ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
ST. PETERSBURG INTERNATIONAL LEGAL FORUM 2015 FORUM LEGAL INTERNATIONAL PETERSBURG ST. 1
CONTENTS
Plenary session 4 Mission of Law in an Era of Change
Lecture 30 Lecture by Valery Zorkin, Chairman of the Constitutional Court of the Russian Federation ”Power of Law and the Right to Power“
Discussion 46 Innovations in Managing Operations of Non-credit Financial Institutions
Report 52 70th Anniversary of the Nuremberg Trials. Report by Alexander Zvyagintsev, Deputy Prosecutor General of the Russian Federation
Discussion 66 Strategic Approach to Islamic Financial Instruments
Conference 72 Eurasian integration: One Year Since Signing the Treaty on the Eurasian Economic Union
78 Rule of Law in the Shanghai Cooperation Organization Member States
84 Conference of Southern Common Market (MERCOSUR) Member States
90 International Conference of the Federal Chamber of Lawyers of the Russian Federation “Strengthening the Independence of the Judiciary and the Adversarial System — Standpoint of the Bar”
98 Legal Education: an Alternative View
Presentation 104 The Hague Conference on Private International Law (HCCH) — Building Bridges for Global Citizenship
110 Presentation of Thai Law
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3 DISCUSSION SESSIONS
1. INTERNATIONAL LAW RULE OF LAW
Roundtable 1.1. 118 Unilateral Sanctions in a Multipolar World: Legal Challenges
Roundtable 1.2 124 Moral Foundations and Natural Law
Roundtable 1.3 130 International and National Criminal Justice: Compatibility and Interaction
Roundtable 1.4 136 Modern Anti-corruption Mechanisms and Ways to Improve Them
Roundtable 1.5 142 Sovereignty and Supranationalism in Contemporary International Relations
Roundtable 1.6 148 Legal Consulting Consulting: Limits of the Possible
Roundtable 1.7 154 Modern Constitutionalism
2. PRIVATE LAW
Roundtable 2.1 166 Acting Novels of the Civil Code for Legal Entities
Roundtable 2.2 172 Business Inheritance
Roundtable 2.3 178 Management of Construction and Investment Projects
Roundtable 2.4 184 Legal Remedies in Case of Non-Performance of Obligations
Roundtable 2.5 190 Reforming Liability Law in Russia: Agenda for 2015
Roundtable 2.6 196 Limited Property Rights: How the Civil Code is Favourable for Businesses
4 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3. CORPORATE PRACTICE INTERNATIONAL TRADE PROTECTION OF COMPETITION
Roundtable 3.1 202 Legal Department in the Digital Age
Roundtable 3.2 208 Globalization of Pro Bono
Roundtable 3.3 214 M&A Deals and Investment Market in Russia in an Existing Environment
Roundtable 3.4 220 Which Role for International Law in the Prevention and Suppression of Illicit Trade?
Roundtable 3.5 226 Product Liability: Effect on the Price
Roundtable 3.6 232 Extraterritorial Effects of National Legislation — Transnational Corporations’ Risks
Roundtable 3.7 238 Regulation of Public Procurement and Procurement by Public Companies
Roundtable 3.8 244 Antimonopoly Law Enforcement in the Modern Economic Conditions
Roundtable 3.9 250 Applying Trade Remedies in BRICS Countries: Policies, Practices, Challenges
4. LITIGATION AND ARBITRATION PRACTICE
Roundtable 4.1 256 Is International Arbitration Stagnating? Would Asian Arbitration Centres Pour New Blood in Dispute Resolution Procedure?
Roundtable 4.2 262 Effective Cross-Border Execution of Judgements: National or Universal Criteria?
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 5 Roundtable 4.3 268 Forensic Expertise — Fact-finding on the Border Between the Subjective and Objective
Roundtable 4.4 276 Business Protection in Case of Bankruptcy
5. SMART SOCIETY
Roundtable 5.1 282 Trademarks: Shield or Sword? Current Issues of Legal Practice
Roundtable 5.2 288 Protection of Personal Data: the Legal Response to the Challenges of the Global Information Progress
Roundtable 5.3 296 Normative Technical Regulations and Innovation in the Digital Era: Eliminating Barriers for Creativity and Innovation
Roundtable 5.4 304 National Efforts to Control the Internet: to regulate or Not?
6. CULTURAL HERITAGE PUBLIC INTEREST ENVIRONMENT
Roundtable 6.1 310 Legal Barriers to Access to the World Cultural Heritage. Whether Is there a Solution?
Roundtable 6.2 318 State Preservation of the Cultural Heritage: How It Works
Roundtable 6.3 324 Cross-Border Environmental Protection
Roundtable 6.4 330 Problems of Harmonization of Energy Law in Russia, EU and Eurasian Economic Union
Roundtable 6.5 336 Development of the Russian Subsoil Use Legislation: Efforts to Provide Influx of Investment
6 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7. INVESTMENTS. FINANCE
Roundtable 7.1 342 Joint Venturing with a Foreign Investor: How to Make a Partnership Work
Roundtable 7.2 348 Russian-Chinese Cooperation: from Words to Action
Roundtable 7.3 356 Investment in Infrastructure as a Driver of Economic Growth in Developing Countries
Roundtable 7.4 362 International Experience of Tax Ruling and the Possibility of Its Implementation in Russia
Roundtable 7.5 368 Global Recession and Prosecution for Financial Crimes
Roundtable 7.6 374 Main Issues of Nuclear New Build Projects
Roundtable 7.7 380 Role of Credit Unions in Legal Entities’ Bankruptcy: Myths and Reality
Roundtable 7.8 386 Public Talk “Capital Amnesty: Guide for Action”
Roundtable 7.9 392 Which Pension System Is Right for Modern Russia?
Roundtable 7.10 398 Development of Japanese-Russian Investment Projects: Practical Issues
Roundtable 7.11 404 Development of Regions and Investment Climate: New Legal Solutions
Roundtable 7.12 410 Worldwide Legal Services for High-Net-Worth Individuals
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7 Plenary session
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
MISSION OF LAW IN AN ERA OF CHANGE
27.05
8 9 Plenary session
MODERATOR SPEAKERS
Veniamin Yakovlev, Dmitry Medvedev, Wolfgang Brandstetter, Adviser to the President of the Prime Minister of the Russian Federal Minister of Justice Russian Federation Federation of the Republic of Austria
Reno Sorieul, Secretary, United Nations Commission on International Trade Law (UNCITRAL)
10 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 MISSION OF LAW IN AN ERA OF CHANGE
John Finnis, Aleksandr Konovalov, Professor of Law and Legal Minister of Justice of the Philosophy Emeritus, University Russian Federation of Oxford
Alberto Mazzoni, Miguel de Serpa Soares, Andrea Orlando, President, International Under-Secretary-General Minister of Justice of the Institute for the Unification of for Legal Affairs and United Italian Republic Private Law Nations Legal Counsel
11 TRANSCRIPT OF THE PLENARY SESSION “MISSION OF LAW IN AN ERA OF CHANGE”
Aleksandr Konovalov, Minister of Justice of the regulations we have adopted, or with a number of interna- Russian Federation: Changes. Are they for the worse or for tional treaties that have been signed. It is more important the better? Changes require decision-making, and people, to understand how solid and efficient the legal basis is at as it is well known, do not like to make decisions. On the this very stage because it is the foundation for the existence other hand, only in the changing, dynamic, multi-faceted of our state and society. Law, as it is known, in its nature society innovations become possible, which are so neces- is a very flexible and active structure. As lawyers, we are sary for further development of man and mankind. convinced that it can give an efficient response to any social What kind of role can lawyers play in these chang- changes and challenges of today’s world, including through es? I think I will not be wrong if I say that this role is huge. traditional regulations or even through legal experiments The best representatives of our profession can help the so- with legislation (without infringing upon fundamental civil ciety find best balance between conservative and innovative rights and liberties). approaches, to optimize technologies without losing their For the Government of the Russian Federation, link with the global vision of trends in development of so- which I have the honour to represent, law first of all is an ciety, basic principles of justice and rationality in relations important instrument for dealing with current social and between human beings. economic tasks. It is also a set of criteria that lays down the Ladies and gentlemen! On behalf of the Organizing foundation for the development of strategic directions of Committee, I would like to welcome you at the V St. Peters- our activities. It is a compass that can help us find solutions burg International Legal Forum, the topic of which this year to any tasks, starting from approaches to international is The Mission of Law in an Era of Change. cooperation and ending with state procurement rules and Changes mean new risks, and new risks require standards. Given the rapidly changing norms, which just changes. Let us make those changes positive. yesterday seemed unshakeable, we cannot do without I would like to wish you successful work at this such a compass, so we must all protect the law, keep and forum. preserve it. I believe that our mission as lawyers — to protect Dmitry Medvedev, Prime Minister of the Russian the values of law — has not become irrelevant today. I men- Federation: Good afternoon, dear colleagues. tioned it last year when I spoke on this forum and I believe This is already the fifth International Legal Forum. that this idea is still relevant and I hope that the St. Peters- We have all gathered here, in a very beautiful place, which burg International Legal Forum will serve this goal. is very nice and interesting itself. I would like to emphasise In the 21st century, regulation is becoming in- that over these five years, the forum has turned into a very creasingly complicated, fragmented, and at the same time, high-profile platform; I might even say a leading interna- more integrated. In order to maintain legal system in good tional platform, which is demonstrated by the number of condition, we must create new legal frameworks and make participants to this forum. We have more and more partici- decisions, including experimental ones. We make such de- pants each year. But this is not about the number of partic- cisions in our country, too. We adopted such laws last year. ipants, it is about their representation. In 2011, represent- One of them is aimed at the development of the Russian atives of 35 countries came to St. Petersburg, and this year Far East. It establishes the mechanism for the functioning we have more than 3000 guests from 84 countries. It means of the territories of priority development. First this idea that this forum is a full-scale, international, representative was designed for the Far East region but then we came forum, and I hope it will be a substantive one as well. to the conclusion that we can extend this mechanism to Here we discuss the most complicated issues of other parts of our big country. The second law establishes a the development of law. One of the topics of today’s plenary special legal framework for the free-trade zone in Crimea. session is the mission of law in an era of change. As you Aside from such unorthodox solutions, law is also renovat- know, it is not very easy to live in a time of change, but ing in Russia through the traditional means. Large-scale changes always happen and the mission of law is always modernization of civil legislation is at its final stage. We there. I would like to remind you the words of the famous have been preparing new norms in such a way so that each German lawyer and thinker Rudolf von Jhering: “The end legislative innovation can be thoroughly examined, although of the law is peace. The means to that end is war”. Period it is not easy and sometimes we had to bring together very of changes always involves struggle not only for the change different positions of all the participants. of social relations, but it is a struggle for the law itself. The Russian Civil Code now includes institutions, We must not measure our success only with a number of which have proven their efficiency abroad and have been
12 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 13 TRANSCRIPT OF THE PLENARY SESSION “MISSION OF LAW IN AN ERA OF CHANGE”
tried and tested by businesses. I would like to give you an I know that it will also be one of the forum’s discussion example. Corporate law includes public and non-public topics. Anyway, the general conditions that underlie this institutions, which are new for us, and common institution system must be preserved. Development of competition, of corporate agreement that allows the sides to govern transparency of tenders, publicity, and customer profes- their relations in the most efficient way. Radical changes sionalism — all these things must be preserved. to the section on liabilities will come into effect next week, Another important matter the lawyers are dealing starting from June 1. For the first time, the Code includes with, and not just lawyers but lawmakers as well, which is the norms on option contracts, security payment, subordi- very closely interlaced with common people, are the tasks nation agreements, as well as many other norms, which I that the development of the Internet sets forth to the legal hope will improve the image of Russian jurisdiction for en- world. Talking about virtual space, legal scholars need to trepreneurs. come up with imaginative, outside-the-box solutions that The adjustment of civil legislation establishes new have never existed before. Firstly, because digital technol- and more precise legal frameworks, which must lay down ogies in the Internet are changing at such a rate that legal the foundation for economic development in our country stratagems cannot keep up with them. Secondly, regulation and guarantee due protection of rights and legal interests in this sphere is very complicated; it must provide, on the for foreign investors, not worse than the ones they can get one hand, for freedom of information exchange, and on the in other, perhaps for familiar for them, systems of law. other, for security for both intellectual and creative rights of I have listed just a few innovations of the Russian creators and opportunity to use the results of their crea- legislation, although many guests of our forum are well tive work. Thirdly, an efficient legal strategy in this field is aware of them. But you understand how challenging it is to impossible without full-scale international cooperation. We integrate into Russian legislation the categories that have all, including myself, appreciate the opportunities the Inter- been developing in other countries, including the An- net has given to us, but at the same time, the government glo-American legal system. In fact, our country became one of any country, including our Government, must take into of the states that borrow various legal institutions, includ- account the need to provide stable and secure communica- ing the common law institutions. tion; moreover, infringement in this field is of transborder When experimenting with law and creating or bor- nature for quite obvious reasons. Given the huge amount rowing new legal frameworks, it is important to remember of information that is being stored in the virtual space, it that the law, flexible as it is, must not be broken by the is obvious that the number of offences in this sphere will new factors. All legal pilot projects must be sooner or later continue to grow, therefore we must establish a solid basis united and incorporated into inherently consistent system, for regulation of various consequences of these offences, integrated into the existing regulation. That is why in main including in the Internet. foundations and principles of the law we must distinguish In recent years, almost all countries, including temporary and constant norms upon which our system Russia, have been developing and adopting new laws in this is based. area. Internet is a very important phenomenon that cannot Let us take an example of the development of state be ignored, and we need advanced legal frameworks here, procurement mechanism in our country, which is quite im- including for the purposes of using the experimental legal portant because of the volume of such procurement. For us models. The ideas on the scope of freedom in the Internet it was quite a challenge to build a universal well-structured are different. There are some suggestions to develop a con- open-ended system to enable an efficient anti-corruption vention on personal data protection at the level of United mechanism in this sphere (unfortunately there is a lot of Nations Organization, which could reflect the best practices abuse there) and to reassure Russian entrepreneurs that of these states. But right now, frankly speaking, politicians stable market rules are guaranteed for them. are not very eager to discuss these issues at the interna- We have achieved a certain progress in this: we tional level. Several years ago, I offered to my colleagues to have a new law on contract system, we have expanded our discuss this issue at various summits and fora but unfortu- set of tools for various tenders, and it has been two years nately, I do not see any progress in this field. Nevertheless, since we started to implement this law, new norms are un- the means to protect personal data and on Internet regula- dergoing efficiency tests. In order to take into account the tion must be reasonable and efficient. I know that there is enforcement practice, we had to improve the law and intro- going to be a separate discussion here, especially because duce several sets of amendments, and additional correc- in the smart society, we as call it now, we must live without tions are underway. I am talking about this issue because breaking the law.
14 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 Judicial decisions are an important guarantee negotiations. This is a new stage of the Eurasian integra- for the development of law whether it has to do with the tion. The norms that underlie the Eurasian Union take into Internet or other sphere of our lives. Currently there is no account various international rules, including the rules and universal treaty that would delimitate the jurisdictions of principles of the World Trade Organization. This means that various national courts, given that the norms do not always the legal groundwork of Russia’s economic policy will con- coincide. This is causing a great number of difficulties. Be- tinue to be tied to implementing various norms of the WTO sides, states are seeking to broaden the jurisdiction of their and EEU at the national level. Together with our partners, courts (some states are overly zealous in this) and sooner we will have to harmonize energy laws taking into account or later each legislative system has to define exactly how the regulations of the EU. foreign judicial decisions will be implemented on its terri- Russia, as well as other members of the union, is tory. It is a very complicated issue for lawyers. Avoiding the completely open for cooperation. We benefit from the full so-called interference into sovereignty in an era of trans- WTO membership. It is necessary for economic devel- national economy and global trends is almost impossible, opment of the country, for the promotion of our goods to although each country decides on its own how widely it is international markets. We have to be frank and admit that going to open the doors to the decisions adopted by other no country in our time can perform all tasks on the internal states. In Russia, our decisions depend on the availability of market by itself and that is why international community is an international treaty with the country whose court has an- simply destined to integration. nounced this decision. We have many such treaties covering Today the EEU was joined by another two coun- a wide number of civil cases. We recognize court-approved tries — Kyrgyzstan and Armenia. We have prepared a new voluntary settlements and under certain conditions, we free trade agreement with Vietnam. It will be the first treaty also recognize the verdicts in criminal cases regarding of its kind signed by the EEU. The day after tomorrow we the compensation to the victims. The decisions of foreign will sign it at the meeting of the heads of the governments arbitration courts are also enforceable, but there are some in Kazakhstan. problems in this field and some opportunities as well. At This interest shows that our economic community any rate, everyone was happy with the existing situation un- has good prospects. We plan to promote cooperation with til a certain point in time, but specialists increasingly often other countries, including China, aligning the Eurasian say now that the Civil Procedure Code needs to be amended economic integration with the initiatives of the Silk Road and improved because of the grave danger of politicization Economic Belt. This is a positive experience. It makes us of judicial decisions, which other states are talking about, re-evaluate the development of our relations with the Eu- and we have to talk about it occasionally as well. ropean Union member states, the United States and some Many of these issues will be discussed at the forum, other countries. The last year enriched international legal starting from the development of international arbitration to field with the experience of living under the so-called sanc- protection of business in case of bankruptcy procedures. I tions. It does not mean that it is an unprecedented event, hope that my colleagues will be able to offer some fresh and yet in a way we have come back to the 20th century. I have unorthodox ideas that will help to relieve the existing prob- repeatedly pointed out that in the last century, our country lems in the field of law. This is extremely relevant for today. was constantly operating under sanctions. It is another The existing system of international law is only effi- matter that our legal system has changed drastically since cient when it is implemented through the internal national then. Many approaches that we did not adopt earlier are law. Yet it is evident that we must not use such mechanisms now reflected in our legislative framework. Our legislation to conceal our policy goals. It is in our long-term interests today is a part of the complex international legal system. to have a set of progressive and democratic binding norms, Any illegal coercion always affects the law on the whole. so on international level we have to preserve the exist- You all know the sequence of events. I will just ing legal tools of peaceful dispute resolution and develop remind you that last March, the Crimea held a referendum mechanisms for making and implementation of coordinated and most citizens voted for reunification with Russia. Our decisions. Such mechanisms are provided for within the country recognized the referendum’s results, while other framework of the United Nations Organization, World Trade countries like the United States and European Union coun- Organization, Council of Europe and other international tries imposed sanctions against Russia. Legally speaking, associations, including the Eurasian Economic Union. these sanctions were unilateral and not universal, because The treaty to establish this union was signed a year the Security Council did not adopt any sanctions, let alone ago by Russia, Belarus and Kazakhstan after two years of the fact that these sanctions disregarded the will of the
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 15 TRANSCRIPT OF THE PLENARY SESSION “MISSION OF LAW IN AN ERA OF CHANGE”
proponents of the Russian integration. Later the deteri- first code of laws of the Russian Empire, further develop- orating situation in the South-Eastern Ukraine caused ing the law. the expansion of the so-called unilateral sanctions aimed Today our legal framework continues to change. against certain sectors of our economy, as well certain As I have already said, our country also adopts elements citizens and companies. from foreign legal systems as well. Over the last 20 years, In response we (and I am not very happy to speak we incorporated a vast number of internationally significant about it) introduced some limitations regarding the import norms into Russian legislation. The work will carry on, of agricultural products, raw materials, food products and because living, dynamic matter of law leaves room both for certain goods. All the parties to conflict are the members advocates of its active interpretation and borrowing, and of the WTO, an organization that was established to remove those who religiously protect its foundations. Both of them any barriers to trade. can always be found in the legal framework. Moreover, WTO’s rules were used to justify unilat- I believe that for the participants of our V Interna- eral sanctions. First our colleagues and partners referred tional Legal Forum there is no mission greater that serving to certain limitations in the rules. Consequently, it is only the law. You are going to have several days to dedicate natural that Russia, using the exemption clauses provided yourselves to this noble goal, to work on various problems in by the existing WTO rules, decided to protect its food mar- various panels. I wish you not only interesting discussions — ket. This is the sequence of events. I would like to stress I hope that you will be able to just walk along the streets of again that I do not consider this to be a good development St. Petersburg. It is a pleasure of its own kind. The weather of international trade relations, but can say that in the this year is just fine, it is not too hot or cold, so you can see near future we will have to decide whether to extend the for yourselves how much we have in common. Thank you. countermeasures or to lift them. I can openly say that our actions will be adequate and they will be based on the Veniamin Yakovlev, moderator, Adviser to the Pres- actions of our international partners. ident of the Russian Federation: Thank you, Mr Medvedev. Despite the last year’s events, I believe that this is Ladies and gentlemen, dear colleagues, we proceed with not the case of a crisis of international law. It is rather a cri- the discussion of the main topic of our forum, The Mission of sis of relations between the states, crisis of states’ attitude Law in an Era of Change. Taking into account the comments to international law. that Mr Medvedev just made, I would like to say that very What should be our response to these events? For important aspect of international relations is international me, it is quite evident: we have to go back to universal in- trade. United Nations Commission on International Trade terpretation of the norms of international law, above all, the Law, or UNCITRAL, boasts an outstanding success in har- provisions of the United Nations Charter, treaties ensuring monization of international trade laws. It develops not just human rights protection across the whole spectre of exist- international treaties but also legal instruments of recom- ing problems, and use them to restore trust to the universal mendatory nature, “soft law” and model laws. This year we principles of international law. Distinguished colleagues, in are celebrating the 35th anniversary of the Vienna Conven- this regard a lot will depend on our professional solidarity tion on Contracts for the International Sale of Goods, and because legal community understands like no other that UNCITRAL also took part in its development. The convention there is no alternative to universal legal instruments. And remains a pivotal international instrument in this area. we do have this set of instruments. It is my pleasure to give the floor to Renaud Sorieul, Distinguished colleagues! Ladies and gentlemen, UNCITRAL Secretary. Mr Sorieul, the floor is yours. dear friends, before I conclude my address, I would like to remind you one date (I think you all know about it). To- Reno Sorieul, Secretary of the United Nations day, May 27th is the date of foundation of St. Petersburg. Commission on International Trade Law: Thank you, mod- On May 27th, 1703 Tzar Peter I began building a city that erator, for your kind words about the work of UNCITRAL. would become a symbol of reforms in our country; a city Your Excellences, distinguished colleagues, ladies and that to a certain degree opened Russia to a dialogue with gentlemen, I would first like to thank the organizers for Western countries and effectively laid a solid foundation inviting the United Nations Commission on International for political, economic, cultural cooperation, pushing Trade Law (UNCITRAL) to this important event. I am priv- our country towards continental law. A century later, one ileged to serve as a secretary of UNCITRAL. I can say the of our most prominent jurists, Mikhail Speransky, sys- theme of this forum, Mission of Law in an Era of Change, tematized foreign and Russian experience, creating the exemplifies the core consideration that UNCITRAL mem-
16 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ber states and the member states of the United Nations as the documentation it considers are readily available on- at large, consider as they develop the trade law standards line in the six languages of the United Nations. I would like for which UNCITRAL is known. In formulating that consid- to address UNCITRAL’s transition from aiming at unifica- eration, the question our member states ask, “What is the tion of commercial law to facilitating its modernization and mission of law in increasing rapid change in the commer- harmonization. Traditionally, UNCITRAL’s work has focused cial law landscape?” on the differences between countries in the domestic As an extension of this question, I would like to dis- legislation governing trade. This focus was inspired by cuss three on-going and related changes in the commercial the observation that these differences can and do operate law rule-making context and UNCITRAL’s approach to these as barriers to commerce by creating legal uncertainty, transitions. which in turn generates transaction costs and for example, The first change is a move from seeking unification increases legal costs, because of the need to research the of the law of commerce to promoting its modernization and foreign law applicable to the contract. These costs can harmonization. result in significant hindrance to trade. The second can be characterized as a shift from the To address the differences in domestic legisla- focus on the development of trade law purely at the interna- tion, UNCITRAL’s traditional approach is to attempt to tional level to recognition of the importance of the domestic unify the law in that area, as was the case with the United and regional perspective. Nations Convention on Contracts for the International Sale Finally, I would like to address a third trend towards of Goods. In that case, the unification by way of a “hard increasing awareness of the importance of commercial law law” convention was an extremely effective approach. The and commercial law reform to sustainable development convention’s 83 state parties indeed account for more than and the development of the rule of law. 80% of the global trade in goods. That approach based To understand the first transition from unification to on the hard law and conventions remains valid. However, modernization, it might help to have a little background on there is a growing recognition by states in UNCITRAL that UNCITRAL, which was established in 1966 to develop global while specific legal differences in certain areas may create standards in the area of international trade law, at the time barriers to trade, the primary barrier may be the result of with the focus on East-West relationship. UNCITRAL does more systemic issues at the national level. The extensive not deal with trade policy, which is the domain of the World trade between certain common and civil law countries with Trade Organization; it rather specializes in improving the le- very different legal systems is a testament to this obser- gal framework that governs the commercial transactions of vation. Rather than disparate legal traditions, it appears business partners and traders at the macroeconomic level. that the biggest obstacle to trade in some countries is the UNCITRAL’s process in developing this framework unavailability of a domestic legal regime that can account is characterized by transparency and inclusiveness. UNCI- for the quickly changing conditions in commercial law. For TRAL’s member states represent every region of the world example, a legal regime that does not effectively enable and every stage of economic development and of course electronic contracting or the type of continuing contrac- every legal tradition. tual relationships that are characteristic of the modern All United Nations member states may partici- global supply chain may deter trade both domestically and pate as members or observers, and due to UNCITRAL’s internationally. For this reason, much of UNCITRAL’s work consensus decision-making process, they have an equal is designed to potentially apply as much to purely domes- opportunity to informed decisions. Other international tic transactions as to international ones. We can see this organizations are also included, and of great importance, so trend in UNCITRAL’s work relating to alternative dispute are the end users of UNCITRAL’s texts — the lawyers and settlements, electronic commerce, insolvency, on-line commercial operators. dispute resolution, security interests, public procurement, This mix of public and private stakeholders and and finally and more recently, to the creation of an ena- interests gives UNCITRAL’s work particular legitimacy. bling environment for micro-, small- and medium-sized In view of both state needs and those of private actors, enterprises. legal standards prepared by UNCITRAL represent what As part of UNCITRAL’s focus on shifting from the international community considers at any given time unification to providing governments with the tools they to be the best international practice in a specialized field. need to modernize and harmonize their laws, rather than In addition, all this work is conducted in the public view, conventions (which are still used in some circumstances), recordings and reports of all UNCITRAL’s meetings, as well you will see UNCITRAL more and more producing model
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 17 TRANSCRIPT OF THE PLENARY SESSION “MISSION OF LAW IN AN ERA OF CHANGE”
laws, legislative guides and other soft law instruments that In an attempt to balance the benefits of regional ini- give states, if they choose to adopt them, the flexibility to tiatives with the need to ensure their compatibility with in- adapt those instruments as necessary to their domestic ternational efforts, UNCITRAL is experimenting with a more legislation. regionally focused approach, in particular when it comes The shift in UNCITRAL’s attention away from purely to implementing UNCITRAL’s standards. The UNCITRAL international also touches the second transition I would Secretariat has long prioritized technical assistance to law like to touch on — the increased significance of the region- reform at the regional and sub-regional level, which can al perspective in commercial law legal standard setting. be an efficient way to target audiences with shared needs, Over time, there has been a proliferation of region- legal traditions and languages. ally focused entities both intergovernmental and non-gov- To supplement these efforts, UNCITRAL is now ernmental, engaged in formulating rules of international testing the effectiveness of having a dedicated regional trade designed to harmonize the legal environment at the presence. In 2012, thanks to generous contribution from regional level. One of the most visible is perhaps European the Republic of Korea, we established a regional centre for Union but of course there are many others on every con- Asia and the Pacific, a centre that is now able to directly fa- tinent and I am particularly pleased here to mention the cilitate commercial law reform in a region notable for high efforts underway in the context of the Eurasian Economic interest among states in harmonizing commercial laws. Community. In addition, the centre has the capacity to cooperate more From the perspective of UNCITRAL, this prolifera- directly with other organizations promoting trade law in the tion of regional initiatives has come with many benefits, for region. Additional efforts for creating comparable regional example, the development at the regional level of expertise centres are being pursued in other regions, including in in some of the fields in which UNCITRAL works and where Africa and in this region — the CIS and Eurasian countries. there have also been challenges. The first among the chal- The pursuit of trade law reform brings me to the lenges is that despite UNCITRAL’s mandate, to coordinate final trend I would like to discuss, which is the growing rec- the work of organizations active in international trade law, ognition by states over the last several years of the impor- there is no binding mechanism to assure the cooperation of tance of commercial law to sustainable development and all these organizations. the development of the rule of law. These are key consider- Thus, internationally- and regionally-focused ations, as governments design the post-2015 development organizations may frequently address the same subject in agenda of the United Nations. their law-reform efforts. This may result in an inefficient It is often observed that rule of law is an impor- use of resources and the solutions, finally adopted, may tant component in sustaining economic development, be in conflict with one another. UNCITRAL has found itself investment and entrepreneurship. Until recently, however, appealing to regional bodies (and here I have mostly the the role of commercial law in the development was often United Nations regional economic commissions in mind) to neglected with the rule of law and sustainable development address these inconsistencies, which can lead to uncer- discussions focusing primarily on public law, human rights, tainty for commercial operators and have thus the exact and criminal law. While those considerations are important, opposite effect to what was intended. Beyond this particular states now understand that the sound regulatory frame- challenge, issues can also arise if the economic stature of work for business, investment and trade is also essential a regional organization and its traders leads to its norms for sustainable development. I might add that moderniza- being imposed beyond its boundaries. In those cases, such tion in that field is also fairly inexpensive way of reaching norms do not necessarily represent the best global solution sustainable development. Consider the case of post-conflict and their imposition may be problematic for states that societies. Criminal justice and electoral reform may be were not involved in their creation. essential in the short term, but the long-term prosperity In many instances, I do not forget that regional and peace will be based in part on the existence of a viable organizations are the best situated to understand regional and vibrant economy that encourages entrepreneurship and local needs and to provide the optimal solutions for and investment. A sound regulatory framework that can that context. However, the concentration of efforts to reach support such an economy (such as access to justice) con- regional integration is such that lawmakers in a given region sists not only of rule of law fundamentals such as access to may easily lose sight of the broader perspective of trade law justice, but is also about the recognition and enforcement beyond the outer limits of the regional organization. UNCI- of property rights and contracts, the security and avail- TRAL is there also to remind everyone of that perspective. ability of credit and the recognition and formalization of
