious metals and gem stones; prices for precious metals are based on world market prices;

Exercise 7. Render the following phrases from Russian into English. I. Natural Resources 1. Частная собственность на полезные ископаемые. 2. Недра находятся во владении государства. 3. Право на земельный участок. 4. Извлекать. 1. 2. 3. 4.

II. Subsoil Users Владеть лицензией на пользование недрами. Лицензия на стратегические месторождения. Разработка шельфовых месторождений. Российские «дочки» иностранных компаний.

1. 2. 3. 4. 5. 6. 7.

III. Licenses Лицензия на геологическое изучение. Лицензия на разведку и добычу полезных ископаемых. Совмещенная лицензия. Лицензия может быть предоставлена. Лицензия может быть продлена для завершения работ. Выдать лицензию. Материковые месторождения.

1. 2. 3. 4. 5. 6. 7.

IV. Transfer of Subsoil Rights Передача прав на пользование недрами. Материнская (основная) компания. Слияние. Присоединение (поглощение). Держатель лицензии. Выделение с пропорциональным распределением. Выделение.

1. 2. 3. 4.

V. Strategic Deposits Стратегические участки недр. Участки недр федерального значения. Федеральное агентство по недропользованию. Исчерпывающий перечень. 260

5. Соответствовать критериям. 6. Считаться стратегическим. 1. 2. 3. 4.

VI. Production Sharing Agreements Инвесторы добывающих отраслей промышленности Разработка участков недр Участок выставлен на аукцион Налоговый режим, установленный для СРП

VII. Precious Metals and Gem Stones 1. Самородные металлы, самородки. 2. Заниматься переработкой драгоценных металлов. 3. Правительство России ведет список компаний. Exercise 8. (Optional) Study the Russian names of substances and their English equivalents and try to reveal a tendency in word–formation of chemical elements. алюминий aluminum (aluminum) кальций calcium гелий helium полоний polonium платина platinum молибден molybdenum Exercise 9. (Optional) Translate into English the names of strategic minerals on the list, specified in the law “On Subsoil Resources” (1992). Use the wordformation pattern derived in Exercise 8, where applicable. 1.

уран

2.

алмазы

3.

особо чистые кварцы

4.

редкоземельные металлы иттриевой группы

5.

никель

6.

кобальт

7.

тантал

8.

ниобий

9.

бериллий

10.

литий

11.

металлы платиновой группы

Exercise 10. (Optional) Translate into English the names of precious metals and gem stones on the list, specified in the law On Precious Metals and Gem 261

Stones (1998). Use the word-formation pattern derived in Exercise 8 where applicable 1.

золото

2.

серебро

3.

платина

4.

палладий

5.

иридий

6.

родий

7.

рутений

8.

осмий

Use of English Exercise 11. Look through the list of verbs collocating with the word "license" and decide which speech style they belong to? • • • • • • •

to hold to obtain to grant to issue to suspend to extend to revoke

Exercise 12. Combine the verbs (phrases) from the first column with the nouns (noun phrases) form the second column to make up all possible collocations. In case of difficulty first render the words from English into Russian. to make a geological survey to explore to develop to produce to extract to refine

subsoil resources subsoil plots mineral resources deposit oil/gas field oil gas metals

Exercise 13. Render the following sentences from English into Russian, paying attention to the expressions “unless… otherwise”/“unless”. 1. A permit, as defined below, shall be required before commencing any mineral extraction operation, unless otherwise exempted by this chapter. 262

2. Unless otherwise specifically agreed, title to the Gas shall pass from Seller to Buyer at the Delivery Point(s). 3. And while economists and analysts say a serious slowdown can still be avoided, many add that unless oil and energy prices fall much further and — most important — stay down, the world economy could be in serious trouble. 4. Unless expressly herein provided, neither party shall be liable for direct, indirect, special, exemplary, incidental, consequential or punitive damages, irrespective of whatever such damages were foreseeable or unforeseeable. 5. When a mining license is issued — … (ii) any other exclusive prospecting license shall so cease to have effect, unless the Minister has, subject to the provisions of section 80(1)(d)(i), determined otherwise on such conditions as may be determined in writing by him or her. Exercise 14. Render the following sentences from English into Russian. 1. Despite this, the provisions of the Subsoil Law could theoretically be interpreted to mean that any subsoil block meeting the main relevant criteria provided for by the Subsoil Law should automatically be treated as being of federal importance. 2. “We are demanding that the Colombian government permanently suspend the oil exploration license of Occidental Petroleum and its associate Shell Oil on our traditional lands”, said Roberto Cobaria, President of the Traditional U'wa Authority. Exercise 15. Translate the newspaper article below from Russian into English. (1) Госдума приняла закон о налоговых льготах для шельфовых месторождений. (2) Этот закон вводит особый порядок налогообложения углеводородного сырья, добытого на новом морском месторождении. (3) В нем также определяются критерии, по которым месторождение признается или, напротив, перестает считаться новым. (4) Кроме того, имущество организаций, добывающих углеводороды на шельфе или в территориальных водах, не будет облагаться налогом на имущество, если оно используется для работ на месторождениях не менее 90 дней в году. (5) Закон должен вступить в силу с 1 января 2014 года, но не ранее чем по истечении одного месяца со дня его опубликования, за исключением положений, для которых установлены иные сроки.

Speaking Exercise 16. Comment on the following statements from the text: • Russian subsoil resources in the ground are owned by the state, irrespective of who holds the title to the relevant land plot or holds the relevant subsoil license; 263

• ownership rights to the extracted resources belong to the holder of the license; Exercise 17. Speak about the rules and regulations of getting a driving license (or any other type of license you are well familiar with) using as many collocations in Exercise 12 as possible. The group will follow your speech and tick the respective word on the list when used. Exercise 18. Speak about important issues of Energy Law covered in the texts using the English equivalents of the phrases in the respective section of Exercise 7. Exercise 19. Prepare presentations on the following topics: 1. Latest amendments in the state regulations in mining, gas and oil production. 2. Foreign investments into the hydrocarbons sector. 3. The functions and work of the Federal Agency for Subsoil Use (Rosnedra).

Summarizing Exercise 20. Read an extract from the interview with Alexander Novak, the Minister of Energy of the Russian Federation at the 14th International Energy Forum, 2014, and summarize it in the form of a narrative reducing to 30 per cent. Say what you have learned about the effects of the recently enacted laws? Interviewer: It has been almost a year since the passage of Law 213. Have investment procedures in the development of mature fields and hard-to-recover reserves changed? Has the law had a beneficial effect? A. Novak: Certainly, the enactment of the law has been an important step for the development of new fields with hard-to-recover reserves. Most experts in this field also agree on the significance of the law for the oil industry, especially in that the document provides measures to support production in alreadydeveloped fields. Previously, the development of hard-to-recover reservoirs located within existing fields was economically unprofitable. Data on the hard-to-recover oil production index, which is being collected from the companies, will help to evaluate the efficiency of the new law. Interviewer: How much oil and gas has been produced due to the enactment of this law? A. Novak: According to experts’ calculations, about 2 billion tonnes of oil will be included in development, and due to this law additional exploration and estimation of hard-to-recover oil reserves to the extent of 22 billion tonnes (in the Tyumen and Bazhenov formations and also oil with a permeability of less than 2 millidarcies) can be carried out. 264

Positive budgetary and multiplier effects are also expected. During the period of development of hard-to-recover oil until year 2032, state income is going to constitute about 2 trillion Roubles with additional production of 326 million tonnes of oil. Since investment into production of hard-to-recover oil has become profitable, companies are adjusting their investment policies and directing funds towards new projects aimed at the production of hard-to-recover oil reserves. Interviewer: What challenges are faced in Russia’s continental shelf? A. Novak: Poor geological research is one of the factors that restrains more active continental shelf reserves exploration. The degree of exploration of initial recoverable resources of the Russian continental shelf is the following: oil 6.8 percent, gas 11.1 percent. Some seas have zero degree of exploration (Laptev Sea, East-Siberian Sea, the Sea of Chukotsk, Bering Sea, Black Sea and Pacific Ocean aquatory in Kamchatka and Kurily areas). However, there has been a growth of the licensing area recently. The total area of the Russian sector of the continental shelf is about 6.6 million square kilometres the licensing area is 19 percent, last year saw just 5 percent. As of October 2013, 131 licenses for the geological survey, exploration and production of hydrocarbons in offshore zones of the Russian Federation were issued. License holders conduct work at their own expense in 110 zones. In order to boost investment in offshore development, Federal Law of 30 September, 2013, No. 268-FZ on Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation in Connection with the Provision of Tax and Customs Duty Incentives for Hydrocarbons Production on the Continental Shelf of the Russian Federation, which provides implementation of a package of measures to stimulate the development of offshore fields, was adopted. Also, with the purpose of stimulation of the greenfield development, Federal Law of July 23, 2013, No.213-FZ, On Amending Chapters 25 and 26 of Part two of the RF Tax Code and Article Three of the Law, On the Customs Tariff, providing an application of reduced rates of the tax on natural resource production was adopted. Russia plays a special role in maintaining the Earth’s Arctic ecosystems and its unique diversity of species. As was already mentioned, a third of the entire area of the Arctic is Russian. These territories are the vivid embodiment of the typical features of the Arctic ecosystems. In order to preserve the environment from possible oil spills during production in the territorial sea, in the exclusive economic zone and in the continental shelf of Russia Federal Law No. 287-FZ of December 30, 2012, on the Amendments to the Federal Law on the Continental Shelf of the Russian Federation and the Federal Law on Internal Seawaters, Territorial Seas and 265

the Adjacent Zone of the Russian Federation, Prevention and Elimination of Oil spills in the Sea, was adopted on July 13, 2013. Russia was also actively involved in the preparation of the second in the history legal binding document — Agreement on Co-operation in the field of preparedness for marine oil spills in the Arctic and combating them, signed during the seventh ministerial session of the Arctic Council in Kiruna on May 15, 2013. Signing the agreement is further evidence of the high responsibility of the Arctic states for the situation in the region1.

Writing Exercise 21. Write an essay of about 200–250 words on one of the subjects below. 1. Regulations for the work at strategic deposits 2. Subsoil licenses

1 Novak A. Russian Steps [Электронный ресурс] / A. V. Novak // 14th International Energy Forum Ministerial. 2014. URL: https://www.ief.org/_resources/files/events/ief14/ russia-minister-of-energy.pdf.

Annex I. Some useful cliches and linkers for summarizing 1. I’ll be speaking about; I’m going to start with; speaking specifically about issues connected with; at this point I’d like to give you a short overview of; I’d like to tell you something about the topic I intend to cover; be particularly relevant for; first allow me to define... then I’ll deal with... after that I’ll discuss; I’ll move on to; I’ll be addressing the main issue; allow me to point out here that; generally, it’s also important to consider that; as I said, please note that; I want to stress that; I’d like to turn to; my next point has to do with; finally; generally speaking; the second type of... third... the fourth type of; a second thing to keep in mind is the fact that; I now come to; I’ll conclude with; my final point is; etc. 2. My presentation will deal with; I would like to start with; I’d like to explain that in my jurisdiction; In our/this country we (don’t) distinguish; Moving to the next point; Turning to. 3. I would like to start with; I am going to give you an overview of; this law deals with/regulates; according to this…; it’s important to stress/point out that; moving to the next point; to sum up; in conclusion. 4. First(ly), the text is devoted to stating…;The text starts with discussing…; To begin with, the author dwells on the question of…; Once it is established that…; In general, …; Thus…; Before discussing…; Even though (though, although)…; On the other hand, …; Moreover, …; The reason is that…; This is certainly true if… So, …; Second(ly), the text contains the information about…; Second, … are dealt with in the text.; Second (Next), the text concerns itself with the following: …; Dwelling on … , the first type of … to be pointed out is …; As to (As regards, In respect of, Concerning) …, the first type of … that can serve as a …is …; It should be mentioned (pointed out, indicated) that …; Another thing with respect to … is that …; It is worth mentioning (highlighting) that…; Mention should also be given to the fact that … 5. namely, for example (instance), as well as, moreover, besides, in brief, in a nutshell, in short, firstly, lastly, because, since, as, due to, even though, as a result, in practice, etc. 267

6. particularly (focusing), even more so (contrasting), on the contrary (contrasting), on top of that (adding information), what is more (adding information), more/most importantly (ordering points), to some extent (generalizing), basically (generalizing), by and large (generalizing), mostly (generalizing), in other words (generalizing) 7. the question of … arises with regard to…; as far as smth. is concerned…; what is of importance is that…; clearly,…; probably this was due to the fact that…; on the strength of these basic principles…; as a consequence… 8. for historical reasons; despite this; however; for instance; unless … otherwise; although; until recently; in general; significantly; in particular

Annex II. Some useful vocabulary notes (Company Law) 1. SUBJECT TO (a), (prep.) В тексте это выражение встречается несколько раз: • An LLC may not have more than 50 participants. Otherwise it shall be subject to transformation into an open joint stock company… • An interest in an LLC is not deemed to be a security under Russian law, and is therefore not subject to registration with the Federal Service for Financial Markets. • In an open joint stock company (OJSC) the number of shareholders was unlimited and shares could circulate freely on the market, meaning that they were not subject to any pre-emption rights or similar restrictions. Shares could also be traded at stock exchanges. Оно может иметь следующие значения: 1) при употреблении в качестве прилагательного: подлежащий чему-либо • a treaty is subject to ratification • the final text of the document will be subject to legal review подчиненный чему-либо • in the era before the Industrial Revolution the corporation wasn't a legal person subject to the law ограниченный чем-либо • in an open joint stock company (OJSC) shares were not subject to any pre-emption rights or similar restrictions. • the use of land is subject to various legal constraints имеющий силу лишь в случае чего-либо • the offer is subject to our final confirmation зависящий от чего-либо • the price for the product is subject to market fluctuations подверженный чему-либо; склонный к чему-либо • investors subject to costly search, however, may also rely on other attributes or even choose to ignore value-relevant information уступающий место чему-либо; 2) при употреблении в качестве предлога: 269

при условии если; в том случае, если • the payment shall be made subject to the submission by the Sellers of the following documents: … • the Client may accept the work product without warranty subject to a reasonable price adjustment; с соблюдением; при соблюдении; при условии соблюдения • subject to the limitations set forth below, the parties will be liable for the damages arising out of the breach of their obligations hereunder в зависимости от • the Supplier shall supply all products ordered, subject to their availability • real estate appraisers study land to form an opinion of its value — subject to the physical and legal constraints affecting its use за исключением / исключениями, указанным в / за изъятием / за изъятиями, предусмотренным в • subject to any obligation to comply with any law, rule or regulation, to make information available to the person entitled thereto, keep confidential any information of the Purchaser, which Shareholder acquired in the course of negotiation • the owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts при предоставлении any party may be represented by legal practitioners or other representatives, subject to such proof of authority as the Tribunal may require. поскольку это допускается; поскольку иное не содержится; поскольку иное не предусматривается TO SUBJECT SB TO STH (v) — подвергать кого-либо чему-либо 2. WITHIN THE PERIOD OF ONE YEAR В англоязычных текстах, относящихся к сфере коммерции и права, предлог within, имеющий значения в течение, не позднее чем, традиционно употребляется в предложениях, где имеется указание на длительность периода, выраженное цифрой (числительным). Например: • There is a federal law allowing consumers to cancel contracts made with a door-to-door salesperson within three days of signing. • You need to file a charge within180 calendar days from the day the discrimination took place. При описательном обозначении периода времени, как правило, более уместен бывает предлог during, имеющий значения в продолжение, в течение, во время, в процессе. Например: "Winding-Up" means the period during which the affairs of the Venture are terminated and the liquidation and sale of the assets of the Venture is accomplished. 270