18 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 business entities. These are some of the important areas Russia and Italy has a long-standing history. The Italian Re- in which UNCITRAL has worked and is currently working. public is one of the most important partners of the Russian UNCITRAL’s work also touches the public sector; its model Federation in Europe, with which we are developing an ex- law and public procurement is a key standard in combating tensive cooperation and are engaged in an active dialogue. corruption in government purchasing. The Italian legal science is a keeper of the millennia-old At the national level, outdated law in any of these traditions of the Roman law, a system that historically has areas will stifle entrepreneurship at home and discourage been a foundation for the legal system of the majority of investment from abroad. It is UNCITRAL’s goal to provide modern states. Common foundation of the legal system al- the internationally accepted standards that can modern- lows us lawyers better understand each other at all times. ize and harmonize these laws. Unfortunately, even as the Mr Orlando, the floor is yours. importance of commercial law to sustainable development and the rule of law have become more visible, it is equally Andrea Orlando, Minister of Justice of Italy: First apparent that the capacity at the local level to implement I would like to thank the prime minister of the Russian commercial law reform can sometimes be limited. Com- Federation who has gathered us here in this outstanding mercial law is constantly evolving and its reformation city that today is celebrating its anniversary. Thank you demands expertise at the national level in both lawmakers very much for gathering us here at this forum that lately and advisers. In UNCITRAL’s experience, it is often difficult has become one of the most important tools for a dialogue to identify government officials with commercial law exper- and exchange of opinions between the representatives of tise. In general, because of other priorities, local needs in different legal traditions and systems. I would also like to this area are often not addressed. We are discussing here, cordially welcome Minister of Justice, Mr Konovalov, and all of course, mainly the problems encountered in developing other ministers, speakers and participants of this forum. countries. Beyond that, both domestic and international I believe that such fora that allow us to share our financial resources for law reform are frequently directed to views are in fact very important venues for all of us to work other areas of law. out a common language that will make it possible to cap- Finally, in some states, modern commercial law ture, analyse and understand the global changes that are exists, but because of the lack of capacity in the judiciary currently underway in the world. and the legal community, they are poorly applied or even Usually when we are talking about globalization, we overlooked. While the general trend is towards the recogni- focus in the first place on the phenomenon that (especially tion of the importance of modern trade law standards, the in the last 30 years) have led to dramatic transformations in lack of domestic capacity to engage in meaningful commer- the world of economy and finance. We are talking a lot about cial law reform is absolutely one of the main challenges the positive and negative impact of such processes in terms UNCITRAL faces going forward. In fact, it is the underlying of the current economic situation, in terms of their impact challenge related to all three of the transitions of changes on the well-being of various countries, in terms of the op- that I have discussed today. States now see the need to portunities they provide and risks related to them. modernize trade laws to maximize the benefits of regional At the same time, we tend to think far less about cooperation activities and to reform commercial law in or- the fact that it is the law that made it possible for these der to foster sustainable development. This is the ambition processes to grow up to the scale that previously would in an era of change. To succeed in this mission, however, have been unimaginable. I am not referring to the tradi- they need technical expertise and capacity to engage the tional law developed by the state, or classical public law. admittedly technical pursuit of trade law reform. UNCITRAL I am referring to the new global law that is a consequence in particular with its regional presence can provide some of an impact of multiple decision-making and regulation assistance, but states will need to fortify their awareness of centres, within the framework of which way too often these issues with resources and focus, if we are to maxi- individual countries turn out to be too passive and they can mize the vast potential of commercial law to sustainable only consider the changes in their national legislation. I am development and the rule of law. referring to the new global regulatory processes that today Thank you for your attention. are developing independently from the states. Globalization and global financial crisis posed a whole number of signif- Veniamin Yakovlev: Thank you Mr Sorieul. Among icant challenges before us. The focus is currently on the the speakers on this plenary session, we have the minister regulatory crisis as one of the causes of the financial crisis of justice of the Italian Republic. The relationship between and crisis of institutions that turned out to be incapable of
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managing the globalization process; the crisis of democra- of this issue was on the sovereign authority that could cy following a certain disregard of democracy, which we see grand certain limited rights to the people. And the process stemming from regulatory centres. of constitutional development was based on fundamen- The old concepts of the state, government and pol- tal norms. A part of this positive law was excluded from icy are superimposed by new concept, the so-called global the domain of sovereign authority, and authority itself government, so new decision-making centres appear, and was under restrictions imposed by the law. This was the the level of the development of contractual law in eco- development of the rule of law. It served as a guarantee for nomics and finance lead to emergence of self-regulating individual’s protection from the authority, based on the need systems. Institutions and financial agencies and indus- to use the tools with which the government could reinstate try-specific associations ranging from banks to insurers its authority. At the same time, there had to be a tool that and internet companies, supervisory bodies, international would deny the authorities some part of their powers and courts, international arbitration, expert communities, that would serve as a guarantee of citizens’ protection from global trade, human rights, labour-related issues, security, arbitrariness. environmental protection, finance — all of this imposes its During the rise of the modern state in the 15th-16th will to specific states and individual citizens. centuries, we witnessed the aggregation and concentra- Against this backdrop, I believe it is very telling tion of authority. If we take Europe as an example, before what happened during the Italian presidency in the Eu- the modern times, there were about a thousand of centres ropean Union. Throughout the Italian session, one of the of authority, while in the early 20th century, there were major issues, also mentioned here by the Russian prime about 30 of them, one for each state on the continent. In minister, was the issue of personal data protection. In the late 20th-early 21st century, the process reversed: the parallel with decision-making involving public institutions classic structure of authority as a state, of which there (completely legitimate and democratically elected), another were around 50 in 1945, now grew to almost 200, and along process was going on. There was a Google global campaign with the states, new actors appear, such as international underway to establish its own private system of law and its organizations, transnational companies that through their enforcement. There is a reason why I am referring to it. The action call into question the role of the states themselves. economy today has stepped beyond the state borders and In Europe it caused the undermining of the two pillars that therefore the law was developing in the same direction and ensured the legitimacy of states’ development — welfare in many ways it anticipated the changes in economy. That is state and law-governed state. Both of them came under exactly why it is important to see the link between law and pressure. To what extent do the states remain the key economy. This was the reason behind the reforms in our players, the protagonists of the present-day global legal country designed to carry out a number of legal measures, system? How do the industry-specific regulatory systems primarily for the civil law, in order to ensure timely admin- function today on the global level? In national legislation, istration of justice for all economic agents. there are certain common rules that are then subdivided Law has to be more sensitive in capturing all these into industry-specific groups, but at the same time, the changes. The power that traditionally has limited itself to system’s coherence and consistence is ensured. Human national borders now crossed these borders, and often this activity is already effectively regulated by global norms and process is uncoordinated, yet we experience its effect on standards, but these norms vary greatly. It may be the case the entire areas of our life. Today the law on national level is of framework norms and principles, or the criteria can be adapting to international norms. Often the matter arises of imposed directly. the so-called sanctions with a certain reputational nature to Certain global organizations occasionally act as them. All this makes us answer numerous questions. What arbitrators. Sometimes this is the matter of the tools for is the foundation of this authority? How legitimate is it? judicial dispute resolution. In other cases, there are no Who controls these processes? What is the role of the law such tools, and everything is being done through nego- in these transformations? As St Augustine wrote, “Without tiations or at the level of national jurisdiction. But if we justice, what else is the state but a great band of robbers?” do not have a common unifying set of rules, how will we Let us consider these words and ask ourselves a question: be able to live? How will this process develop further? What will become of the world, if these numerous sources In recent years, we have seen the emergence of centres of authority do not obey justice, law and legislative acts? of authority that lack the legitimacy and cause tension In the old world, this legal question has always in the life of states and hinder public sovereignty and been related to the idea of limitation of authority. The focus public control over the actions of the government. Very
20 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 often now, many people believe that problems cannot be be the danger of marginalization of European states caused resolved within the framework of national legislation, and by these global processes, and it would also mean harm for their aspirations cannot be met. Also widespread is the the entire Europe. However, Europe should be a guarantee concept according to which global legislation does not to its partners; only thus can we face numerous challenges allow for further development and we need to somehow and threats of today. close within our smaller motherlands. Indeed, national Some of these threats require maximum coopera- legislation sometimes would prevent us from having a tion between states and a common strategy in place. Suf- proper look at global phenomena, but there is another fice it to remember the danger of terrorism, which poses issue, a very timely issue, considering that many coun- a threat to the values of our society, rights and freedoms tries now experience centrifugal processes, and nation- of our citizens. We must combat terrorism at the global alist movements are on the rise. The European Union level. Transnational nature of this phenomenon requires was an attempt to create a global management tool, to exchange of opinions and information, development of co- create a single political, economic and legal space that operation with law enforcement agencies, judiciary bodies, would be legitimate but at the same time it would be able police authorities and most importantly — when waging to protect its citizens from the negative consequences of this war, we must respect the principles of freedom and this process, especially from the tensions that exist in the human rights. matters of relation of economy and democracy. Terrorism is not the only threat to our future. Italy’s The future goal was to integrate all member states experience shows that there are other equally grave dan- within a single European space. Such ideas, perhaps slight- gers both to freedom and economy. They are known today ly utopian, were shared by the states after two catastrophic in the form of organized crime and the Mafia. The recogni- world wars. We know about the priceless contribution of tion of the ever-growing ties between international criminal the Soviet people to the victory, but coming back to the organizations has forced international institutions such as subject matter of our discussion, I would like to say that the EU and the UN to launch a process (albeit slow for the in the very beginning of the European integration process, time being) of enhancing cooperation in combating organ- law has played a fundamental role. First, it was a purely ized crime. I think we need to adopt new decisions because instrumental role but in parallel, we also saw a process the Mafia today is one of the most serious dangers to safety that provided law with the function of autonomy and thanks and freedom of our citizens. to that, European integration became primarily law-based. In conclusion, I would like to go back to the topic of In the mid-20th century, the European Court came up with our today’s discussion. Creation of a multi-tier system in a whole code of rules and principles that became the basis the framework of which traditional role of the state would for European legislation. The fundamental rights were ex- superimpose the wide network of decision-making and reg- tended within the Council of Europe with the adoption of the ulatory centres established by state and private entities — Human Rights Convention and establishment of European this issue remains extremely important. institutions such as European Coal and Steel Community, This second-tier authority affects almost daily the Euratom (European Atomic Energy Community), EU (Euro- lives of the states and citizens, but it is experiencing some pean Union). And finally, the Maastricht Treaty was adopted. serious legitimacy issues, and thinking about the mission Thanks to the Treaty of Nice, these parallel paths merged in of the law in an era of change means also creating a certain one point. global context for a new global law. And this means, as far Schuman said that united Europe cannot be created as Italy is concerned, bringing national legislation (where overnight and even together we cannot do it. This is the necessary) in line with the dynamically changing global consequence of individual processes, which would be the realities, at the same time preserving the honourable tradi- expression of individual solidarity. The identity of Europe tions of Italian jurisprudence. is that it created the most advanced political space in the I believe that the Russian Federation can play a area of protection and promotion of fundamental human very important role in this. The Council of Europe is an rights. Some people still want European countries to go important international body to promote the processes we their separate ways, but these sentiments stem from the are discussing now. I think that this ambitious plan must past failures, and one of such failures was an attempt to become our goal. We need to establish such a framework create a common political space based not just on econom- so that the globalization processes could fully realize their ic and general financial interests, but also human-centric positive potential without compromising our democratic democracy. This is a way with many obstacles. There will gains. Thank you.
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Veniamin Yakovlev: Thank you Mr Orlando. of the instrument to the needs of the sector or industry One of the guests of honour here is Alberto Mazzo- concerned and the legal and political requirements of the ni, President of the International Institute for the Unifica- project. UNIDROIT typically holds extensive consultations tion of Private Law, which was established in 1926 as an with scholars and practitioners from countries with differ- auxiliary institution of the League of Nations. But today ent legal systems. And the actual work that leads to the UNIDROIT is an independent international non-govern- adoption of an international standard involves experts and mental organization, which plays a leading role globally in government representatives from a large number of coun- promoting modernization and unification of the private law tries, thus ensuring that the final product may be accept- in different countries. able to the majority of countries in the five continents. Mr Mazzoni, please, the floor is yours. It is from the standpoint of this experience that I would like to share with you a few thoughts on the mis- Alberto Mazzoni, president of International Insti- sion of law in the era of change. The years that followed tute for the Unification of Private Law: Honourable prime the end of the Cold War, some 30 years ago, unleashed a minister of the Russian Federation, honourable ministers chain of profound transformations in the world that can of justice of the Republic of Austria and Italy, distinguished still be felt today. The enthusiasm about what was then speakers and guests, ladies and gentlemen! It is a great hoped to be the beginning of a lasting era of peace, pros- honour to participate in this high-level panel under the perity and democracy led some to go as far as to declare highest auspices of the Prime Minister of the Russian that our society had reached the end of its political evo- Federation. UNIDROIT is proud to count this great country lution. The more sober historians who survived the many among its most active and supportive member states. human and economic catastrophes that had marked our Russian legal experts have contributed to our work 30 years in paradise are bound to acknowledge, with in many areas. And your continued participation in our relief or resignation, that history has not ended, that we work has not only ensured a desirable level of diversity in have not yet witnessed a radical change in the nature the legal, social and cultural influences that our work has of man, and that states, boundaries and governments, benefited from, but has also often been crucial to guaran- despite their notorious imperfections, still exist. Yet not tee the high quality of our products. I am therefore deeply all remains the same. If state sovereignty as such has grateful to the organizers for giving me the honour to not disappeared and is not likely to do so in the near participate in this panel today. future, there is growing consensus about the collective I address you as president of the Governing Council responsibility of all states to foster the development of of the International Institute for the Unification of Private international normative standards and to implement Law (UNIDROIT). UNIDROIT is an independent intergovern- them by addition or compliance. However, the need to mental organization with its seat in Rome. It was created develop international normative standards co-exists with in 1926, as the moderator mentioned, and mandated to a greater awareness of the complexities of the issues to prepare drafts of laws and conventions with a purpose of be tackled and the weaknesses of any attempt to build establishing internationally uniform laws and facilitating an effective rules-based system without at the same international relations in the field of private law. time seeking a parallel improvement of the social and Our 63 member states are drawn from the five con- economic conditions in all nations and in particular in the tinents and represent a variety of different legal, economic least developed nations. and political systems, as well as different cultural back- The lesson that we have learned is that to this end grounds. The independent status of UNIDROIT amongst the the law has a crucial role to play in two strictly linked per- intergovernmental organizations has enabled it to pursue spectives. On the one hand, international trade, finance and working methods that have made it a particularly suitable investments are certainly needed to encourage progress forum for tackling more technical and, correspondingly, towards an enhanced global prosperity and a more equi- less political issues. table distribution of the latter. But the availability of none In its nearly 90-year history, UNIDROIT has worked of these important tools may be taken for granted; they all on over 70 projects, some of which had later been adopted require an adequate level of legal certainty and predictabili- as international conventions by other organizations and ty. New technologies, integrated logistics, evolving com- others that have been finalized by UNIDROIT itself. mercial practices, fast-growing financial markets, complex UNIDROIT has used a flexible approach in its supply chains are but a few examples of situations calling working methods, adapting both the process and the form for a modern, business-friendly legal framework. Where
22 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 transactions by their very nature tend to be transnational, UNIDROIT, it has been acting in the field of international the legal framework, too, should consist of uniform, widely monetization of private law long before the UN was estab- accepted solutions. lished in 1945. On the Hague Conference I will only say in On the other hand, experiences, as well as ethi- passing that unlike UNCITRAL and UNIDROIT, whose mis- cal and political judgements, converge in telling us that sion is to harmonize at the level of substantive private law, improvement of business context is not per se an adequate the mission of the Hague Conference is rather to harmonize or satisfactory result. Significant progress must also be private international law. In other words, to harmonize achieved in the fight, through the law, against poverty, poor that special part of private law that deals with the rules of life quality, environmental depletion, illegal migration, conflict, to be used for the purpose of identifying, which organized crime and other sources of social instability and substantive law must be applied in international cases in lack of substantive justice. which private parties are involved. Thus, two are the goals that through the law the It is unquestionable that the programmatic linkage international community must pursue in parallel. On the of UNCITRAL to the broader goals set up by the UN General one hand, facilitating trade and economic interconnections, Assembly, as well as its nearly universal membership, and on the other hand, promoting sustainable development, place UNCITRAL in a unique position for being the lead having regard, in particular, for a fair balance between international agency in the field of international harmoniza- economic efficiency and social justice. tion of private law. Both goals are essential to reconstruction and However, all three sister agencies are complimen- maintenance of peace. It is self-evident that peace is tary and they are all perfectly aware of the need to avoid du- threatened by poverty, social injustice and unbearable plications in areas in which one of them is already working inequalities in economic development. However, peace is or has already accumulated valuable experience. also threatened or hindered, if its economic foundations are By loyally sharing their tasks through communica- disregarded and if the role of trade and economic cooper- tion and cooperation, the Hague Conference and UNIDROIT ation in preventing international conflicts is forgotten or have also done and continue to do very important harmo- misunderstood. nizing work in their respected fields. And I think it is fair to It is well known that free trade of goods and servic- say that they, too, like UNCITRAL, have generally pursued es is a powerful factor in building a favourable environment the objective of legal harmonization, always bearing in for peace. It is perhaps less known, but equally true, that mind the importance of joining business promotion and free access to capital also plays a similar and very relevant social inclusion. role. In other words, not only cross-border free circulation Consistently with this long-standing philosophy, of goods, but also capital interdependence contributes allow me now to spend a few more words specifically on to peace. In pursuing these peace-fostering goals, there UNIDROIT’s vision of its future role in contributing to the is not only a major role to be played by the cooperation evolution of private law in the international perspective. between and amongst states and the rules of public inter- Being aware of the constrains of time I will confine national law. In parallel, a very significant and sometimes myself to conveying three messages, which, I hope, will fundamental role may (and it is respectfully submitted, offer a clear and easy-to-remember summary, description must) also be played by private law. In particular, by such of UNIDROIT’s fundamental choices. evolutions of private law that may be inspired or guided by First, UNIDROIT intends to pursue not only projects international legal standards developed by both private and promoting instruments of hard law, but also, and in certain intergovernmental organizations with a global reach. areas even preferably, projects promoting instruments of UNIDROIT is one of the three intergovernmental soft law. organizations acting at a global level, and whose mission is Second, UNIDROIT intends to pursue not only to contribute to the global strengthening of the rule of law projects promoting uniformity or harmonization in inter- through modernization of private law. The other organiza- national trade or financial transactions and markets, but tions are UNCITRAL (that is the United Nations Commission also projects promoting international harmonization in the on International Trade Law) and the Hague Conference on private law regulation of agriculture. Private International Law. UNCITRAL is the largest of the Third, UNIDROIT intends to pursue not only harmo- three and I will not say anything more because Mr Sorieul, nization projects reflecting the common core of the law as its Secretary-General, has already spoken on it. And the is in most legal systems, but, preferably, projects promoting Hague Conference is the eldest of the three sisters and, like better rules. That is, projects designed to achieve a step
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forward, or an upgrade, with respect to the existing status moting at the same time international economic cooper- of the law. It is a philosophy of improving as opposed to a ation and sustainable development together with social philosophy of merely mediating or averaging. justice. In agriculture, legal localism cannot be disregarded, Why soft law projects and not only hard law pro- nor wiped out. But unless legal localism is somewhat coun- jects? Because the essential social function of the law is to ter-balanced by a minimal and non-binding uniform legal induce or promote factual observance of desirable behav- framework elaborated under the auspices of independent iours. Which function may well be fulfilled satisfactorily international organisations, it will be impossible to channel even if it is not always possible or even desirable to put international investments on equitable terms towards agri- in place a stringent system of effective sanctions against culture in countries that badly need such investments. non-observance. Conclusively on this point, UNIDROIT believes that In an international context dominated by the pres- even if agriculture has long been considered an inappro- ence of states that are still very jealous of their sovereignty, priate field for proposing and developing projects of legal soft law instruments may not only be the sole politically uniformity or harmonization, the time has now come to acceptable solution, but also the most effective in obtaining turn the page and to open a new chapter of its institutional the result of inducing widespread observance. mission by including agriculture in a prominent position This is all the more so in the contemporary world, among the areas targeted as deserving efforts of private where globalization multiplies interconnections among law harmonization. states with sometimes very distant cultures and interests Third and the last point. Why not only projects re- and with strong differentials in development. In other flecting a common core of the law as is in most countries, words, the more active the participation of strongly dif- but also more daring projects seeking to promote better ferentiated members of the international community and solutions through innovative rules? The reason is less the greater the drive towards a poly-centric distribution obvious than it might seem at first sight and deserves to be of political and economic power, the more the sensible spelled out. New institutional economics is increasingly at- way to achieve uniformity or harmonization of private tentive to the impact of the legal and regulatory framework law in internationally relevant sectors is to recommend on economic activity. Modern economic theory associates observance and implementation of universally accepted economic development with the quality of social institu- non-binding principles articulated in a text or a soft law. tions. Outdated laws and inadequate mechanisms for the This is what UNIDROIT is sought to achieve by launch- enforcement of legal rights are now recognized as gen- ing, broadening and refining the UNIDROIT principles of erating economic inefficiency and hindering sustainable international commercial contracts, an instrument that economic development. This is a particularly serious prob- is particularly well known in Russia, highly appreciated lem in many developing countries, but it is also a non-neg- and frequently applied, notwithstanding its non-binding ligible problem in a number of developed countries with nature. This is also what UNIDROIT intends to do in the mature economies. Removing differentials by promoting newly entered field of projects of private law harmoniza- the adoption of uniform rules reflecting a common core of tion in agriculture. existing national laws may not be sufficient or satisfacto- Promoting good contractual practices and merely ry, in that it may simply amount to a missed opportunity. highlighting the areas where local law should intervene by Particularly whenever the adoption of a strong innovative imposing mandatory rules is probably the most realistic legal solution may per se produce tangible and easily approach and the most beneficial solution for all stake- measurable economic benefits. It would suffice to mention holders. As opposed to dreaming the impossible dream, in this respect the extraordinary success that thanks to the or a nightmare, of superimposing an international biding pivotal role of some fresh ideas and an innovative structure instrument on the national regulations of agriculture, which has been achieved in less than ten years from its entering are intrinsically affected by localism for political reasons to force by the UNIDROIT Convention on Cape Town, On In- and out of respect for deep-rooted rural traditions. ternational Interest in Mobile Equipment together with its Turning now to my second message: Why projects Aircraft Protocol. Results tell of over 65 contracting states, of harmonization not only in the areas of international trade of which 57 are adhering to the Aircraft Protocol, and the and/or finance, but also in the field of the legal aspects of realistic forecast of savings directly resulting from the risk agriculture? I believe that at this point the answer may be reduction brought about by the mere adoption of the Con- easily extracted from the observations that I have already vention and the Protocol reaching the staggering amount offered: on the need to strike a fair balance between pro- of 160 billion dollars during the period 2009–2013. Based
24 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 on this awareness, an intergovernmental agency such as colleague Alexander Konovalov (Minister of Justice of the UNIDROIT has come to the firm conclusion that its institu- Russian Federation) whom I recently met in Vienna (we had tional mission must now increasingly also encompass the a very fruitful and productive work session) and it is a great duty of proposing new ideas and new solutions, as opposed honour and pleasure for me to express some thoughts on to simply remaining faithful to the old model of uniform- the issues of this conference and its topic — Mission of Law ity-based and broadly accepted common core rules. This in an Era or Change. should not be seen by the states or by public opinion as an Let me start by mentioning that the general unauthorized step by UNIDROIT contravening its mission of political situation does not really give us reasons for a promoter of international legal uniformity. optimism at all. The crisis in the Middle East, as the root In the first place UNIDROIT, as the other sister of an incredibly evil terrorist movement, which has trig- agencies UNCITRAL and the Hague Conference, is a public gered a wave of refugees and made the Mediterranean institution whose lack of financial or political involvement Sea a grave for countless desperate human beings. And, together with its balanced composition constitutes per se of course, the problems in Europe’s relations with the a significant guarantee of independence, neutrality and Russian Federation, which reminds us of what happened non-subservience to any vested special interest. Moreo- on our continent in recent past and which was deemed to ver, UNIDROIT is of course fully aware and mindful of the have been overcome. political boundaries it must respect. Making ultimate policy The memories, which have characterized the month choices is not within its competence. However, suggesting of May, should show us the right way forward again. The them or panoply of them as recommended solutions to its end of the war 70 years ago should remind us of the truly member states and to international community in general tremendous efforts of the Soviet Republic, which liber- is within its competence, although this may have become ated Austria from a brutal and criminal regime by paying more evident in recent years than it was in the past. a high price — almost 40.000 soldiers of the Soviet Army On the whole, good rules, whether innovative or were killed during the fights in and around Vienna. And on reflecting the wisdom of tested practices, are always capa- the 15th of May this year, we in Austria remembered the ble of inducing progress based on their own intrinsic good conclusion of the State Treaty in 1955. It was a sign of hope quality. This is the final argument that justifies UNIDROIT’s in times of Cold War, which re-established Austria as a free present vision of its role. A balanced but not conservative and democratic state. And this treaty has been the founda- approach vis-à-vis the challenges posed by the open issue tion for the present freedom and economic development of that we are here convened to discuss, namely, the issue of our country. which role should we assign to private law in the context of So let me use this opportunity to express my very the international debate on the promotion of the rule of law. personal gratitude to the representatives of the Russian Thank you for your attention. people who enabled this treaty and secured a peaceful and beneficial future for Austria. It is of special importance for Veniamin Yakovlev: One view on the mission of me personally, since I am a son of a man who was active in law in an era of change will present Wolfgang Brandstet- the Resistance movement against the Nazi regime. ter, Federal Minister of Justice of the Republic of Austria. This Austrian state treaty is based on the fact that Austria is the state that has a very rich legal tradition. Its Austria was obliged to respect human rights and to guar- legislation has become a model for many countries as antee the rights of the Slovenian and Croatian minorities, they developed their own legal systems. Today Austrian and that is what we did. After all, the Republic of Austria lawyers are actively participating in the development of not only committed herself to respect such human rights international legal system. We know that Vienna is the seat but this commitment has also become part of Austrian of a number of authoritative international organizations, constitutional law by incorporating the entire human including those that are working towards unification and rights convention of the Council of Europe in our Consti- harmonization of law. tution. This happened in 1964, not chance only nine years Mr Minister, please, the floor is yours. after we got back our freedom and independence again. And this commitment, our European commitment, to hon- Wolfgang Brandstetter, Federal Minister of Justice our these rights, and thus also protect individual rights of the Republic of Austria: Mr Prime Minister, my dear and freedoms of all citizens should point and pave the colleagues, ladies and gentlemen! I am very pleased about way to the future, as a key to resolving present problems this opportunity I got through the kind invitation of my in this field.