The failure to charter vessels in due time shall not be considered as force majeure. … The time of fulfillment of the obligations is extended according to the time during which such circumstances and their consequences are occurring. 3. TO DEEM — полагать, считать Является элементом официально-делового стиля речи. Его синоним в нейтральном стиле — глагол to consider. To deem используется в основном в письменной речи. В бытовой речи звучит книжно, высокопарно. 4. IN ACCORDANCE WITH — в соответствии с Данное выражение является элементом официально-делового стиля и часто употребляется в сфере права и коммерции как в письменной, так и в устной речи. Для нейтрального стиля более характерно выражение according to. 5. ОБОСОБЛЕННАЯ СОБСТВЕННОСТЬ В основных переводах ГК РФ на английский язык найдены следующие варианты отображения данного российского термина: Перевод и научное редактирование П. Б. Мэггса при участии А. Н. Жильцова (1997 г.)

separate property

Перевод К. Осакве (2000 г.)

specific property

Перевод и научное редактирование У. Э. Батлера (2008 г.)

solitary property

2. ПРАВО СОБСТВЕННОСТИ НА… (имущество ) I. • the right of ownership of (property) • the right to ownership of (property) • ownership of (property) rights Фраза the right of ownership of (property в данном случае является клише с весьма распространенного в российском праве выражения право собственности на (имущество). В англоязычных юридических текстах данная конструкция, которая словарно полностью повторяет свой русский эквивалент, встречается крайне редко. Иногда (также редко) она может появляться в несколько измененном виде с другим предлогом. Ограниченность употребления, очевидно, связана с наличием указания на объект собственности, которое делает фразу излишне громоздкой. Выражения the right of ownership и ownership right (без уточнения объекта собственности) существуют самостоятельно. 271

Например: • What is not evident in this definition of Rights of Ownership of Real Property is that most Americans do not have the right of real property ownership. Americans are tenants and a deed is a transferable leasehold giving the rights of use so long as property taxes are paid. • Disputes can often arise between those who commission and pay for the development of software and those who actually write the software. If faced with such a dispute it is important to know which party is entitled to ownership of the software — particularly where the software has significant commercial value. • Alternatively, if there is no right to ownership of the software, it is important to establish the terms of any license to use the software. Периодически можно встретить другие конструкции, которые близки к русскому выражению право собственности на (имущество), которое мы здесь рассматриваем. Например: • Because ownership of gas rights was different than ownership of oil rights, Amarillo Oil vested ownership of the produced gas in the owner of the gas rights rather than in the operator of the wells which only owned the oil rights. II. • ownership of (property) • ownership in (property) • (property) ownership В большинстве случаев для передачи того же смысла встречаются выражения: ownership of (реже — in) property (land, company, copyright, etc.) либо property ownership. При этом имеется в виду, что само слово ownership вмещает в себя понятие право собственности. Например: • In the Panhandle, ownership of oil and ownership of gas are often severed so that the owner of the oil rights does not own the gas rights and vice versa. • This … chapter … takes account of the recent substantial changes in the law relating to land ownership in Scotland and deals with the three main aspects of this: the nature of landownership, burdens on land and transfer of ownership in land. • There are several different ways to transfer property ownership, and each of them begins with the official recording (filing) of the unrecorded deed as the first step. III. Означает ли сказанное, что выражения, приведенные в разделе I, не стоит использовать? Нет, не означает. При создании на английском языке письменных текстов (а иногда и в устной речи тоже) о российских юридических реалиях эти выражения могут оказаться чрезвычайно полезными, поскольку для русской юридической речи как раз характерно развернутое проговаривание: право собственности на… + указание на объект собственности. 272

Помимо этого, могут возникать ситуации, когда такое развернутое проговаривание окажется не просто данью традиции, а обязательным условием, невыполнение которого приведет к утрате полного смысла, заложенного в русском термине. 3. НА ПРАВАХ • …a commercial organization operates property under the right of economic or operational management; В российском праве много выражений, включающих конструкцию на правах. Например: • Принадлежать на правах хозяйственного ведения. • Распоряжаться на правах оперативного управления. • Владеть на правах собственности. • Занимать на правах аренды. • Пользоваться на правах аренды. • Распоряжаться на правах доверительного управления. Для того чтобы понять, стоит ли использовать предлагаемый сложный и громоздкий вариант перевода или можно обойтись более простым и компактным вариантом, необходимо решить, является ли простой вариант адекватным для передачи мысли, заложенной в исходном русском контексте. Необходимо иметь в виду, что в ряде случаев полноценное сравнение возможно не на уровне фразы, а лишь на уровне предложения в целом или даже ситуации. Сложный вариант Простой вариант to hold / possess under the right of to own; ownership to hold the ownership of; to hold the title to; to occupy under the right of rent to rent; to occupy under a rental contract; to use under the right of lease to lease; to use under a lease contract; to belong under the right of economic to exercise economic management of; management to dispose under the right of to exercise operational management operational management of; to dispose under the right of to perform / exercise trust administrust administration of tration of property; to administer property (placed) in trust; Однако вариант в тексте — правильный с точки зрения грамматики и словарно ближе к русскому, а значит, может пригодиться.

Annex III. Employment Law Vocabulary 1. CONSENT — AGREEMENT В юридических текстах часто появляется слово consent, обозначающее согласие. Возникает вопрос: можно ли его заменить привычным и знакомым словом agreement — и если да, то в каких случаях, а если нет, то в чем между ними разница? Для того чтобы ответить на этот вопрос, сравним наборы значений этих слов: Agreement

Consent

1. Соглашение, договор, договоренность, взаимное согласие, совпадение, сходство, сговор 2. Согласие

Разрешение, дозволение, позволение, готовность, согласование, согласие

Как мы видим, эти слова не являются полными синонимами. Слово agreement имеет более широкое значение и в юридических контекстах обозначает единство позиций обеих сторон по какому-либо вопросу. Двустороннее согласие After almost a year of uncertainty and struggle, German carmaker Opel announced today it has reached a tentative agreement with employee representatives for the approval of the so called Plan for the Future.

Одностороннее согласие, разрешение, позволение the employer cannot modify the terms and conditions of the employment contract without written consent of the employee

employment terms and conditions that have been agreed upon by employer and employee 274

При этом надо иметь в виду, что глагол to consent практически не используется, а когда надо обозначить действие, говорят либо to agree, либо to give consent. To agree

To give consent

1. Договориться, достигнуть со- Давать разрешение, согласие глашения, согласовать 2. Согласиться (на условие в рамках договора) 3. Сходиться во мнениях или присоединиться к мнению 2. THE LAW STIPULATES THAT… Объясняя содержание законодательства, важно не только знать и уметь использовать глаголы, обозначающие функцию, исполняемую конкретной нормой (оговаривать, устанавливать, предусматривать, определять, запрещать и проч.), но и соблюдать существующую в языке грамматическую традицию. Так, по-русски при изложении содержания того или иного законодательного акта в подавляющем большинстве случаев используется неопределенно-личная конструкция: в законе говорится…, в статье устанавливается… В английском языке данную мысль традиционно выражают в форме активной конструкции: the law stipulates…, the article provides… PATTERN: the law +VERB VERBS: to stipulate

оговаривать

to provide

предусматривать постановлять

to determine

определять

to establish

устанавливать

to specify

уточнять, подробно оговаривать, разъяснять детали

to proscribe

запрещать, объявлять вне закона

to prohibit

запрещать

to envisage

предусматривать (будущие возможности) 275

3. EXPRESS, EXPRESSLY В юридическом английском языке прилагательное express, как правило, переводится следующим образом: • прямо выраженный • положительно выраженный • явно выраженный Используется в составе таких выражений, как: — express contract — контракт с фиксированными условиями; — express terms, express conditions — прямо выраженные условия, положительно выраженные условия (в отличие от implied terms (conditions) — подразумеваемые условия). При этом достаточно широко встречаются и другие выражения: — express agreement, express approval, express authorization; — express permission, express consent; — express provision, express intention; — express license, express warranty. Наречие expressly, которое может сочетаться с большим количеством глаголов и имеет следующие значения: • прямо • определенно, точно, ясно, недвусмысленно • специально, намеренно Часто используется с глаголами to provide, to recognize, to require, to state, to accept, to agree, to authorize, to prescribe, to consent, etc., а также в составе выражения expressly or implicitly. 4. SALARY — WAGE salary is a fixed regular payment made by an employer, often monthly, for professional or office work as opposed to manual work. (Collins English Dictionary — Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003) wage (often plural) is payment in return for work or services, esp. that made to workmen on a daily, hourly, weekly, or piece-work basis. (Collins English Dictionary — Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003) 5. PAY — EARNINGS — REMUNERATION — COMPENSATION — PAYROLL PAY — оплата труда, плата В правовых контекстах pay как существительное используется для того, чтобы обозначить оплату труда или ставку оплаты труда работника в широком смысле без указания на то, в какой именно форме (salary 276

или wage) такая оплата осуществляется. Может также служить словомзаменителем для таких слов, как allowance, benefit и др. В законе Великобритании Employment Rights Act 1996 и в законе США The Fair Labor Standards Act of 1938 слово pay как существительное встречается в составе следующих словосочетаний: 1. adoption pay 2. agreed rates of pay 3. annual rate of basic pay 4. arrears of pay 5. deductions from pay 6. equal pay 7. Equal Pay Act of 1963 8. holiday pay 9. hourly rate of pay 10. itemised pay statements 11. maternity pay

12. normal pay day 13. (one) week’s pay 14. overtime pay 15. paternity pay 16. pay day 17. pay period 18. pay statement 19. reduction of pay 20. regular rate of pay 21. sick pay 22. take home pay of workers

EARNINGS (всегда во множ. числе): 1) заработок (труд.); 2) поступления, выручка (коммерц.) Dictionary of Law под ред. Ned Beale (Bloomsbury) дает следующее определение слову earnings: 1. the salary or wages, profits and dividends or interest received by an individual 2. the profits of a business REMUNERATION — вознаграждение Слово связано с широким спектром видов вознаграждения за труд, включая неденежные формы. Remuneration is the total of the financial and nonfinancial benefits to the employee of all the elements in the employment package. The substantive law on wages and remuneration covers such elements as forms and methods of payment, the protection of wages against unlawful deductions and other abuses, minimum wage arrangements, and other topics. Remuneration has historically included payroll as well as other forms of employee compensation. Most states, however, rely on the National Council on Compensation Insurance (NCCI)1 to determine remuneration. NCCI's definition of remuneration includes forms of employee compensation, such as: 1 The National Council on Compensation Insurance (NCCI) — Национальный совет по компенсационному страхованию (США), национальная ассоциация, собирающая, анализирующая и распространяющая информацию о программах страхования работников от несчастных случаев на рабочем месте и заболеваний, связанных с выполняемой работой. NCCI публикует рекомендации по величине страховых тарифов и структуре полисов такого страхования. Создана в 1922 г.

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• • • • • • • • • •

Salary or hourly pay Commissions Bonuses Overtime pay, less the premium portion Holiday, vacation and sick pay Rental value of employer-provided housing Value of employer-provided meals and lodging Time worked and accrued vacation upon dismissal Piecework, incentive plans, and profit-sharing plans Value of store certificates, merchandise or credits given to employees1

Более подробный список видов выплат и благ, которые относятся либо не относятся к понятию remuneration согласно NCCI, приводится на сайте: http://workcompconsultant.com/workers-compensation-remuneration-payroll.htm. COMPENSATION: 1) вознаграждение, плата; 2) компенсация (за вред, неудобство, незаконные действия другой стороны договора). 1. Слово compensation означает то же самое, что remuneration, т. е. плата за труд. В этом значении слово compensation используется в законе США The Fair Labor Standards Act of 1938. Некоторые источники отмечают, что в отличие от remuneration под compensation подразумеваются только денежные выплаты. Использование слова compensation в значении плата за труд часто встречается в рекрутинге. 2. Вместе с тем нельзя не обратить внимание на то, что в тексте закона Великобритании Employment Rights Act 1996 слово compensation встречается только для указания на возмещение за различные незаконные действия со стороны работодателя. Например, термин compensation for unfair dismissal встречается в тексте этого закона 16 раз, compensation for loss of office — 1 раз, прочие упоминания относятся к компенсационным выплатам, связанным с нарушением той или иной статьи закона, или в связи с решениями судов при рассмотрении трудовых споров. PAYROLL: 1) cумма к выплате; 2) платежная ведомость. 6. BENEFITS — ALLOWANCES There are many types of benefits and allowances that you may have to include in an employee's income. Whether or not they are taxable depends on the type of benefit or allowance and the reason an employee receives it. 1

http://definitions.uslegal.com/r/remuneration.

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Your employee is considered to have received a benefit if you pay or provide something to him or her that is personal in nature. A benefit can include: • a reimbursement of personal expenses; • free use of property, goods, or services owned by you; or • an allowance. When you provide a benefit to your employee you may have to include the value of it in the employee's income. Whether or not the benefit is taxable depends on its type and the reason an employee receives it. The benefit may be paid in cash (such as a meal allowance or reimbursement of personal cellular phone charges), or provided in a manner other than cash (we call this a non-cash benefit), such as a parking space or a gift. Once you determine that the benefit is taxable, you need to calculate the value of the benefit. The value of a benefit is generally its fair market value (FMV). This is the price that can be obtained in an open market between two individuals dealing at arm's length. The cost to you for the particular property, good, or service may be used if it reflects the FMV of the item or service. You must be able to support the value if you are asked. Add the taxable benefits and allowances to the employee's income each pay period to determine the total amount that is subject to source deductions. The benefits and allowances may be subject to CPP contributions, EI premiums and income tax deductions1 . 7. LABOR BOOK Названия (заголовки) документов необходимо по возможности переводить словарно как можно ближе к оригиналу. Это требование в первую очередь относится к локальным административным реалиям, т. е. к документам, должностям, названиям организаций и учреждений, которые имеют хождение или имеются только в России и не имеют аналогов за рубежом. Трудовая книжка — labor book — является одним из наиболее характерных примеров. В тексте мы видим, что упоминание трудовой книжки — labor book — снабжено пояснением в скобках: employment history — которое включено, чтобы облегчить понимание для англоязычных читателей, которые не знакомы с российской практикой трудовых отношений. Такой прием вполне эффективен, поскольку он позволяет ввести незнакомый термин, изначально избавляя иностранного читателя от необходимости обращаться к справочной литературе. Здесь может возникнуть вопрос, а не стоит ли вообще не осложнять положение англоязычного читателя упоминанием такой «экзотической» реалии, а просто написать то, что читателю понятно — employment history — и избежать, таким образом, кальки с русского? 1

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/bnfts.

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Однако в данном случае это было бы неправильно. Во-первых, employment history — это сведения об опыте работы, представляемые работником, который сам несет ответственность за их достоверность. Такие сведения включают в себя перечисление мест работы и занимаемых должностей, часто с указанием основных должностных обязанностей. Employment history никогда не содержит сведений о причинах увольнения. Как правило, employment history можно встретить в виде раздела в резюме, которое работник направляет работодателю, узнав об имеющейся вакансии. Резюме посылается для того, чтобы работодатель мог решить, целесообразно ли приглашать данного работника на интервью или нет. Во-вторых, для employment history совершенно не характерна важнейшая функция трудовой книжки — быть основным документом при начислении пенсии. В-третьих, employment history может способствовать пониманию текста, когда это выражение однократно использовано как один из пунктов списка необходимых для поступления на работу документов. Однако если говорить о многократном использовании такого варианта перевода в рамках одного текста, например если далее пересказывается содержание ст. 62 ТК РФ (Выдача трудовой книжки и копий документов, связанных с работой), то это выражение только запутает. При решении допустимости той или иной погрешности в передаче смысла чрезвычайно большое значение имеет источник, в котором появляется тот или иной термин. В популярном тексте или газетной статье, где юридические тонкости не так важны, но большое значение имеет понимание массовой аудиторией основного смысла, такое могло бы существовать. Однако в профессиональном юридическом тексте, к которому предъявляются повышенные требования точности терминологии, стоит придерживаться не описательной референции, а прямого называния документа: labor book. Полная замена термина labor book на employment history в юридическом тексте некорректна, поскольку здесь имеет место совпадение (и то неполное) всего одной функции — представление (а не удостоверение) сведений о местах работы. 8. DIPLOMA Вероятно, кто-то может решить, что перевод на английский язык должен звучать как можно более «иностранно» или что для англоязычных читателей будет привычнее выражение degree certificate, однако: 1) в России документы о профессиональном образовании принято называть именно дипломами, и разумно воспользоваться этим международным словом, которое имеется также и английском языке; 280

2) в п. 3 ст. 98 английского закона, который называется Employment Rights Act 1996, в соответствующем контексте также упоминается слово diploma: 98 General. … (3)In subsection (2)(a)— (a) “capability”, in relation to an employee, means his capability assessed by reference to skill, aptitude, health or any other physical or mental quality, and (b) “qualifications”, in relation to an employee, means any degree, diploma or other academic, technical or professional qualification relevant to the position which he held.

Annex IV. Articles devoted to the modern privatisation processes and competition in Russia (Reporting by Margarita Papchenkova, Olga Popova, Zlata Garasyuta, Darya Korsunskaya, Lidia Kelly in Moscow and Karin Strohecker in London; Writing by Margarita Papchenkova and Lidia Kelly; editing by Philippa Fletcher) Russian oligarchs are the most likely potential buyers of the stakes in some of the country's largest companies that President Vladimir Putin wants to sell. The Kremlin said on Tuesday foreign investors were welcome to participate in the privatization announced the day before, which has been driven by an economic crisis brought on by low oil prices. But former officials, bankers and analysts said the perceived risks of a country subject to western sanctions over Ukraine and with a history of disputed property rights, would limit foreign participation. Two senior government officials said the plan may only raise between 50 and 80 percent of the trillion rubles envisaged. Russian's well-connected magnates may have to be cajoled into investing at a critical juncture for the economy, but could in the long term end up with valuable assets at bargain prices, leaving the Kremlin open to accusations of sweetheart deals. The preliminary privatization plan, aimed at preventing the state budget deficit from ballooning, coincides with a second year of recession for Russia where share prices have slid along with the price of crude.. Sources told Reuters the Kremlin is considering reducing state stakes in oil companies Rosneft and Bashneft, shipping firm Sovkomflot, diamond miner Alrosa and state-controlled bank VTB. Government sources told Reuters some of the stakes could be sold on the Moscow Stock Exchange. “It is possible to sell these assets, but it will be a serious effort”, Andrei Shemetov, deputy head of the Moscow Exchange, said. Crude prices, Russia's main export, trade at around $30 per barrel — nearly half the $50 per barrel penned into the 2016 budget, which envisages a deficit of 3 percent of GDP and will not be revised until March. 282

“This looks like selling diamonds from Russian crowns at a pittance”, said an investment banker at a Western bank. Putin, a vocal advocate of state control, could face unwelcome scrutiny from a Russian public that still remembers the privatization of the 1990s, when state companies were sold at give-away prices to a chosen few. Who and how may buy? On a practical level, Shemetov said the key factor would be timing. “It's better to break the selling down into a few stages”, he said, adding that the market may not be able to absorb stakes from two oil firms, such as Bashneft and Rosneft, simultaneously. According to two officials familiar with the discussion on privatization, 4 percent of Rosneft could be sold on the stock exchange, but there is reluctance to do so, considering the super-low price of the company's shares. Shemetov said such a stake could be “absorbed by the market”, but external conditions would be crucial. Sanctions do not prohibit Rosneft shares from being sold by the state, but many potential buyers will be cautious given that oil prices are still on a downward trajectory. Alrosa and Sovkomflot have been catching investors' eyes for a long while, Shemetov said. “I suspect (Alrosa) will stir the largest demand”, said Vadim Bit-Avragim, portfolio manager at Kapital investment house. “The company's business is recovering, demand for diamonds is returning”. Sovkomflot, which has already held several meetings with investment funds, according to a top manager of the company, generates 80 percent of its revenues from outside Russia, lowering its exposure to country-related risks. Proceeds Finance Minister Anton Siluanov has said he hopes for around 1 trillion rubles, or 1 percent of gross domestic product, from privatization this and next year. The 2016 budget, approved before the new plan, envisages only about 33 billion rubles ($416.19 million) in privatization revenues. But two senior government officials said the plan may bring a total of between 500 billion rubles and 800 billion rubles. “Some assets will be sold — the budget needs cash”, said Sergei Aleksashenko, a former deputy central bank governor and a non-resident senior fellow at the Brookings Institute in Washington. “But overall the proceeds from privatization will be much less than the drop in oil revenues”. With demand from global investors expected to be lower, local players may have be left with open playing field. Will Ballard, head of Emerging Markets and Asia Pacific Equities at Aviva Investors in London said the timing was not ideal from the state's point of view. 283

“If they are looking to do it now, it must be selling effectively from a need basis rather than 'seller wants to get the maximum price”, he said. Others went further. “This privatization looks as if intended for big businesses”, a source in the financial market said. A former government adviser said the timing and shape of the plan may be driven by factors beyond the need for cash. “All of this may indeed have been done to make the assets more affordable for politically connected businessmen”, the adviser said. “Or just out of their usual paranoia — they don't want to release control”. This could potentially enrich those around Putin and cause public discontent that could hinder his possible presidential re-election in 2018. According to polls — more than half of Russians oppose privatization. It may also be easier said than done. Putin has repeatedly urged Russia's super-rich business elite to bring back money they moved abroad as the rouble currency plunged. “It's possible it is tied to the process of de-offshorisation to bring money back to Russia and in return get good assets at half price”, the financial market source said. To avoid criticism, an investment banker said, Putin must ensure the assets are not sold too cheaply. The president has already said Russian companies with offshore accounts will not be eligible to buy, and state banks would not be able give loans to potential investors. “The only option is to force some oligarchs, loyal to the Kremlin, to buy stake with a premium to market prices”, said the investment banker, who is close to the process. "Then it will look more like a tax on a group of people, which would be quite a realistic scenario, given Putin's style of management". What Putin envisages and what may happen may not coincide however; several ambitious privatization plans announced by Russia in the past decade failed to materialize1 . Russia preparing for large-scale privatization January 19, 2016 VLADISLAV GORDEEV, RBC DAILY Shares of country’s largest banks could be sold. According to Russian Minister of Finance Anton Siluanov there’s a possibility that the country’s largest state banks — Sberbank and VTB — could be privatized, but it’s necessary to start the process with the sale of the state stake in the Rosneft petroleum company. Siluanov made this announce1

http://www.reuters.com/article/us-russia-privatisation-plan-idUSKCN0VB23D.

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ment during an interview with the news program, “Vesti on Saturday with Sergei Brilev”. “We are primarily talking about a package, which should have been sold a few years ago”, the minister said. “This Rosneft package equals 19.5 percent”. Privatization: Speed bump or stop sign? On January 13, 2016 Alexei Ulyukayev, the minister of economic development, declared the need to return to the issue of privatization of stateowned banks. He expressed this opinion while speaking at the Gaidar Forum. According to Ulyukayev, partial privatization and partial occupancy of the companies will help fundamentally change the situation in the field of the capitalization of the domestic banking sector. In an interview with the German publication Handelsblatt in December 2015, German Gref, the head of Sberbank, spoke about the need for the “full privatization” of the company. According to him, in this case it should be a transitional period during which the Bank of Russia, which is now the largest shareholder of the credit institution (50 percent plus one share), should retain 25 percent of the company. Gref also noted that the privatization would allow the bank to “significantly improve its situation”. First published in Russian in RBC Daily1. Putin outlines conditions for privatization of state assets February 3, 2016 PETR NETREBA, YEVGENY KALUKOV, MIKHAIL RUBIN, YANA MILUKOVA, RBC DAILY Russia’s president has said that ‘big’ privatization should not lead to the sale of assets for a pittance or at the expense of the state, investors must seek their own resources, and the authorities must prevent assets from being taken offshore. Russian President Vladimir Putin has outlined the key points that need to be followed during the sale of state-owned companies, the most important of which he said is maintaining the unconditional transparency of privatization transactions. “All privatization deals must strictly comply with the standards and requirements of the law, of course. We need to ensure the maximum transparency of these transactions both for their participants and the public”, said Putin during a meeting with the government on Feb. 1. With oil prices at record lows and Russia’s economy continuing to suffer from the effects of the global financial crisis and Western sanctions, the depleted state coffers are in urgent need of capital and the Kremlin has identified the sale of state assets as a way of raising much-needed funds. 1

http://www.reuters.com/article/us-russia-privatisation-plan-idUSKCN0VB23D.

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Russia preparing for large-scale privatization Among the key points in his comments on privatization, Putin also noted the economic feasibility of the sale of state assets and stressed that there should be no fire sale of shares. “It will not bring much benefit for the budget, moreover, such practice is fraught with hostile takeovers of rival companies, and this ultimately is also not the best for the market. This, of course, should be avoided”, he said. Putin also noted that “privatization is not only a fiscal component”, but also “the way to structural changes in the economy”, and therefore it is fundamentally important that the state has a “clear understanding of what and to whom it is selling, and what consequences it will have for the development of entire industries and the entire economy”. In this regard, Putin pointed to the need to pay more attention to “the quality of investors.” According to him, the transfer of shares from the state to private investors is only possible if they have clear development plans, as well as their own resources. He also noted that the state should retain control over the strategically important enterprises and block privatized assets from being taken out of the country. "The new owners of privatized assets should be in Russian jurisdiction. Grey schemes, the withdrawal of assets to offshore accounts, [and the] concealment of owners of the shares are unacceptable. “We have been talking about de-offshorization, and in these circumstances, to go toward a new privatization, allowing the further offshoring of the Russian economy, is wrong”, said Putin1 . Restoration of competition According to Liveinternet, in August 2015 Yandex's share in the Russian search engine market was 57 percent and Google's was 35.2 percent. Analysts at Renaissance Capital note that Yandex's share in Android devices in the second quarter of 2015 decreased to 39 percent (it was 42 percent in January-March of the current year) and in the Chrome browser to 38 percent (45 percent a year ago). The Google Russia press office refused to comment on the issue, saying that the company will “study FAS's decision when it receives it”. Yandex's press office told the Kommersant business daily that it would “welcome FAS's decision”. “We are waiting for the injunction and the entire decision and believe that it will help restore competition on the market”, said the Yandex spokesperson2 . 1

http://www.reuters.com/article/us-russia-privatisation-plan-idUSKCN0VB23D. http://rbth.com/business/2015/09/15/google_accused_of_breaking_russian_antimonopoly_laws_49265.html. 2

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Too early to call Despite the fact that the EU Commission has already begun a formal investigation of the same practices, Russia is the first jurisdiction that has officially recognized them as being anticompetitive, said the Yandex press office. The world has seen successful precedents to such decisions: In 2009, after formal proceedings that involved Google, Opera and Mozilla, the EU obliged Microsoft to offer European customers a window for choosing browsers with the computer's first activation. However, it is still too early to make conclusions about the affair. Anton Babenko, a partner at the Pavda and Epstein legal firm, says that FAS's decision may be challenged in a court of arbitration and it is not guaranteed that it will “stand” in court. “Google's prospects will largely be determined by the volume of evidence provided by companies, as well as by technical inspections”, said Babenko1.

1 http://rbth.com/business/2015/09/15/google_accused_of_breaking_russian_antimonopoly_laws_49265.html.

Glossary abet

подстрекать, способствовать, соучаствовать (в совершении преступления)

abuse of authority

злоупотребление полномочиями

accede to a treaty

присоединиться к договору (на правах подписавшей стороны)

access

право доступа

accession (to)

вступление, присоединение (в/к международный/ому договор/у)

acquisition of assets

приобретение активов

acquisition of the exclusive rights

приобретение исключительных прав

act on behalf of the company

действовать от имени компании

action or omission to act

действие или бездействие

additional payments

доплаты

adjudicate

рассматривать спор, выносить решение

administer justice

отправлять правосудие

administrative fines

административные штрафы

admit to placement

допускать к размещению

affiliate

аффилированное лицо

aggregate asset value

совокупная стоимость активов

aggregate book value

совокупная балансовая стоимость

aiding and abetting

пособничество и подстрекательство

alienate a company name

отчуждать название компании

allocate vouchers

распределять ваучеры 288

alter the wording

изменить формулировку

amend

вносить поправки (в законодательство)

amicable settlement

мировое соглашение

anti-bribery laws

антикоррупционное законодательство

antitrust matters

вопросы антимонопольного права

appellation of origin of goods

наименование места происхождения товара

applicable language rule

применимые нормы языка

applicable law

применимое право

applicable legislation

применимое право

applicable regulation

применимые законы

apply restitution

применять реституцию

appoint and dissolve the government

назначать и распускать правительство

as amended

с изменениями

assets and liabilities

активы и пассивы

assign rights

передавать права (другому лицу)

at least three calendar days’ prior notice

предупреждение не позднее чем за три дня

bailiff service

подразделение судебных приставов

balance sheet value

балансовая стоимость

be disciplined

получить дисциплинарное взыскание

be entitled (to)

иметь право, быть уполномоченным

be exempt (from)

освобождаться (от налогов)

be exempt from import duty

быть освобожденным от импортной пошлины

be jointly and severally liable

нести солидарную ответственность

be liable for monetary obligations

нести ответственность по денежным обязательствам

be mortgaged

находиться в залоге

be nominated

быть назначенным

be publicly tradeable

находиться в свободной продаже 289

be relieved of criminal liability

освобождаться от уголовной ответственности

be secured by pledge

быть обеспеченным залогом

be vested with extensive powers

быть облеченным широкими полномочиями

bear liability

нести ответственность

bearer securities

ценные бумаги на предъявителя

beneficiary

бенефициар

bid

предлагать цену на аукционе

bid rigging

мошеннический сговор на торгах, нечестное предложение цены

bill of exchange

переводной вексель

board of directors

совет директоров

body of law

совокупность правовых норм

book-keeping

бухгалтерия

bundle the controlling stakes

объединять контрольные акции

business trip allowance (per diem)

суточные (возмещение расходов, связанных со служебной командировкой)

buy a participatory interest

приобретать долю участия

buyout of leased state property by the lessees

выкуп имущества арендными предприятиями по договорам аренды

by virtue (of)

посредством чего-либо, на основании чего-либо

capital adequacy

уровень достаточности капитала

cargo sea and river ports and airports

морские и речные грузовые порты и аэропорты

cash flow

движение, поток денежных средств

cash out

продать ради прибыли, перевести в наличные

cassational instance

кассационная инстанция

CEO (Chief Executive Officer)

Главный исполнительный директор

certify the right

удостоверять право 290

challenge and declare invalid

оспаривать и объявлять недействительным

challenge transactions

оспаривать сделки

chamber audit

камеральный аудит

charter (the Charter)

устав (общества – российского юридического лица)

charter capital

уставный капитал

Chief Accountant (CA)

Главный бухгалтер

chief executive officer

главный исполнительный директор

circulation of land plots

оборот земель

civil proceedings

гражданский процесс

clear settlements under transactions with securities

четкие расчеты по операциям с ценными бумагами

closed joint stock company (CJSC)