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And for this reason, Austria attaches such great im- tolerated. Such manifestations constitute a perversion of portance to the respect of human rights and fundamental the right of freedom of opinion, also according to the case freedoms, but not with a raised forefinger, rather with the law of the European Court of Human Rights, have to be humility of failure. We have to try again and again to im- fought by criminal law, too. prove our systems. And we in Austria also face major prob- Ladies and gentlemen, let me come back to the era lems, such as in our penal system, which sometimes does of change and the role the law plays in shaping international not meet the standards of the European convention, so we relations. Considering the relations between the Russian have to work on it. It is not so easy to meet the standards Federation and Europe (or rather the European Union since of our convention in daily work, but it is necessary. We have Russia is a part of Europe), I would like to quote your famous to try it again and again, even if it is hard and needs strong Russian author Dostoyevsky. By the way, thanks to my col- effort, but as a well-known Russian proverb says, “bez league for this guided tour this morning, which gave me the muki net nauki”, so we have to go on. The era of change is chance to follow the tracks and traces of this great author. characterized through new facts and developments, which Dostoyevsky wrote so many strong sentences and just one are really bad, to say it very clearly. Unfortunately, we have quote, one of the strongest sentences. It is the sentence, to encourage all participating countries, in particular those “The feelings of those we love most are most easily hurt”. with internal conflicts, to take effective measures to protect Ladies and gentlemen! The common European minorities and to actively combat the increasing incidences house we talked about in the era of Gorbachev and later on, of hate crime. Hate crime is a new phenomenon. was constructed bigger than it is now. It was based on the Everyone who sows hatred and intolerance against European Convention of Human Rights as a strong founda- minorities or religious groups has left the framework of the tion and its roof should cover Russia and its citizens, too, no law and therefore becomes an outlaw, but nevertheless he question of it. must be prosecuted by applying criminal law proportion- By the way, if there are any problems with the ately and effectively. Yet we all know the deficiencies in our house rules, they should be clarified inside and not outside own national systems. And by looking upon current event in the house. the Middle East, we perceive a atrocities and brutalities of Just now, there is a lack of mutual respect, and for unimaginable proportions. Apart from the flow of refugees, this reason, it would be worthwhile for my point of view to including women, children and men narrowly escaping re-evaluate the potential of the Council of Europe. First of genocide, we must also recognize the dark side of mod- all, Russia is a full member of this forum and has accepted ern communication technology — as already mentioned, its specific obligations in the matters of fundamental hu- namely, the Internet and the so-called social media, which man rights. Secondly, all other members can discuss [any terrorists can misuse for propaganda purposes. matters] with Russia in the Council of Europe on an equal But such misuse not only generates disgust, but basis. This willingness to hold the dialogue among equal also brings about poisoned fruits by misleading young members should be kept and expanded further, and we, people full idealism, solidarity and initiatives to actively Austria, acknowledge with appreciation that judgements participate in combat operations or at least to glorify and of the European Court of Human Rights have an important justify alleged heroic deeds in hate postings. effect on legislation in your jurisdiction. From my point of view, this constitutes a repulsive In the same way, in Austria we are really obliged betrayal and misuse of parts of our younger generation, so in many areas to amend acts of legislation; modifications we should not be indifferent, but do what we can against of the criminal code, or the Code of Criminal Procedure in this huge new problem together. Russia, have also resulted in reducing the total number I know that quick and simple solutions are not in of pre-trial detainees and improving detention conditions, sight. Criminal law is a blunt weapon when it comes to according to the Convention. Unrestricted appreciation is avoiding and combating misguiding convictions, but in our due for that. democratic society, we must indeed also show strength It is also quite significant that the Russian Consti- in defending our common values and punish any violence tutional Court and also other courts of that country in their motivated by racism or intolerance. own judgements have made references to the case law of In the light of such developments of hate crime, the European Convention of Human Rights. We have to en- I have announced a tightening and sharpening of our crim- force this legal dialogue without any restrictions, barriers inal law referring to the offence of hate speech because or wars, therefore I would consider it an important step to manifestations of hate speech and hate crimes must not be cancel the suspension of voting rights for Russian repre-
26 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 sentatives in the Parliamentary Assembly of the Council of Mr Prime Minister already pointed out. But we must not Europe as soon as possible. Evidence that such a dialogue forget reason number two. If you can guarantee each and can be very fruitful is provided by the introduction of the every citizen that his fundamental rights are efficiently proceedings in Russia in 2012-2013 along the lines of Eu- protected by law, especially referring to ethnic minorities, ropean legal practices. This introduction was accompanied then this leads you to the point where the national or by the Council of Europe in the form of a training project for geographical borders are becoming less important. We judges and legal administrative staff with the participation Austrians have a good best practice example thanks to of the experts from the Netherlands and of course, from Italy and the United Nations, and this example could work Austria. The conclusion of Austria’s experiences is evident: in other regions of Europe, too. a willingness to hold a dialogue and keep it does not mean It is the status of South Tyrol, where our South Ty- appeasement if such dialogue is held on the basis of firm roleans in Italy can make use of their language and their legal convictions. With this in mind, I wish that the fruit- guaranteed rights without any problems. And last year, ful exchange of ideas on the rule of law and commercial there were plans to change the structure of the current relations should take place in this place on this forum, as I system of South Tyrol. Our Tyroleans would have suffered am sure it will. from this plan because they would have lost an important Ladies and gentlemen, at the end of my speech let regional court. When this problem was raised, it did not me add some short personal remarks. Last Saturday I was take long until my colleague Andrea Orlando promised attending the European Song Contest in Vienna together with me that these plans would not become reality. Thanks to more than 10.000 enthusiastic people in Vienna’s big city hall Andrea, who is with us today, thanks to Italy (and by the and I was happy about the huge success Russia had. The Rus- way, congratulations for Italy, too: they ranked third in the sian singer, Polina Gagarina, had a great performance indeed, Song Contest only be beaten by Sweden and Russia, of and she was second at last among 40 countries joining the course). European Song Contest. A great success, and she deserved it What we, Italy and Austria, have reached together for the wonderful song “A Million Voices”. So, Russia was on in South Tyrol, this is, ladies and gentlemen, Europe at its the top of the countries that are doing their best to succeed best and I would strongly like Russia to be a part or at least in this prestigious European contest, which was watched by a strong partner of it. almost 300 million people on TV. Since the next sheet of my Ladies and gentlemen, let me come to the end. The papers is on the bottom, I have to fetch it. This, ladies and last century could be called the century of wars. So let us gentlemen, was a huge success for Russia and at the same make this century the century of bridges. It is not only a time, a great success for Europe. It was a great success for wish, it is not only a figure of speech, no; it is nothing less Europe to have Russia as a participant. And this contest in than our responsibility. So let us face it. Spasibo. Vienna (and this is quite a symbol) would have been much less attractive without Russia. Veniamin Yakovlev: Thank you very much for your This event was entitled, Building Bridges from speech, Mr Brandstetter. the Beginning, and that was what we really did. Well, we We have just heard from the representatives of the Austrians are pre-destined for building bridges because countries of the continental law and on this note, I would of our geography and our history. As mentioned, we got like to introduce the guest of honour of our forum, one of our freedom and independence again because of the the outstanding representatives of the academic community bridges that had been built in 1955 between Washington, of the common law states, Professor Emeritus of the Oxford London, Paris and Moscow. So we got back our freedom University Mr John Finnis. Mr Finnis started teaching and national identity by the international community law back in 1966. Since then, the range of his academic at that time, and that is why we Austrians want to give interests has included political and legal theory, legal ethics something back to it. For this reason, we are eagerly and constitutional law. In his works, Professor Finnis also participating in all activities, bilateral or on an EU basis writes about ethical substantiation of the norms of positive that help other countries to strengthen and improve their law, in particular the correlation of human rights and the legal system and their rule of law standards. We did this common good. He also develops the ideas formulated by especially in the Eastern Europe and the Balkan area, and Jean-Jacques Rousseau, John Locke and other thinkers of activities like that are so important for two reasons. First, the Enlightenment era regarding the natural law theory and a strong and reliable legal system is a necessary basis its relation to political and legal setting of the 21st century. for investments, prosperity and flourishing economy, as Mr Finnis, the floor is yours.
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John Finnis, professor of law and legal philosophy is applicable to the particular situations of our individual and emeritus, University of Oxford: Chairman, prime minister, associative life. So there is honesty and dishonesty, as well councillors and other ministers, ladies and gentlemen! It is competence and incompetence, in interpretation and appli- a privilege to address so many of you involved, as you most- cation. I have tried to help my students to understand and ly are, in the practice and application of law, and a privilege appreciate how far the possibility of justice according to law, to be able to do so on a platform with distinguished persons or of doing injustice under form of law, depends on their intimately involved in the deliberations and decisions, which personal honesty as legal practitioners, for as practition- result in making of new laws and reformation of old laws. ers, they will have the opportunity of losing, concealing or Though I have had some small involvement in both secretly destroying the documents on which their opponents these important responsibilities, my principle vocation has in litigation and the court or arbitral tribunal may or will been the teaching, investigation and critical discussion of the rely in pursuing and delivering the judgement, in which the reasons why every political community needs laws, and what law, correctly interpreted, is applied to the historical facts, kinds of laws it needs to regulate the authoritative decisions established as real facts by true evidence distinguished from (legislative, judicial, administrative), without which its people false claims. An absolutely primary role for law, the reason could not flourish in the diverse ways in which they are mor- for having laws, is to enable disputes to be ended and ally entitled to be helped to flourish, to do well in undertaking, justice between persons re-established on the basis not of coordinating and carrying out the moral responsibilities and one party’s superior force or cunning or ability to purchase opportunities of private life: in their families, their enterpris- judgement, but instead on the basis of valid laws, enforced es, their civil associations of every kind. at the time of the dispute’s causa and applied accurately to So it is a special privilege to be invited to share with the real, true, not feigned or imagined, facts. these distinguished officials and with you all a few academ- So, besides the dramatic and searing appeal to ic reflections on this great practical question of the role of truth that on occasion might be directed against legal forms law in an era of global change. and power, by reminders that, as was famously said, “A That role will be an instance, or at most a de- simple act of an ordinary courageous man is not to support velopment, of the role the law has always performed, lies! Let the lie come into the world, let it even reign over it, whenever its value as a means to good ends has been but not through me. One word of truth outweighs the whole sufficiently acknowledged and respected among those world”. Besides such appeals, there is more ordinary and to whom it is addressed. And as I just remarked, those prosaic day-by-day fidelity to truth demanded of all law’s to whom our country’s law is addressed include us all, practitioners, judges and arbitrators. Without that fidelity, whether as citizens or as, for a time, officials of the gov- law can scarcely fulfil its role in this era or in any era. Now, ernment of our country as we know, one and the same proposition of any kind can So, we can ask: In what ways does law serve as be expressed in many different statements or sentenc- a means to good ends, ends that cannot be achieved well es, for example, statements or sentences in Russian or without the help of law? As we all know, every law is a more English, or German, or Italian — the same proposition. or less general proposition, a unit of meaning expressed Thus we can understand and share or discuss each other’s and conveyed by the sentences, statements, in the pub- intentions and objections and ends and chosen means. lished text, which declares that law to its subjects, includ- Through these propositions about what is to be done, or not ing those whose office will be to apply it administratively to be done, or about what is power or faculty or authority to or judicially. The work of the lawyer, whether as a student, do and create and affect — through these, a commonality, teacher, practitioner or a judge begins with the effort to find or community, of understandings and plans can come into (by our craft’s techniques of understanding and interpre- being. And the distinctiveness of law is that these plans link tation), what truly are the propositions of law that truly the past with the present and the future. are the valid laws that are conveyed by those statements The work of, for example, an engineer or soldier is and those texts when they are related to all other relevant to relate the present to the future effectively, but the work of textual statements and result in established propositions of law is to relate our present and near future to the commit- our law as a whole system. ments made in and for our community in the past by acts of This, in its way, is a search for truth — not some constitution-making, legislation, adjudication or award or grand universal truth, but truth nonetheless. Truth about other official decision affecting someone’s legal status or what our lawmakers have committed us to and have taken rights or obligations. The commonality is not simply among responsibility for committing us to comply within so far, as it contemporaries living together or communicating with
28 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 each other in the present; it is a commonality of us now and The branches of law we call private law enable and those who were before us and who established the stat- facilitate a flexible, far-reaching system or network for utes, customs, institutions, contracts, trusts or usufructs. coordinating these diverse common goods; a system that They retain their validity despite their age and because of is truly a coordination, not a directive management on the their lawful origins in the past. By respecting and honour- model of a military formation or sporting team or other ing them, we make it also possible and rational to legislate technical “unitary goal: win or lose” operation or formation. now, or to make contracts or treaties now, in the faith that To confer on some of us the responsibility and au- in that future, in which today’s present will be past, our thority of leadership or even to acknowledge that authority law-making decrees and acts will retain their relevance as when it emerges without lawful conferral is to accept valid and applicable then in the future because validly made a substantial and permanent risk of abuse. Abuse that if now. The reality of change, indeed, global change, does not it occurs is likely to be severe because political authority nullify or undermine these fundamental truths about law, and state law must bear the responsibility of exercising that law links present and future to the past not by magic or physical force against persons and their possessions for superstition but by rational design and reasonable fidelity the sake of preserving justice, and that capacity can always to undertakings and commitments; design and fidelity that de-facto be diverted to unjust and unlawful purposes. can yield rich fruits in stability, predictability, respectful Against such diversion we erect the legal obstacles of legitimate expectations and consequently, in investment, constitutional separation of powers, judicial process, the complex sequential exchange and other sources of en- remedies of public law and so forth, but in the end our se- hanced productivity and thus enhanced human flourishing. curity against the standing possibilities of abuse of law or And among those good fruits is the dignity and rightful of raw governmental power depends upon the willingness liberty of the subjects who know that their compliance with of those in authority to accept that they are members, chil- law will be met reciprocally by courts and other officials of dren, of one community of solidarity, and under providence every kind in the mutuality of expectations and obligations, of one destiny and one shared memory, one patriarch and which ensues that their status as free subjects of the law therefore, to accept the reciprocity of subjection to the is not a form of subjection or enslavement, crude or subtle. same equitable laws themselves, to which their fellow This stability of the rule of law is not immobility; it in no way citizens are subject. excludes lawful amendments of past enactments in order For as far forward we can envisage, I believe that to accommodate changing needs and changing conditions global community of humankind as a whole will not yet be for human flourishing, and to do so without the retroactivity a community of such solidarity, in which these intimations that would defeat the legitimate expectations of the law’s of reciprocity and commonality would be sufficiently strong, subjects, for past, present and future are abstract names for sufficiently reliable and focused for it to be reasonable to flesh-and-blood people, for those of our people who made entrust to some individuals the responsibility, authority and the commitments embodied in laws and lawful institutions, power of law-making and law enforcement. for the benefit of not only themselves and their neighbours, Our responsibility to our fellow members of but also and even equally, of us their successors who the global community of mankind will be better served, should (and do) have same concern for our children and therefore, by fidelity to promises, to treaties and other other successors. The obligation of law is not owed to the international or transnational agreements and by forms of lawmakers as rulers. It is owed (by me, for example) to all cooperation broadly similar to the model of international who are my fellow subjects of the same law or of the same arbitral institutions and processes. Those are and will be system of law, our law. The authority of our lawmakers as genuine moral obligations, subserved by coordination of rulers is above all is a responsibility of serving the common national legal forms and processes, but they are not yet good of our community in which each member is entitled to law in its central form and role, though they reasonably are be considered and respected. That common good is itself to called international law to signify the judicially arbitrarily be understood as in truth an ensemble, a set, a collection enforced obligatoriness of those rules and their adaptability of common goods, that is, of communities — familial, local, or reformability by agreement. Thank you. educational, professional, agricultural, industrial, commer- cial and financial, each with a common good that serves Veniamin Yakovlev: Thank you, Mr Finnis. the flourishing of each of the persons who are its members In the past year, we have seen the events and de- in accordance with their particular needs, their particular velopments in humanitarian, political and economic areas contributions and aptitudes and the protection of the whole. that would have an impact on the stability of global law
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and order. But law has traditionally been one of the most word “pravda”, which means “truth” in the modern Russian efficient, reasonable and morally justified instruments of language. I believe that this understanding of law as the conflict resolution in the rapidly changing world. truth and with that, as both standard and ideal, very much When we discuss today the subject matter of reflects the mission of law in the modern world of change. our plenary session, it is only natural that we refer to the As a legal counsel of the United Nations, I inevi- experience of the lawyers who have been working after tably approach the mission of law from the international World War II, when the United Nations Organization was perspective, in particular from that of the United Nations. established and appeared a new system of international I am often challenged with questions about the role and relations, which was based on the rule of law. mission of the United Nations and of its foundational doc- Today, in the second decade of the 21st century, it is ument, the Charter. Do the institutions and mechanisms safe to say that the mechanisms developed back then have of the United Nations operate to the benefit of all of its not lost their significance and the UN system has remained member states? Does the organization have the capabili- a linchpin of international security. ties and working legal instruments to address the complex In this regard, of special relevance is the presenta- chains of challenges and threats, which are increasingly tion by Miguel de Serpa Soares, Under-Secretary-General abundant? Can international law truly be considered as a for Legal Affairs and United Nations Legal Counsel, whom guarantor of stability in a rapidly changing world and is the we have the honour to welcome here today. Mr de Serpa Charter of the United Nations, which was signed 70 years Soares, please, the floor is yours. ago this month, still up to the task of ensuring peace and security? These are all difficult but relevant questions, Miguel de Serpa Soares, Under-Secretary-General which are rooted in the spreading conflicts in different for Legal Affairs and United Nations Legal Counsel: Your regions of the world and in new or re-imagined challenges, Excellency Prime Minister Medvedev, your Excellency Mr such as pandemic diseases, piracy, terrorism, transnation- Konovalov, distinguished participants of the V St. Peters- al organized crime and mass migration. Certainly, the 70 burg International Legal Forum, ladies and gentlemen. years since the creation of the United Nations have been [in Russian] Dobry den’, spasibo za priglashenie prinyat difficult, and that is for sure. I would have to admit that in uchastie v etom vazhnom yuridicheskom forume (good certain instances it has failed to prevent emerging conflicts afternoon, thank you for the invitation to participate in this or adequately respond to on-going ones. However, there is important international legal forum). a common understanding that without the United Nations I am truly honoured to address this large and and the laws and legal mechanisms that it has put in place diverse gathering of governmental and international affairs the world would have been a much more chaotic and dan- officials, judges, lawyers, legal practitioners from many re- gerous place. gions of the world. I would like to commend the organizers The organization, which was created in the after- for the choice of the topic of this year’s plenary discussion, math of the Second World War, was entrusted by its found- The Mission of Law in an Era of Change. This truly reso- ing fathers with the task, first and foremost, of preventing nates with the current international climate and the con- a future tragedy on the same scale. As we all know, in this stantly changing nature of today’s international relations. mission the United Nations has succeeded. This task, and In the modern world, nobody is immune from the I quote, “to save succeeding generations from the scourge challenges of local and regional conflicts, post-conflict of war” is still at the heart of the raison d’être of the United peacebuilding, economic crisis, infectious diseases, climate Nations. It is reflected in the global attention to the 70th an- change, just to name a few. In the case of such challenges, niversary of the end of the Second World War and the recent the law is the only common ground and framework that is participation of the United Nations Secretary-General in the available to those who must seek to address them. anniversary events of the 9th of May in Moscow. In the words Mr Prime Minister, ladies and gentlemen, in of the Secretary-General, at the ceremony of the planting preparation for this forum I am sure that my of my fellow of the Tree of Peace and Unity to commemorate the end of speakers were looking for inspiration in the enormous the Second World War and the establishment of the United riches of Russian literature and legal doctrine. Perhaps Nations held at the United Nations headquarters in New the oldest known Russian codified legal source dating from York, and I quote, “in establishing the United Nations 70 around the 10-12th centuries, “Russkaya pravda”, would be years ago, the founders planted the seeds of an organization a better place to look. The etymology of the Russian word they hoped would lead the human family out of the horror “pravo” (law) goes back to this source. It grows from the and into a better future”.
30 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 Now, 70 years have passed and the United Nations international structures. He said, and I quote, “everybody has grown into the only truly universal international organ- today with part of his being belongs to one country, with its ization providing its member states with the safe common specific traditions and problems, while with another part he place where every nation can speak and be heard in order has become a citizen of the world, which no longer permits to prevent or resolve conflicts or defuse potentially danger- national isolation. Seen in this light, there could not be any ous situations. conflict between nationalism and internationalism, between It is a unique forum designed to harmonize deci- the nation and the world”. End of quote. sion-making of states and solve the differences by peaceful The mission of law at the international level is to means. Its legal basis — the Charter of the United Nations — help the individual nations to better integrate in the world remains foundational to the international legal system. Its on the basis of the fundamental principle “par in parem im- core principles set out in Article 2, including the equality of perium non habet” — an equal has no power over an equal. sovereign states, the non-use of force or threat of the use of Ladies and gentlemen, this idea that nations and force and the peaceful settlement of international disputes sovereign states do not exist in a vacuum but cooperate on are the framework within which international relations are the basis of law brings me to another dimension of the mis- conducted. This distinct durability owes itself to the fact that sion of law in the current international setting — the rule of the Charter is a living instrument, which has been able to law. For building a safer, more secure and united world, the successfully adapt to emerging challenges and threats. A task of promoting the rule of law at the international and perfect example is peacekeeping, which nowadays forms an national levels is of particular importance. Responsibility essential part of the organization’s work and a lion’s share of for ensuring the rule of law at the national level naturally its budget. For a year from July 2014 to June 2015, the peace- rests, first and foremost, with the respective nation states. keeping budget will be 8.5 billion, a number that, I believe, At the international level, the corresponding efforts speaks for itself in a time of economic difficulties. of the United Nations include encouraging the progres- However, what now represents one of organization’s sive development of international law and its codification, most vital activities is not even mentioned in the Charter as supporting the growing network of international treaties, such. It was introduced later on by the General Assembly establishing and promoting international mechanisms open and the Security Council in an effort to tune the organization to the states for the peaceful resolution of their disputes, to the realities of the changing world. This example further establishing or helping to establish international and hybrid demonstrates that in order to find legal solutions to address criminal courts and tribunals to prosecute those responsi- new challenges and threats, it is important that the inter- ble for international crimes and training and education in national community stands as one. The unity among the international law. members of the Security Council, especially its five perma- The Office of Legal Affairs of the United Nations, nent members, is of the utmost importance in this regard. which I have the privilege to head, is in the lead on many United approach of the members of the family of the nations of these activities. The rule of law features high on the has enabled us to successfully counter piracy off the coast secretary-general’s agenda. In this, he is following the of Somalia, to respond to Ebola pandemic in Africa and to lead that was set by member states at the milestone 2005 bring stability to conflict-torn countries like Sierra Leone and World Summit. In the World Summit outcome document, Liberia. I am fully convinced that the political will, commit- the heads of states and governments affirmed that human ment and unity among member states will make it possible to rights, the rule of law and democracy, and I quote, “are find appropriate legal solutions to other complex problems of interlinked and mutually reinforcing and that they belong to the modern world. This idea of the unity of all players in the the universal and indivisible core values and principles of international arena, big and small, will no doubt be reflected the United Nations”. End of quote. And again they reaf- in the discussion track on supranationalism and sovereignty firmed their, and I quote, “commitment to the purposes in contemporary international relations, which I am planning and principles of the Charter and international law and to to attend in the coming working days of the forum. international order based on the rule of law and interna- When I was preparing for this forum, I came across tional law, which is essential for peaceful coexistence and a very instructive statement by the second secretary-gen- cooperation among states”. End of quote. eral of the United Nations, Dag Hammarskjold, entitled Mr Prime Minister, ladies and gentlemen, the topic The Nation and the World. Back in 1955, he confronted of the mission of law in an era of change is vast and multi- this difficult question of how to find a balance between the dimensional and I have had a chance to barely touch upon nation and the world, the individual state and multilateral only the tip of the iceberg.
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I would like to praise the organizers of this forum Dmitry Medvedev: Thank you, Mr Yakovlev. who have challenged the participants with difficult ques- I was making notes quite diligently throughout the tions and have managed to shape a wonderful programme. session and I was going to do a detailed analysis of my I anticipate a fruitful exchange of opinions with my learned colleagues’ presentations. But then I thought: it is such a colleagues in search for a common ground. nice weather today. And after Mr Brandstetter mentioned And of course, we will all be inspired by the glorious the performance of our Polina Gagarina I learned that the history of our host city. In the Second World War, this city participants are going to visit a concert tonight, so you faced unspeakable tragedy and survived the most horren- will have an opportunity to see for yourselves that our dous and prolonged siege. Its population stoically held out performers are capable of many other interesting things, through 872 days without food, fuel and basic living supplies in addition to singing at the Eurovision song contest. So until that siege was broken. I think that the example of I will just thank the participants of the plenary session heroism, compassion and resilience of this common people for their patience. Events like this are usually quite should be a source of inspiration to us and the reminder that prolonged. I would like to mention the fact that all our even the most complex and daunting of challenges surren- colleagues today referred in their presentations to the der in the face of unity and true commitment. main idea of the plenary session — the mission of law in Bolshoe spasibo. the modern world. I am convinced that even despite some differences in our views and legal systems, we are still on Veniamin Yakovlev: Thank you very much Mr Serpa the same page regarding the main thing that unites us — Soares for your contribution. we all serve the law and we all believe that only the law I would like to thank once again the panellists for can resolve conflicts and we all are convinced that the law their interesting presentations and I would like to ask the has a vast potential. Prime Minister Medvedev to sum up the outcomes of our I wish you a pleasant stay in St. Petersburg and discussion. a fruitful work at the forum.