закрытое акционерное общество (ЗАО)

collateral

залоговое обеспечение

combined license

совмещенная лицензия

commercial bribery

коммерческий подкуп

commingle

смешиваться, соединяться

commission of an unlawful act

совершение незаконного деяния

company name

название компании

company’s constitutive documents

уставные документы компании

complete a tax return

заполнить НД

compliance

выполнение, соответствие (правовым нормам)

comply with the current legislation

соответствовать действующему законодательству

compulsory terms

обязательные условия

concerted actions

согласованные действия

consortium

синдикат

constituent entity

субъект Российской Федерации

continental shelf

континентальный шельф 291

contractual relationships

договорные правоотношения

contravene

противоречить

contribution

взнос (в устав общества)

controlling person

контролирующее лицо

convert the right into lease or ownership

преобразовать право в договор аренды или в право собственности

copyright

авторское право

corporate bonds

корпоративные облигации (долговые обязательства)

corporate compliance

соблюдение принципов честного ведения бизнеса

corporate entities

корпоративные организации

corporate profits tax

налог на прибыль организаций

corporate property tax

налог на имущество организаций

counterparty

контрагент, противная сторона

credibility of a prospective buyer

надежность потенциального покупателя

criminalize

квалифицировать что-либо как преступление

criminally obtained property

имущество, полученное незаконным путем

criterion/criteria

критерий/критерии

currency control

валютные резервы

currency intervention

валютный контроль

currency subsidies

режим валютного курса

current account

текущий счет

custodian

здесь: орган исполнительной власти

customs territory

таможенная территория

date of the application

дата подачи заявки

day-to-day management

оперативное управление

debt and equity instruments

долговые и долевые документы

declare void

объявить недействительным

dependant, dependent

иждивенец 292

deposit

месторождение

deputy

заместитель

Deputy Chief Accountant

заместитель главного бухгалтера

develop a deposit

разрабатывать месторождение

direct investment

прямая инвестиция

discharge debts

выплачивать долги

discharge the secured obligation

исполнить обеспеченные ипотекой обязательства

discipline

привлечь к дисциплинарной ответственности

disclosure of the employer’s confidential information

разглашение конфиденциальной информации работодателя

discount bills

дисконтировать, учитывать (векселя)

disposal of property

здесь: реализация имущества

dispose of the depositor’s securities

распоряжаться ценными бумагами депонента

dissolution

аннулирование, роспуск (компании)

distinctive features

различительная черта (способность)

district court

суд округа

divvy up

распределять

document is presented to the employee for countersigning

ознакомление работника (с документом) под роспись

domestic law

внутригосударственное право, национальный закон

draw a check

выписать чек

easement (servitude)

сервитут (напр., право прохода по чужой территории)

effect payments

производить платежи

eligible jurisdictions

приемлемые юрисдикции

employee is terminated

с работником прекращен трудовой договор

enact

вводить закон, предписывать, устанавливать 293

encumbrance

закладная, обременение

enforcement measures

принудительные меры

engage in entrepreneurial activities

заниматься предпринимательской деятельностью

enjoy a higher status

пользоваться более высоким статусом

enjoy a right of first refusal

пользоваться правом преимущественной покупки

entail liability

влечь за собой ответственность

enterprise stake

доля компании

entity’s market share

доля хозяйствующего субъекта на рынке

entrepreneur

предприниматель

entrepreneurial

предпринимательский

entrepreneurial activity

предпринимательская деятельность

establish a tax regime

установить налоговый режим

event of default

факт несостоятельности, случай невыполнения обязательств

evince the creative character

ясно показывать творческий характер

excessive bank interest

чрезмерный (банковский) процент

exchange bond

биржевая облигация

excise taxes

акцизы

executive

исполнительная власть

executive branch

исполнительная власть

executive power

исполнительная власть

existing shareholders

действующие акционеры

exploration and production license

лицензия на разведку и добычу полезных ископаемых

export/import transactions

экспортные/импортные сделки

extend a license

продлить лицензию

external management

внешнее управление

extract subsoil resources

извлекать полезные ископаемые

extraction sectors

добывающие отрасли 294

facilitate mortgage securitisations

упростить сделки по секьюритизации ипотеки

facilitate privatization

содействовать процессу приватизации

failure to abide by the privatization rules

несоблюдение правил приватизации

falsification of the debtor’s accounting statements

фальсификация бухгалтерской отчетности должника

federal constituent entity

федеральный избирательный округ

federal treasury-owned enterprise

федеральное казначейское предприятие

Federation Council

Совет Федерации

file a tax return

подавать НД

filing date

дата подачи заявки

financial disclosure

раскрытие информации о финансовом положении

financial health

стабильное финансовое положение

financial rehabilitation

финансовое оздоровление

fixed-term contract

срочный договор

flat rate

единообразная ставка

forced absence

вынужденный прогул, вынужденное отсутствие (на работе)

forced labor

принудительные работы

foreclosure

обращение взыскания, лишение права выкупа заложенного имущества, переход заложенной недвижимости в собственность залогодержателя

foreign securities

внешние ценные бумаги (ценные бумаги иностранных эмитентов)

former job

бывшее место работы

fundamental rights

основные права

gem stones

драгоценные камни

generic

обобщенный, общий, универсальный, непатентованный (о лекарствах), немарочный 295

geological survey license

лицензия на геологическое изучение недр

golden share

«золотая акция»

graduates that are employed for the first time in their life

выпускники, впервые поступившие на работу

grant a license

предоставить лицензию

grant permission

давать разрешение

grant a vacation

предоставить отпуск

grants a patent

выдавать патент

handle a case

вести судебный процесс

have a pre-emptive right to renew the lease

иметь преимущественное право перезаключить договор аренды

health and recreational resorts

санаторно-курортные зоны

high technology industrial areas

высокотехнологичные промышленные районы

hiring must be documented

прием на работу оформляется приказом (распоряжением) работодателя

hold a license

владеть лицензией

hold a second job

работать по совместительству

holding company

компания-держатель, холдинг, холдинговая компания

hydrocarbons

углеводороды

impose restrictive exemptions

налагать ограничения

imposition of contractual terms

введение договорных условий

in compliance (with)

в соответствии с чем-либо

in conspiracy with others

в сговоре с другими лицами

in official capacity

в качестве должностного лица

in the capacity of the General Manager

в качестве генерального директора

index

индексировать

individual entrepreneur

индивидуальный предприниматель 296

industrial design

промышленный образец

industrially applicable

промышленно применимый

infringe rights

нарушать права

infringement of intellectual property rights

нарушение прав интеллектуальной собственности

in-kind remuneration

оплата труда в натуральной форме

insolvency regulation

законы, регулирующие процедуру банкротства

insurance agent

страховой агент

insurance broker

страховой брокер

insurance company

страховая компания

insurance license

лицензия на страховую деятельность

insurer

страховщик

intangible assets

нематериальные активы

interest rate

процентная ставка

interest-free loan

беспроцентная ссуда

intermediary

посредник

intermediation

посредничество

internal order

приказ (по организации)

internship

стажировка

invalidate

признавать недействительным

invalidity

недействительность

invention

изобретение

investment recoupment period

срок окупаемости инвестиции

investment unit

инвестиционный пай

issuable security

эмиссионная ценная бумага

issue a license

выдать лицензию

issue an order

выдавать распоряжение

issue bonds

выпускать долговые обязательства, облигации

issue securities

выпускать ценные бумаги 297

issue shares by private placement

выпускать акции по закрытой подписке

job duties

должностные обязанности

job seeker (job applicant)

соискатель на должность

joint capital

складочный капитал

joint– stock company

акционерная компания

joint venture

совместное предприятие

judicial power

судебная власть

judicial supervision

судебный надзор

justice of the peace

мировой судья

land plot

земельный участок

language policy

правовое регулирование национально-языковых отношений, языковая политика

large-scale investor

крупный вкладчик

lease

аренда, сдача внаем; договор аренды

leasehold

недвижимость, купленная на правах аренды

legal entity

юридическое лицо

legal form of business organization

организационно-правовая форма бизнеса

legislative branch

законодательная власть

legislative power

законодательная власть

legislative veto

вето, налагаемое законодательным органом

legislature

судебная власть

lender of last resort

кредитор последней инстанции

lending

кредитование, предоставление займа

lessee

арендатор, съемщик

lessor

арендодатель

levy

облагать налогом

levy execution

взыскать по исполнительному листу

liability

ответственность 298

liability insurance

страхование ответственности

license agreement

лицензионное соглашение, лицензионный договор

license holder

держатель лицензии

limited liability company (LLC)

общество с ограниченной ответственностью (ООО)

liquid voucher market

рынок с высоким спросом на ваучеры

liquidation

прекращение хозяйственной деятельности компании

liquidity

ликвидность

loans for shares scheme

залоговая приватизация

lose confidence in the employee

утратить доверие к работнику

loss of confidence

утрата доверия

main production assets

основные производственные активы

management board

правление (компании)

mandatory

обязательный к исполнению

maturity of exchange bonds

срок погашения биржевых облигаций

meet criteria

соответствовать критериям

mergers and acquisitions

слияния и поглощения

military court

военный суд

military service registration documents

документы постановки на воинский учет

mineral extraction tax

налог на добычу ископаемых

minors

несовершеннолетние

misconduct

проступок

monetary policy

денежно–кредитная политика

money in circulation

деньги в обращении

moral (personal) right

личное неимущественное право

mortgage agreement

договор об ипотеке

mortgage certificate

закладная, закладной сертификат, ипотечное свидетельство

mortgage-backed bond

обеспеченная ипотекой облигация 299

mortgagee

залогодержатель, кредитор по ипотеке, закладной

mortgage-participation certificate

ипотечный сертификат участия

mortgagor

залогодатель, должник по ипотеке, закладной

municipality

муниципальный округ, муниципалитет

native metals

самородные металлы, самородки

neighboring rights

смежные права

nomination

назначение на должность

non-commercial organization

некоммерческая организация

nonpublic joint stock company

непубличное акционерное общество (НПАО)

notify

уведомлять

notoriety

здесь: известность

null and void

ничтожный и не имеющий юридической силы

obtain a license

получить лицензию

obtain a patent

получать патент

obtain majority

достигать большинства

obtain the status of a resident

получить статус резидента

obtaining an advantage

извлечение выгод и преимуществ

occupancy right

право пользования (помещением)

occupational safety requirements

требования техники безопасности

off-shore field

шельфовое месторождение

off-the record reports

неофициальная отчетность

on a tender basis

на основе тендера

on behalf of an issuer

от имени эмитента

on–demand deposit

бессрочный вклад, депозит до востребования

onshore deposit

материковое месторождение 300

on-site audit

выездной, камеральный аудит

open joint stock company (OJSC)

открытое акционерное общество (ОАО)

open-ended contract

бессрочный договор

operating mode

режим работы

options on shares

опционы на акции

order on hiring

приказ о приеме на работу

outer appearance

внешний вид

out-of-court foreclosure

обращение взыскания во внесудебном порядке

owe royalty fees

быть обязанным выплатить гонорары

owe a severance pay

быть обязанным выплатить выходные пособия

participant in a limited liability company

участник общества с ограниченной ответственностью

participatory share

пай

patent

патент

patent application

заявка на получение патента

payment of annuities

ежегодные выплаты

payment due

платеж в обусловленный срок, причитающийся платеж

pecuniary value

денежная или имущественная ценность

perform tasks outside the scope of one’s job duties

выполнять работу, не входящую в должностные обязанности

permit

разрешение

perpetually

вечно, бессрочно

personal income tax

налог на доходы физических лиц, НДФЛ

pertaining (to)

относящийся, имеющий отношение к чему-либо, свойственный чему-либо

pledge

залог (на ценные бумаги)

pledged property

заложенное имущество 301

portfolio of government securities

портфель государственных ценных бумаг

precious metals

драгоценные металлы

pre-emptive right

преимущественное право покупки (акций)

primary employment

основное место работы

priority investment project

приоритетный инвестиционный проект

probationary period

испытательный срок

proceeds

выручка, доход

proceeds from the use of property

доходы от использования имущества

produce on a profitable basis

производить на прибыльной основе

production sharing agreement (PSA)

соглашение о разделе продукции

prohibition from engaging in certain professional activity

лишение права заниматься определенной деятельностью

prohibition from holding certain positions

лишение права занимать определенные должности

promissory note

долговое обязательство, простой вексель

properly formalized dismissal

правильно оформленное увольнение

property on the books

имущество на балансе

prosecution

преследование (судебное)

provide suretyship

предоставлять поручительство

provide the legal framework

обеспечить правовую базу

provisions that are not compliant with the Labor Code

положения (договора), не соответствующие Трудовому кодексу

provisions that impair the employee’s position

положения (договора), которые ухудшают положение работника

public domain

публичная собственность, народное достояние 302

public joint stock company (PJSC)

публичное акционерное общество (ПАО)

pursuant (to)

согласно, в соответствии

qualified majority

квалифицированное, определенное большинство

quotation request

запрос цены (документ, направляемый покупателем потенциальному поставщику с просьбой сообщить цену и возможные условия продажи)

real estate/property

недвижимое имущество

reduced tax rate

снижение, понижение, опущение налоговой ставки

refine metals

заниматься переработкой, очисткой металлов

refusal to employ (denial of employment)

отказ нанять (кого-либо на работу)

re-instate in one’s position

восстановить в должности

reinstate the debtor’s solvency

восстановить платежеспособность должника

reinsurance

вторичная страховка, перестрахование

reinsurance contract

договор перестрахования

remit

переводить, пересылать (валюту на счет)

remuneration

вознаграждение

repatriation of currency proceeds

репатриация валютной выручки

repayment secured (by)

выплаты, обеспеченные чем-либо

resignation

сложение полномочий, отставка

restriction

ограничение

retain the power

удерживать полномочия

revocation of a banking license

аннулирование банковской лицензии

right of free fixed-term use

право безвозмездногo, бесплатного срочного пользования 303

right of lifelong inheritable possession

право пожизненного наследуемого владения

right of ownership, proprietary right/interest

право собственности, вещное право

right of perpetual (indefinite) use

право бессрочного пользования участком

right to public disclosure

право на обнародование произведения

right to withdraw

право выхода (из общества)

salary

заработная плата; оклад, должностной оклад

satisfy creditors’ claims

удовлетворять требования кредиторов по денежным обязательствам

secured bond

обеспеченная облигация

secured creditors

кредиторы, обеспеченные залогом

securities market

рынок ценных бумаг

security

ценная бумага

seek protection

добиваться защиты

separate property

обособленное имущество

separation of power

принцип разделения властей

service mark

знак обслуживания

set monopolistically high prices

устанавливать монопольно высокие цены

set-off/offsetting claims

требование о зачете, зачет требований

settled in rubles

расчеты производятся в рублях

settlement documents

расчетные документы

severance benefit

выходное пособие

severance compensation

выплаты при увольнении, выходное пособие

sham insolvency

фиктивное банкротство

signatory (to)

страна или лицо, подписавшее договор; участник договора

single material breach

однократное грубое нарушение

social security contributions

отчисления в Фонд социального обеспечения 304

special economic zone

особая экономическая зона

special preferential regime for conducting business activities

особый режим ведения предпринимательской деятельности

spin-off

спин-оф, выделение с пропорциональным распределением (акций вновь образованной компании между акционерами материнской компании)

split-off

сплит-оф, выделение (компании)

standby facility

резервный кредит

standstill agreement

соглашение о сохранении «статус-кво»

state duty

государственная пошлина

state insurance

государственное страхование

state language

государственный язык

State pension insurance certificate

Свидетельство государственного пенсионного страхования

state unitary enterprise

государственное унитарное предприятие

state-owned entity

государственное предприятие

statute law

право, выраженное в законах, законы, статутное право

statute of limitations

закон об исковой давности

statutory minimum monthly pay rate (MROT)