32 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 33 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
POWER OF LAW AND THE RIGHT TO POWER
28.05
34 35 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION ”POWER OF LAW AND THE RIGHT TO POWER“
he issue of proportionality of the law and force I would not blame the legal community for such is a fundamental one for the entire international conservative thinking. Primarily, because lawyers have to legal theory and practice. Fate of the states and be conservative, due to the specific nature of their social the whole humanity as a civilization of law depends role. Besides, legal community is always society’s own on its solution. It is especially relevant in the flesh and blood; it cannot avoid the destabilizing influence Tcurrent time of global changes. Recently these changes of the chaotic and turbulent processes that take place in were so rapid that it left legal systems — both national society. And finally, legal society of a certain country is and international — lagging far behind. As a result, it not always deeply entrenched in the specific sociocultural just paves the way for numerous legal conflicts, but also environment of its society and state and cannot simply creates regular precedents of national and international “shake off” this comprehensive networking. processes encroaching any legal field whatsoever. And this Yet the process of globalization that ushers in means entering the space governed by the so-called “law of turbulence and chaos puts an ever-growing sociocultural power”, which is basically arbitrariness, an opposite to the pressure onto society and legal community of every coun- law as a measure of freedom. In my presentation, I would try. Sometimes it poses new and very challenging philo- like to focus on this issue. sophic and legal issues related to the problem of the power of law and the law of power. Specific Features of the Current Era of Change Law and Justice. Social Cornerstone of Law One of the main factors of the current change is globalization, which is picking up its speed and scale, con- The time of change has always served as a stress tributing to closer communication, connectivity and inter- test for the majority of social and public structures. In the dependence of countries and regions. Globalization, as any time of change, the conflicts and collisions broaden both major social event, has its positive and negative aspects. I nationally and internationally that need to be enclosed by am not going to focus on the positive ones; you know them the power of law. These changes — evolutionary and par- well. Regarding the negative ones, however, I would like to ticularly revolutionary — are never understood pre-emp- point out the fact that globalization introduces to our lives tively by legal regulatory mechanisms. a dramatic instability that lays bare the fragile, transcend- In such conditions, the main factor of social and ent and uncertain nature of the contemporary world. public stability is popular support of the government and Having understood all this, some people start acting more the state. Without it, no nation and no state can successfully carefully, according to the “if only it would not collapse” pass the stress test. And popular notions of what is due, principle, while others cynically try to use this existential good and just play the decisive role in this support. fragility in their own interests. Yet these notions, despite the advanced state of Already back in the 1990s political analysts started globalization, remain radically different today. I believe that interpreting the situation using the terms of the catastrophe in the twenty-year-old dispute of two concepts –Francis theory, and in the 2000s the phrases like “global turbulence” Fukuyama’s liberal globalization and Samuel Huntington’s and “creative chaos” found their way into the vocabulary of interaction of civilizations — the latter seems to be correct the current policymakers. Global economic crisis also con- about our era. Or rather, what is more correct about is the tributed greatly to this, having catalysed the crisis processes recognition of the fact that the notions of the due, good and in all other areas of life around the world. just vary greatly in different sociocultural regions of the These transformations of national and global reality world and cannot be reduced to some universal paradigms and changing political language to describe this reality — let of the “just law”. us be frank and admit it — have caused a certain “concep- What does it mean? It means that, on the one tual shock” among the majority of legal scholars, because hand, there are indeed rather numerous sociocultural no valid legal doctrines have any relevant set of concepts to notions that are universal for the entire humanity and that comprehend such turbulent and chaotic reality. make up a “universal agreement corpus” of what is due, We cannot say that global legal community did not good and just. It also means that, on the other hand, mass respond in any way to this. Yet these reactions have not conscience of each society includes the areas of history, led to a comprehensive review of national and interna- religion and socioculture that have its own specific notions tional legal systems according to the changing global of the just and due. reality. Consequently, any new laws that can introduce the
36 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 era of change in the legal domain have to be in harmony content and scope of the notion of human rights. with the ethical norms of social majority. I think it would be On this professional conference, I am not going to appropriate to mention words of the major French social dwell upon the lists and phrasings of human rights, laid scientist Pierre Bourdieu. He stressed that the law and out in the fundamental decisions of the UN and other foun- law administration can be effective only if the law and the dational international documents. I would just like to stress norm of its legal interpretation correlate to the common that while all these international regulatory documents concepts of justice. highlight the individual and personal nature of inalienable That is, common ethical notions, entrenched in human rights, they effectively omit or ignore the fact that the religious tradition of a nation, its historical culture and the human is a social being. experience, its specific mentality are not some trifles that Basic human rights include only such society-re- lawmakers can ignore. This is the domain of such social lated rights as the right to assemble and right to unions, values that cannot be negated by regulatory acts or quickly which do not provide for the protection of society as a reforged arbitrarily. And most importantly, it is in the time whole. This surely stems from the paradigmal notions of change, when legal regulatory system of the written law of the Western culture that individualism and personal inevitably weakens, this sphere of social values often turns egoism pervade the core of human nature. Margaret out to be the key regulator that saves the society and state Thatcher, the former prime minister of the United King- from the immersion into the unlawful chaos of “war of dom, expressed this Western-specific position perhaps everyone against everyone”. most blatantly when she said on several occasions: “There All major historical legal achievements — be it is no such thing as society. There are individual men and Hammurabi’s Code, Rome’s and Magdeburg’s legal systems women, and there are families”. or the Napoleonic Code — were built keeping in mind those Yet as you know, the human is a social and ideas of the just, good and due that were established in political being. And their social nature did not become public morals of the relevant era and cultural and historic hackneyed in two thousand odd years since Aristotle first area. Almost all failures of legal regulation in the past were described it. People — men, women and their families related to such catastrophic gaps between the public mor- — join to form the society, in which a system of ethical als and formal legal obligations. priorities exists that does not necessarily manifest itself Some may object that all this is only relevant for openly, but is rather well-defined nevertheless. This the societies that did not go through the modernization system, not being immovable and absolute, still shows stage. And that taking into account the “retrograde” socio- itself to a varying degree during personal and collective cultural norms of some societies and states only preserves decision-making. It manifests itself differently depending the archaic features and slows down the victorious march on personal and collective perception of complexity, dan- of global humankind towards the universal norms of law ger and importance of a situation in which a person and and justice. society find themselves. I would like to point out in this regard that even Yet in any momentous situation, almost all types in the most advanced countries the notions of the just of state-organized societies use the slogan “Society is in law vary greatly. For instance, the majority of the Ameri- danger”. It leads to a comprehensive social consensus, can states practices capital punishment and is not going which shows that people are ready to bear the burden and to abolish it. In the Nordic countries, the tax on the rich hardships, to make sacrifices not just for their current and is 70–80% of the income, and social majority does not future personal well-being but for all the people, close and consider it an unjust encroachment of the sacred right to distant, that make up this national community. Societies private property. And modern Japan, which hardly can be in which this social and historical trend has established left aside when speaking about the advanced countries, a more distinct individualism usually demonstrate lower commonly practices legal dispute resolution not through degree of such readiness to take over such social responsi- judicial decisions but by informal mediator groups reason- bility and bear hardships than in the societies that socially ing with the parties. and historically were formed based on strong and stable collectivist notions. Yet this “social feeling” is present in Human Rights and Society almost any society. I think that one of the most dangerous legal trends One of the most acute regulatory problems of the of the current time of change is that individual human current era of change are the conflicts arising around the rights are increasingly set against social rights. At that,
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 37 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION “POWER OF LAW AND THE RIGHT TO POWER”
the society is seen as something cluttered, amorphous and Prophet’s caricature. This newspaper has never been very inherently incoherent, while an individual is seen as some- popular in France and was perceived by almost all French thing definite and with a distinct certainty to it. society with a certain degree of disgust, since its editorial Based on this, an individual is entrusted with policy was largely based on consistent publishing of shock- ostensible — and increasingly more extensive — rights. ing profanities offending the feelings of the followers of the While the body of society is usually considered “silent country’s major religions. Yet many social scientists admit majority,” content with legal normativity of personal rights that “Je suis Charlie”, a public action organized by the and rights of its constituent communities. government and certain liberal communities, has led to a The falsehood of this approach is manifested catastrophic schism in society and dramatically weakened increasingly often exactly in the conflicts of the time of the public support of the government, because a large part change. It is this “silent majority” that saves or destroys of the French society viewed this action not as a rightful the organism of society and state by deciding to take in indignation about an inhuman act of terrorism but as a the changes or ignore them. It does so based on the fact demonstration of solidarity of state authorities with amoral whether these changes receive ethical authorization from editorial policy of “Charlie Hebdo”. the “silent majority” and whether it is ready to acknowl- In order to start creating our successful future, we edge the changes as due, good and just. need to understand the present properly. In other words, One of the most recent examples that demonstrate to conduct extensive research of what the specialists the danger of neglecting the sentiments of social majority call the formula of socio-cultural identity of a nation. To is the terrorist attack on the office of “Charlie Hebdo” that research and to understand: exactly what creates prereq- happened following its controversial publication of the uisites and conditions for widening of socio-cultural divide
38 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 in global trends, in Russian economic, legal, social, cul- ignore the dangers related to the concept of “post-Chris- tural, etc. policies as well as in spontaneous and organ- tian” Europe, which is very accommodating for such ized regional processes. novelties. Supporters of this concept say that Christian According to the available studies, these prerequi- values, culture and related standards of social behaviour sites and conditions lie in the area of legislative improve- have already become obsolete. That we allegedly need ment, in the “faults” of law enforcements, in the content rehabilitation and liberation of human instincts suppressed and quality of TV and school educational programmes, in by culture. I cannot but agree with the researchers who blocking the channels of vertical social mobility for people ask the following question in this regard: is a human with from poor families (due to catastrophic financial stratifica- absolutely free instincts truly a human, and does he or she tion). This list also includes the attempts to impose on our have the right to be called so? society, deeply traditional by and large, psychological and Human beings stood out among animals primar- legal novelties that are unacceptable for its traditional eth- ily because already at the earliest stages of formation nic, family and confessional normativity, using propaganda of human society they had a system to restrict some and legislative acts to achieve this. Including the obliga- instincts; without it, humanity’s development would have tion to be tolerant to any form of “loose morals”. In other taken a different course. Undermining human social nor- words, this tolerance is boundless and merciless in its mativity by way of refusal from some fundamental social destructive and law-defiant consequences for socio-cul- and biological imperatives upon which it was initially based tural identity of Russia. (it is no coincidence that some of them were supported and These new trends did not come out of nowhere; hallowed by Christianity) means changes in some funda- they resulted from certain social problems. Yet we cannot mental anthropological characteristics of a human being.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 39 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION “POWER OF LAW AND THE RIGHT TO POWER”
Perhaps someday humanity will follow this path, but it will of society and state, but such oversimplified approach not be the humanity as we know it and maybe not humanity towards modernization and democracy deeply puzzles me. at all. Obviously, it requires a very careful attitude, at least. First of all, it seems completely unhistorical. The related problem of social normativity is espe- Authors of such modernization/Westernization theories cially important for lawyers. Analysis of this problem should seem to forget that it took several centuries for Western be based on the notion that a social norm is something that developed countries to reach their present democratic promotes sustaining and development (not destruction!) of system of society and state. None of them has moved from society. The law can be neutral to certain deviations from traditional into modernized society in just one short leap. social normativity whose aim is to preserve the society, yet it Besides, modernization of each and every Western should hardly support the promotion of such deviations. The country has been very painful and bloody. This process has goal of such promotion is to disintegrate social normativity, already been studied rather well by the researchers who causing the loss of society’s identity. Yet in given historical generally admit that, for instance, success of moderni- conditions, the law is a part of a normative system belonging zation in England was ensured by the harshness of laws to this society and not to some other. It is this discrepancy and efficiency of state mechanisms of law enforcement. of norms, deeply rooted in society, and observed trends in Likewise, 150 years ago, it took a bloody civil war between Russian reality that become a major factor of the growing the North and the South for the United States, the current socio-cultural divide that sociologists note with concern. “model of democratic modernism,” to move to successful This is the reason they consider Russia’s current relative modernization. stability to be fragile and unstable. Speaking about it, I am These are not some isolated cases. Many times, not urging anyone to return to some “trouble-free past”. I asked my foreign colleagues the question about democ- This is both unreasonable and impossible. You cannot step ratization and modernization. None of them could give an into the river of history twice. And what is most important — example of a situation when dramatic modernization of state we cannot give up on the changes simply to avoid any risks. and society resulted from the prior establishment of institu- We need changes, and this need is also dictated by the tions of developed democracy. The examples to the contrary, development of Russian society and international environ- however, are numerous. Social and political studies that were ments in which Russia has already engaged and cannot carried out in the last decades throughout the world show “jump out” of now. that democratization and weakening of regulatory function of state and legal institutions first appear and take root only Modernization and the State’s Regulatory Role during and after successful modernization, never before it as its prerequisite. A good example to illustrate this is the Singa- Many experts believe that one of the main fea- pore miracle that resulted from the top-bottom moderniza- tures of today’s time of change is a process of political tion, according to experts. and legal modernization that is getting wider under the It seems that a myth about the beneficial effect of a pressure of globalization. I share this view. At the same weaker state regulation as a prerequisite of modernization time, I must point out that modernization in the Western reforms originated from the liberal premises of free market political theory is almost always seen as Westerniza- economy. Such mythologization (erroneous, in my opin- tion. That is, as a replanting into modernized societies ion) of modernization is underpinned by the scientifically and states of the institutions and examples of political incorrect analogy between the “invisible hand of the market” structures and (what is extremely important for us) legal and “dormant social element of community”. Allegedly, both norms and regulatory systems that are built and used in simply need to be left alone and then they will create the the developed Western countries. best possible state of economy, society and state. Western modernization theories almost inevitably I am not going to question the economic part of include the establishment of democratic social, national this analogy — it is outside my expertise, although in the and legal systems as their conceptual core and a neces- current financial crisis the majority of prominent econ- sary modernization priority. This means that democracy in omists agreed that its main cause was putting too much these theories is a basic precondition for modernization. trust into the “invisible hand of the market,” which led to Besides, democratization in these theories presupposes global deregulation of primary financial institutions. maximum weakening of state and legal regulation over all And there is more than enough evidence proving spheres of public life. that the “state and legal regulation” part of this analogy is I am a convinced supporter of democratic system wrong. Apart from what has already been said, I would like
40 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 to cite the example of the present-day Libya. tragic local wars. Before the external intervention to topple Qaddafi’s The UN, as its name and charter implies, is an regime, it was a typical example of a top-bottom authori- organization of the united nation states. That is, it was tarian modernization. There was a very tough authoritar- created and it functions based on the voluntary decisions ian state regime. And at the same time, the country had of sovereign states that unite their efforts within the UN’s the highest quality of life in the Arab Africa, a developed framework to achieve common goals in the global world. welfare system, modern system of secondary and higher These sovereign states granted the UN the right to make education and a dynamic economy. decisions that affect national interests of all member states. External interference “to topple the authoritarian After the UN, sovereign states jointly decided to establish tyrant and establish democracy” has thrown the coun- other international organizations that were granted the right try back into the Middle Ages and utter lawlessness. to make decisions that affect the national interests of all And instead of democratic modernization and law-gov- member states. erned state, the country got hundreds of lawless tribal Such decisions of the states that joined the UN gangs, both large and small, that have already spilled over and other international organizations inevitably raised the borders of the former Libyan national territory. a question about the relations of international legal acts I have to point out that a very similar process of and national legislation. I would like to explain my legal democracy-bringing by toppling the statehood with the opinion on this matter. On the whole, it is in line with the help of external intervening forces is happening now in views of some of my counterparts from European consti- Syria and Yemen. tutional courts. To sum up this idea, I will just remind you the fact I believe that Russia’s participation in several that has been frequently proven since the ancient times: international conventions and agreements of various lev- any large society is too big and complicated to do its els, both global and regional, does not mean delegation political, economic, social and legal regulation directly. of a certain part of national sovereignty to that level. UN It is even more so in the case of modern societies, social membership means uniting sovereignties, not delegating organisms of incomprehensible complexity. And it is also them. The organization was initially created based on the very relevant for the societies that are wide open to the idea of the united nations and joint, or pooling of, sover- globalized world and that have additionally set the ambi- eignties. tious tasks of profound modernization before them. Under Correspondingly, Russian membership in interna- such circumstances, the liberal ideologeme “state is a tional agreements and conventions means only that Russia night watchman with minimal mandate” is far from being voluntarily takes upon itself the responsibilities listed in enough to meet the challenge. Under such conditions, the these international documents and reserves for itself the true democratization priority is not weakening of regula- sovereign right of final decision in accordance with the tive function of the state but better legal regulation of all Constitution of the Russian Federation in case any legal spheres of life of society and state. Such regulation has to conflicts or disputes arise. be smart, careful and correlating with status, goals and I would like to emphasize that the provision about values of society. the supremacy of national law is clearly stipulated by I am convinced that only this will allow democra- the Russian Constitution. According to article 15, § 1 of tization and improvement of a state. Only this can improve the Constitution of the Russian Federation, it shall have and, I dare say, educate society. This is the only way supreme legal force in the system of legal acts. At the towards creating of fully-fledged law-governed society and same time, § 4 of the same article 15 states that univer- state. sally recognized principles and norms of international law as well as international agreements of the Russian State Sovereignty and International Law Federation should be an integral part of its legal system. If an international agreement of the Russian Federation In a month, the United Nations Organization will establishes rules, which differ from those stipulated by celebrate its 70th anniversary. The UN’s greatest and national law, then the rules of the international agreement undoubted merit that nobody and nothing can belittle is shall be applied. This clause is often viewed as a conflict the fact that humanity has spent these 70 years without inherent in our Basic Law. any major wars. The UN’s undoubted problem is the fact I am convinced that there is no conflict. Due to the that its mechanisms did not prevent numerous bloody and Constitution’s supremacy, international legal arrange-
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 41 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION “POWER OF LAW AND THE RIGHT TO POWER” ments must be interpreted as a concretization of Con- Besides, this article of the Rome Statute contradicts stitution’s provisions, but they cannot be applied if they articles 91 and 98 of the Russian Constitution that guaran- go beyond the limits set by constitutional legal meaning. tee immunity for the president, members of the Council of Similar precedents of constitutional interpretation of Federations and State Duma. The exemptions from the non international legal norms are already known and are bis in idem principle (which forbids to be convicted twice for widely discussed in the global community of constitu- the same crime) stipulated in § 3, article 20 of the Statute tional law experts. contradict the article 50 of the Russian Constitution that For example, the Federal Constitutional Court of provides no exceptions to the said principle. Article 89 of the Germany in several resolutions stated and substantiated the Statute regarding the surrender of the persons to the Court legal position “of the limited effect of the legal rulings of the contradicts the article 61 of the Russian Constitution, which European Court of Justice”. Such stance implies that “the guarantees that its citizen may not be deported from the state has the right to ignore the decision of the European Russian Federation or extradited to another state. Court in cases and sections that contradict the consti- Yet I believe that there is another reason why many tutional values protected by the Basic Law of Germany”. countries have not signed and ratified the Rome Statute. Constitutional Court of Austria rejected the legal position of This is because these countries feel some — and, as I have the European Court on similar grounds. Having acknowl- already shown, well-grounded — mistrust of the estab- edged the need to take into account the judicial practice and lished system of international criminal law. resolutions of the ECHR, the Constitutional Court of Austria These countries unavoidably “try on” the above and indicated the impossibility of application of the decisions and many other precedents of international criminal justice legal positions of the ECHR that contradict Austrian consti- falling outside the scope of its sovereignty and jurisdiction. tutional principles. The same decisions to refuse to accept These countries realize the possibility of the the legal position of the European Court if it contradicts to Court’s becoming politicized, because it can decide at its national constitution were adopted by constitutional courts own sole discretion which state and under what circum- of France and Switzerland. stances demonstrate the unwillingness or inability to pros- The Constitutional Court of the Russian Federation ecute crimes and initiate criminal prosecution of suspects. expressed similar opinion (judgement dd. December 6, 2012). And because of it, the Court on its own volition decides on Constitution and International Criminal Justice the applicability of international intervention in national Russia has signed but not ratified the Rome Statute of the affairs. International Criminal Court (ICC). The main reason is that These countries understand that, say, the ICC may some of its articles contradict both Russian Constitution be used by the authorities or internal opposition forces of and foundational international legal documents. a country to resolve an internal conflict for their benefit For instance, according to article 61, § 1 of the by provoking criminal excesses and drawing international Constitution, a citizen of the Russian Federation may not justice into this conflict. This is how the “post-Maidan” be deported from the Russian Federation or extradited Ukraine operates, which did not ratify the Rome Statute, to another state. Considering the constitutional and legal but officially accepted the jurisdiction of the ICC. meaning of the terms “deportation” and “extradition,” The countries that did not ratify the Rome Statute this article needs to be amended to enable the ratification cannot help seeing (in today’s informationally-transparent of ICC’s Statute. And if you take into account that such world all that is secret very quickly comes to light) that amendment is prohibited by chapter 2, a new Constitution some decisions of international courts are made against needs to be adopted to make it possible! the backdrop of the full-scope information war against the Moreover, in accordance with the 1973 Interna- political leaders representing one side of a conflict, with tional Convention on the Prevention and Punishment of a clear pre-existing accusatory attitude towards this side, Crimes against Internationally Protected Persons, includ- and with the help of fabricated evidence for the prosecu- ing Diplomatic Agents, a head of state is always under tion, that is, using the double standard policy. international protection when he or she is on the soil of In this regard, the biggest potential danger lies a foreign state. At the same time, article 27 of the Rome in international courts’ practice of implementing the Statute stipulates the irrelevance of official capacity of the legal novelties that extend beyond international law and accused, which allows applying the Statute to heads of become legitimate precedents through the courts’ deci- states and governments, members of the government and sions. This practice raises reasonable suspicions that it parliament. might be used by external forces, which can overtly influ-
42 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 43 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION “POWER OF LAW AND THE RIGHT TO POWER” ence courts to remove from the political arena unwanted Evidently, the ten fundamental principles in their state leaders and internal transformations of the coun- current form provide a truly vast “field of uncertainty” for tries “that are in the way”. such legal collisions. It is against the backdrop of such colli- Finally, analysis of international courts’ regu- sions in international law-making and law enforcement that lations and their past actions shows that unconditional we see attempts to return to the precedent of the “unprece- acceptance of their jurisdiction almost always means not dented law of Nuremberg” and attempts to impose the “law only a legal conflict with the constitution of a country, of power” through international criminal courts. but rejection of some of its most important principles. In I repeatedly said that the only way out of this prob- other words, it means a voluntary abandonment of impor- lematic and somewhat dead-end situation that I see is to tant elements of national legal sovereignty in favour of an regard the fundamental principles of the UN Charter as an international court. interconnected system. Naturally, many countries, with Russia among them, Including a clear legal definition of conditions and see such universalization of international criminal law as a required sufficient extent of interference of international unacceptable, because it undermines the basis of inter- bodies in internal affairs of sovereign states, as well as national law: principle of sovereignty of nation-states and limitation of constitutional law’s competences. creation of the UN to unite, not to extract, sovereignties. Including a clear definition of conditions and However, none of the above means that the global normative situations where certain fundamental principles society of law-governed sovereign states does not need take precedence. certain universal norms of international criminal law and Including a clear codification of nation-state’s and judicial institutions that oversee their application. It is also international bodies’ competences in criminal proce- natural that these institutions should prosecute perpetra- dures, etc. tors if a sovereign state fails to do it for some reason and In any case, I believe that one of the most press- asks international society for help. We cannot allow terror- ing tasks of contemporary legal science is to conceptually ists and people committing other crimes against humanity study the interconnection of constitutional and interna- to go unpunished. tional legal orders and correlation between national and The important thing is for these universal norms international law competences. Current escalation of to be fully in line with the constitution and the system of global challenges shows that we cannot wait any longer, legal principles recognized by the international community and that palliative measures will no longer serve. and by Russia and ratified by appropriate states, and for In my opinion, if these conceptual issues stay international judicial institutions to fully comply with these unanswered, we will not be able to build an effective and universal norms. trustworthy international system of institutions of crimi- Yet as I illustrated earlier, the reality is far from nal justice. being this good. And it is not so much the leadership and Therefore, international constitutional practice members of these international courts who are at fault. shows that the right legal stance regarding the correlation I repeatedly said and wrote that one of the biggest problems between national and international law is to implement of international law enforcement is the fact that the ten international legal arrangements only when they do not fundamental principles of international law contained in contradict the principles, spirit and letter of the national the UN Charter do not create a defined legal system, which constitution. This is how national sovereignty can and must would allow to apply them without legal collisions. be preserved in the globalizing world. As a result, when making and enforcing laws, Let me once again remind you that all current inter- someone may decide that there is nothing more important national organizations were created by voluntary decisions than sovereignty and territorial integrity of the state, while of sovereign states. These sovereign states are the only pri- others might think that these notions can be sacrificed mary source of legal authority of international organizations. for the nations’ right to self-determination or for human There are no other sources, divine or otherwise. rights protection. As a result, when making and enforcing laws, someone may decide that there is nothing more On International Community’s Interference important than sovereignty and territorial integrity of the with Internal Affairs of Sovereign States state, while others might think that these notions can be sacrificed for the nations’ right to self-determination or It is the most topical and problematic issue in mod- for human rights protection. ern theory and practice of foreign relations.
44 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 Possibility of such interference was allowed under — Ukrainian authorities who, according to the the doctrine of “humanitarian interventions,” and in 2005 the country’s Constitution and legislation had the right to sup- UN adopted the norm called The Responsibility to Protect. press the coup, did not utilize the resources they had; Let me express my opinion on the matter. I certainly agree — the West openly, determinedly and consistently that gross violations of human rights warrant intervention of supported the shift of the political standoff in Ukraine international community and the UN. However, the principles, towards the unconstitutional seizure of power; mechanisms and procedures of such an intervention do not — new Ukrainian authorities assumed a national- guarantee that it will not lead to aggravation of humanitarian istic and anti-Russian position, which scared and antago- crisis and to even bigger violations of human rights. nized the Crimean citizens. For now, the safeguard principles, mechanisms The Crimea conducted a referendum and, accord- and procedures are evidently incomplete in the legal sense. ing to its results, became a part of Russia. The Constitu- Examples of such interference are usually negative. And tional Court has also made its decision on the Crimea. The we absolutely cannot allow such interference without the Court had the following tasks before it: 1) to determine UN’s sanction. Proponents of this approach lament that whether president’s request is constitutional; 2) to examine because of the veto of one of the Security Council perma- the form and procedure of signing of the agreement; 3) to nent members, countries initiating the interference cannot check whether the content of the agreement is in line with obtain legal sanctioning for it. Therefore, they propose the provisions of the Constitution. Now this decision of the to reform of the Security Council and deprive permanent Court is being analysed and criticised. I am not going to members of the right to veto. respond to the criticism, since it was done professionally I personally see neither political nor legal logic and conclusively by the Court’s officials in their research behind this. First, in the post-Soviet history of our “turbu- articles. lent and chaotic” world, there have not been a single situ- To me it is much more interesting to look at how ation where a humanitarian intervention brought positive “sore spots” of contemporary law are being revealed by the political, social or economic results to the state subjected so-called “Crimea situation”. to it. Second, it is the right to veto that now safeguards the There are two main accusations that the West UN from dangerous interventions. Without this right, inter- brings to Russia: 1) exerting pressure on the Crimean vention will become a genie let out of a bottle. It will lose citizens during the referendum and 2) violating Ukraine’s all legitimacy. I think my colleagues sitting here under- territorial integrity. stand that even one “failed” intervention under the UN As for the first one, the legitimacy of the referen- auspice can irrevocably undermine international authority dum, I think all doubts are unfounded. The initial choice of the organization. of the Crimeans was confirmed by their attitude later. For example, according to a telephone survey of Crimean citi- Law and the Crimea Situation. zens that carried out this January, 82% of the respondents The Principles of Territorial Integrity of a State fully support joining Russia, 11% inclined to support it and and of Equality and Self-Determination of Peoples only 4% were against. What is very important is that the survey was carried out by a Ukrainian company with the Speaking of the international system through support of a Canadian foundation! correlation between the power of law and the law of power, The second argument on territorial integrity of I cannot omit the Crimea situation, which is viewed in the a state deserves more attention. The dangers of shaking West as the starting point of the current international the Yalta-Potsdam international legal system that became crisis. Today, the West blames Russia for sparkling global the basis for the post-World War II global order worries tension by allegedly annexing Crimea. But let us recall the me, too. But to avoid serious threats to international events in Ukraine and look at them from constitutional and security, we should acknowledge that after the collapse of legal point of view. the Soviet Union those borders have been significantly and, In an article published in “Rossiyskaya Gazeta” in more importantly, hastily changed. March this year, I presented the facts in detail. I am not The Crimea situation is, perhaps, the most vivid going to repeat myself and will just present the following example of such hastiness. Legal norms are notoriously general conclusions: abstract. However, any real situation where they are — “Maidan-2014” resulted in an unconstitutional applied is historically specific. In this particular case, coup d’etat; I can give much more conclusive (or rather, historically
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 45 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION “POWER OF LAW AND THE RIGHT TO POWER” indisputable) arguments in favour of the union of Russia ent ways of solving such issues. It includes both the high and Crimea then in the case of the so-called Kosovo standard demonstrated by Scotland’s referendum on inde- precedent, which the Crimean authorities referred to, by pendence, and a constitutional ban of such a referendum in the way. Yet five years ago, the UN International Court Spain blocking a possible separation of Catalonia, and the acknowledged the legitimacy of the one-sided decla- Kosovo model of very questionable legitimacy. ration of independence of Kosovo, saying that interna- I think that in every controversial case where the tional law contains no prohibition of that and that the principle of territorial integrity clashes with the principle of Kosovo precedent does not contradict the international national self-determination, the decision must be based on legal norms. Earlier, the US and the majority of the EU minimizing human rights violations. All the factors of each members assumed the same position. Yet, contrary to unique situation arising in the international practice should the lawyer Barack Hussein Obama’s beliefs, Kosovo did be reviewed by this criterion. not conduct a referendum. And this is by far not the only If we seriously expect humanity to go in the direc- distinction between the Crimea and Kosovo in favour of tion of a voluntary union of sovereign equal states, we have the former. to accept that it involves growing freedom for nations and I am not going to deliberate on double standards peoples to choose their state identity. Such understanding in international law, particularly when it comes to the of global legal development prospects helps us to choose application of the principle of state territorial integrity. the right criteria for evaluation of very complex modern Instead, I would like to focus on theoretical aspects of such realities. It means that the international community must international law principles as territorial integrity of a state acknowledge a nation’s decision made peacefully and in and equality and self-determination of peoples. Because accordance with political and legal rules. This approach is without a theoretical construct allowing to draw parallels lawful by nature, since it is based on the principle of formal between these two principles, there can be no legal criteria equality of nations and peoples. to evaluate situations arising in international relations, This is how the Constitutional Court rationalized its which require application of these principles. decision on Crimea. Creation of such a construct requires, first, under- standing of the main tendencies of modern international On the Unconstitutional Coup d’Etat legal development and, second, the ability to predict mid- dle- and long-term prospects of global legal development Political crisis in Ukraine that led to a global polit- of humanity. At each historic stage, the balance of these ical and legal crisis drew attention to the issue of forceful competing fundamental international legal principles is unconstitutional coup d’etat. defined by numerous practical factors. At the same time, at I want to say a few words on coups, which are called a certain point this practice itself upsets this balance under revolutions in case of their success. Although people can the influence of new factors. Therefore, it is important to resort to an uprising against tyranny and suppression, the understand which tendencies and prospects correlate with Constitution of the Russian Federation as a democratic certain events and processes that change the status quo. law-governed state does not permit an unconstitutional Undoubtedly, the break-up of the USSR and the change of power. Forcible assumption of power and armed following collapse of the bipolar world order are among rebellion are subject to criminal prosecution. Moreover, such events and processes that had great influence on both a coup as a way of solving problems is a disease; a pathology international and global relations. It resulted in a serious of a political organism. In any case, Russia did not solve any blow to the Yalta-Potsdam agreements on state borders of the critical issues through revolutions and coups. And that were the foundation of stability in Europe. It gave rise each achievement was gained at too high a price. to political and legal uncertainty in very complex issues in This is completely true of the coup of 1993 initi- view of globalization’s controversial influence on national ated by the President Yeltsin’s unconstitutional Decree identity of many peoples. No. 1400, when the executive power applied brute force We see that the idea of state’s self-determination to the representative power, which refused to comply becomes a matter of practical policy for more and more with the decree. I constantly return to the tragic events of nations that do not have their own statehood. In the begin- October 1993, because in my opinion they largely prede- ning of the 20th century, there were 50 states; now, there termined the future not only of Russia, but also of other are 250. And apparently, this process is not over. Today, post-socialist states. The following point seem the most international political and legal practice tries out differ- important to me.