законодательно установленный минимальный размер оплаты труда (МРОТ)

strategic deposit

стратегическое месторождение

strategic subsoil plots

стратегические участки недр

subject matter of the contract

предмет договора

subject to confirmation

подлежащий подтверждению

submit a candidate

выдвигать кандидатуру

subsidiary

дочерняя компания

subsidiary liability

субсидиарная ответственность

subsoil license

лицензия на пользование недрами

subsoil plots of federal significance

участки недр федерального значения

305

substitution for a temporarily absent employee

заместительство временно отсутствующего работника

supervision

надзор, наблюдение

supervisory board

наблюдательный совет

supervisory control

оперативное руководство, наблюдение

supervisory instance

надзорная инстанция

supplemental increases

надбавки

supplier

поставщик

suretyship

поручительство, гарантия

suspend a license

приостановить действие лицензии

suspensory veto

отлагательное вето (президента)

tax authorities

налоговые органы

tax base

налоговая база

tax credit

налоговый кредит: разрешенный законом прямой вычет определенных расходов, обычно социально мотивированных или общественно важных, из общей суммы налоговых обязательств (в отличие от вычетов, уменьшающих налогооблагаемую базу)

tax evasion

уклонение от уплаты налогов противозаконными методами

tax exemption

освобождение от налогов

tax haven

налоговое убежище

tax incentives

налоговые льготы

tax loophole

лазейка в налоговом законодательстве

tax rate

налоговая ставка

tax reporting

налоговая отчетность

tax return

налоговая декларация, НД

tax stabilization clause

статья закона, гарантирующая налоговую стабильность

taxable permanent establishment

постоянно работающее налогооблагаемое предприятие 306

term deposit

срочный вклад, вклад на определенный срок

title to real estate

право собственности на недвижимое имущество

trade name (commercial designation)

фирменное наименование, название фирмы: не обязательно является официальным наименованием фирмы; может быть зарегистрировано в качестве товарного знака

trade secret

коммерческая тайна, производственный секрет

trademark

торговая марка

trademarks mark

торговый знак

transfer to a new job

перевести на другую работу

treasury bills

казначейские векселя

undertake (to do smth)

принимать на себя обязательство (сделать что-либо)

undervalued transactions

сделки по заниженной стоимости

unfair dismissal

незаконное увольнение (связанное с нарушением норм закона)

ungrounded refusal

необоснованный отказ

unilaterally

в одностороннем порядке

unitary entities

унитарные организации

unlawful dismissal

незаконное увольнение

uphold the right

защищать право

utility model

полезная модель

vacate the property

освободить помещение (собственность)

VAT: value added tax

налог на добавленную стоимость, НДС

vest

наделять (полномочиями, властью)

volatile political environment

нестабильная политическая среда

voucher-assisted privatization

«ваучерная приватизация»

waive the right

отказаться от права 307

wind up

ликвидировать (компанию)

withdrawal

снятие средств со счета

withdrawal of goods from circulation

изъятие товаров из обращения

withholdings from salary

удержания из заработной платы

work-related accident

несчастный случай на производстве

wrongful dismissal

незаконное увольнение

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16. 17. 18.

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Answer keys to exercises Unit 1 Exercise 1. 1 — a; 2 — c; 3 — b; 4 — b; 5 — c; 6 — a; 7 — b Exercise 2. 1 — False; 2 — True; 3 — True; 4 — False; 5 — False; 6 — True; 7 — False Exercise 3. 1 — force; 2 — acts; 3 — approved; 4 — source; 5 — provides; 6 — judicial; 7 — legislative; 8 — deals; 9 — people; 10 — executive Exercise 4. 1 — elected; 2 — powers; 3 — highest; 4 — responsible; 5 — granted; 6 — legislature; 7 — to Exercise 5. 1 — has; 2 — nominated; 3 — were; 4 — was; 5 — required; 6 — oversees; 7 — becomes; 8 — constitute Exercise 8. statute law — b; domestic law — c; applicable law — d; suspensory veto —f; supreme law — a; constitutional law — e Exercise 9. 1 — domestic law; 2 — enjoy a higher status; 3 — qualified majority; 4 — fundamental rights; 5 — constituent entity; 6 — subject to confirmation; 7 — enact the constitution; 8 — be vested with extensive powers; 9 — dissolve the government; 10 — submit a candidate. Exercise 10. Совокупность правовых норм; получать законность; наивысшая законная (юридическая) сила; прямое действие; источник внутреннего права (страны); предусматривать федеративное государство; осущест314

влять полномочия; состоять из двух палат; два срока подряд; быть облеченным обширными полномочиями; с учетом подтверждения (одобрения) кем-либо; подавать на рассмотрение; порог для обеспечения мест в Думе; осуществлять надзор за деятельностью правительства; и. о. президента; охватывать вопросы, не предусмотренный Конституцией; пользоваться более высоким статусом. Exercise 11. body of law; to be vested with extensive powers/authority; qualified majority; to submit a candidate; legislative veto; statute law; applicable law; subjects of the RF; to possess executive, legislative and judicial power(s); the upper chamber; the lower chamber; to extend a term; to amend the appointments procedure; federal constituent entity; to be responsible before the president; acting president; to carry out the functions of the office.

Unit 2 Exercise 1. 1. F (One: the Supreme Court of the Russian Federation, since 2014) 2. F (Judges of the Constitutional Court of the Russian Federation and of the Supreme Court of the Russian Federation are appointed by the Federation Council of the Federal Assembly of the Russian Federation on proposal of the President of the Russian Federation. Judges of the federal courts are appointed by the President of the Russian Federation. Judges of the constitutional courts and justices of the piece of the constituent entities of the Russian Federation are appointed in accordance with the legislation of the respective constituent entities.) 3. F (The main task of the Constitutional Court of the Russian Federation is to resolve cases regarding the constitutionality of normative legal acts of all levels.) 4. T 5. F (Commercial courts administer justice in the sphere of entrepreneurial and other economic activities.) 6. F (Justices of the peace consider property disputes.) Exercise 2. 1 — established; 2 — amended; 3 — handle; 4 — legal; 5 — owner; 6 — natural Exercise 3. 1 — liquidation; 2 — economic; 3 — invalidated; 4 — independent; 5 — existing; 6 — renamed Exercise 4. 1 — A assistance; 2 — C applied; 3 — C affect 315

Exercise 5. 1 — c; 2 — b; 3 — d; 4 — a Exercise 6. justice of the peace; constituent entity; supervisory instance; entrepreneurial activity; invalidity of a patent; commercial court; Federal Assembly; adopt a law; economic disputes; appoint judges; constitutionality of normative legal acts; give clarifications on the issues; property disputes; protection of intellectual property rights; voluntary consent of the parties; labor disputes Exercise 7. 1 — to; 2 — at; 3 — by; 4 — on; 5 — in; 6 — beyond; 7 — upon; 8 — aside; 9 — in; 10 — to; 11 — to; 12 — on; 13 — on; 14 — through

Unit 3 Exercise 2. 1 — F; 2 — T; 3 — T; 4 — F; 5 — F; 6 -T Exercise 3. 1 — C; 2 — B; 3 — B; 4 — A; 5 — C; 6 — A, C; 7 — B Exercise 4. 1 — on; 2 — upon; 3 — to; 4 — by; 5 — by; 6 — at; 7 — in; 8 — for; 9 — by; 10 — on; 11 — by; 12 — on Exercise 5. 1 Full (General) Partnerships (E) 2 Limited Partnerships (B) 3 Production Co-operatives (D) 4 State and Municipal Unitary Enterprises (C) 5 Individual Entrepreneurs (A)

a_____________________ ОТВЕТ: Individual Entrepreneur a citizen who has obtained state registration certifying his right to engage in entrepreneurial activities;

b _____________________ОТВЕТ: Limited Partnerships this business combines the features of a full partnership and an LLC, having two categories of members: some members are jointly and severally liable for 316

the obligations of the business, while the others are only liable for the business’ debts within the amount of their respective contributions into the joint capital;

c_____________________ОТВЕТ: State and Municipal Unitary Enterprises a commercial organization which has not been granted the right of ownership of the property assigned to it by the state or municipality, but operates that property under the right of economic or operational management;

d _____________________ ОТВЕТ: Production Co-operative this form of entity was inherited from the early post-soviet economy. It is still used in small business in certain economic sectors such as agriculture;

e _____________________ ОТВЕТ: Full (General) Partnerships members of the business are jointly and severally liable for its obligations. Management decisions require a unanimous consent of all members. A member may not participate in more than one such business at any given time. Exercise 7. 1. − registration cost and time needed to found a respective entity − amount of contributions into the capital of the business − desire to be covered against personal liability − taxation scheme − management appropriate to the type of business − need to raise money − need to obtain licenses and permits Exercise 8. Businesses

Members

1. limited liability company

participants

Capital formed up at the foundation of the business

Equity units

Liability born by the members

charter capi- (participalimited lital tory) interest ability

317

Окончание табл.

2. closed joint stock company

shareholders

charter capi- share tal

limited liability

3. open joint stock company

shareholders

charter capi- share tal

limited liability

4. full (general) partnership

partners

joint capital

partners are jointly and severally liable for the obligations of the business

5. limited partnership

full partners limited partners

joint capital

full partners are jointly and severally liable for the obligations of the business and limited partners enjoy limited liability

Exercise 10. On Limited Liability Companies 1. доля в обществе с ограниченной ответственностью

participatory interest

2. ответственность ограничена the liability is limited to the размерами взносов в устав- amount of contributions to the ный капитал company’s capital 3. в противном случае

otherwise

4. подлежит преобразованию

be subject to transformation 318

5. единоличный участник 6. не считается ценной бумагой 7. регистрация в Федеральной службе по финансовым рынкам 8. минимальный уставный капитал 9. стократный минимальный размер оплаты труда 10. право выхода из общества 11. если это особо оговорено в уставе 12. участники не отвечают по обязательствам общества 13. остальные участники имеют преимущественное право покупки II. On Joint Stock Companies 1. нести риски убытков, связанные с деятельностью общества 2. процедура, установленная федеральным законом 3. имущество на балансе 4. общество, зарегистрированное на бирже 5. акции свободно обращаются на рынке 6. не регулируются нормой о преимущественном праве покупки 7. торговаться на бирже 8. крупные акционерные общества 9. Российская торговая система (РТС) 10. Московская межбанковская валютная биржа (ММВБ) 11. осуществлять права 12. размещены по открытой подписке

sole participant is not deemed to be a security registration with the Federal Service for Financial Markets minimum charter capital 100 times the minimum monthly wage right to withdraw if the charter specifically permits it participants are not liable for the company’s obligations; the existing participants have preemptive rights

bear the risk of losses associated with the company’s activities procedure established by federal law property on the books company listed on a stock exchange shares circulate freely on the market are not subject to pre-emption rights to be traded at stock exchanges major companies Russian Trading System (RTS) the Moscow Interbank Currency Exchange (MICEX) to exercise rights placed by open subscription

319

III. Management Structure of Joint Stock Companies 1. уставные документы 2. общее собрание акционеров 3. изменения в уставе 4. жестко регулируется (законом) 5. совет директоров 6. правление 7. коллегиальный исполнительный орган 8. ежедневное управление обществом 9. главный исполнительный директор 10. действовать от имени общества 11. доверенность, подписанная главным исполнительным директором

constitutive documents general shareholders’ meeting amendments to the charter rigidly regulated Board of directors Management board collegial executive body [kə'li¦§¨əl] day-to-day management the chief executive officer (the CEO) act on behalf of the company power of attorney executed by the CEO

IV. Less Common Forms of Doing Businesses 1. 2. 3.

полное товарищество товарищество на вере производственный кооператив

Full (General) Partnerships Limited Partnerships Production Co-operative

4.

государственные и муниципальные унитарные предприятия индивидуальный предприниматель получил государственную регистрацию

State and Municipal Unitary Enterprises

5. 6. 7.

заниматься предпринимательской деятельностью 8. солидарно отвечать по обязательствам 9. складочный капитал 10. управлять имуществом на правах хозяйственного ведения

Individual Entrepreneur obtained state registration to engage in entrepreneurial activities jointly and severally liable for the obligations joint capital to operate property under the right of economic management

320

11. управлять имуществом на правах оперативного управления

to operate property under the right of operational management

Exercise 11. 1. Are preferred stocks subject to business risk?

Влияют ли коммерческие риски на выплаты по привилегированным акциям?

2. Subject to any limitations in its Memorandum or Articles, a company may purchase, redeem or otherwise acquire and hold its own shares.

При соблюдении любых ограничений, содержащихся в ее учредительном меморандуме или в уставе, компания может приобрести, выкупить или иным способом получить собственные акции.

3. The Company may, subject to Articles 7 and 8, from time to time pass an ordinary resolution referring to this Article 6 and authorizing the board to exercise all the powers of the Company to allot relevant securities.

Принимая во внимание положения ст. 7 и 8, Компания может периодически принимать обычные резолюции со ссылкой на настоящую ст. 6 и уполномочивающие совет директоров осуществить все правомочия компании для размещения соответствующих ценных бумаг.

4. Subject to the articles of association, annual general meetings are held at such times and place as determined by the directors of the Company. The directors may also, when they think fit, convene other general meetings of the Company.

В соответствии с уставом ежегодные общие собрания проводятся тогда и в том месте, где определят директора компании. Директора могут также по своему усмотрению созывать другие общие собрания.

5. An annual general meeting needs Ежегодное общее собрание акto be called by not less than 21 ционеров должно созываться days’ notice in writing. при письменном оповещении не менее чем за 21 день. 6. Subject to obtaining shareholder approval on an annual basis, the Company may call other general meetings on 14 days’ notice.

При ежегодном получении одобрения со стороны акционеров компания может собирать другие общие собрания, оповестив их о созыве за 14 дней. 321

Exercise 12. 1. Вкладом в уставный капитал ООО могут быть деньги, ценные бумаги, другие вещи или имущественные права либо иные права, имеющие денежную оценку.

The contribution into the charter capital of an LLC may be made in money, securities, other things or property rights or other rights of monetary value.

2. Участники общества с ограниченной ответственностью, внесшие вклады не полностью, несут солидарную ответственность по его обязательствам в пределах стоимости неоплаченной части вклада каждого из участников.

The participants in a limited liability company who have failed to make their contributions into the charter capital of the company in full are jointly and severally liable for its obligations within the value of the unpaid part of their respective participatory interests.

3. В случае банкротства ООО по вине его участников или по вине других лиц, которые имеют право давать обязательные для ООО указания, на указанных участников или других лиц в случае недостаточности имущества ООО может быть возложена субсидиарная ответственность по его обязательствам.

If an LLC becomes bankrupt due to the fault of its participants or due to the fault of other persons who have the right to give mandatory instructions to the LLC, the abovementioned participants and those other persons may be made subject to subsidiary liability for the obligations of the LLC.

4. Участник ООО может в любой момент выйти из состава общества, потребовав выплаты стоимости своей доли в уставном капитале, без согласия других участников, если такое право предусмотрено уставом общества.

The participant in an LLC may withdraw from the Company at any time and demand that his participatory interest in the charter capital be paid to him without other participants’ consent, if the charter of the company provides so.

5. Поскольку акционер не вносил вклад в уставной капитал, а покупал акции, соответственно, он как собственник ценных бумаг вправе продать их тому, кто захочет их купить, но не вправе требовать от общества вернуть ему их стоимость.

Because the shareholder did not make any contribution to the charter capital, but bought his shares instead — as a securities’ owner he has the right to sell them to a person who would wish to buy them, but he is not in a position to request that the company should return their value to him. 322

6. Участники ЗАО имеют преимущественное право покупки акций, продаваемых другими участниками. Это означает, что если акционер захотел продать свои акции третьему лицу, то он может сделать это только в том случае, если другие участники ЗАО откажутся приобретать эти акции.

CJSC shareholders exercise preemption rights in relation to the shares offered by other shareholders. This means, that if a shareholder wishes to sell his shares to a third person, he can do it only where the existing shareholders of the CJSC refuse to purchase these shares.

7. Поскольку акции могут продаваться свободно, ОАО обязано ежегодно публиковать для всеобщего сведения финансовые результаты своей деятельности.

As the shares may be freely traded in the market, the OJSC has an obligation to publish for public knowledge the financial account of its business operations.