46 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 47 LECTURE BY VALERY ZORKIN, CHAIRMAN OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION “POWER OF LAW AND THE RIGHT TO POWER”
Yeltsin’s Decree No. 1400 was supported by the means they want to ensure freedom of some citizens West and applauded by Russian pseudo-liberals, yet it was at the expense of others. To me, the perfect example of the first instance of crude destruction of the forming con- a Russian liberal is a prominent Russian legal scholar stitutional law and (most importantly) of appearing legal and philosopher Boris Chicherin (1828–1904), whose idea consciousness in the biggest post-communist country. It of liberalism could be applied to the modern-day Russia. later gave rise to the methods of the so-called “colour rev- His formula “liberal measures and strong authority” still olutions” across and beyond the post-communist states. remains relevant. There is another important point allowing to Those pseudo-liberals are also the ones who better understand the situation around the Decree No. recently started calling for a new Constitution with 1400. After signing the Decree, Yeltsin gave a television a different distribution of powers. I think that this shows address emphasizing (and I quote) “the biggest outrage the inability or reluctance to see the real problems of the is the Supreme Soviet’s so-called economic policy and its country, which cannot be solved by simply transferring the decisions on the budget and privatization”. I think, that is authority from the president to the parliament. I am not the key. The Supreme Soviet (with all its shortcomings) saying that targeted amendments of the Constitution are indeed tried to minimize the effects of the “shock therapy” impossible, including those aimed at extending the parlia- on population and to stop that outrageous privatization ment’s powers. Yet hoping that such amendments would that was already gaining momentum at the time. And drastically improve our political and legal reality is would which was largely influenced by American advisors (not mean becoming a legal idealist. selflessly, as we know). Constitution is a formal social contract on the The History will tell who was right. Yet it is already principles of state and social structure, which should be apparent that by that extortionate privatization the pseu- based on a real social contract. And what social contract do-liberal government inflicted such damage upon the can we speak of in a country with such social inequality? economy, social relations and political and legal develop- In a country where nobody doubts the unjustness of this ment of the state that their repercussions will be felt for a inequality? However, not one of the discussed projects of long time. How can a society with such a steep stratification a new constitution proposes solutions to this key issue. develop normally? Even by official estimations, the decile Besides, those who today advocate radical changes in Russia has long since stepped over the critical 10-point in Russia’s Basic Law simply underestimate the enormous threshold and amounted to an average of 16-17 points. I and as yet fully unrealized legal capacity of our current am not even going to mention the unofficial statistics. The Constitution. What we need is not a constitutional reform example of Ukraine has demonstrated the explosiveness (which can only aggravate the existing social and polit- of this situation. Its national conflict has many reasons and ical divide), but a foundation for real social consensus. causes, but behind them, there is such a deep underlying To ensure this, we need to understand first, where in our factor as erosion of the foundations of social justice due to newest history we missed the chance to establish a more the oligarchic structure of the Ukrainian economy. just society. Because social justice is the foundation of But the biggest catastrophe was in the disruption social consensus and the main guarantee of political and of moral foundations of Russian society, of its labour ethics legal development of the nation. and priority on solidarity. It is indicative that today, accord- When I think about these issues, I often recall ing to sociologists, “moral degradation of the large part of “perestroika” — the time of big changes and big hopes. society” is among three internal events or processes that Recently, I even decided to re-publish one of my arti- worry one in two Russians the most. This is even more cles from that period, printed in “Vestnik akademii than falling living standards (which was the choice of 43% nauk SSSR”, an official digest of the Soviet Academy of of respondents, i.e. less than a half). Sciences. Certainly, knowing what I know today, even I find In their deliberations on the state and prospects some of my old ideas naïve, for example, the hopes that of law and democracy development in Russia, our pseu- the Soviet system could evolve into a socialist law-gov- do-liberals usually “step over” these processes, leaving erned state. As many others at the time, I underestimated them out of their analyses. I call them “pseudo-liberals” the depth of the social and political divide that was latent because they are oriented on Western examples of liber- in that period. However, I think that two of my ideas from alism and completely ignore the specificities of Russia’s that article are still relevant. historical development, including such key events of First, new authorities (updated Soviets, as its most recent history as unlawful privatization, which I thought back then) should become a political form of
48 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 “community of independent citizens and owners, and not *** an almighty political machine towering over the masses of In conclusion, let me emphasize one point to help people deprived of their rights and identity”. Even today (in you understand all of the above. We hear increasingly often the current circumstances), I can repeat that separation that the West, primarily the US, impose its values on the rest of working people from the authorities can be overcome of the world based on the principle of “the law of power”. But through their reunion with property. Second, the govern- this is only one side of the coin. We should not forget the other ment (the ruling Communist Party at the time) should be side: the law of modernism that set free people’s creativity radically reformed, so that we have “a de facto two-party became the main source of economic power of the West. system with a legitimate multiparty one”. Back then, I For Russia, it means that clearing the legal barrier thought our country had “a chance to come to a two-party is the main condition for a well-being of the Russian soci- socialist system through reforms” and on that basis grad- ety as a whole and of each Russian citizen in the modern ually, without radical changes and revolutions, to develop complex, contradictory and globalizing world. Conse- towards a law-governed democracy. The issue of estab- quently, it is the main guarantee that our country will be lishment of two equal political parties as a prerequisite for able to defend its geopolitical interests and its social and law-governed democracy still holds true for Russia. cultural identity.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 49 Discussion
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
INNOVATIONS IN MANAGING OPERATIONS OF NON-CREDIT FINANCIAL INSTITUTIONS
27.05
50 51 Discussion
MODERATOR SPEAKERS
Sergei Shvetsov, Oleg Ivanov, First Deputy Chairman, Bank Vice-President, Association of of Russia Regional Banks of Russia
52 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 INNOVATIONS IN MANAGING OPERATIONS OF NON-CREDIT FINANCIAL INSTITUTIONS
Alexei Guznov, Roman Bevzenko, Head of Legal Department, Partner, Pepeliaev Group — Bank of Russia Professor, Russian School of the Private Law under the Government of the Russian Federation
53 INNOVATIONS IN MANAGING OPERATIONS OF NON-CREDIT FINANCIAL INSTITUTIONS
Petersburg International Legal Forum The first issue for discussion was bankruptcy of non- held a panel titled on innovations in man- credit financial institutions, new legal instruments to ensure aging operations of non-credit financial continuity of non-credit financial institutions’ operations, their institutions. The panel’s moderator was rehabilitation and issues of business transferring. Sergei Sergei Shvetsov, first deputy chairman of Shvetsov and Alexei Guznov, representatives of the Bank of St.the Bank of Russia. Speakers included Oleg Ivanov, vice pres- Russia as a mega-regulator, spoke first. The moderator said ident of the Association of Regional Banks of Russia; Alexei that there is “a bill aimed at implementation of key features of Guznov, head of Legal Department of the Bank of Russia; an effective regime for countering losses, i.e. for supporting and Roman Bevzenko, professor at the Russian School of the institutions’ operations even when they encounter certain dif- Private Law under the Government of the Russian Federation. ficulties”. Alexey Guznov, in turn, noted, “the models applied Opening the discussion, Sergei Shvetsov noted its during banks’ bankruptcy can largely be applied to non-credit new format: instead of focusing on one topic, the participants financial institutions’ bankruptcy, as well”. consecutively addressed five issues in a lively polylogue. Roman Bevzenko expressed his point of view. “We have an interesting session. It is an experiment As a private law expert, he analysed the situation around of sorts. We will cover five questions, and we will do it rather non-credit financial institutions and the law on mortgage in quickly. The general topic is future initiatives. There are many view of recent amendments to the Civil Code of the Russian bills currently submitted to the Duma by deputies and the Federation. government. These bills are devoted to protecting the finan- The second topic was the role of a financial ombuds- cial market both in terms of consumers’ rights protection and man. Currently, there is no effective mechanism for pre-trial development of tools of quality inspection. However, we are settlement of disputes between citizens and financial institu- not going to discuss them, but rather speak about the initia- tions in Russia. However, as the moderator Sergei Shvetsov tives that might, perhaps, appear this autumn or next spring. put it, “it is difficult for one person to deal with many creditors All the topics are completely new for the Russian legislation”. without a mediator”. Participants discussed the ombuds-
54 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 man’s right to restructure citizens’ debts upon application, as authority of the Central Bank of the Russian Federation. well as pros and cons of the ombudsman as a mediator. Roman Bevzenko commented on the balance of The topic of Oleg Ivanov’s presentation was the intervention of the mega-regulator: economics of disputes, the financial side of legal conflicts. “If an organization seeks public funding and attracts The speaker emphasized that internationally, disputes with capital from an unlimited number of third parties, these financial institutions are settled not at court but with the third parties must be protected by the regulator. Affairs of help of an ombudsman, while in Russia the initial purpose non-public companies and relations between private inves- of their work was distorted. tors do not concern the regulator. Its sphere of influence is In conclusion, Mr Ivanov said, “One of the main public joint-stock companies only”. conclusions, which I am not going to defend, is that a financial The last question that Mr Shvetsov asked was, where ombudsman in Russia should not be responsible for loan is the line between the imposition of administrative penalties restructuring”. on legal entities and on executive officers? It seems that there In turn, Alexei Guznov added that the Bank of Russia should be a clear division of responsibility of a legal entity supports the idea of creating the ombudsman institution. In and the official responsible for the violation. The modera- his words, “the demand for this institution from the banking tor offered a possible solution: if a legal entity violates the and insurance sectors, as well as, probably, from non-credit legislation of the Russian Federation because of management financial institutions, has existed for quite a long time”. decisions of an official, the responsibility should be borne Then the participants moved on to the issue of solely by the official. agreement with the regulator, pointing out that introduc- At the end, there was a Q&A session and a vote for or tion of an agreement with the Bank of Russia is aimed against this format of discussion. Overview of several related at less supervision of conscientious market participants. issues in a short period of time was widely supported by the Logically, then the discussion moved on towards the fourth audience and Mr Shvetsov said that it should be used in the issue, regulation and supervision of emitters and limits of future.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 55 70TH ANNIVERSARY OF THE NUREMBERG TRIALS REPORT BY ALEXANDER ZVYAGINTSEV, DEPUTY PROSECUTOR GENERAL OF THE RUSSIAN FEDERATION
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
70TH ANNIVERSARY OF THE NUREMBERG TRIALS
27.05
56 57 70TH ANNIVERSARY OF THE NUREMBERG TRIALS REPORT BY ALEXANDER ZVYAGINTSEV, DEPUTY PROSECUTOR GENERAL OF THE RUSSIAN FEDERATION
his year is not only significant because of On the Soviet territory, the Nazis fully or partially the 70th anniversary of the great victory over destroyed and burned down 1710 towns and cities, over Nazism, which all progressive humankind 70 thousand villages and more than six million buildings, celebrated, but also because of a number of about 25 million people lost their homes. The industry, other jubilees related to the World War II. And agriculture, transport, medical and social spheres TI mean first and foremost 70 years of the International all experienced colossal destruction. 1,670 Orthodox Military Tribunal set up for the court in Nuremberg and Christian churches, 237 Roman Catholic churches and the trials of the Nazi Germany leaders, and also 70 years 532 synagogues were demolished. Many cultural valuables since the foundation of the United Nations Organization — were stolen, historical monuments ruined. an international organization created to maintain the The total amount of losses suffered by the Soviet world peace, security and development of international Union is expressed in astronomical numbers. And how cooperation. Those are, of course, very important events, can all of that be assessed... Yet some people advise us to which laid the foundation for the post-war world order. forget everything. But, as the Russian saying goes, where As we approach these anniversaries, we see can we find such an axe to cut off our memories? that there were and still are active attempts to rewrite I took interest in the Nuremberg trials a long the history of the World War II, to revise its results, to time ago, in 1960s, I wrote several books about it and whitewash the Nazis or even to turn them and their prepared scripts for two documentaries. I think, it gives accomplices into heroes. me the right to highlight the main, as I see them, facts and In fact, attempts are being made to revise the final observations on the subject. documents of the Nuremberg trials that clearly indicate First, let me emphasize that ever since the the initiators and the culprits of this war and qualify the beginning of the war, the Soviet leaders insisted on an Nazi ideology and the Nazi crimes. The purpose of these international trial over the leaders of the Nazi Germany. unscrupulous attempts is to use historical speculation in Notably, the impunity of the culprits of the World geopolitical games, to provoke political phobias and to set War I had largely predicated the decision of the leaders whole countries and peoples against each other. of the Nazi Germany to start a new war and to commit I would like to highlight some of the issues related numerous war crimes. Articles 227 and 228 of the Treaty of to preparation and holding of the Nuremberg trials over Versailles of 1918, however, which legally ended the World chief German criminals, which was a response to the War I, contained an obligation to criminally prosecute the atrocities of the Nazis, unprecedented in the world history, German Keizer Wilhelm II and his accomplices. Keizer was and which became a milestone in the development of to be tried by a special tribunal consisting of five judges international law and national legal systems. This process appointed by the UK, France, Italy, the US and Japan. became the first instance of public condemnation of But that did not happen. crimes of a state level, criminal acts of a regime, its penal According to the documents that have since been institutions and its senior political and military figures; it declassified, back in the late 1941, the Soviet government gave a harsh assessment to its accomplices. directly raised the issue before the allies about the Let me remind you that during the World War responsibility of the German government and command II, the USSR suffered huge losses. These losses (both for the crimes committed on the territories temporarily human and material) were much bigger than those of all occupied by the Wehrmacht. the Allies combined. On April 27, 1942, the Soviet government The USSR lost almost 27 million people, of that officially directed a note to all the envoys and about 16 million were civilians (to put you into perspective, ambassadors, titled “On the monstrous atrocities and France lost 412 thousand people, the UK lost 92 thousand brutal violence of the German Fascist invaders in Soviet and the US — 3,000). Most of the Soviet people died in districts occupied by them and on the responsibility the occupied territory, in concentration camps and at of the German government and military command for forced labour. The Nazis enslaved nearly five million of my these crimes”. The demand to create the International compatriots. We should add to the human losses the fact Military Tribunal was also contained in the declaration that after the war the birth rate in the USSR fell nearly by of the Soviet government from October 14, 1942, “On the 16%. Therefore, total (direct and indirect) demographic responsibility of the Nazi invaders and their accomplices losses of the Soviet Union amounted to approximately 50 for the atrocities committed by them in the occupied million people. countries of Europe”.
58 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 On November 2 of the same year, the Presidium go on reproducing people who want to continue the way of the Supreme Council of the USSR (the collective head of they have in the past”. the state) formed an extraordinary state commission on the Such opinions were typical among many investigation of atrocities of the German invaders and their Americans. According to a survey conducted in 1945, 67% accomplices. of the US citizens stood for a swift out-of-court punishment The Commission brought together a variety of of the Nazi criminals, practically, for lynching. The British materials, incriminating the Nazis in the destruction of were just as vindictive. As one politician noted, all they millions of innocent civilians, including children, women could discuss were the places where to put the gallows and and the elderly, in the inhumane treatment of prisoners the length of ropes. of war, and the destruction of towns, villages, historical Probably, that was the fate awaiting Germany if it monuments and art objects, as well as in enslavement of was not for a firm position of the Soviet Union. millions of people. These materials included testimonies Naturally, the unprecedented atrocities of the of witnesses and victims and documentary evidence: Nazis caused anger and universal indignation in many photographs, examiners’ reports, exhumation of bodies countries, first of all in the countries that directly suffered and original documents issued by the Nazis themselves. from the Nazi aggression and villainies of the invaders. In November 1942, Moscow prepared a response Many people wanted revenge and did not have the patience to another British diplomatic note. Soviet leader Joseph for organizing and holding trials in accordance with legal Stalin personally corrected a phrase in the draft response principles. prepared by the People’s Commissar for Foreign Affairs Extrajudicial executions did take place. We can Vyacheslav Molotov: “The Soviet government would hardly blame the French Resistance members who welcome it if in view of the above we could agree on without a trial executed over eight thousand Nazis and creation of the International Tribunal immediately, before their accomplices. Certainly, that was an act of retribution. the war ends”. However, an open trial would be a better historical lesson in However, the idea of an international trial over keeping with the spirit of the times and the notions of legality the Nazi war criminals did not establish itself among the and justice, it would be more compelling and didactic. Allies at once. It seems that the Soviet leaders turned out to be Some of the Western politicians wanted to do wiser and more visionary than many Western politicians by away with the war criminals without legal procedures and insisting on a legal procedure for punishing war criminals. formalities. For example, back in 1942, the British Prime When Churchill tried to impose his opinion on Minister Winston Churchill said that the Nazi leaders Stalin, he responded firmly: “Whatever happens, there should be executed without a trial. And he expressed this must be... a corresponding court ruling. Otherwise people opinion several times. will say that Churchill, Roosevelt and Stalin just took Similar ideas existed on the other side of the revenge over their political enemies!” Atlantic, as well. In March 1943, at a dinner with Lord In a meeting with Stalin in Kremlin on October 9, Halifax, the ambassador of the United Kingdom, the US 1944, Churchill said, “We must make sure that even our Secretary of State Cordell Hull said that he would prefer to grandchildren do not witness the defeated Germany rising “shoot and physically destroy all the Nazi leaders”. from its knees!” Stalin did not agree with such a formula in Some of the military had an even simpler solution. principle. He replied, “Overly harsh measures will arouse For example, on July 10, 1944, the US General Dwight D. a desire for revenge”. Eisenhower suggested that the enemy leaders should be Notably, even during the war in the Soviet Union shot “attempting to escape”. there were the first public trials of the Nazi criminals. For There were also ideas to destroy the whole German example, a military tribunal in Kharkiv in December 1943 General Staff, the entire SS personnel and all of the leaders considered the case of three German officers accused of of the Nazi party (including the smallest ones), etc. barbarous executions of civilians using gaswagens, mobile The then US President Franklin D. Roosevelt not gas chambers. The trial became a topic for a documentary only did not contradict his comrades-in-arms, but actually film that was screened across the country. supported them. On August 19, 1944, he noted: “We have Gradually, our Western allies also came to the got to be tough with Germany and I mean the German idea of a trial. In the end, the Soviet leadership prevailed. people, not just Nazis. You either have to castrate them or However, Prime Minister Churchill thought that the trial you have to treat them in such a manner so they can’t just should be a political, not a legal, act. President Roosevelt
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 59 70TH ANNIVERSARY OF THE NUREMBERG TRIALS REPORT BY ALEXANDER ZVYAGINTSEV, DEPUTY PROSECUTOR GENERAL OF THE RUSSIAN FEDERATION said that the procedure should not be too legal and under 19 countries more signed the Agreement more and the no circumstances should journalists and photographers be Tribunal was rightly called the Court of Nations. allowed in the courtroom. The Charter introduced legal liability for the To be fair, along with cynical proposals for the people who formed, directed and implemented the policy tribunal as a formal smoke screen for the forejudged death of war as a source of hatred and mass atrocities. At the penalty, some representatives of the Allies did speak of same time, criminalization of aggression as the gravest the need of an earnest hearing and fair verdicts. Robert international crime received a firm legal grounding. H. Jackson, an American judge and future chief United The London Agreement met international approval: States prosecutor at the Nuremberg trials, said, “If we it was high time for a strict lesson for the authors and want to shoot Germans as a matter of policy, let it be done executors of the horrible plans of world domination, terror as such, but don’t hide the deed behind a court. If you and mass killings, sinister ideas of racial superiority, are determined to execute a man in any case, there is no genocide, horrific devastation and plunder of vast territories. occasion for a trial...” Members of the Tribunal included: from the USSR From July 17 to August 2, 1945, leaders of the — Deputy Chairman of the Supreme Court of the USSR USSR, Great Britain and the United States met in at the Iona Nikitchenko, from the USA — former Prosecutor Potsdam (or Berlin) Conference, where they discussed General Francis Biddle, from the UK — Presiding Judge Sir the issues of the post-war Europe. They made important Geoffrey Lawrence, from France — professor of Criminal decisions about demilitarization and denazification of Law Henri Donnedieu de Vabres. Germany and, among others, about punishment of war Each co-creator of the London Agreement sent criminals. Importantly, the allies officially committed to their chief prosecutors, their deputies and assistants. give the accused a swift and fair trial. The final document Roman Rudenko headed the Soviet delegation (albeit, stipulated that an agreement on this issue and specific a little later); he was the prosecutor for the Ukrainian date of the beginning of the trial would be reached at the Republic at the time. negotiations currently held in London. At the first joint meeting, chief prosecutors from It is no secret that preparation of the Charter of the USSR, the USA, the UK and France compiled the list the Nuremberg Tribunal caused some arguments, because of defendants. At first, the list was supposed to include the Allies had different legal systems (Anglo-Saxon, only ten to twelve people from various Nazi governmental continental and socialist). Each country had its own legal bodies. But USSR’s Iona Nikitchenko insisted on including traditions, and there were significant differences between German industrialists. In the end, the list was extended. national legislations, especially in procedural norms. The trial commenced on November 20. The list of Robert H. Jackson, whom I already mentioned, recalled his defendants included 24 Nazi criminals with their ideology shock when he “heard what the Russian delegation was and practice of national superiority, racism and violence. saying about the Anglo-American prosecution practice... Three of them were not present: Robert Ley committed They believe that since the continental law does not shift suicide, Gustav Krupp was considered medically unfit for the onus of proof to the accused, the Anglo-American trial and the missing Martin Bormann was tried in absentia. system is unfair, because a defendant is not provided with Soon after the end of the World War II, people a full account of evidence collected against them... There is started saying that the Nuremberg trials could not have certain rationality to this criticism”. been fair, because it was a trial of victors over the defeated. In spite of significant difficulties, lawyers In summer 2005, in an interview for the representing the four victorious powers found mutually documentary film “The Nuremberg Tocsin” Deputy acceptable solutions and created unique procedural tools Chairman of the Supreme Court of Nuremberg Ewald that turned out to be quite effective. Bershmidt (now retired) directly said that the trial was not On August 8, 1945, three months after the biased, it was truly just and honest. victory over the Nazi Germany, representatives of the Eight months ago, in September 2014, Peter governments of the USSR, the USA, Great Britain and Küspert, president of the Nuremberg Court, told me France signed the Agreement on the Organization of about the trial during an interview for a new film: the Trial of the Major War Criminals. Charter of the “I can confirm the legal purity of the Nuremberg trials. International Military Tribunal for the prosecution and I believe it was very just. The prosecutors collected punishment of the major war criminals of the European thousands of documents. More than 400 witnesses gave Axis was an integral part of that Agreement. Later, their testimonies”.