Exercise 13. 1. Speak about liability of owners in various Russian businesses using English equivalents of the following words and expressions: участники

participants

отвечают по обязательствам общества

are liable for the obligations of the company

несут ответственность ответственность ограничена размером взноса в уставный капитал отвечают по обязательствам общества собственным имуществом субсидиарная ответственность несут солидарную ответственность

bear liability the liability is limited to the amount of the contribution in the charter capital are liable for the obligations of the company with their own property subsidiary liability to be jointly and severally liable

2. Speak about contributions into capital of Russian businesses using English equivalents of the following words and expressions: уставный капитал charter capital складочный капитал joint capital жестко регулируется законом to be rigidly regulated делать взносы в уставный to make contributions into the капитал charter capital стократный минимальный раз100 times minimal monthly wage мер оплаты труда 323

тысячекратный минимальный размер оплаты труда полностью оплатить зарегистрированный уставный капитал в течение… подлежит перерегистрации

1000 times minimal monthly wage to pay the registered charter capital in full within… is subject to re-registration

Speak about interests and shares in Russian businesses using English equivalents of the following words and expressions: доли participatory interests акции shares не считается ценной бумагой is not deemed to be a security не может предлагаться в откры- cannot be offered to public той продаже зарегистрировано на бирже is listed on a stock exchange регистрация в Федеральной registration with the Federal Serслужбе по финансовым рынкам vice for Financial Markets. Российская торговая система Russian Trading System (RTS) (РТС) Московская межбанковская ва- the Moscow Interbank Currency лютная биржа (ММВБ) Exchange (MICEX могут свободно обращаться на may circulate freely on the market рынке торговаться на бирже to be traded at stock exchanges не регулируются нормой о преIs not subject to pre-emption rights имущественном праве покупки осуществлять права

to exercise rights

размещены по открытой подписке

are placed by open subscription

Unit 4 Exercise 1. 1 — D; 2 — B; 3 — F; 4 — C; 5 — A; 6 — E Exercise 2. 1 — A; 2 — A; 3 — B; 4 — B Exercise 4. protection (preservation) and support of a state language; mandatory use; to be entitled to an interpreter; national patrimony; the guarantee of equality of languages; denial of the rights; applicability of the law; traffic signs; liability (responsibility) 324

Exercise 5. Гарантировать права; местные институты самоуправления; вести официальные государственные дела; юридическое лицо; противоречить; быть несовместимым с чем-либо; вести за собой налоговые расходы; акция; уставный капитал; правила защиты прав потребителей; иметь право на; являться объектом уголовного разбирательства; оштрафовать компанию.

Unit 5 Exercise 3. 1 — replenish; 2 — never; 3 — viable; 4 — wary; 5 — investment; 6 — artificially; 7 — value; 8 — revenue; 9 — loan; 10 — security; 11 — astonishingly; 12 — explicit; 13 — pointless; 14 — auction; 15 — reservation; 16 — twice; 17 — disqualify Exercise 4. 1 — special; 2 — provided; 3 — board; 4 — shareholders; 5 — void; 6 — entities; 7 — reduced Exercise 5. 1 — F; 2 — T; 3 — F; 4 — T Exercise 6. 1 — b; 2 — e; 3 — c; 4 — d; 5 — f; 6 — a Exercise 7. Государственное промышленное имущество; частные промышленные предприятия; осуществлять переход прав на что-либо; подкупить чем-либо; обменивать на акции; препятствовать кому-либо сделать что-либо; удерживать; балансовые запасы нефти; приобретать что-либо за незначительную часть рыночной цены; выплачивать заем; металлургическая компания; резервированная цена; повод; уславливаться о ставке; очевидно; превратить что-либо в прибыльное дело; бесплатная передача акций служащим; распределять национальное богатство среди людей; пополнять государственный бюджет; финансово жизнеспособный бизнес; право вето по определенным вопросам повестки дня; соответствующая сделка; оспаривать недействительную сделку; положения устава; приобретаться менеджерами; быть вынужденным управлять огромным сектором неэффективных государственных предприятий; унаследованных от советской экономики; Государственный комитет по управлению государственным имуществом Российской Федерации; первоначальные цели; прекратить субсидирование экономически невыгодных предприятий. 325

Exercise 8. small enterprises; large-scale capital injections; attracting foreign investment; sale of state-owned property at auctions; sale of state-owned property at tenders; board of directors; reorganization of unitary enterprises into open joint-stock companies; the sale of shares on stock exchanges; a prospective buyer; volatile political environment; facilitate privatization; bundle the controlling stakes; sell the assets out; pursue privatization voluntarily; coerce employees to sell their shares; audacious scheme; contrive; come to the fore; affiliate; spurious grounds Exercise 9. 1 — distributed for free; 2 — a fixed face value; 3 — lack of cash; 4 — incommensurate with the assets; 5 — “lease buy-outs”; 6 — hire-purchase arrangement; 7 — a collectively-owned worker cooperative; 8 — afflicted by corruption; 9 — a limited liability company; 10 — rigged auctions; 11 — equitable distribution

Unit 6: part 1 Discussion 2. What are the most common ways to look for job now? (to place a classified, to browse, job opportunities, a vacancy, position, applicants) 7. См. ст. 1 гл. 1 ТК РФ. 8. См. ст. 2 гл. 1 ТК РФ. 9. См. ст. 3 гл. 1 ТК РФ. Exercise 2. 1 — employ; 2 — provide; 3 — reason(s); 4 — obliged; 5 — practice; 6 — appropriate; 7 — grounds; 8 — commitment; 9 — constitutes; 10 — punished Exercise 3. 1 — setting out; 2 — entered; 3 — tightly; 4 — employees; 5 — impair; 6 — applicable; 7 — since; 8 — expressly; 9 — consent; 10 — amended; 11 — primary Exercise 4. 1 — into; 2 — in; 3 — by; 4 — to; 5 — by; 6 — after; 7 — for; 8 — under Exercise 6. I. Recruitment 1. в качестве генерального директора

in the capacity of the General Manager 326

2.

выплачивать работнику вознаграждение

to remunerate the employee

3.

соискатель на должность

a job applicant / job seeker

4.

представить свидетельство to produce State pension insurance государственного пенсион- certificate ного страхования

5.

представить документы по- to produce military service registraстановки на воинский учет tion documents II. Ungrounded Denial of Employment

1.

представить письменное объяснение причин отказа нанять работника

to provide a written explanation of the reasons for refusal to employ

2.

отказ в найме

denial of employment

3.

необоснованный отказ нанять беременную женщину

ungrounded refusal to employ a pregnant woman

III. Employment Contract 1.

2.

3.

4.

5. 6. 7.

8.

не может быть отменено по договоренности между сторонами положения (договора), не ухудшающие положение работника положения (договора), ухудшающие положение работника по сравнению с установленными гарантиями положения (договора), не соответствующие Трудовому кодексу применимые законодательные акты ничтожный и не имеющий юридической силы выполнять работу, не входящую в должностные обязанности в одностороннем порядке

cannot be superseded by an arrangement between the parties the provisions that are not detrimental to the Employee the provisions that impair the employee’s position as compared to those set forth by mandatory guarantees the provisions that are not compliant with the Labor Code applicable laws null and void to perform tasks outside the scope of one’s job duties unilaterally

327

9. 10.

работать по совместительству основное место работы

to hold a second job primary employment

IV. Term of Employment 1. бессрочный договор 2. срочный договор 3. заместительство 4. 5. 6. 7.

1. 2. 3.

4. 5. 6. 7. 8.

open-ended contract fixed-term contract substitution for a temporarily absent employee Internship CEO

стажировка главный исполнительный директор главный бухгалтер заместитель главного бухгалтера

Chief Accountant Deputy Chief Accountant

V. Employment-Related Orders приказ по организации приказ о приеме на работу прием на работу оформляется приказом перевести на другую работу предоставить отпуск привлекаться к дисциплинарной ответственности с работником прекращен трудовой договор ознакомление работника (с документом) под расписку

VI. Probationary Period 1. испытательный срок 2. ребенок, не достигший 18 лет 3. несовершеннолетние 4. выпускники, впервые поступившие на работу

internal order order on hiring the hiring must be documented by an order/directive of the employer to transfer to a new job to grant vacation to be disciplined an employee is terminated; (the document) is presented to the employee for countersigning

probationary period a child under the age of 18 minors graduates that are employed for the first time in their life

Exercise 7. 1 — consent; 2 — agreement; 3 — agreement; 4 — agree; 5 — consent; 6 — agree Exercise 8. 1 — undertakes; 2 — produce; 3 — superseded; 4 — impair; 5 — prohibited 328

Exercise 9. 1. The Employer may not request from the job applicant certain documents, necessary for execution of an employment contract. 2. An Employee cannot be required to perform tasks outside the scope of his job duties. 3. The Employer is obliged to respond to the request of the Employee. 4. Employers in Russia are required to issue an internal order each time an employee is hired or transferred to another job. 5. The Employee may request the Employer to provide a written explanation of the reasons for refusal to employ. 6. Article 68 requires that the order on hiring must be issued and presented to the employee for countersigning 7. Selected categories of employees may not be required to serve a probationary period Exercise 10. 1. The general principle of recruitment is that the Employer does not have a right to request from the job applicant any documents other than those that are expressly listed in the Labor Code and other laws and regulations.

Базовый принцип найма состоит в том, что работодатель не вправе требовать от поступающего на работу каких-либо документов, помимо тех, которые прямо поименованы в Трудовом кодексе и других законах и законодательных актах.

2. Under Russian labor legislation the relevant employment duties and obligations must be expressly defined in the employment contract.

В соответствии с российским законодательством в трудовом договоре должны быть ясно и четко обозначены должностные обязанности работника.

3. There is no general right to be paid while out sick but the contract can provide for it expressly or custom and practice of the industry/job can imply it but this may need to be proven if questioned)

В целом не существует права на оплату при отсутствии по болезни, однако в контракт может быть включено прямо выраженное условие либо обычай и практика оборота в данной отрасли (профессии) может предполагать такую оплату, однако это может потребовать доказывания в случае сомнения. 329

4. The Employee expressly agrees to submit himself / herself to alcohol and drugs tests at the Company's discretion.

Работник прямо и безоговорочно соглашается проходить тестирование на алкоголь и наркотики по усмотрению компании.

5. Note that common law implies a duty of loyalty in the employment contract; common law also protects confidential information and trade secrets in the absence of an express or written term in the contract covering this area.

Обратите внимание на то, что общее право подразумевает включение в трудовой договор обязанности работника сохранять лояльность по отношению к работодателю. Общее право также защищает конфиденциальную информацию и коммерческую тайну в случае отсутствии прямо оговоренного или фиксированного обязательства или отсутствии письменного условия в контракте, регулирующем данный вопрос.

Exercise 11. 1. Вознаграждения работникам включают в себя все формы возмещения, которые предприятие предоставляет работникам в обмен на оказанные ими услуги.

Remuneration to the employees includes all forms of compensation, that the entity provides to the employees in exchange for their services.

2. Для работы по совместительству согласия нанимателя по месту основной работы не требуется. 3. Временное заместительство оформляется приказом нанимателя. 4. Если суд признает отказ в приеме на работу необоснованным, то он обяжет работодателя заключить с работником трудовой договор.

Work in a second job does not require asking for any permission from the primary job employer.

5. Ранее КЗоТ 1971 г. установил в ст. 5, что условия, ухудшающие положение работника по сравнению с законодательством о труде, недействительны.

Earlier the LC of 1971 established in Art. 5 that the provisions impairing the employee’s position as compared with that set forth in the Labor Law are invalid.

Substitution for a temporarily absent employee must be formalized by an internal order of the employer. If the court recognizes the refusal to employ a person ungrounded, it will obligate the employer to conclude an employment contract with that employee

330

6. Прекращение срочного трудового договора в связи с истечением срока его действия не происходит автоматически.

Termination of an employment contract due to the expiration of its period is not be automatic.

7. В качестве заместителя главного бухгалтера г-н Иванов организовывал бухгалтерский учет хозяйственной деятельности своей организации.

In the capacity of Deputy Chief Accountant Mr Ivanov organized accounting of the business activity of his organization.

Optional task: 1. Временное заместительство оформляется приказом нанимателя. В таком приказе обязательно должен быть указан период, в течение которого работник будет являться заместителем.

Substitution for a temporarily absent employee must be formalized by an internal order of the employer. Such order must necessarily specify the period during which the employee will work as a substitute.

2. Если суд признает отказ в приеме на работу необоснованным, то он обяжет работодателя заключить трудовой договор с работником в порядке, предусмотренном трудовым законодательством.

If the court recognizes the refusal to employ a person ungrounded, it will obligate the employer to conclude an employment contract with that employee in accordance with the procedures stipulated in the Employment Legislation.

3. Ранее КЗоТ 1971 г. установил в ст. 5, что условия, ухудшающие положение работника по сравнению с законодательством о труде, недействительны, но не указал вида недействительности. На практике же они стали признаваться ничтожными.

Earlier the LC of 1971 established in Art. 5 that the provisions impairing the employee’s position as compared with that set forth in the Labor Law are invalid, but did not specify the type of invalidity. However, in practice such provisions have started to be recognized null and void.

4. Прекращение срочного трудового договора в связи с истечением срока его действия возможно не автоматически, а лишь в случаях, когда хотя бы одна из сторон выразит по этому поводу свою волю.

Termination of an employment contract due to the expiration of its period may not be automatic, but is only possible where at least one party voices its will to do so.

331

5. Работодатель принимает на себя обязательство обеспечить каждому работнику сохранение его рабочего места при условии соблюдения таковым своих обязанностей.

The employer undertakes to preserve each employee’s job, provided the employee fulfills all his job duties.

6. В качестве заместителя главного бухгалтера г-н Иванов осуществлял организацию бухгалтерского учета хозяйственно-финансовой деятельности и контроль над экономным использованием материальных, трудовых и финансовых ресурсов предприятия.

In the capacity of Deputy Chief Accountant Mr Ivanov organized accounting of the business and financial operations as well as control over cost-effective usage of material, labor and financial resources of the entity.