60 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 This is what well-educated Germans say, those issued, part of them to Germans. Newspapers, radio and who look at the history objectively. The true lawyers, who cinema allowed millions of people around the world to dedicated their lives to jurisprudence, to the service to Law follow the progress of the trial. It is for this purpose that the and Justice. Importantly, they now organize lessons about representatives of the media were given a greater share of the Nuremberg trials in the hall No. 600. This is the hall seats in the courtroom: 250 out of 350. where nearly 70 years ago the hearings took place. The Nuremberg trials were, indeed, trials and not I have been to Nuremberg several times and a political reprisal of victors against the defeated. conducted classes in that hall with schoolchildren and The Soviet delegation had done great students, the future German judges and prosecutors who preparations for the trial. A lot of materials and after graduation will work in courts and prosecutor’s documents of the Extraordinary State Commission offices. They listened to the stories of the Nuremberg trials had to be put in order. German documents obtained by with great interest. the Soviet troops also needed to be prepared to use at I think it is an interesting practice, which we court. A small group of prosecution officers was sent need to implement as well. For example, this autumn, we to Nuremberg for this purpose. They were selecting might conduct lessons in honour of the 70th anniversary materials that could be used by the Russian prosecutors of the Nuremberg trials in all schools and faculties of and by the people conducting the preliminary law in Russia. interrogations of defendants and witnesses. The Nuremberg trials were distinguished by The Soviet mission organized special documentary the fact that the defendants were provided with all the and investigatory groups who were systematizing necessary procedural guarantees. They could defend documents and conducting preliminary interrogations. themselves personally or through a lawyer, provide Many members of the Soviet delegation could evidence in their defence, give statements, question testify of the Nazi atrocities themselves. For example, witnesses, etc. Joseph Hofmann, aide-de-camp and personal bodyguard For example, German lawyers were employed of Roman Rudenko, with tears in his eyes spoke about to defend the accused, and they were paid good money the liberation of a Polish town of Lublin and the Majdanek at the time. They had 27 lawyers at their service camp located near it. The interview took place in Poltava (many of whom were former members of the Nazi in November 2014, five months before his death, when party, by the way), who were assisted by 54 paralegals a documentary about the Nuremberg trial was filmed. and 67 secretaries. They were allowed to study all He was particularly shocked by the size of the concentration the documents used in the trial, all of which were camp, which the Nazis called “the extermination camp”. translated into German. Everybody could understand I would like to quote his words: “At the camp, fires where everything that was going on: the hearings were being human bodies were burned were still smouldering. Six gas simultaneously interpreted into four languages: English, chambers, each able to hold over a thousand people, could French, Russian and German. Defendants could bring in not burn all the corpses. Prisoners told us that the Nazis witnesses. Moreover, the number of witnesses introduced then collected the ashes and used it to grow vegetables. by the defence was two times bigger than that of the At Majdanek, my boots became white with human ashes. prosecution. Overall, the defence spoke three times The whole area was covered with it”. Joseph Hofmann’s longer than the prosecution. For example, Hermann father and uncle died. He told me how the Nazis buried his Göring alone, who was called “the Nazi No. 2”, spoke at grandparents alive just because they were Jewish. the trial for almost two days. Notably, the Soviet prosecutors presented Hundreds of witnesses have been questioned both evidence not only of the crimes committed against the in the courtroom and in the field; thousands of documents, Soviet Union, but also against Czechoslovakia, Poland, photographs, documentary films and newsreels were Yugoslavia, Greece, as well as the premeditated murder reviewed. Reliability and credibility of the database of 50 captured officers of the British Air Force who is beyond doubt. Transcripts of the Nuremberg trials escaped the camp at Sagan in March 1944 (they were amounted to nearly 40 volumes, or 16 thousand pages. executed by a firing squad after being caught on direct The sessions were recorded on magnetic tape and disks. orders from Hitler). The Nuremberg trials were transparent in the According to the decision of the Prosecution broadest sense of the word. All 403 sessions of the Tribunal Counsel, the Soviet prosecutors questioned in court 15 out were open. Sixty thousand passes to the courtroom were of 19 defendants.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 61 70TH ANNIVERSARY OF THE NUREMBERG TRIALS REPORT BY ALEXANDER ZVYAGINTSEV, DEPUTY PROSECUTOR GENERAL OF THE RUSSIAN FEDERATION
The Allies often could not agree on the sentence. hard conditions of the war, collected condemning evidence For example, the Tribunal’s stance on the common plan before the trial and tried to ensure justice and fair or conspiracy of the German leaders. Representative sentences during it. of France Henri Donnedieu de Vabres and his alternate How was it all happening? I do not have much Robert Falco did not see evidence of either. The US Justice time, so I will only speak very briefly about Chief Soviet Francis Biddle was of the same opinion; he said that there Prosecutor Roman Rudenko, who was 38 years old at the was no concept of “conspiracy” in international law before time. the Nuremberg trials. Now let us look at the Nuremberg trials in time The Soviet delegates offered one argument and space and draw some parallels. At the time, the US after another proving that a common plan or conspiracy Prosecutor Robert Jackson had very big ambitions. He really existed and had serious consequences and that it wanted to run for president and he was open about it. should be given an appropriate assessment. The British With this in mind, he came to Nuremberg. In contrast, representative Sir Norman Birkett supported them. He Roman Rudenko he had no presidential ambitions. I think thought that the Tribunal must recognize the existence it was impossible at the time. A young man from a large of a common plan or conspiracy, otherwise the trial over peasant family, his path to become a prosecutor was not Nazism, its party and the state will downgrade to a trial easy. A year before the war, he was dismissed from the over a few individuals. position of the prosecutor of the Stalinskaya Oblast’ and In the end, they achieved a compromise. The a shadow of repressions was looming over him, but in Tribunal recognized the existence of a common plan or the first days of the war he enlisted. During the war, his conspiracy for planning and waging wars of aggression, but career begins its rapid growth. In 1943, he becomes the not for committing war crimes and crimes against humanity. prosecutor of Ukraine. Individual sentences were also a subject for clash Unlike his colleagues, chief prosecutors from of opinions. Several works note the cruelty of Soviet judges the UK, the USA and France, Rudenko knew first- who allegedly demanded hanging all of the accused. hand what the war and atrocities of the Nazis were. Actually, that was the demand of Soviet chief prosecutor, Before the Nuremberg trials, he was in charge of an Roman Rudenko, while the Soviet judges had a different investigative group following the troops and collecting opinion. They thought that Dönitz, von Papen and Fritzsche evidence of the Nazi crimes. After that, he acted as should be sentenced to ten years of imprisonment, while prosecutor in two landmark trials over the Nazis, in Schacht and Frick should be imprisoned for life. Kharkiv and Moscow. The French representatives proposed life His speeches at the trial were compelling, strong, sentences for Jodl, Rosenberg, Frank and Frick, while legally verified, conclusive and resonant. He did not the Americans — for Rosenberg and Frick. The Soviet simply accuse; he was able to rise to the philosophical and French judges did not want to acquit anyone. The understanding of the global tragedy. He exposed the French also did not agree with hanging and proposed essence of Nazism, horrible plans for the destruction shooting instead. of entire nations and peoples and everlasting danger of Deliberations were prolonged by the fact that ideas of national superiority. Arguments of the chief Soviet there was an even number of the Tribunal members, prosecutor formed the basis for recognizing aggressive and their votes were often evenly divided, while a war the gravest crime. definite decision required a minimum of three votes out Moreover, Rudenko got along with people very of four. The preliminary vote also included assistant well. For example, at first his relationships with Robert judges, but their votes were often evenly divided as Jackson, American prosecutor, were rather tense, well. Because of this, three defendants were acquitted. because Jackson always tried to show that he was For example, Iona Nikitchenko and Henri Donnedieu de in charge. After all, Nuremberg was in the American Vabres voted for convicting Hjalmar Schacht, while Sir occupation zone. Rudenko kept a low profile, but did not Geoffrey Lawrence and Francis Biddle voted against it. waver. And then their relationships improved. Everything Since a conviction required at least three votes, Hjalmar changed after one incident. Schacht was acquitted. In winter of 1946, Rudenko was reported that In the West, there is a lot being said and written American soldiers were warming themselves by the fire, about the Western participants of the trial, but hardly using the documents the Soviet delegation intended to use anything about the Soviet representatives who, despite at the Nuremberg Tribunal for kindling!
62 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 Naturally, he was outraged and informed car. After all, Judge Jackson was driven in the Führer’s Jackson. Jackson was shocked and expected a scandal. limousine and Ribbentrop’s Mercedes! In fact, the car was But Rudenko acted like a real man. He looked through used by a representative of SMERSH, the Soviet counter- the documents, saw that they were insignificant and intelligence service. did not make a fuss. Jackson appreciated it. After that, But who was the culprit? Who arranged a according to Jackson’s personal bodyguard Morits Fuchs, provocation with the aim to embroil chief prosecutors he often came to Roman Rudenko’s house and they had of the USSR and the USA? There were a lot of people lengthy discussions. who wanted to. For example, surviving SS officers. They In December 1945, one incident nearly caused repeatedly threatened to find a way into the courtroom a serious conflict between the two delegations. Around and take prosecutors and judges hostage. This is why midnight, the Soviet delegation’s Horch drove up to the the curtains in the courtroom were always tightly drawn, Grand Hotel. and the prisoners were escorted through an underground Suddenly, a man ran up to the car and fired. gallery... But the gunman was never found. The driver, a Soviet sergeant, was killed. Before dying, The other Hofmann, Evgeniy, head of the Soviet he managed to say that the gunman was wearing the translators, left a lot of interesting observations in his American uniform. memoirs. For example, he told that the Nuremberg trials He fled in the direction of the train station. were the first instance when simultaneous interpretation American journalists thought that Rudenko was the was broadly used. It was not smooth sailing: four intended victim. Indeed, it was supposed that Russia’s languages, faulty equipment, and shortage of qualified chief prosecutor should be driven in the gorgeous trophy interpreters. The Nazis used it to their advantage
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 63 70TH ANNIVERSARY OF THE NUREMBERG TRIALS REPORT BY ALEXANDER ZVYAGINTSEV, DEPUTY PROSECUTOR GENERAL OF THE RUSSIAN FEDERATION whenever they could. Göring, Ribbentrop, Kaltenbrunner Rudenko his head. But Paulus was firm and confirmed and some of the other defendants tried to confuse the all his statements. interpreters and the judges. And then the spring of 1946 came. The process I would like to tell one more story. It was late at seemed to be in full swing and unstoppable. Dozens of night. The Soviet translators were trying to translate the witnesses, hundreds of pieces of evidence, thousands of speech of Rudenko’s assistant from Russian into English translated pages — all of it was behind. The final battle laid for the judges of the Tribunal. There was not enough ahead. But something unforeseeable happened. On March time, nor energy. They have not been sleeping for days. 5, in the American town of Fulton Churchill delivered his When Rudenko asked the American chief of translators, short speech. Just 15 minutes, but they turned the world Colonel Doster, for help, he threw up his hands: “We will upside down. His main idea was “Communism is a threat never do it by morning!” to the West. We must fight it”. It was a signal to start the Countess Tatiana Trubetskaya, head of the Cold War, to construct the Iron Curtain. Russian translators working under the authority of the The defendants immediately became exited. USA and France, heard it and told her superior Colonel Göring stated bluntly, “Finally, now we will crush them!” Doster, “The Russians will take care of it”. For three days, heavy silence hung in the judges’ room. No For the first time since 1917, the two Russias one knew how to proceed. But common sense prevailed. united for a common cause. For the time being, they put politics aside, because I also cannot omit the brilliant tactical move of otherwise the Nazis might have gone unpunished. the chief Soviet prosecutor: appearance of field marshal Göring assessed the charges and evidence Friedrich Paulus at the trial as a witness, who was against him correctly; he did not doubt his fate — the death delivered to the American occupation zone, to the city full of sentence — and decided to make the Tribunal the scene of various secret service agents, without any of them noticing! his last fight. He did not shy away from confrontation and Everybody in Germany, and in the rest of the escalation. world, thought that Paulus was dead. Three years earlier, Sir Norman Birkett, representative of the United on February 3, 1943, national mourning was declared Kingdom, later wrote in his diary: “The cross-examination in the Third Reich. At the coffin, Hitler said an eloquent had not proceeded more than ten minutes, before it was speech about the achievements of Paulus, who perished at seen that Göring was the complete master of Justice Stalingrad. Paulus was buried as a hero. Hitler personally Jackson. Very polite, extremely perceptive, shrewd, put a diamond-studded marshal’s baton in the coffin. But clever and inventive, he quickly assessed the situation, the coffin was empty. Paulus died for the Reich, but he and, as his self-confidence grew, his advantage over the lived in Russia. His was spared for the trial over the major Prosecution became ever more evident... His testimony Nazi war criminals. took almost two days and never, under any circumstances, Rudenko was one of those who suggested to was he interrupted”. secretly delivering Paulus from Russia to Nuremberg. His Joseph Hofmann recalled those events in the statement was critical for the Soviet delegation. Only he interview he gave for the documentary on the Nuremberg could personally confirm that the operation Barbarossa, trials in autumn of 2014. “I witnessed Jackson’s interrogation a surprise attack on the Soviet Union, was developed well of Göring. He was an intelligent man, everybody agreed. before June 1941, while the Nazis claimed that the threat But he did not have enough evidence, and Göring defeated came from the Soviet Union and they just made a pre- him. Then he threw his folder on the table and refused to emptive strike. continue the interrogation... After that, Rudenko started When the Lord Justice Geoffrey Lawrence, questioning him... And virtually made him confess...” president of the Tribunal, asked Rudenko, “How long will As an American journalist aptly put it, Göring it take you to deliver Paulus from Moscow to Nuremberg?” had a hard time under Rudenko’s “machine-gun bursts of He simply said, “A few minutes, I think”. The hall went still... killer questions”. Another English lawyer was even more It was the moment of truth for Rudenko. After graphic: “This goose has had it!” all, he knew: it is one thing for Paulus to give testimony Certainly, Chief Soviet Prosecutor Roman Rudenko in Moscow, and completely another in Nuremberg, his drew the final line under the interrogation of Göring, and homeland... How would he behave in the face of his a very bold one. His questions plunged Göring into deep former accomplices? Imagine if Paulus did not confirm despondency. Afterwards, the Reichsmarschall stopped the testimony he gave in Moscow? It could have cost his active resistance, became dispirited and dramatically
64 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 changed his behaviour. It was noted by everybody present of violence, proved that they can take a stand against in the courtroom, and Rudenko’s prestige increased. universal evil and administer justice. Everyone started to talk about his professionalism. After the Nuremberg trials, there were 12 other He performed his role in the International processes. They were not international. One of them was Military Tribunal with brilliance and dignity, which largely the so-called Einsatzgruppen trial. In the beginning of the predetermined his future. In 1953, he was appointed war, regular German forces in Poland and the USSR were the prosecutor general of the USSR and worked in that followed by the special groups, or the SS Einsatzgruppen. capacity for 27 years. In the entire 293-year history of the Their task was to destroy “everyone who may pose a threat prosecutor’s office in Russia, only Alexander Vyazemsky to the Nazi Germany”. They simply annihilated Jews, served in this position longer, for 29 years, and it was in the Gypsies and other sub-humans, not sparing women and time of Catherine II. children. In a mere two years, the SS Einsatzgruppen have From September 30 to October 1, 1946, the destroyed over a million people. Tribunal gave its verdict. Most of the accused were found The American Benjamin B. Ferencz was a chief guilty of grave crimes against peace and humanity. prosecutor in this process. He was just 27 years old Twelve of the accused were sentenced to death through back then. I met him and we spoke about Nuremberg hanging. These were Göring, Ribbentrop, Keitel, when he was over 90. “I thought and I still think that the Kaltenbrunner, Rosenberg, Frank, Frick, Streicher, lessons of history that we learned in Nuremberg can Sauckel, Jodl, Seyss-Inquart and Bormann in absentia. only make sense if they are used to prevent such crimes Seven of the accused received prison sentences ranging in the future,” he said to me. When I asked him what he from 10 years to life in prison, three were acquitted. The remembered best of all at the process, he answered, Soviet party insisted on a stricter verdict and submitted “during the trial I did not so much remember as I was its dissenting opinion to the court. astonished to see in the defendants the lack of any hint The verdict of the Nuremberg Military Tribunal of remorse or compassion to the millions of killed and states: “War is essentially an evil thing. Its consequences tortured… This I will never forget”. are not confined to the belligerent States alone, but affect Bitter experience of the World War II made the whole world. To initiate a war of aggression, therefore, everyone take a fresh look at humanity’s many challenges is not only an international crime; it is the supreme and understand that every person on the planet is international crime...” responsible for the present and the future. The fact that The main elements of the state and political the Nuremberg trials did happen means that our leaders machine of the Nazi Germany, raised to diabolical should not anticipate impunity and ignore the determination perfection, were pronounced criminal. However, contrary to of peoples, debasing themselves to double standards. the opinion of the Soviet government representatives, the Being a response to the unprecedented Nazi High Command, the General Staff and the Sturmabteilung atrocities, the Nuremberg trials became an important (SA) were not considered criminal. milestone in the development of international law and Thus, the Soviet Union played a huge role in national legal systems. It had and still has a significant the creation and operation of the Nuremberg Tribunal. impact on many norms of international common and First, the very idea of its establishment belonged to the contract law and international judicial institutions. USSR. And the leadership of our country was able to In particular, it facilitated the UN’s adoption of the realize it, despite, as we see, the initial resistance of the Convention on the Prevention and Punishment of the Crime Allies. Second, the Soviet diplomats and lawyers have of Genocide in 1948 and the four Geneva Conventions for made a significant contribution to the Agreement for the the protection of war victims adopted in 1949. Prosecution and Punishment of the Major War Criminals After the Cold War, the UN Security Council of the European Axis signed in 1945, which became the took into account the Nuremberg experience when it basis for the International Military Tribunal at Nuremberg. established Criminal Tribunals for the former Yugoslavia Third, the Soviet delegation has done outstanding work and Rwanda in the early 1990s. preparing and conducting the trial, including supporting Having developed within the UN framework a the prosecution and formulating the verdict. special international treaty — the Rome Statute of the The Nuremberg trials were the first and so far International Criminal Court (1988), people of the world the most important legal action undertaken by the United realized the idea of the permanent international judicial Nations. Peoples of the world, united in their rejection institution to prosecute international criminals.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 65 70TH ANNIVERSARY OF THE NUREMBERG TRIALS REPORT BY ALEXANDER ZVYAGINTSEV, DEPUTY PROSECUTOR GENERAL OF THE RUSSIAN FEDERATION
Importantly, the charter documents of these It helped to expose and prosecute thousands and international courts (tribunals) were not only based on the thousands of Nazis and their collaborators who were Nuremberg Charter and its verdict; they also capitalize on guilty of previously unheard-of ghastly crimes. By the their principles in relation to the present-day background. way, the atrocities on the occupied Soviet territory, largely Yet there is still a long way to go in order committed by the collaborators, often surpassed in their to develop an effective international toolset to fight violence the ones committed by the Nazis themselves. international crimes. Until 1990s, great number of lawyers and just For instance, we should think why of all 192 UN honest persons from Israel, Canada and the US took part member states, 137 (almost two-thirds) still have not signed in the search and prosecution of criminals. The USSR the 1968 Convention on the Non-Applicability of Statutory actively cooperated with other states in order to expose the Limitations to War Crimes and Crimes against Humanity. Nazis and put them on trial. For almost ten years after the enactment of the Our country continues this work even today. Rome Statute, the states concerned could not decide what For instance, Prosecutor General’s Office of the Russian should be understood under the term “act of aggression”, Federation for many years has been sending the materials and who should decide whether there are reasons to concerning Nazi prison camp guards to a British historian. initiate criminal proceedings. Only in June 2010, the UN Just recently, in early May, Russia’s Investigative member states managed to make corresponding additions Committee initiated criminal proceedings under art. 357 of to the Rome Statute. Yet a lot still needs to be done to the Criminal Code (genocide) against Vladimir Katriuk, 93, ensure these additions coming into effect and becoming for participation in mass murder of Soviet citizens in the generally accepted norms of international law. And to village of Khatyn, Belarus. Unfortunately, Canada refused to ensure this, states need to show their political will… extradite Katriuk for prosecution several times and in 2008 The lessons of Nuremberg are especially relevant dropped all charges against him. It is not very clear why. today, when noble ideas of international justice often go Political and legal factors helped many Nazi to pieces after they collide with bloc thinking, political criminals escape justice. prejudices and national egoism; sometimes they even get Just recently, the US published a controversial discredited by the malpractice of some authorities currently report on many Third Reich functionaries who found rendering international criminal justice. We must not allow shelter in America after the war. It turns out that the Nazis these authorities to become the tool for achieving political and their accomplices were in demand by the CIA and goals of a state or a group of states; they must not condone the defence industry. The report does not give the exact arbitrariness towards undesirable countries or their leaders. number of culprits who fled to the US after the war, but it I would like to raise again the question: who hints at several thousand. This is not the first proof of the politically hogtied the International Criminal Court fact that “the citadel of democracy” has been harbouring following the events in South Ossetia and prevents it from Nazi criminals for many years. initiating criminal prosecution for the crimes committed This dirty story was made public thanks to the in August 2008? The Russian party handed over all the report made by our colleagues from the US Department materials to the Court already back in 2009! Why the Court of Justice. The powers that be in Washington have been is not doing anything about war crimes in the south- against its publication for a very long time. Senior lawyer western Ukraine, where children, old people, innocent men Mark Richard started the work on the report. In 1999, he and women are being killed?! convinced his colleagues to tell about the “critical page” in Time is a strict judge. It is absolute. It is not the American history (and we have to give credit to this man determined by people’s actions, it does not forgive for his civic courage). Six years later the work was complete, contempt to verdicts that it once made, be it of a man or but it was banned from publication. Only thanks to the efforts the entire peoples and states. Unfortunately, the hands of David Sobel, a lawyer, the Department of Justice provided on its dial never show humanity the direction of their the copy of this report, from which it had thoughtfully movement, but having once started counting the moments, removed around a thousand pages. Yet “The New York time eagerly writes fateful letters to those who tried to be Times” managed to obtain the full version of the report. too familiar with it. The Department says that the report is not finished and is In the post-war time, it seemed that the full of factual errors, but it does not specify, which ones. Nuremberg trials greatly contributed to the eradication of How did it become possible? With the advent of the the “brown plague”. In this, its historic role is indisputable. Cold War, the West started seeing the USSR as its enemy.
66 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 And according to popular belief, the enemy of my enemy is are becoming more obvious. Cultures and civilizations my friend. show the signs of deep cracks along the edges. So we cannot but help asking a question: how Terrorism, a new sweeping evil, is on the rise much and what efforts does it require, to draw conclusions and has quickly grown into an independent global from the experience of the Nuremberg trials that would force. It shares some common features with Nazism usher in a new world order without wars and violence, and Fascism, in particular, its flagrant ignoring of based on actual non-interference in the internal affairs of international and national law and complete disregard other peoples and states, on respect of human rights? of human life. Surprise attacks, cynicism and cruelty of All prosecutors at the Nuremberg trials expressed terrorist attacks together with a sheer number of their concern about the safety of peoples, so that Nazi crimes victims sow fear and chaos in the countries that seemed could not be repeated. Roman Rudenko, chief Soviet well protected against any threat. prosecutor, stressed that the defendants must be punished International terrorism, its most dangerous to the fullest extent of the law not just for their crimes, variety, is directed against civilization itself. Even now, but “for the sake of strengthening global peace, for the it poses a significant threat to human development. sake of future safety of nations”. Robert H. Jackson, chief We have to fight this evil without fail or failure, just like American prosecutor, said that “it is beyond any doubt that the International Military Tribunal did 70 years ago in prosecution of only several top Nazi officials and leaving Nuremberg. the network of Nazi organizations unpunished in the Today we remember the Nuremberg trial not only post-war society would mean the encouragement of the as a milestone in the history of humankind. Successful possibility for development of a germ of a new Nazism...” experience of combating aggression and Nazi terror of Recently, there have been many publications, the World War II is still relevant. The principles set by the films and TV programmes that distort the historical reality. first international criminal court constantly prove their Numerous “works” of the former Nazis and other authors applicability in the present-day global world, which is full whitewash and sometimes even heroize the leaders of the of conflicts and contradictions. Many approaches can be Third Reich, while Soviet military commanders are readily adopted as they are. Others, in our view, require revision besmirched, without so much as a backward glance at the and development. The world faces new challenges that we truth and actual course of events. need to address. A common trick is used — to show Nazi leaders as It is an open secret that popularisers of Fascism ordinary persons: look how normal and even nice they are; and Nazism have some influence over the younger minds, they are not sadists and hangmen. including in the countries that suffered all the horrors of Take Himmler as an example. Who really was inhuman regimes of Hitler and Mussolini. It is fraught with this “tender” person? These are his words spoken in a grave danger for the generations to come. It cannot go public: “I do not care in the slightest how the Russians unmentioned that the actions of some national authorities or Czechs are feeling. Whether some nations prosper or contribute to it, however willingly or not. starve is of interest to me only because we can use them Some states (strangely enough, primarily as slaves for our culture, and the rest does not make European ones) have long been trying hard to review the any difference whatsoever to me. Whether ten thousand role of the Soviet Union in World War II and to equalize Russian women die of exhaustion or not, while digging an Nazism and the Stalinist regime. They are trying to antitank ditch, only concerns me because this ditch must involve some respected international organizations be built for Germany…” into these attacks on history and truth, including the Even Hitler gets his share of warm depictions. Council of Europe and Organization for Security and In the vast literature of “Hitler studies”, he is shown Cooperation in Europe. as a brave warrior of the World War I, a man of arts I wish I could speak today about the triumph of — a painter and architecture connoisseur, a humble the Nuremberg principles in the modern world and how vegetarian and an exemplary statesman. successfully they are implemented in the framework of We regret to acknowledge that the relapses of the states’ cooperation. Alas, the real picture compels us past are happening increasingly often in some countries. to focus on problems instead. The Nuremberg Charter We live in a turbulent and unstable world that is growing stipulates a crucial principle of inevitability of criminal more vulnerable as the years pass. The contradictions liability for international crimes. Yet humankind so far has between the developed countries and the rest of the world failed to ensure its consistent implementation.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 67 70TH ANNIVERSARY OF THE NUREMBERG TRIALS REPORT BY ALEXANDER ZVYAGINTSEV, DEPUTY PROSECUTOR GENERAL OF THE RUSSIAN FEDERATION
There is a current trend on international arena Unfortunately, we have to admit that people today to talk about fighting impunity, but when it comes to are not immune to Nazism and extremism. The same is practice, double standards are used very liberally, true about the young people living in the Allies countries. according to the well-known saying of an American For instance, there are over 900 extremist groups in the president of the 20th century: “He may be a son of a bitch, US, including the neo-Nazi ones. but he is our son of a bitch!” Huge educational, outreach and legal efforts are As President Putin pointed out, the “vaccine” required, especially among the younger generation. against the Nazi virus, discovered in the Nuremberg trials, At the initiative of Russia and some other states, is losing its potency in some European countries. since 2004 the General Assembly has been adopting the It is a great shame! It is a shame because we resolutions aimed at fighting Fascism and neo-Nazism. witness now many cases of the revival of the Nazi ideology, The most recent one was adopted on December 18, 2014. It cases of history and lessons of the World War II being is called “Combating glorification of Nazism, neo-Nazism forgotten or distorted. It will just suffice to mention and other practices that contribute to fuelling contempo- recent remarks of Ukraine’s Prime Minister Yatsenyuk rary forms of racism, racial discrimination, xenophobia and who said about a certain Soviet invasion of Ukraine and related intolerance”. This document was co-authored by Germany. This can only be seen as a distortion of history, the total of 44 nations from all over the world. a defilement of the memory of victims and heroes of the The resolution expresses deep concern about any Great Patriotic War, including millions of Ukrainians who forms of glorification of the Nazi movement, neo-Nazism were killed by the Nazis and their accomplices. and former members of the Waffen SS organization. It also Russophobes and Cold War proponents in some voices concern about declaration or attempts to declare Baltic states are falling back to falsification of history such members and those who fought against the Allies increasingly often. and collaborated with the Nazis the participants of national The actions of the Nuremberg International liberation movements. Military Tribunal are often called “the Nuremberg The voting results for these resolutions are quite epilogue”. This metaphor is totally appropriate in relation telling: 133 states voted for, 4 delegations voted against to the prosecuted leaders of the Third Reich and disbanded (Canada, Palau, USA and, for the first time, Ukraine), criminal organizations. Yet as we can see, the evil of 51 states abstained. Fascism and its various manifestations are harder to The resolution provides for the appropriate eradicate than it seemed back in 1940s, in the euphoria remedial actions taken on the national level, including of the great victory. Moreover, this evil appears in the legislative ones. countries that have won the war. Last May, Russia introduced criminal It is wrong to assume that the history of Nazism responsibility for rehabilitation of Nazism. Legislation of will stop with the death of the last war criminals and many other countries also includes similar provisions. current experience, including the one of Russia’s For instance, in Germany, you can get behind bars for neighbours, proves it. five years, if memory serves, for denial, belittlement or Unless humanity raises the alarm now, the worse propaganda of Nazi crimes. is to come: the history is going to repeat itself. Have a look It is especially sad (and this one is relevant just in the Internet — there are some very popular websites that for Russia) that we are translating very few Russian promote Nazism and romanticise the SS. And few people books on this subject. Yet there are translated books know about the Nuremberg trials and their outcomes. aplenty in our bookstores. Just go and have a look what This April, the Prosecutor’s Office in Lipetsk is there; you will find memoirs of SS-men, Luftwaffe Oblast’ organized some events to commemorate the officers, Wehrmacht soldiers — you name it. And then 70th anniversary of the victory over Germany and go into a bookstore somewhere abroad. I always do commencement of the Nuremberg International Military when I go on business trips abroad — I have not seen Tribunal. Among these events was a social research a single Russian translated book about the Nuremberg of regional education institutions. Its results showed trials. For the last 25 years, not a single Russian book that about 70% of the respondents aged 15–17 do not was translated and distributed. So why do we feel so know anything about the Nuremberg trials, 19% heard indignant when many foreigners do not know the whole something about it and only 11% said that they know truth about the World War II? About its true victims, its about it. heroes and anti-heroes.
68 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 True, in Soviet times there were few such So I think that we still have something to write translated Russian books abroad. Very few! and talk about… We need to write, we need to speak and to So the question is, is it really surprising that raise the awareness of our people and other nations about there are so few of those abroad who know the true what our allies and we accomplished during and after history of the World War II, the war that our fathers and World War II. Those who forget need to be reminded; those grandfathers fought? who do not know — put wise. I will give you just one example. As you know, every Esteemed colleagues, there is still a long way year Moscow organizes Non/Fiction book expo. My book, to go to ensure that the truth about World War II and the “Nyurnbergsky nabat” (“The Nuremberg Tocsin”), was re- role of the USSR in defeating the Axis, in preparation and cently presented there. So some Americans and Europeans carrying out of the Nuremberg trials, and building of the came over, studied the book and asked, “What is this book post-war world order is made known to the ignorant, so about?” They were told that it is about the Nuremberg trials. that the truth would prevail both over blatant lies and So they say again, “How interesting. Is it in Russian? Who intentional and unintentional hushing up. So that the is the author? A Russian! Why does a Russian author write Nuremberg principles would triumph all over the world about the Nuremberg trials? And why now? What else can and turn into reality. be said about it what has not been said before?”