Unit 6: part 2 Exercise 2. 1 — in; 2 — on; 3 — for; 4 — on; 5 — for; 6 — of; 7 — per Exercise 3. 1 — C reduced; 2 — A hazardous; 3 — B provides; 4 — A arrangements; 5 — C duration; 6 — B exceed; 7 — C required Exercise 4. a — 2 internal secondary job; b — 5 performing the duties of a temporarily absent employee; c — 3 external secondary job; d — 4 combining occupations (job positions); e — 1 secondary job Exercise 7. I. 1 — prohibited; 2 — harmful; 3 — hazardous; 4 — impair; 5 — dismissal; 6 — non-compliance; 7 — disqualification; 8 — repeated; 9 — administrative fines; II. 1 — under the age of three; 2 — night; 3 — overtime; 4 — workload concessions; 5 — flexitime; 6 — part-time work; 7 — home-based employment

Unit 6: part 3 Exercise 2. 1 — working; 2 — employee; 3 — employment; 4 — acquires; 5 — use; 6 — organization; 7 — prohibited; 8 — withheld; 9 — agreement; 10 — consents 332

Exercise 3. 1 — A; 2 — C; 3 — A; 4 — B; 5 — C; 6 — C; 7 — A; 8 — A Exercise 4. 1 — to; 2 — after; 3 — in; 4 — to; 5 — until; 6 — to; 7 — on Exercise 7. Public Holidays. Annual Paid Holiday 1. public holidays are days off; 2. if a public holiday falls on a Saturday or Sunday, the subsequent working day is a non-working day; 3. annual paid holiday (vacation ); 4. to be recalled from vacation; 5. to grant a vacation; 6. use/take vacation; 7. to refuse annual paid holiday; 8. to withhold a vacation; 9. payment in lieu of untaken annual paid holiday Social security. Sick leave 1. social security benefits; 2. obligatory contributions are paid out of employee’s salary; 3. sick leave compensation; 4. to submit a doctor’s note; 5. to be absent on sick leave; 6. statutory sick leave compensation; 7. laborrelated injury; 8. occupational disease; 9. average earnings; 10. overall length of service; Maternity leave 1.maternity leave is provided cumulatively; 2. child’s care provider; 3. partially paid childcare leave; 4. the employee retains the right to return to his/her job; 5. the entire period of paid or unpaid leave; 6. total term of employment; Exercise 8 1 — next; 2 — consecutive; 3 — consecutive; 4 — subsequent Optionally: 5 — consecutive

Unit 6: part 4 Exercise 4. 1. internal work regulations 2. with due regard for the opinion 3. work discipline 4. to incentivize 5. incentive 6. to perform their employment duties in good faith 7. a public citation for efficiency 8. valuable gift 9. certificate of honor 10. to impose a disciplinary sanction 11. to commit a breach of discipline 333

12. warning 13. reprimand 14. dismissal 15. to request a written explanation from an employee 16. to provide a written explanation 17. each breach of discipline may only be punished by a single disciplinary sanction 18. order imposing a disciplinary sanction shall be announced to the employee against signed acknowledgement 19. challenge a disciplinary sanction 20. to have a clean disciplinary record Exercise 5. 1. F: The employer is to request the explanation, i.e. accounting of the reasons and circumstances due to which the breach was committed. These circumstances might render the employee not responsible for the breach. Whereas the acknowledgement means confirming that the person has committed a breach, i.e. the confession of guilt, which is not required. The text omits to say anything about the consequences of the employer’s failure to request the explanation, but mentions the outcome of the employee’s refusal to provide an explanation. 2. F: An employer has the duty to announce the disciplinary sanction to the faulty employee and not merely to make it available to him, because the employee might choose to ignore the internal order and claim that he was unaware of the sanction imposed. 3. F: This period shall start to count from the date on which the disciplinary sanction was imposed and not from the date of the first breach. Exercise 6. I. (1) B — given; (2) C — job; (3) C — employment II. (4) B — handed in; (5) B (C is also possible) conducting/doing III. (6) B — duties; (7) C — good cause Exercise 7. 1 — partially; 2 — in favor of; 3 — dismissed; 4 — state fees; 5 — impose; 6 — Plenum’s; 7 — misconduct; 8 — alleged; 9 — significant; 10 — extreme; 11 — evidence

Unit 6: part 5 Exercise 2. (1) C — certified; (2) B — premises; (3) A — decision; (4) A — consequences; (5) C — ungrounded 334

Exercise 3. 1 — failed; 2 — employment; 3 — payable; 4 — performance; 5 — occupational Exercise 4. 1 — employee; 2 — job; 3 — is; 4 — for; 5 — incorrect; 6 — trying Exercise 7. What are the grounds for terminating an employment agreement? 1. termination upon mutual agreement of the parties 2. termination on the employee’s own initiative (resignation) 3. termination of an employment agreement on the employer’s initiative 4. ‘at-will’ resignation/voluntary resignation 5. exhaustive list 6. dismissal without cause What are the general grounds for dismissal? 1. to make redundant 2. reduction in the workforce 3. professional incompetence 4. performance appraisal 5. repeated failure to discharge one’s duties 6. job duties 7. to be disciplined 8. absence from work without good cause 9. appearance at the workplace in the state of intoxication 10. disclosure of the employer’s confidential information 11. occupational safety requirements 12. work-related accidents 13. to pose a danger What are the specific grounds for dismissal? 1. misconduct 2. to lose confidence in the employee 3. single material breach What are the statutory provisions about of notifying parties to an employment agreement regarding termination? 1. at least three calendar days’ prior notice 2. wrongful dismissal/unlawful dismissal What are the statutory redundancy procedures? 1. severance compensation 2. severance benefit 3. dependent 4. to formalize the termination properly 335

What are the ways to remedy unlawful dismissal? 1. to re-instate in the position 2. forced absence 3. to hold a job with lower pay 4. to alter the wording of the ground for dismissal Exercise 8. 1. 1 — F: the right to resign is not dependent on the payment of compensation for unused paid leave, although the employer is obliged to make this payment). 2. 2 — F: good cause is a term which is inappropriate for describing the actions of the employer) 3. 3 — F: only if that violation resulted in work-related accidents or posed a danger to other employees) 4. 4 — T Exercise 12. 1 — regulatory body; 2 — supervises; 3 — compliance; 4 — work-related; 5 — administrative; 6 — premises; 7 — without notice; 8 — monitor; 9 — comply; 10 — rectification; 11 — to restore; 12 — irregularities; 13 — disciplinary; 14 — demand

Unit 7: part 1 Exercise 2. 1. F: The Constitution establishes the principle of private ownership of land but does not regulate land relations in detail. 2. F: Not all agricultural land, however, is subject to the Agricultural Land Law. It does not extend, for example, to those land plots that were provided to individuals for the construction of individual homes or garages, or for a smallholding or dacha garden. 3. F: Ownership of land plots in state or municipal ownership, where such land plots are free from any buildings and structures, is to be awarded to individuals and legal entities through bidding by tender or auction. 4. F: Although there is no express provision permitting land ownership by foreigners, the Land Code may clearly be interpreted as allowing such ownership. Exercise 3. 1 — to; 2 — in; 3 — on; 4 — with; 5 — for; 6 — for; 7 — for; 8 — under; 9 — into; 10 — on; 11 — upon Exercise 4. 1 — ownership; 2 — creation; 3 — validity; 4 — enforceability; 5 — effective; 6 — operational; 7 — immovable 336

Exercise 5. 1 — estate; 2 — use; 3 — owned; 4 — ownership; 5 — regulated; 6 — defines; 7 — prohibits Exercise 6. 1 — significantly; 2 — in particular; 3 — sets forth; 4 — consent; 5 — of particular significance; 6 — to assign; 7 — to mortgage; 8 — subject to; 9 — apply to; 10 — by mutual agreement; 11 — provided by; 12 — in conjunction with; 13 — constitutes grounds; 14 — misuse; 15 — a material deterioration; 16 — failure; 17 — designated purpose Exercise 7. 1 — b; 2 — d; 3 — e; 4 — c; 5 — a Exercise 8. Оборот земель сельскохозяйственного назначения; сделки с недвижимостью; рассматривать участки земли и здания как отдельные объекты недвижимости; распоряжение земельными участками; быть предоставленным через проведение тендера или аукциона; в соответствии с федеральным законом; федеральное казначейское предприятие; преобразовать это право в договор аренды или в право собственности; иметь преимущественное право возобновления договора аренды; право собственности на недвижимое имущество, вещное право; необходимое условие для того, чтобы иметь юридическую силу и возможность быть исполненным по суду; общая собственность. Exercise 9. to uphold the right to own private property; to put an end to the political debate; to detail the procedures for the reclassification of land; to make the land market in Russia more transparent; except in cases where it is specifically prohibited; to specify the rights; owners of premises in non-residential buildings; to be in the condition stipulated by the lease; to enter into a new lease; to be subject to state registration; to be deemed concluded upon state registration; a unified system of state cadastral registration

Unit 7: part 2 Exercise 1. 1. T 2. F (From the date of state registration of the ownership right of the purchaser/investor of the house or the apartment.) Exercise 2. 1 — enter into; 2 — acquire; 3 — be sold; 4 — provided that; 5 — to stipulate; 6 — is prohibited 337

Exercise 4. 1 — (should) vacate; 2 — to foreclose on; 3 — to secure; 4 — to refinance; 5 — occupy; 6 — be evicted upon; 7 — concluded; 8 — be terminated; 9 — provided for Exercise 5. 1 — b; 2 — d; 3 — k; 4 — a; 5 — g; 6 — i; 7 — f; 8 — j; 9 — e; 10 — h; 11 — c

Unit 8 Exercise 2. 1 — inventive; 2 — assignees; 3 — protection; 4 — applicable; 5 — filing; 6 — appearance; 7 — combination Exercise 3. 1 — by virtue of; 2 — by virtue of; 3 — represented; 4 — thereof; 5 — granted; 6 — expires; 7 — a request; 8 — registration; 9 — absence; 10 — with respect to; 11 — deemed Exercise 4. 1 — with; 2 — from; 3 — from; 4 — at; 5 — for; 6 — in; 7 — by; 8 — to; 9 — within; 10 — during; 11 — under Exercise 6. 1. To incur losses — d (терпеть убытки); 2. License agreement — g (лицензионное соглашение); 3. To entail liability — i (влечь за собой ответственность); 4. To file a patent application — n (подать заявку на получение патента); 5. To be a signatory to an international treaty — a (быть стороной, подписавшей международный договор); 6. Payment of annuities — c (ежегодные выплаты); 7. To meet criteria — m (соответствовать критериям); 8. Utility model — b (полезная модель); 9. To be industrially applicable — k (быть применимым в производстве); 10. Outer appearance — e (внешний вид изделия); 11. Distinctive features — l (отличительные черты); 12. To assign rights — h (переуступать права); 13. Appellation of origin of goods — j (наименование места происхождения товара); 14. Historical denomination — f (историческое название, обозначение). Exercise 7. pertaining to; individual entrepreneur; to alienate the company name; neighboring rights; moral right; proprietary right; trade secret; the applicable legislation; inter alia; handicraft product; inalienable right; to cease its use; public domain; literary work; the priority date Exercise 8. patent protection; to file a patent application; to obtain a patent; to grant a patent; patent pending 338

Exercise 9. 1 — e); 2 — c); 3 — b); 4 — g); 5 — a); 6 — h); 7 — d); 8 — f) Exercise 11. 1. Not complete: also civil and criminal 2. T 3. F: 10 years 4. Not complete: and original 5. F: by virtue of registration with Rostpatent or by virtue of international agreements to which Russia is a party. 6. F: may not alienate 7. T 8. F: Trade names are other than company names, they do not require registration. 9. T 10. Not complete: only moral rights 11. F: databases are protected as compilations

Unit 9 Exercise 2. 1. F — selected by the government 2. T 3. F — 5 years Exercise 3. 1. – B; 2. — A; 3. — C; 4. — C; 5. — A; 6. — C. Exercise 4. 1 — in accordance with; 2 — on; 3 — within; 4 — provided that; 5 — into; 6 — on; 7 — under; 8 — relating to; 9 — within; 10 — under; 11 — on; 12 — without; 13 — by; 14 — to; 15 — in accordance with; 16 — under; 17 — from Exercise 5. 1. applicable; 2. investing; 3. competition; 4. striving; 5. regulations; 6. provided; 7. reduced; 8. attracting; 9. providing. Exercise 6. 1 — d; 2 — g; 3 — a; 4 — i; 5 — h; 6 — k; 7 — n; 8 — c; 9 — l; 10 — e; 11 — f; 12 — m; 13 — j; 14 — b. Exercise 7. The word “Law” 339

Unit 10 Exercise 1. A — 3: Issuance and regulation of securities; B — 1: Debt securities; C — 4: Secured debt instruments; D — 2: RDRs, exchange bonds, investment units Exercise 3. 1 — securities; 2 — issuing; 3 — be; 4 — deemed; 5 — secured; 6 — immovable; 7 — entities; 8 — mortgages; 9 — treated Exercise 4. 1 — issuable; 2 — realization; 3 — holder; 4 — simplified; 5 — issuance; 6 — investment; 7 — pursuant; 8 — ownership Exercise 5. 1 — d; 2 — f; 3 — g; 4 — a; 5 — b; 6 — f; 7 — c Exercise 6. 1 — Brokers; 2 — Dealers; 3 — Trust managers; 4 — Registrars; 5 — Depositories; 6 — Organizers of trades; 7 — Clearing organizations Exercise 7. Процедура эмиссии, проспект эмиссии, иностранный эмиссионер, предоставлять услуги депозитария, выпускать акции, привлекать капитал, акционерное общество с ограниченной ответственностью, залог на недвижимое имущество, финансирование с привлечением заемного капитала, оказание услуг, договор об учреждении траста, рынок ценных бумаг, от имени эмитента, управляющий трастом, распоряжаться ценными бумагами депонента, применимое право, организатор торгов, клиринговая компания. Exercise 8. issue securities, securities regulator, admit to placement, be liable, jointstock company, corporate bonds, closed joint-stock company, limited liability company, unsecured bond, pledge, mortgage, mortgage-participation certificate, promissory note, a bill of exchange, issuable security, nominal value, provision of services, maturity of exchange bonds, trust agreement, ownership right to the property, security market, perform transactions with securities, at the expense of investors, trust management agreement, depositary, open depositary account, stock exchange, clear settlements under transactions with securities Exercise 9. 1 — over; 2 — from; 3 — of; 4 — on behalf of; 5 — for; 6 — on; 7 — for; 8 — into; 9 — on; 10 — with; 11 — of; 12 — for; 13 — for; 14 — with 340

Unit 11 Exercise 2. 1 — establish; 2 — entity; 3 — renewed; 4 — grant permission; 5 — criteria; 6 — supervisory control; 7 — discretion Exercise 3. 1 — c; 2 — a; 3 — b; 4 — c; 5 — a; 6 — b Exercise 4. 1 — to; 2 — to; 3 — to; 4 — by; 5 — for Exercise 6. 1 — entitled; 2 — controlling; 3 — mandatory; 4 — comply; 5 — suspension; 6 — revocation; 7 — stipulates; 8 — balance; 9 — compensation Exercise 7. 1 — a; 2 — d; 3 — e; 4 — g; 5 — c; 6 — b; 7 — f Exercise 8. Процентная ставка; кредитор последней инстанции; осуществлять денежную эмиссию; проводить умеренную кредитно-денежную политику; депонировать средства в ЦБ под 0%; коэффициент строгой ликвидности; казначейский вексель; межбанковский рынок; валютное регулирование; ставка ЦБ; активы и пассивы; расчетно-кассовый центр (РКЦ); кредитный рейтинг; резервный кредит. Exercise 9. current account; provide safe custody/deposit boxes; withdrawal; draw cheques; carry out foreign exchange deals; liquidity ratio; deposit account; treasury bills; investment portfolio management; merging; discounting bills Exercise 10. 1 — printing; 2 — inflation; 3 — monetary policy; 4 — supervises and regulates; 5 — bank accounts; 6 — circulation; 7 — interest rate

Unit 12 Exercise 2. 1 — abolished; 2 — remit; 3 — prohibited; 4 — authorized; 5 — notify; 6 — due; 7 — supplier; 8 — exceptions Exercise 3. 1 — lender; 2 — file; 3 — are listed; 4 — submitted; 5 — transaction; 6 — customs declarations; 7 — receipt; 8 — settlements; 9 — under; 10 — envisaged. 341

Exercise 4. 1 — a; 2 — c; 3 — d;4 — e; 5 — b Exercise 5. Обесценивание национальной валюты; влечь уголовную ответственность; широкий спектр валютных операций; внутренний счет; основные требования; правило о репатриации; договор перестрахования; переводить валюту на счет; получение (квитанция); отзыв лицензии; устанавливать для юридических лиц; валютные ограничения; покупка и продажа иностранной валюты; снижение стоимости доллара; подтверждающие документы. Exercise 6. establish the basic rules of currency regulation and control; transfer of funds; overseas account; apply to Russian residents; notify tax authorities; settlements between Russian residents and non-residents; envisaged by instructions; export/import transactions Exercise 7. 1 — restrictions; 2 — violation; 3 — operations; 4 — decline; 5 — currency; 6 — regulation

Unit 13 Exercise 2. 1 — B; 2 — A; 3 — C; 4 — A Exercise 3. 1 — from; 2 — rate; 3 — payable; 4 — reduce; 5 — income; 6 — unrelated; 7 — taxed; 8 — determined; 9 — assumed Exercise 4. 1 — applied; 2 — imposes; 3 — subject; 4 — exempt; 5 — entities; 6 — transactions Exercise 5. Государственный пенсионный фонд Фонд социального обеспечения Федеральный фонд медицинского страхования Региональные фонды медицинского страхования Exercise 6. 1 — tax; 2 — criterion; 3 — income; 4 — rate; 5 — interest; 6 — discretion; 7 — incentives; 8 — rates 342

Exercise 7. 1 — b; 2 — c; 3 — d; 4 — a; 5 — e; 6 — g; 7 — f Exercise 8. according to the recent amendments; be subject to taxation; to impose a tax; taxable permanent establishment; double tax treaty; at one’s discretion; with regard to; tax return; to collect taxes; legal entities; flat rate; income tax; tax benefit / relief / exemption / privilege; tax rate; tax authorities; applicable; to be subject to audit Exercise 9. Претворять (осуществлять) поэтапно; выгодно (благоприятно) для налогоплательщиков; поправки, вступившие в силу; камеральный аудит; налоговые ставки, применимые к чему-либо; принимать различные ставки подоходного налога; приобретение жилья; действующее законодательство предусматривает ставку в размере; взаимная выгода; операции REPO; происходит (вытекает) из; налог на имущество организаций; сумма налога за данный период; отчисления в Фонд социального страхования; подать налоговую декларацию; нижестоящие налоговые органы; снизить налоговую ставку. Exercise 10. 1 — excise duty; 2 — corporate profits tax; 3 — VAT; 4 — personal income tax Exercise 11. 1 — income tax; 2 — corporation tax; 3 — taxed; 4 — tax; 3 — VAT; 4 — excise; 5 — VAT; 6 — excise taxes; 7 — tax havens; 8 — tax burden; 9 — tax avoidance; 10 — tax evasion

Unit 14 Exercise 2. 1 — requires; 2 — insurers; 3 — in accordance; 4 — intermediation; 5 — allowed; 6 — may; 7 — performance Exercise 3. 1 — access; 2 — restrictions; 3 — conclude; 4 — mandatory; 5 — quota; 6 — exceed; 7 — tax purposes Exercise 4. 1 — requirements; 2 — businesses; 3 — brokers; 4 — compulsory; 5 — beneficiaries; 6 — termination; 7 — risk; 8 — personal; 9 — combined Exercise 5. Посредничество на рынке страхования; страхователь; осуществлять страховую деятельность; принимать нормативно-правовые 343

акты; регулировать страховую деятельность; действовать от имени и по поручению страховщика; накладывать ограничения; уставный капитал; заключать контракт; что касается; далек от превышения; цели налогообложения; обязательные условия; выгодоприобретатель; прекращение действия страхового договора; размер иностранного капитала. Exercise 6. be responsible for issuing insurance licenses; aim at strengthening the financial stability; insurance is regulated by Russian legislation; act in the name, save for; the quota is set at; legislative initiatives; provide for different types of insurance Exercise 7. 1 — protection; 2 — premiums; 3 — insurer; 4 — loss; 5 — insured; 6 — tax shelters; 7 — invest; 8 — investors; 9 — reinsurance; 10 — damage

Unit 15 Exercise 1. A — 8; B — 4; C — 1; D — 2; E — 7; F — 3; G — 5; H — 9; I — 10; J — 11; K — 6 Exercise 3. 1 — C, 2 — A, 3 — B, 4 — C Exercise 4. 1 — creditors; 2 — appointed; 3 — approval; 4 — guarantees; 5 — liquidations; 6 — triggered; 7 — face; 8 — loans; 9 — obtain Exercise 5. 1 — at; 2 — to; 3 — up; 4 — on; 5 — in; 6 — to; 7 — at; 8 — up; 9 — to; 10 — under; 11 — on; 12 — to; 13 — after Exercise 6. 1 — damages; 2 — fees; 3 — insolvency; 4 — property; 5 — secured; 6 — auction; 7 — provides; 8 — infringed; 9 — proceedings Exercise 7. 1 — g; 2 — e; 3 — b; 4 — f; 5 — a; 6 — c; 7 — d Exercise 8. 1 — secured; 2 — ahead; 3 — void; 4 — relieved 344

Exercise 9. Оздоровление, неплатежеспособная компания, банкротство, передавать активы, преференциальные (приоритетные) сделки, оспаривать, заявленный (ожидающий рассмотрения), инициировать процедуру банкротства в отношении должника, производить обязательные платежи, обеспечивать сохранность активов и производить их оценку, передавать права другому лицу, выпускать долговые обязательства, участие в совместных предприятиях, увеличивать кредиторскую задолженность, брать в долг, предоставлять поручительство, назначенный судом управляющий, предпринять радикальные меры по реструктуризации, удовлетворить требования кредиторов по денежным обязательствам, прекратить процедуру банкротства, приступить к ликвидации, удовлетворить требования кредиторов, подписать мировое соглашение, сомнительная сделка, сделки по заниженной стоимости, признавать недействительным, имущественная масса, материальный ущерб, быть обязанным выплатить гонорары, удовлетворить в полном объеме, заложенное имущество, влечь за собой невозможность, быть признанным банкротом (стать банкротом), нести ответственность по денежным обязательствам, недостаточный. Exercise 10. legal framework, sole entrepreneur, developer, to draft laws, standstill agreement, to satisfy creditors’ claims, to file a petition, to begin insolvency proceedings, to obtain a court judgment, to owe a sum of money, supervision, financial rehabilitation, external management, liquidation, amicable settlement, to compile a list of creditors, to appoint a temporary administrator, to purchase assets, to transfer debts, to grant loans, establishment of branch offices, holding company, financial health, to dismiss a debtor’s management, to draw up a plan, creditors’ meeting, to discharge debts, to wind up, to challenge transactions, to infringe the rights, to apply restitution, counterparty, invalidated transaction, preferential transaction, moral damages, to owe severance salary, to be secured by pledge, to levy execution over, to reinstate the debtor’s solvency, to waive the right, to be sold at a public auction, controlling person, mandatory instructions, subsidiary liability, chief executive officer, falsification of the debtor’s accounting statements Exercise 13. 1. T 2. F (Plus financial rehabilitation and arrangements with creditors.) 3. F (If the court determines that the debtor’s solvency cannot be restored, it declares the debtor bankrupt and liquidates it.) 4. T 5. T 345

Unit 16 Exercise 2. 1 — C; 2 — A; 3 — B; 4- B; 5 — C Exercise 3. 1 — competitors; 2 — economic; 3 — exemptions; 4 — preferences; 5 — favorable; 6 — establishment; 5 — production; 6 — intangible Exercise 4. 1 — approval; 2 — entity; 3 — share; 4 — acquires; 5 — asset; 6 — target; 7 — value; 8 — relevant Exercise 5. 1 — competitive; 2 — fairness; 3 — reputation; 4 — losses; 5 — misleading; 6 — comparison; 7 — provides; 8 — prohibited; 9 — procedure Exercise 6. 1 — c; 2 — d; 3 — b; 4 — e; 5 — a; 6 — f Exercise 7. Быть в ведении кого-либо; рынок финансовых услуг; государственные льготы; наиболее влиятельные хозяйственные субъекты; коллективное доминирование; уставный капитал; совокупный доход; приобретать голосующие акции; добросовестность; проводить тендеры; льготные условия; вопросы антимонопольного права; слияния и поглощения; доля хозяйственного субъекта на рынке; изъятие товаров из обращения; предмет договора; входные барьеры на рынок; основные производственные активы; совокупная стоимость активов; балансовая стоимость. Exercise 8. commodities market; abuse of a dominant position; unfair competition; presumption of market dominance; consumer demand; FAS register; acquisition of right; distorted information; restriction of competition; concerted actions; quotation request; set monopolistically high prices; imposition of contractual terms; produce on a profitable basis; participatory share; intangible assets; aggregate book value; acquisition of assets Exercise 9. 1 — practices; 2 — position; 3 — cartel; 4 — access; 5 — market; 6 — procedure Exercise 12. 1. F 346

2. T 3. F 4. T

Unit 17 Exercise 2. 1 — B — entities; 2 — A amended; 3 — C develop; 4 — B — be responsible for; 5 — B resolving; 6 — A forged Exercise 3. 1 — provision; 2 — organizations; 3 — acted; 4 — lawful; 5 — imprisonment; 6 — actively; 7 — commission; 8 — subsequently; 9 — criminally Exercise 4. 1 — anything; 2 — conduct; 3 — organization; 4 — persons; 5 — managerial; 6 — bribe; 7 — period; 8 — offense; 9 — enforcement Exercise 5. 1 — as; 2 — giving; 3 — applies; 4 — RUB; 5 — value Exercise 6. 1– in; 2 — at; 3 — at; 4 — for; 5 — of; 6 — for; 7 — in; 8 — of; 9 — in; 10 — for; 11 — to; 12 — of Exercise 8. 1 — присвоение имущества, растрата — e 2 — незаконное завладение имуществом — f 3 — нецелевое использование средств — b 4 — злоупотребление влиянием в корыстных целях — c 5 — злоупотребление служебным положением — a 6 — незаконное обогащение должностного лица — d Exercise 9. General Comments 1. brought substantial changes to Russian anti-bribery laws 2. any actions or omissions to act 3. in one’s official capacity 4. to criminalize bribery 5. administrative fines 6. ethical code of conduct for personnel 7. off-the-record reports 8. forged documents 347

Criminal Offenses 1. active and passive bribery 2. provision of a bribe through intermediaries Sanctions 1. acted alone or in conspiracy with others 2. for the commission of a lawful or an unlawful act 3. amount of the bribe 4. fine from 15 to 30 times the amount of the bribe 5. forced labor 6. a person may be relieved of criminal liability 7. reported himself Confiscation 1. criminally obtained property 2. proceeds from the use of such property 3. if criminally obtained property has been commingled with other property 4. confiscation will be proportional to the value of the bribe Active Commercial Bribery 1. commercial bribery 2. pecuniary value 3. abuse of authority 4. a person who performs managerial functions 5. contrary to the lawful interests 6. expands the reach of this Article beyond the persons with managerial functions 7. prohibition from holding certain positions 8. prohibition to engage in certain professional activity 9. forced labor 10. may be relieved of criminal liability 11. was subject to bribe solicitation 12. voluntarily reported the bribe Aiding and Abetting Public Bribery 1. aiding and abetting public bribery Exercise 10. I. Verb+ BRIBE 1. to give a bribe

METHODS OR CIRCUMSTANCES OF GIVING A BRIBE 1. providing a bribe through intermediaries 348

2. to provide a bribe

2. providing a bribe in conspiracy with others

3. to receive a bribe 4. to report a bribe 5. to solicit a bribe II. Verb+ BRIBERY

TYPES OF BRIBERY Adjective+ BRIBERY

1. to combat bribery

1. active bribery

2. criminalize bribery

2. passive bribery

3. to engage in bribery 4. to aid bribery 5. to aid and abet bribery

Unit 18 Exercise 2. 1 — B issued; 2 — A project; 3 — B in charge of; 4 — C freely; 5 — A transfer Exercise 3. 1 — foreign; 2 — basis; 3 — exhaustive; 4 — under; 5 — investment; 6 — of; 7 — Government; 8 — current Exercise 4. 1 — measures; 2 — development; 3 — mainland; 4 — customs territory Exercise 5. 1 — falls within the joint competence of; 2 — have competence over; 3 — core legal act; 4 — provides the general legal framework; 5 — covers almost all principal issues; 6 — other principal law; 7 — sets forth the legal framework; 8 — principal piece of legislation; 9- provides the general legal framework Exercise 7. I. Natural Resources 1 — private ownership of minerals; 2 — subsoil resources are owned by the state; 3 — title to land plots; 4 — to extract 349

II. Subsoil Users 1 — hold subsoil licenses; 2 — license for strategic deposits; 3 — to develop off-shore fields; 4 — Russian subsidiaries of foreign companies III. Licenses 1 — geological survey license; 2 — exploration and production license; 3 — combined license; 4 — license may be granted; 5 — license may be extended for completion of the works; 6 — to issue a license; 7 — onshore deposits IV. Transfer of Subsoil Rights 1— transfer of subsoil rights; 2 — parent company; 3 — consolidation; 4 — merger; 5 — license holder; 6 — spin-off; 7 — split-off V. Strategic Deposits 1 — strategic subsoil plots; 2 — subsoil plots of federal significance; 3 — Federal Agency for Subsoil Use; 4 — exhaustive list; 5 — to meet the criteria; 6 — to be deemed strategic VI. Production Sharing Agreements 1 — investors in the extraction sectors; 2 — subsoil plot development; 3 — subsoil plot was put to auction; 4 — PSA tax regime VII. Precious Metals and Gem Stones 1 — native metals; 2 — to refine precious metals; 3 — Russian Government maintains a list of companies Exercise 9. 1 — uranium; 2 — diamonds; 3 — high-purity quartz; 4 — the yttrium group of rare earths; 5 — nickel; 6 — cobalt; 7 — tantalum; 8 — niobium; 9 — beryllium; 10 — lithium, 11 — the platinum group of metals Exercise 10. 1 — gold; 2 — silver; 3 — platinum; 4 — palladium; 5 — iridium; 6 — rhodium; 7 — ruthenium; 8 — osmium Exercise 11. All these verbs belong to the official style. Exercise 12. to make a geological survey of: subsoil/mineral resources; oil /gas/metals; to explore: subsoil/mineral resources; subsoil plots; a deposit; oil/gas field; oil/gas/metals; to develop: subsoil plots; deposit; oil/gas field; to produce: oil /gas /metals; to extract: subsoil/ mineral resources; oil /gas /metals; to refine: oil /gas /metals

Сontents От редактора ......................................................................................................3 Введение ............................................................................................................5 Unit 1. Constitutional Law of the Russian Federation ..........................................8 Unit 2. Judicial System of the Russian Federation .............................................. 17 Unit 3. Establishing a Legal Presence in Russia .................................................. 29 Unit 4. Language Policy in the Russian Federation ............................................ 44 Unit 5. Privatization in Russia ........................................................................... 52 Unit 6. Employment Law in Russia: Part 1 Arising of Employment Relations....................................................................... 64 Unit 6. Employment Law in Russia: Part 2 Remuneration and Working Hours Arrangement ............................................... 78 Unit 6. Employment Law: Part 3 Rest Days and Social Security ........................................................................... 88 Unit 6. Employment Law: Part 4 Internal Work Regulations ................................................................................. 99 Unit 6. Employment Law: Part 5 Termination of an Employment Agreement ............................................................. 110 Unit 7. Property Rights in Russia: Part 1 Property Rights in General .............................................................................. 123 Unit 8. Property Rights in Russia: Part 2 Mortgage of Real Property ............................................................................... 133 Unit 8. Intellectual Property Rights in Russia ................................................... 140 Unit 9. Promoting Foreign Investments in Russia ............................................ 154 Unit 10. Issuance and Regulation of Securities in Russia .................................. 166 Unit 11. Banking in Russia .............................................................................. 174 Unit 12. Currency Regulation in Russia ........................................................... 184 Unit 13. Taxation in Russia.............................................................................. 194 Unit 14. Insurance in Russia ............................................................................ 204 Unit 15 . Insolvency in Russia .......................................................................... 213 Unit 16. Competition Protection Law in Russia ............................................... 225 351

Unit 17. Corporate Compliance in Russia ........................................................ 236 Unit 18. Energy Law in Russia (Natural Resources) ......................................... 252 Annex I. Some useful cliches and linkers for summarizing ................................ 267 Annex II. Some useful vocabulary notes (Company Law) ................................. 269 Annex III. Employment Law Vocabulary ......................................................... 274 Annex IV. Articles devoted to the modern privatisation processes and competition in Russia................................................................................ 282 Glossary .......................................................................................................... 288 Список использованных источников .......................................................... 309 Answer keys to exercises................................................................................... 314

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