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 69 Discussion
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
STRATEGIC APPROACH TO ISLAMIC FINANCIAL INSTRUMENTS
27.05
70 71 Discussion
MODERATOR SPEAKERS
Maksim Tafintcev, Aisulu Baibagysova, President, Arab European Head of Representation in Lawyers Association Russia, National Bank of the Republic of Kazakhstan
Linar Yakupov, President, Association of Regional Investment Promotion Agencies – President, Fund for the Devel- opment of Islamic Business and Finance
72 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 STRATEGIC APPROACH TO ISLAMIC FINANCIAL INSTRUMENTS
Vladislav Zabrodin, Managing Partner, Capital Legal Services
Costas Ioannou, Inese Tenberga, Director, Oneworld Mideast Ltd Expert on Banking Law of Dubai Branch the Faculty of Law, Saint- Petersburg State University
73 STRATEGIC APPROACH TO ISLAMIC FINANCIAL INSTRUMENTS
n the work of session “Strategic approach to Islamic and CIS countries were broadly debated, which have financial instruments” were presented many introduced Islamic banking in their financial institution. experts from international financial organizations on Thus, the Head of National Bank of Kazakhstan in Russia development of Islamic business and finance, as well as Aisulu Baibagysova has summarized the experience experts from banking law, which have considered the of Kazakhstan in application of Islamic banking in its Iways of implementation of institution of Islamic banking (IB) financial system, the stages of development of legislation in Russia. background for establishment of Islamic banking. The moderators of the session were Maksim Ms Baibagysova also remarked “In period of financial Tafintcev, president of Arab European Lawyers Association; crisis, having the lack of investments, Islamic banking and Linar Yakupov, president of Association of Regional may serve as the alternative instrument of development of Investment Promotion Agencies and president of Fund for financial system”. In this case the experience of another the Development of Islamic Business and Finance. CIS member country Kirgizstan is notable, which apply Among the issues on the agenda were reviewed the Islamic banking, while shifting from the system of some aspects of functioning of Islamic banking in the commercial banking towards the implementation of countries with sharia law, features and possibilities of Islamic financial institutions. construction of national model of Islamic banking in Inese Tenberga, expert on banking law of the Faculty Russia. Furthermore, the experience of Kazakhstan of Law, St. Petersburg State University, has told about the
74 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 prospects of functioning of Islamic banking in the framework to the principles of Islamic banking. of Eurasian economic Union, stressing out the necessity of Vladislav Zabrodin, managing partner at “Capital setting up level playing field for all market participants for Legal Services” mentioned that the existing legal framework all member states. The first step shall be taken toward the allows to implement the institutions of Islamic banking in professional training of specialists, creation of sharia councils Russia, however it is essential to create the infrastructure at banks, as well as educating the society about the Islamic of assessment of each transaction for compliance to the banking. The speaker has also outlined the pros and positive principles of Islamic banking. The compliance with sharia aspects of IB development in Russia as investment inflow, the law and creation of institutions in Central Bank, which will shift from western banks pressure, ensuring equal rights and ensure this correspondence should be the main objects of access for all market participants. in the implementation of Islamic banking, otherwise there The audience has expressed an intense interest is a huge risk that banks will abuse and carry out their own regarding the issues of granting of credit and procedure of transactions veiled under the principles of IB. borrowing under Islamic banking in view of the bans existing Costas Ioannou, director of “Oneworld Mideast in it as the prohibition of transaction including the degree Ltd Dubai Branch”, in his report presented the experience of uncertainty, and transactions with risky elements. In this of Dubai in its formation as financial centre of the Middle case the transactions with derivatives are not feasible in East. The Gulf corporation council (GCC) plays an essential Islamic banking. Great attention was paid to the questions role in this development, as many countries like Oman, of signing and execution of lease agreement in Islamic Kuwait and Saudi Arabia show a keen interest to the banking system and its difference from conventional form of agenda of this organization. The achievements of Dubai transaction. as international Islamic financial centre can be attributed Maksim Tafintcev has shed light on existing to the following factors as the existence of free economic possibilities of Association in view of development of area, developed legal system, based on English common Islamic financial institutions, including the Middle East in law system. The GCC has the right to act independently major investment projects. The necessity of improvement from the Central bank, which creates flexible terms of of legislation framework is the mandatory requirement for operation as well as providing attractive investment full functioning of Islamic banking were marked, as it will climate for foreign investors. attract more foreign investors. The need of legalizing of IB Summing up the session’s work, the speakers also explained by the fact that the 20 millions of Muslims emphasized the necessity of coordinated approach from living in Russia should be included in the financial market the governmental institutions from one side, as well as without coming into conflict with their religious beliefs. international associations from the other to create an The examples of many developed countries as Luxembourg, institutional framework for application of IB in Russia, Great Britain and Hong Kong were illustrated as counties, the need of propaganda to spread the moral and ethical which has attracted the resources of Islamic financing by background of Islamic banking, inadmissibility of formalized upgrading their own legal background, which corresponds approach toward an institution of Islamic banking.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 75 Conference
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
EURASIAN INTEGRATION: ONE YEAR SINCE SIGNING THE TREATY ON THE EURASIAN ECONOMIC UNION
27.05
76 77 Conference
MODERATOR SPEAKERS
Robert Arutyunyan, Berik Imashev, Aleksandr Konovalov, Member of the Board — Minister of Justice of the Minister of Justice of the Minister, Eurasian Economic Republic of Kazakhstan Russian Federation Commission
78 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 EURASIAN INTEGRATION: ONE YEAR SINCE SIGNING THE TREATY ON THE EURASIAN ECONOMIC UNION
Aleksandr Fedortsov, Igor Tushinskiy, Ovanes Manukiyan, President, Court of the Deputy Minister of Justice of Minister of Justice of the Eurasian Economic Union the Republic of Belarus Armenia
79 EURASIAN INTEGRATION: ONE YEAR SINCE SIGNING THE TREATY ON THE EURASIAN ECONOMIC UNION
St. Petersburg International Legal Forum Fedortsov, President of the Court of the Eurasian held a conference titled “Eurasian Integration: Economic Union; and Igor Tushinskiy, Deputy Minister of One Year since Signing the Treaty on Eurasian Justice of the Republic of Belarus. Economic Union”, which was organized by the Participants discussed the legal consequences Ministry of Justice of the Russian Federation. of transition from EurAsEC to EEU, improvement of VParticipants included moderator Robert competitive legislation of the EEU member states, ways Arutyunyan, member of Board — Minister, the Eurasian to ensure fair competitive environment in transborder Economic Comission; Berik Imashev, Minister of Justice commodity markets and dispute resolution mechanism in of the Republic of Kazakhstan; Aleksandr Konovalov, the Eurasian area. Minister of Justice of the Russian Federation; Aleksandr
80 ПЕТЕРБУРГСКИЙ МЕЖДУНАРОДНЫЙ ЮРИДИЧЕСКИЙ ФОРУМ 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 81 Conference
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
RULE OF LAW IN THE SHANGHAI COOPERATION ORGANIZATION MEMBER STATES
26.05
82 83 Conference
MODERATOR SPEAKERS
Anatoly Kapustin, Aleksandr Konovalov, Berik Imashev, President, Russian Association Minister of Justice of the Minister of Justice of the of International Law - First Russian Federation Republic of Kazakhstan Deputy Director, Institute of Legislation and Comparative Law under the Government of the Russian Federation
84 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 RULE OF LAW IN THE SHANGHAI COOPERATION ORGANIZATION MEMBER STATES
Rustam Shohmurod, Han Henglin, Minister of Justice of Tajikistan Senior Advisor, Ministry of Justice of the People’s Republic of China
Kazem Gharib Abadi, Wijeyadasa Rajapakshe, Deputy Secretary General, High Minister of Justice of Sri Lanka Council for Human Rights of the Islamic Republic of Iran
85 RULE OF LAW IN THE SHANGHAI COOPERATION ORGANIZATION MEMBER STATES
St. Petersburg International Legal Forum held and Wijeyadasa Rajapakshe, Minister of Justice of Sri a theoretical and practical conference on rule of Lanka. law in the Shanghai Cooperation Organization Participants discussed the issues and prospects member states. Participants included Aleksandr of legal cooperation among the Shanghai Cooperation Konovalov, Minister of Justice of the Russian Organization member states, new challenges and VFederation; Berik Imashev, Minister of Justice of the threats brought by deepening integration processes Republic of Kazakhstan; Rustam Shohmurod, Minister and expansion of the spheres of influence of integration of Justice of Tajikistan; Han Henglin, senior advisor to associations. the Minister of Justice of the People’s Republic of China; Participants also agreed to make this conference Kazem Gharib Abadi, deputy secretary general of the High an annual event to discuss various topical issues. Council for Human Rights of the Islamic Republic of Iran;
86 ПЕТЕРБУРГСКИЙ МЕЖДУНАРОДНЫЙ ЮРИДИЧЕСКИЙ ФОРУМ 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 87 Conference
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
CONFERENCE OF SOUTHERN COMMON MARKET (MERCOSUR) MEMBER STATES
28.05
88 89 Conference
MODERATOR SPEAKERS
Ksenia Belikova, Aleksandr Konovalov, Professor of the Department Minister of Justice of the of Civil and Labour Law, Russian Federation People›s Friendship University of Russia
90 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 CONFERENCE OF SOUTHERN COMMON MARKET (MERCOSUR) MEMBER STATES
Julio Cesar Alak, Elena Rafalyuk, Marina Freire, Minister of Justice and Senior Researcher, Institute Judge, Supreme Court of Brazil Human Rights of the of Legislation and Comparative Argentine Republic Law under the Government of the Russian Federation
91 CONFERENCE OF SOUTHERN COMMON MARKET (MERCOSUR) MEMBER STATES
mong participants of the conference were: economic development, observance and protection of moderator of the discussion Ksenia Belikova, human rights” and gave retrospectives and prospects of professor of the Department of Civil and Labour cooperation with MERCOSUR’s institutional framework Law, People’s Friendship University of Russia, and its interaction with Russia and other countries moderator; Aleksandr Konovalov, Minister worldwide; Marina Freire, Judge, Supreme Court of Brazil, Aof Justice of the Russian Federation; Julio Cesar Alak, in her report titled Legal Cooperation of MERCOSUR Minister of Justice and Human Rights of the Argentine Countries she focused on practical effects of MERCOSUR’s Republic; Marina Freire, judge of Supreme Court of supranational institutions on Brazil’s legal system; Elena Brazil; Elena Rafalyuk, senior researcher at Institute of Rafalyuk spoke about similarities and differences in Legislation and Comparative Law under the Government of various integration approaches in MERCOSUR and EEU. the Russian Federation. The panel provided a fruitful discussion Conference of Southern Common Market that helped to find answers to many questions of the (MERCOSUR) Member States was opened by Alksandr participants and audience, and its results allowed to Konovalov who pointed out the potential for cooperation forecast the patterns of future cooperation of MERCOSUR of the Russian Federation with MERCOSUR countries member states with each other and other countries. and the organization itself, emphasizing that Russian Participant finished session with several businesspeople need to get to know better the legal propositions: to continue the research of American systems of MERCOSUR member states. The moderator integration associations in order to ascertain spoke about the prerequisites and factors that facilitated MERCOSUR’s place and role among them; to familiarize and hindered the integration in retrospect; Argentine’s the business circles of Russia and MERCOSUR countries Minister of Justice, Mr Alak, formulated the “four tasks with their legal systems. that MERCOSUR countries face: promotion of democracy,
92 ПЕТЕРБУРГСКИЙ МЕЖДУНАРОДНЫЙ ЮРИДИЧЕСКИЙ ФОРУМ 2015 ПЕТЕРБУРГСКИЙ МЕЖДУНАРОДНЫЙ ЮРИДИЧЕСКИЙ ФОРУМ 2015 93 International Conference of the Federal Chamber of Lawyers of the Russian Federation
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
STRENGTHENING THE INDEPENDENCE OF THE JUDICIARY AND THE ADVERSARIAL SYSTEM — STANDPOINT OF THE BAR
28.05
94 95 International Conference of the Federal Chamber of Lawyers of the Russian Federation
SPEAKERS
Elena Borisenko, Vladimir Pligin, Deputy Minister of Justice of Chairman, Committee of the the Russian Federation State Duma of the Federal Assembly of the Russian Fed- eration on the Constitutional Legislation and State-Building
Yury Pilipenko, Senior Partner, Law Firm “Yust”
96 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 STRENGTHENING THE INDEPENDENCE OF THE JUDICIARY AND THE ADVERSARIAL SYSTEM — STANDPOINT OF THE BAR
Konstantin Dobrynin, Genri Reznik, Axel C. Filges, Deputy Chairman, Federation First Vice-President, Moscow President, Council Committee of Con- Chamber of Lawyers The German Federal Bar stitutional Legislation and State-Building, Federal Assem- bly of the Russian Federation
James R. Silkenat, Paul-Albert Iweins, Urs Haegi, Immediate Past President Former President, French Partner, VISCHER AG — of American Bar Association, National Bar Council Vice-President, Attorney at Law Sullivan Swiss Bar Association & Worcester LLP
97 INTERNATIONAL CONFERENCE OF THE FEDERAL CHAMBER OF LAWYERS OF THE RUSSIAN FEDERATION “STRENGTHENING THE INDEPENDENCE OF THE JUDICIARY AND THE ADVERSARIAL SYSTEM — STANDPOINT OF THE BAR”
articipants included government officials, Rus- Conseil National des Barreaux; and Urs Haegi, Vice Pres- sian lawyers and members of foreign lawyers’ ident of the Swiss Bar Association. associations, legal consultants and scholars, Yury Pilipenko noted that the theme of the confer- as well as international experts on law. Topical ence is directly related to the issue of competition between issues of the Russian legislation and law en- jurisdictions, which was discussed at the Forum earlier: Pforcement, as well as the role of lawyers in solving these independence of the judiciary is one of the main factors for issues, were discussed in view of international experi- solving it. ence. Elena Borisenko also stressed the particular Participants were greeted by Elena Borisenko, importance of the topic: access to justice is relevant for the Deputy Minister of Justice of the Russian Federation; whole world, and the importance of lawyers can hardly be Konstantin Dobrynin, Deputy Chairman of the Council of overestimated since only they can ensure the adversary the Federation Committee for Constitutional Legislation nature of a hearing and, therefore, guarantee the human and State-Building; and Yury Pilipenko, president of the right to a fair hearing. Analysis of the lawyers’ role becomes Federal Chamber of Lawyers of the Russian Federation. even more important since Russia is now on the threshold of He also was a speaker of the panel. Other speakers in- major reforms: Ministry of Justice of the Russian Federation cluded: Genri Reznik, First Vice President of the Moscow develops a draft concept note for regulation aimed at guar- Chamber of Lawyers; Axel C. Filges, President of the anteeing the right of every individual to qualified legal assis- German Federal Bar; James R. Silkenat, Immediate Past tance stipulated in Article 48 of the Russian Constitution. As President of American Bar Association, attorney at “Law deputy minister of justice has noted, “The draft must take Sullivan & Worcester” LLP; Paul-Albert Iweins, former into account whether lawyers are independent, qualified and President of the Paris Bar and former President of the ethical. If they are, the quality of justice will be high”.
98 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 According to Vladimir Pligin, the discussion and independent, because they provide legal assistance to touches upon fundamental issues, since justice based on citizens and evidence to the court for making well-founded the principle of separation of powers implements the pro- and just decisions. Second, the more active the lawyers visions of the law and Article 2 of the Constitution, which are in discussing problems of the judiciary and the more defines the rights and freedoms as the supreme value. As judges have a background in advocatory work, the more for the bar, stipulation of Article 2 of Russia’s Constitution independent the court will be and the higher judges’ com- is conceptual, and constant strengthening of the lawyers’ petence will be. role and improving regulation of their activities are cru- Genri Reznik spoke about the quality of criminal cial for the protection of human rights and freedoms. justice system and reminded the participants that in April Konstantin Dobrynin described the cooperation 2015 the VII All-Russian Congress of Lawyers adopted a between lawyers and the Council of the Federation Com- resolution “In support of expanding the use of trial by jury”. mittee for Constitutional Legislation and State-Building: a Currently, there are only 600 hearings per year involving working group created more than two and a half years ago a jury, while federal courts, accusatory by inclination, are drafts bills aimed at improving criminal procedural laws. often subjective, partial and do not observe the presump- Their adoption would strengthen the position of a lawyer tion of innocence. in a criminal hearing and, therefore, would ensure a more Mr Reznik said, “Why are there hardly any acquit- comprehensive support of the civil right to qualified legal tals in professional courts, while the jury finds the accused assistance. innocent in 20% of the cases? Because the jury interprets Axel C. Filges outlined the role of lawyers in the uncertainties in favour of the accused. In Russia, 25,000 development of the judiciary system. First, for the system people are being acquitted by the jury annually, while the to be strong and independent, lawyers must be strong professional courts view themselves as soldiers at the
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 99 INTERNATIONAL CONFERENCE OF THE FEDERAL CHAMBER OF LAWYERS OF THE RUSSIAN FEDERATION “STRENGTHENING THE INDEPENDENCE OF THE JUDICIARY AND THE ADVERSARIAL SYSTEM — STANDPOINT OF THE BAR”
100 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 front line in the war on crime. If there is a slightest chance Paul-Albert Iweins added, “Lawyers are an of the accused being guilty, he or she will be pronounced integral part of the legal system of a state, and a guilty. But evidence in a trial is imperfect by nature, law-governed state needs lawyers to be independent”. fraught with mistakes. The presumption of innocence To preserve their independence, lawyers should main- takes into account that even the most impartial investiga- tain professional ethics and corporate discipline, check tion can leave doubts; this is why not proved guilty equals on those who join the profession and oversee the edu- proved innocence. Yet our court has no doubts”. (Elena Bo- cation of the members of the bar. In its turn, the state risenko pointed out that it is partially lawyers’ fault: there must guarantee independence of lawyers and ensure are cases when during adversarial proceedings lawyers do their rights. nothing to defend their clients.) Urs Haegi stressed, “To stay independent, it is James R. Silkenat spoke about improving the important to follow professional and ethical rules, most access to justice and presented a special project of the importantly, to avoid conflicts of interests and to keep American Bar Association. There are several programmes professional secrets”. He announced that the Swiss Bar within the project to help people who do not have enough Association launches a new programme aimed at increas- money to pay for legal assistance find lawyers who need ing independence of lawyers, judges and prosecutors and clients. The Association also offers education grants pro- strengthening their position against the legislative and viding internship in legal firms and has created a special executive branches. working group devoted to practical aspects of legal edu- In his closing speech, Yury Pilipenko noted, cation. “Lawyers around the world face the same issues,” “Independent, strong, respected and reputable justice is noted James R. Silkenat. “But it is the lawyers who play impossible without independent, strong, respected and a critical role in supporting the rule of law and increasing reputable lawyers”. independence of the judiciary”.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 101 Conference
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
LEGAL EDUCATION: AN ALTERNATIVE VIEW
27.05
102 103 Conference
MODERATOR SPEAKERS
Mikhail Schwartz, Mikhail Lobov, Olga Shepeleva, Associate Professor of the Head of Human Rights Policy Senior Legal Officer, Global Law Faculty, Saint-Petersburg and Cooperation Department, Network for Public Interest State University Council of Europe Law (PILnet)
Viktor Blazheev, Chairman, Association of Lawyers of Russia
104 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 LEGAL EDUCATION: AN ALTERNATIVE VIEW
Artem Karapetov, Yury Tolstoy, Andrey Egorov, Director, M-Logos Legal Professor of Civil Law First Deputy Chairman of Institute Department of Law Faculty, the Board, Alexeev Private Saint-Petersburg State Law Research Centre under University the President of the Russian Federation
Anton Selivanovsky, Andrey Dontsov, Associate Professor of the Partner, White & Case LLС Department of Civil and Entrepreneurial Law, Higher School of Economics
105 LEGAL EDUCATION: AN ALTERNATIVE VIEW
uring this conference the experts discussed the His vision of the reasons for the low quality role of state interference for the purposes of of legal education was described by Artem Karapetov, providing quality standards of legal education; Director of M-Logos Legal Institute, by drawing attention they also stressed the need to take a rational to the law of supply and demand in the context of approach to the study of international law at educational dilemma. Duniversities and participation in international educational The discussion was continued by Anton ranking systems. Selivanovsky, Associate Professor of the Department The discussion was opened by Mikhail Lobov, head of Civil and Entrepreneurial Law, Higher School of of the Human Rights Policy and Cooperation Department, Economics, who dwelt on the question of balance between Council of Europe, who noted that “in the modern world theoretical and practical competences. with its growing interdependence, which is even more so in The overview of issues and trends in the area of the European countries, there are fewer and fewer issues legal education was also given by Yury Tolstoy, Professor to be exclusively regulated by the national law.” of the Civil Law Department at the Faculty of Law of the He emphasized the need for integration of international law St. Petersburg State University. and national law sources into the legal education process. Drawing conclusions of the conference, Mikhail Viktor Blazheev, Rector of the Kutafin Moscow Schwartz, Associate Professor of the Faculty of Law at State Law University (MSAL), expressed an opinion that St. Petersburg State University, who was moderating the the previously existing “monoeducation” was better than discussion, noted that the quality of legal education is the current two-level education system. Considering enormously influenced by the market and its demands, international ranking systems compulsory, the Rector of including governmental demands. MSAL proposed establishment of a new one in the Russian “The conference demonstrated a natural diversity Bar Association chaired by him. of approaches and I would like to distinguish two of them: Andrey Dontsov, partner of the “White & Case” internal problems of the higher school and the external LLС, suggested we follow the example of American and factors. Currently it is highly difficult to determine whether British law schools where education aims at development the higher school has internal resources for development. of both theoretical and practical skills. We understand that we are developing in the right way, In her turn Olga Shepeleva, Senior Legal Officer but the external factors — financing, bureaucracy, market of the “Global Network for Public Interest Law” (PILnet), influence and demands — put a pressure on us. Today we described as utopia the trend of solving problems in the touched upon a very important topic that not all lawyers sphere of education and practical training only by faculties work in companies and that high standards of education of law, she put forward an argument to encourage and are good when everybody competes at the relevant market. enhance supplementary educational programs provided by At the same time our graduates are hired by governmental professional communities and employers. agencies that do not pay high salaries and, consequently, Andrey Egorov, First Deputy Chairman of the do not have high requirements. It means that a university Board at the Alexeyev Private Law Research Centre diploma has a value, and a graduate with mediocre grades under the President of the Russian Federation, believes in any case will find a job and make a legal career. These that reviewing of any legal problem in the context of are external conditions,” said the expert. comparison with western approaches is quite promising.
106 ПЕТЕРБУРГСКИЙ МЕЖДУНАРОДНЫЙ ЮРИДИЧЕСКИЙ ФОРУМ 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 107 Presentation
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
THE HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW (HCCH) — BUILDING BRIDGES FOR GLOBAL CITIZENSHIP
28.05
108 109 Presentation
SPEAKER
Christophe Bernasconi, Secretary General, Hague Conference on Private International Law
110 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 THE HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW (HCCH) — BUILDING BRIDGES FOR GLOBAL CITIZENSHIP
111 THE HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW (HCCH) — BUILDING BRIDGES FOR GLOBAL CITIZENSHIP
What is the Hague Conference on Private What is the membership status at HCCH International Law? currently? For more than 120 years, the Hague Conference on Private Presently, the HCCH has 80 Members (79 Member States, International Law (“HCCH”) has been a dynamic global plus the European Union) and 146 States in total that forum that develops innovative and effective solutions for are linked to the HCCH (by being either a Member State individuals and businesses alike that move, trade, or invest or a non-Member Contracting State). Our Member and across borders. It is the only international organisation non-Member Contracting States are regionally diverse, in The Hague with a legislative function and it fulfils its representing nations from North America, South America, mandate by developing progressive conventions, protocols, Australia, Africa, Western and Eastern Europe, the Middle and soft law instruments. To pursue universal reach, the East, Central Asia, and Southeast Asia. HCCH has cultivated a regional presence around the globe; in addition to its headquarters in The Hague, it has regional What is the process of becoming a Member? offices located in Buenos Aires and Hong Kong. The process to become a member to the HCCH is fluid and uncomplicated, involving three simple steps. The first What work does HCCH undertake and how does step requires a Candidate State to request an existing it benefit the world at large? Member to propose that Candidate State for membership. The HCCH undertakes normative and post-Convention In practice, this request is made to the government of The work. Normative work entails research to identify Netherlands. The second step involves Members deciding legal needs in areas that are within the mandate of the on the admission of the Candidate State within six months organisation; proposals of new instruments; and expert of the submitted request. Admission is then determined discussions and negotiations to draft process leading to based on majority vote. Following an affirmative vote, new legislative instruments. HCCH has three major areas the third step involves the Candidate State accepting the in which this work is undertaken: International Family Law, Statute of the HCCH. After this acceptance, membership is in particular child protection; International Civil Procedure considered effective immediately and is deposited with the & Legal Co-operation; and International Commercial & Netherlands Ministry of Foreign Affairs. Finance Law. The HCCH has produced 38 conventions and protocols, as well as one soft law instrument. After What are the benefits of becoming a member promulgation, post-Convention work involves promoting to HCCH? these instruments; monitoring their practical operation; HCCH membership offers interested States the opportunity publishing guides to good practice, practical handbooks, to collaborate with the only organisation that addresses etc.; and offering technical assistance to ensure proper crucial and very practical cross-border issues at the global implementation and practical operation. level. Members, who contribute only modest membership The Hague Conventions and Instruments offer litigants fees, are able to co-determine the work programme simple, cost-effective solutions that increase legal and are granted priority access to technical assistance. certainty, predictability, and efficiency for a wide range However, while they are under no obligation to join any of civil and commercial proceedings. Daily, they benefit of the Conventions, Members are encouraged to do so, millions of individuals and companies whose dealings especially in consideration of the many benefits of joining and activities cross international borders. Thus, the Hague Conventions, which some have compared to “world Conventions offer a multitude of advantages, from laws” as a result of their wide application and/or general facilitating international trade, commerce, and foreign importance. direct investment, to giving effect to the human rights of a child in need of protection.
112 ПЕТЕРБУРГСКИЙ МЕЖДУНАРОДНЫЙ ЮРИДИЧЕСКИЙ ФОРУМ 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 113 Presentation
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
PRESENTATION OF THAI LAW
27.05
114 115 Presentation
SPEAKERS
Vongthep Arthakaivalvatee, Director of International Affairs Division, Ministry of Justice of the Kingdom of Thailand
116 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 PRESENTATION OF THAI LAW
Vitaya Suriyawong, Director General of Department of Corrections, Ministry of Justice of the Kingdom of Thailand
117 PRESENTATION OF THAI LAW
mong speakers of the presentation were: or consumers, at the forefront rather than treatment. Vitaya Suriyawong, general director of Although there has been a gradual shift towards Department of Corrections, Justice Ministry treatment and rehabilitation for drug addicts over the of Thailand and Vongthep Arthakaivalvatee, years, the view that drug sale and use is a crime that director of International Affairs Division, should be punished still remains strong. Indeed, past AJustice Ministry of Thailand. Thai criminal justice policy has reflected this mindset In the past decades, the spread of narcotic through policies that focus on suppression rather than drugs and their impact on criminal justice systems have prevention and rehabilitation, under the “war on drugs” exacerbated all around the world. They affect not only a ideology. nation’s criminal justice system, but also its development Meanwhile, Thai narcotics laws are numerous and sustainability. Indeed, the United Nations has and comprehensive, but scattered. Though they cover established the Committee on Narcotics Drugs specifically the main areas of prevention and control, suppression to review and reform worldwide drug policy, among its and rehabilitation, they are not always implemented other numerous mechanisms. Recognizing the importance according to their philosophy, or are not utilized to their of law in shaping practice and transforming policy into maximum capacity. This and national drug policy has action, Thailand has taken a two-pronged approach, led to a dramatic rise in the number of Thai prisoners. addressing the issue of narcotic drugs at both the In fact, inmates imprisoned for drug-related offences international and national level. account for approximately 70% of the over 300,000 strong At the national level, the perception on drugs prisoner population. has been one that puts punishment of those involved in The prevention, suppression and control of drugs illegal drugs, whether they are producers, traffickers, now therefore form part of the National Agenda, and are
118 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 one of the key policies of the Thai Minister of Justice, H.E. The Department of Corrections has drafted a new Gen. Paiboon Koomchaya. As the Office of the Narcotics Corrections Bill intended to wholly replace the current Control Board, the agency responsible for Thailand’s Act which has been in force for over 80 years in order the narcotics laws, is under the purview of the Ministry of handle the high number of prisoners, including those Justice, the Ministry is most appropriately situated to imprisoned for drug-related offences. The Corrections drive legislative change in this area. This political will Bill was conceptualized to restructure the Thai prison has allowed and bolstered momentum to reform Thai management system into one that is more efficient with narcotics law. Through the Ministry of Justice, this focus on the rehabilitation of prisoners in order to return is being accomplished by the Office of the Narcotics human capital to society, reduce recidivism, and provide Control Board, the Department of Corrections, and the public safety. Department of Probation, who are directly affected by Of course, it cannot be denied that without a national drug policy. national strategy, it would be difficult to effectively tackle The Office of the Narcotics Control Board is the drug problem in Thailand, even with legislative currently compiling all narcotics-related law into a reform. It is for this reason that the Ministry of Justice single code so as to make it easier to visualize the entire of Thailand is also developing a Roadmap that will narcotics law framework as a cohesive whole while further provide for a system-wide approach for the prevention, emphasizing the importance of rehabilitation. Emphasis control and suppression of narcotic drugs in Thailand. is also placed on the distinction between producers, By integrating agencies involved, as well as the private traffickers, and consumers so that the right treatment sector and society, it is hoped that an effective and and/or punishment can be administered to the right group sustainable strategy can be implemented to build and of people. protect a safer society for all.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 119 DISCUSSION SESSIONS
120 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 1. INTERNATIONAL LAW RULE OF LAW
2. PRIVATE LAW
3. CORPORATE PRACTICE INTERNATIONAL TRADE PROTECTION OF COMPETITION
4. LITIGATION AND ARBITRATION PRACTICE
5. SMART SOCIETY
6. CULTURAL HERITAGE PUBLIC INTEREST ENVIRONMENT
7. INVESTMENTS FINANCE
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 121 Roundtable 1.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
UNILATERAL SANCTIONS IN A MULTIPOLAR WORLD: LEGAL CHALLENGES
28.05
122 1.1
123 Roundtable 1.1
MODERATOR SPEAKERS
Khristofor Ivanyan, Joseph Brand, Kazem Gharib Abadi, Managing Partner, Partner, Deputy Secretary General, High Law Firm “Ivanyan & Partners” Squire Patton Boggs Council for Human Rights of the Islamic Republic of Iran
Jean-Marc Thouvenin, Director of the International Law Centre (CEDIN), Paris West University Nanterre La Defense, France
124 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 UNILATERAL SANCTIONS IN A MULTIPOLAR WORLD: LEGAL CHALLENGES
Konstantin Dolgov, Andrey Klishas, Regis Bismuth, Richard Blakely, Commissioner for Human Chairman, Federation Council Professor, Barrister, Rights, Democracy and the Committee of Constitutional University of Poitiers Brick Court Chambers Rule of Law, Ministry Legislation and State-Building, of Foreign Affairs of the Federal Assembly of the Rus- Russian Federation sian Federation
Zhang Naigen, Vladimir Chizhov, Professor, Fudan University Permanent Representative of the Russian Federation to the European Union and European Atomic Agency
125 UNILATERAL SANCTIONS IN A MULTIPOLAR WORLD: LEGAL CHALLENGES
eading experts in US, EU and international law as Professor of University of Poitiers Regis Bismuth well as senior state officials from Russia and other focused on the extraterritorial effect of sanctions, their appli- countries participated in the panel on legal aspects cation to activities outside the territory of the state that intro- of sanctions. Khristofor Ivanyan, managing partner duced the sanctions (for example, with respect to goods pro- at Ivanyan&Partners, moderated the discussion. duced in the state or with respect to payments in the state’s LJoseph Brand, partner at Squire Patton Boggs, currency). He noted that such sanctions have no basis under discussed the US sanctions regime. Under US law international law. Professor Bismuth highlighted “blocking” both President’s executive orders and laws passed statutes, prohibiting compliance with extraterritorial sanc- by Congress may serve as the basis of sanctions. tions within states, and the WTO Dispute Settlement Body as From the beginning of 20th century US imposed sanc- two means to combat sanctions’ extraterritorial effect. tions in 120 cases. Professor Andrey Klishas, Chairman of the Fed- Deputy Secretary General of the High Council eration Council’s Committee on Constitutional Legislation for Human Rights of Iran Kazem Abadi underlined the and State-Building, observed that sanctions appear to be fundamental difference between multilateral sanctions im- primarily a political and economic instrument states use. posed by the UN Security Council and unilateral sanctions He noted that effective legal mechanisms to protect these introduced by a single state or a group of states. Mr. Abadi affected by sanctions are, in fact, missing in the states that stressed that affected parties may challenge sanctions in actively use unilateral sanctions. the WTO Dispute Settlement Body or in the national and Richard Blakely, barrister at Brick Court Cham- regional courts (some Iranian companies successfully bers, discussed the means available in the EU to challenge used the latter option). sanctions before the EU Court. He noted that there are a
126 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 1.1
limited number of grounds for such a challenge, including of the sanctions and inefficiency of the challenges against manifest error of assessment, procedural irregularities, sanctions brought before the General Court and ECJ. In par- violation of human rights and disproportionality. ticular, EU regularly reintroduces sanctions after the court The Ministry of Foreign Affairs Commissioner for has annulled them. Human Rights, Democracy and Rule of Law Konstantin Zhang Naigen, professor of Fudan University, Dolgov stressed that unilateral sanctions are unquestion- discussed the institutional aspects of the imposition of ably contrary to international law. This is confirmed by the sanctions provided by international law. He underlined, resolutions General Assembly adopts annually condemn- that imposition of sanctions outside of the mechanisms ing USA’s unilateral sanctions against Cuba. provided by the UN Charter violates the principles of inter- Jean-Marc Thouvenin, director of the Centre for national law reflected in the Charter. International Law (CEDIN), professor of Paris West Uni- versity Nanterre La Défense, devoted his presentation to sanctions against members of parliament. He noted that imposition of sanctions against such persons for the acts performed in their official capacity violates international law and in particular immunity of members of parliament, freedom of speech as well as constituting an impermissi- ble interference into internal affairs of the state. Permanent Representative of Russia to the EU and Euroatom Vladimir Chizhov also noted the political nature
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 127 Roundtable 1.2
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
MORAL FOUNDATIONS AND NATURAL LAW
28.05
128 1.2
129 Roundtable 1.2
MODERATOR SPEAKERS
Aleksandr Konovalov, Alberto Mazzoni, John Finnis, Minister of Justice President, International Professor of Law and Legal of the Russian Federation Institute for the Unification Philosophy Emeritus, of Private Law University of Oxford
130 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 MORAL FOUNDATIONS AND NATURAL LAW
Janina Dill, Professor of the Department of Politics and International Relations, University of Oxford
Michael Swainston, Vladimir Isakov, Barrister, QC, Brick Professor — Head of Depart- Court Chambers ment of Theory of Law and Comparative Law, Higher School of Economics
131 MORAL FOUNDATIONS AND NATURAL LAW
he panel was dedicated to the sources of On the other hand, recognition of the role of morality does current legal norms. History of philosophy offers not refuse its rational and pragmatic nature. The solu- numerous theories of legal system formation, tion to this apparent contradiction may be in a synergistic including the concept of natural law, legal approach to the understanding of the law and following the positivism and various combinations of the two. law, which united three levels of human mind: empirical, TThe main topic was the correlation between rational and irrational (ethical). The best example of such justice and law, moral measurement of the legal culture integration is the emergence of legal principles in the and issues brought by the concept of natural law, which Anglo-Saxon and continental legal systems. modern legal scholars and practicing lawyers now face. Alberto Mazzoni, president of the International Institute Primarily, these are the issues of the sources of law and for the Unification of Private Law (UNIDROIT), contin- fundamental values that are common for various cultures, ued the topic and told about the application of fundamen- and of the role of religion in the formation of a just legal tal legal principles in the modern system of internation- system. Speakers also touched upon ethical aspects of in- al private law. ternational law and politics. The imperatives developed by UNIDROIT can sup- Discussion was moderated by Aleksandr Kono- plement national law, being a set of rules based on univer- valov, Minister of Justice of the Russian Federation, who sally recognized principles. shared his views on the relevance of the natural law theory John Finnis, professor of law and legal philosophy for modern jurists. According to Mr Konovalov, refusal emeritus at University of Oxford, elaborated on the issue to recognize the moral aspects and the importance of mor- of universality of legal principles in the modern legal sci- al motivation in following the law limits its applicability. ence. These principles represent a set of natural obliga-
132 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 1.2
tions and common ethical norms, which exclude everything that leads to the disregard of the rights of others. Any society needs justice and law. Moral law is a natural and, therefore, rational principle accessible by everyone. Janina Dill, professor of the Department of Pol- itics and International Relations at University of Oxford, spoke about representation of the mediaeval theory of just wars in modern international law. She also touched upon the correlation between state interests and individual rights, morals and violence. Michael Swainston, barrister and member of Brick Court Chambers, spoke about ethical issues in internation- al law, particularly about the correlation between the prin- ciples of mutual respect of state sovereignty, territorial integrity and nations’ right to self-determination. In conclusion, Vladimir Isakov, professor at the Higher School of Economics — National Research Univer- sity, shared his view on the role of the natural law theory in modern jurisprudence.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 133 Roundtable 1.3
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
INTERNATIONAL AND NATIONAL CRIMINAL JUSTICE: COMPATIBILITY AND INTERACTION
29.0527.05
134 1.3
135 Roundtable 1.3
MODERATOR SPEAKERS
Bakhtiyar Tuzmukhamedov, Gleb Bogush, Judge, Appeals Chamber of Associate Professor of the Law the International Criminal Tri- Faculty, Lomonosov Moscow bunals for Rwanda and for the State University Former Yugoslavia
Vagn Joensen, President of the International Criminal Tribunal for Rwanda
136 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 INTERNATIONAL AND NATIONAL CRIMINAL JUSTICE: COMPATIBILITY AND INTERACTION
Vladimir Vardanyan, Gennady Esakov, Head of Legal Advisory Service, Head of Department Constitutional Court of the of Criminal Law, Higher School Republic of Armenia of Economics
Sergei Knyazev, Anita Ušacka, Judge, Constitutional Court of Former Judge of the International the Russian Federation Criminal Court Appeals Division
137 INTERNATIONAL AND NATIONAL CRIMINAL 1.3 JUSTICE: COMPATIBILITY AND INTERACTION
he panel was co-hosted by the St. Petersburg International Criminal Tribunals for the former Yugosla- International Legal Forum and Martens Readings via and Rwanda. on International Humanitarian Law, a regularly The speakers summed up the experience gath- held conference organized by the regional ered by the International Criminal Tribunal for Rwanda, delegation of the International Committee of the which completes this year, focusing then on the Inter- TRed Cross, Russian Association of International Law and national Criminal Court, which only begins its activity. Law Faculty of St. Petersburg State University. Armenia’s case attracted much interest, where Constitu- The panellists included both academics with tional Court once expressed its doubt that some provisions treasure trove of practical experience and practitioners of the ICC’s Rome Statute conformed to the Republic’s with significant academic background. Among them were Basic Law and where now a constitutional reform is Gleb Bogush, associate professor of the Law Faculty, drawing to a close that will enable the Statute’s ratifica- Lomonosov Moscow State University; Vladimir Vardanyan, tion. The panel demonstrated constitutional boundaries head of Legal Advisory Service, Constitutional Court of the and framework of international legal dialogues in which Republic of Armenia; professor Gennady Esakov, head Russia takes part and which show that Russian criminal of Department of Criminal Law, Higher School of Econom- procedure legislation and its enforcement are unavoidably ics; Vagn Joensen, President of the International Criminal affected by the combined influence of the constitutional Tribunal for Rwanda, previously a judge of the Supreme principles and requirements of the international criminal Court of Denmark; professor Sergei Knyazev, judge justice standards. In conclusion, the panellists developed of the Constitutional Court of the Russian Federation; Ani- some concrete proposals how to improve Russian criminal ta Ušacka, judge of the Appeals Division of the Internation- and criminal procedure legislation, taking into account al Criminal Court (retired), former judge of the Constitu- the advances of international legal science. tional Court of the Republic of Latvia. The panel was moderated by Bakhtiyar Tuz- mukhamedov, judge of the Appeals Chamber of the UN
138 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 139 Roundtable 1.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
MODERN ANTICORRUPTION MECHANISMS AND WAYS TO IMPROVE THEM
28.05
140 1.4
141 Roundtable 1.4
MODERATORS SPEAKERS
Oleg Plokhoy, Aleksandr Fedorov, Henglin Han, Head of the Directorate for Vice-Chairman, Investigative Senior Advisor, Ministry Corruption Prevention, Admin- Committee of the Russian of Justice of the People’s istration of the President of Federation Republic of China the Russian Federation
Aleksandr Savenkov, Sergey Kachushkin, Deputy Minister of Internal Deputy Head of Tver Region Affairs of the Russian Federa- Government - Representative tion - Chief of the Investigation of Tver Region in Moscow Department of the Ministry of Internal Affairs of the Russian Federation
142 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 MODERN ANTI-CORRUPTION MECHANISMS AND WAYS TO IMPROVE THEM
Aleksey Aleksandrov, Sadananda Gowda Kirill Kabanov, Helena Refosco, First Vice-Chairman, Devaragunda Venkappa, Chairman, Public Organisa- Trial Judge, Sao Paulo State Federation Council Committee Minister of Law and Justice of tion “National Anti-corruption Court of Justice of Constitutional Legislation the Republiuc of India Committee” and State-Building, Federal Assembly of the Russian Federation
Pekka Hallberg, Valentin Mikhailov, Emeritus President, Supreme Deputy Head of the Directorate Administrative Court of Finland for Corruption Prevention, Administration of the President of the Russian Federation
143 MODERN ANTI-CORRUPTION MECHANISMS AND WAYS TO IMPROVE THEM
n his introductory speech, moderator Oleg Plokhoy, Sadananda Gowda Devaragunda Venkappa, head of the Directorate of Corruption Prevention, Minister of Law and Justice of the Republic of India, Administration of the President of the Russian shared the experience of his country with the audience. Federation, stressed the relevance of the roundtable “The goal of the government is to serve the country in topic and noted that fighting corruption is a priority the name of public good”, stressed the Minister outlining Iof the majority of states all over the world. He also the state administration system of India. Currently there described major anti-corruption mechanisms recognized is an anti-corruption law and specialized anti-corruption in conventions of international organizations and national bodies. Moreover, India joined the international anti- laws on the example of Russian legislation. Giving the corruption agreements, in particular the UN convention. course for discussion, the moderator proposed to discuss “Anti-corruption warfare is urgent for stimulating efficiency of introduced anti-corruption mechanisms economic prosperity of the country and development of both at the level of states and the level of international entrepreneurship”, concluded the speaker. regulation and to consider ways of their enhancement in Pursuing the discussion, Kirill Kabanov, Chairman the context of modern challenges. of the National Anti-Corruption Committee, supported In the opinion of the first speaker, Alexandr the need to introduce a new article on embezzlement of Fedorov, Vice-Chairman of the Investigative Committee of public funds into the Criminal Code with imprisonment as the Russian Federation, in the anti-corruption fight, first of a prescribed punishment. all, it is necessary to bring criminal charges against legal Helena Refosco, Trial Judge, Sao Paolo State entities. He reminded that a draft law with such provisions Court of Justice, stressed that the reason for corruption is under review in the State Duma: “Anti-corruption in Brazil is inequality: people feel injustice in the society instruments are strongly linked with corporate crimes, and and turn to dishonest mechanisms of interaction. “Today adoption of these laws will support corruption prevention”. we are experiencing an important political reform”, said Henglin Han, Senior Advisor of the Ministry of the expert, “reform aiming at improvement of the situation. Justice, People’s Republic of China, emphasized that in Since last year there is a new law on immunity agreements fighting corruption it is necessary, above all, to follow and it is an important measure to fight corruption. the rule of law. He added that the Chinese government Cooperation with jurisdictions in other countries is a is engaged in an active dialogue with other states in significant step on the way of corruption prevention; we order to exchange experience and improve the national need to share experience at such events like the Forum”, legal environment; it is also committed to strengthen concluded the expert. multilateral cooperation under the relevant UN convention Fighting corruption at the regional level was taking maximum efforts for dealing with corruption. described by Sergey Kachushkin, Deputy Head of the Aleksey Alexandrov, First Vice-Chairman, Tver Region Government, Representative of the Tver Federation Council Committee of Constitutional Region Government in Moscow; he drew the attention Legislation and State Development, Federal Assembly of the audience to the problem of parallel regional of the Russian Federation, suggested that this topic and federal authorities that requires development of should be considered from the general to the specific. mutual control mechanisms. The expert also stressed In the beginning, it is necessary to deal with education the need to enhance the system of filing declarations by for children and bring back the moral values at school, representatives of regional legislative authorities. because the adults themselves – parents and teachers – Pekka Hallberg, Emeritus President, Supreme set an example for the younger generation with their own Administrative Court of Finland, named the Act on behavior. Secondly, it is necessary to enhance the level administrative procedure, high salaries of officials, public of legitimacy in the country. Thirdly, fighting corruption disclosure and transparency of official documents among in judicial and law enforcement institutions and security the reasons for a low level of corruption in Finland. services is an integral element on the way to compliance Valentin Mikhailov, Deputy Head of the Directorate with legal order. “Fighting corruption is a foundation on for Corruption Prevention, Administration of the President which the state is built and the phenomenon of corruption of the Russian Federation, Doctor of Legal Sciences, is a force destroying the state”, concluded the expert, reviewed the notion of corruption; he noted that currently giving assurance that currently new anti-corruption it is becoming a geopolitical instrument. At the same measures are being prepared in Russia and it is important time the expert stressed that when we consider the to engage scholars in this work. problem of corruption in a certain country we need to
144 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 1.4
address the topic of national legal consciousness and social responsibility of citizens. The priority task is to form boundaries of admissible behavior. Drawing conclusions of the discussion, co- moderator Alexandr Savenkov, Deputy Minister of Internal Affairs of the Russian Federation, Head of the Investigation Department, supported the statement of Valentin Mikhailov that corruption has a geopolitical character; together with other speakers he emphasized the need to combine a systemic approach and science in development of new anti-corruption legal provisions. In conclusion the Deputy Minister noted the high level of Russian laws’ elaboration in the relevant area: “The anti-corruption criminal policy in Russia is based on the scientific potential; it is characterized by a systemic approach, high potency, effectiveness, high-quality of enforcement and ever- growing international cooperation”.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 145 Roundtable 1.5
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
SOVEREIGNTY AND SUPRANATIONALISM IN CONTEMPORARY INTERNATIONAL RELATIONS
28.05
146 1.5
147 Roundtable 1.5
MODERATORS SPEAKERS
Anatoly Kapustin, Miguel de Serpa Soares, Vladimir Gyulumyan, President, Russian Association Under-Secretary-General Leading Adviser of the of International Law - First for Legal Affairs and United Department of Public Law, Deputy Director, Institute of Nations Legal Counsel Constitutional Court of the Legislation and Comparative Russian Federation Law under the Government of the Russian Federation
Alexei Moiseev, Vice-President, Russian Association of International Law - Vice-Rector on International Relations, Russian Customs Academy
148 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 SOVEREIGNTY AND SUPRANATIONALISM IN CONTEMPORARY INTERNATIONAL RELATIONS
Vigen Kochаryan, Tatsiana Mikhaliova, Igor Tushinskiy, Deputy Minister of Justice of Deputy Head - Head of the Deputy Minister of Justice of the Republic of Armenia Department of Research in the the Republic of Belarus Sphere of State Regulation and International Law, National Center of Legislation and Legal Research of the Republic of Belarus
Sergey Usoskin, Tatyana Neshataeva, Head of Research Judge, Court of the Eurasian Programmes, Center for Economic Union International and Comparative Law
149 SOVEREIGNTY AND SUPRANATIONALISM IN CONTEMPORARY INTERNATIONAL RELATIONS
On this session the participants discussed relevant trends any standard generally accepted definitions, which gives of development of international community against the full scope for academic research and legal foresight within backdrop of the growing interdependency of countries due various competing philosophies and schools of thought. to economic and political globalization, on the one hand, The panellists included Miguel de Serpa Soares, and strive towards stronger national sovereignty and its in- Under-Secretary-General for Legal Affairs and United Na- ternational and legal fundamental principles on the other, tions Legal Counsel; Vladimir Gyulumyan, leading Adviser determined by the necessity to face the threats to peace of the Department of Public Law, Constitutional Court of and security. Much attention was given to the attempts to the Russian Federation; Vigen Kochаryan, Deputy Minister analyse the legal status of a state in modern internation- of Justice of the Republic of Armenia; Tatyana Mikhaliova, al relations, discuss the ways to enhance the integration deputy head, head of the Department of Research in the processes and identify the potential pitfalls for sovereign Sphere of State Regulation and International Law, National statehood caused by congregative sentiments. Centre of Legislation and Legal Research of the Repub- The discussion was also focused on the issues lic of Belarus; Tatyana Neshataeva, judge, Court of the of sovereignty of states in international law, phenome- Eurasian Economic Union; Igor Tushinskiy, Deputy Minister non of supranationalism in international relations and its of Justice of the Republic of Belarus; Sergei Usoskin, head manifestation in the work of the present-day international of research programmes, Centre for International and organizations; correlation of sovereign and supranational Comparative Law. potentials in international law in the framework of modern The panellists offered their views and opinions transformations and prospects of development of interna- on the newest concepts of state sovereignty and supra- tional community. The discussion was even more relevant nationalism of international organizations, discussed the because these legal traditions are contemplative and lack prospects of their relation in legal regulation of integration
150 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 1.5
processes, and analysed the existing and possible integra- tion models for international and regional organizations. The speakers addressed international legal challenges of the development of the Eurasian Economic Union, the establishment of which had posed a number of fundamental legal issues, and their solution largely predetermines the successful operation and development of integrated Eurasian legal space. The panellists agreed that supranationalism of international organizations does not threaten the sovereignty of a state, but implies a higher level of responsibility and interaction between the govern- ments of international organizations’ member states. The panel was organized by the Russian Interna- tional Law Association and Russian Bar Association. The moderators were professor Anatoly Kapustin, president of Russian International Law Association, Doctor of Law, First Deputy Director at Institute of Legislation and Comparative Law under the Government of the Russian Federation, and professor Alexei Moiseev, vice-president of Russian Inter- national Law Association, Doctor of Law, vice-rector for international relations at Russian Customs Academy.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 151 Roundtable 1.6
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
LEGAL CONSULTING: LIMITS OF THE POSSIBLE
28.05
152 1.6
153 Roundtable 1.6
MODERATOR SPEAKERS
Taliya Khabrieva, Vladimir Pligin, Andrey Klishas, Director, Institute of Legislation Chairman, Committee Chairman, Federation Council and Comparative Law under of the State Duma of the Committee of Constitutional the Government of the Russian Federal Assembly of the Legislation and State-Building, Federation — Vice-President, Russian Federation on the Federal Assembly of the RAS — Member of the Presidential Constitutional Legislation and Russian Federation Council for Countering State-Building Corruption — Chairman, Interdisciplinary Coordinating Scientific Council — Academician, RAS — Doctor of Legal Sciences, Professor
154 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 LEGAL CONSULTING: LIMITS OF THE POSSIBLE
Aleksandr Shokhin, Yury Lyubimov, Natalya Tretyak, Wenqing Liu, President, Russian Union of In- Secretary of State — Deputy First Deputy Minister Director of Department of the dustrialists and Entrepreneurs Minister of Justice of the of Education and Science Guidance of Work of Lawyers Russian Federation of the Russian Federation and Public Notaries, Ministry of Justice of the People’s Republic of China
Mikhail Lobov, Liliya Shchur-Trukhanovich, Valеry Turcey, Head of Human Rights Policy Deputy Chief of Legal Head of International Affairs, and Cooperation Department, Department, Eurasian Ministry of Justice of France Council of Europe Economic Commission
155 LEGAL CONSULTING: LIMITS OF THE POSSIBLE
he roundtable participants discussed the norm-setting consultancy in corporate structures, attesta- situation and development trends of law-making tion and accreditation of experts. consulting in Russia and other countries, In opening the discussion, the roundtable principles and mechanisms of its self-regulation moderator Taliya Khabrieva, director of the Institute of and improvement of the quality of law-making Legislation and Comparative Law under the Government Tconsultancy services, enhancement of responsibility of of the Russian Federation, vice-President of the Russian international bodies, national organizations and experts Academy of Sciences, member of the Anti-Corruption acting in this sphere. Council under the President of the Russian Federation, Special attention was given to possibilities and Chair of the Interdisciplinary Council on Coordination of ways of introduction into law-making consultancy of in- Research and Methodology Support of Anti-Corruption terdisciplinary methods of reviewing law-making initia- Practices, member of the Russian Academy of Sciences, tives and projects, a combination of classical and modern Doctor of Law, stressed the relevance of law-making con- technology of law drafting, use of scientific methods of sultancy referring the statement by the Chairman of the forecasting and risk assessment in law-making and en- Government of the Russian Federation Dmitry Medvedev forcement practices. that modernization of the Russian legislation will remain In the course of discussion there was an exchange at full speed. of opinions on such relevant issues as decommercializa- Vladimir Pligin, deputy of the State Duma of the tion of law-making consultancy, its legal regulation and Federal Assembly of the Russian Federation, Chairman of deregulation (self-regulation), qualification requirements the State Duma Committee on Constitutional Legislation for experts, transparency of law-making consulting servic- and State Development, highlighted the importance of the es, conditions and criteria for specialization of consulting institute of law-making consultancy and told about the companies that provide expert support of law-making Scientific Council for Lawmaking under the State Duma activities to public authorities in the Russian Federation, that comprises leading lawyers of the country.
156 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 1.6
Andrey Klishas, Chairman of the Federation Mikhail Lobov, head of the Human Rights Policy Council Committee on Constitutional Legislation and and Cooperation Department, Council of Europe, gave a State Development of the Federal Assembly of the Russian presentation on the international component of law-mak- Federation, Doctor of Law, professor, Honored Lawyer of ing consulting. the Russian Federation, described identification of public Liliya Shchur-Trukhanovich, Deputy Chief of the demand for adopting laws as the most significant part of Legal Department, Eurasian Economic Commission, noted the law-making process. that the beginning of the Eurasian Economic Union func- Alexandr Shokhin, President of the Russian Union tioning should lead to significant changes of law-making of Industrialists and Entrepreneurs, emphasized the need consulting in member states. for available institutional formalized and transparent tech- Valery Turcey, head of the International Affairs nology and mechanisms for lobbying interests. Department, Ministry of Justice of the Republic of France, Yury Lyubimov, Secretary of State, Deputy Minis- outlined the law-making process in France and proposals ter of Justice of the Russian Federation, drew attention to for improvement of the system. staffing of law-making consultancy. The discussion resulted in development of propos- The discussion was continued by Natalia Tretyak, als for quality enhancement and elimination of negative First Deputy Minister of Education and Science of the Rus- practices in the area of law-making consultancy services; sian Federation, who described the forms of legal consult- development of educational and training programs, cours- ing used by the Ministry in its activities. es, and other educational forms of law-making consul- Wenquing Liu, Director of the Administrative tancy; introduction into the Russian consulting system Department of Lawyers and Public Notaries, Ministry of of positive experience of the Venice Commission of the Justice of the People’s Republic of China, spoke about Council of Europe and other international organizations on cross-border legal services and the legal services market evaluation and participation in the development of member in general on the basis of Chinese experience. states’ legislation.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 157 Roundtable 1.7
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
MODERN CONSTITUTIONALISM
29.05
158 1.7
159 Roundtable 1.7
MODERATOR SPEAKERS
Valery Zorkin, Alessandro Criscuolo, Mohamed Achargui, Chairman, Constitutional Court President, Constitutional Court President, Constitutional Court of the Russian Federation of the Italian Republic of the Kingdom of Morocco
Vladimir Pligin, Chairman, Committee of the State Duma of the Federal Assembly of the Russian Federation on the Constitutional Legislation and State- Building
160 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 MODERN CONSTITUTIONALISM
Petr Miklashevich, Igor Rogov, Andrey Klishas, Chairman, Constitutional Court Chairman, Constitutional Chairman, Federation Council of the Republic of Belarus Council of the Republic of Committee of Constitutional Kazakhstan Legislation and State-Building, Federal Assembly of the Russian Federation
Dmitry Vyatkin, Aleksey Aleksandrov, Nikolai Bondar, Deputy chairman of the First Vice-Chairman, Judge of the Constitutional Committee on Constitutional Federation Council Committee Court of the Russian Federation Legislation and State-Building, of Constitutional Legislation State Duma of the Federal and State-Building, Federal Assembly of the Russian Assembly of the Russian Federation Federation
161 MODERN CONSTITUTIONALISM
hairman at Constitutional Court of the Russian and State-Building, Federal Assembly of the Russian Fed- Federation Valeriy Zorkin was a moderator of the eration; Nikolai Bondar, judge of the Constitutional Court of roundtable. Among panelists were Alessandro the Russian Federation. Criscuolo, president of the Constitutional Court In his brief opening statement Valeriy Zorkin of the Italian Republic; Mohamed Achargui, pres- invited the participants to a productive discussion Cident of the Constitutional Court of Morocco, chairman of of topical issues of state and legal development the Association of the Francophone Constitutional Courts; and to finding a solution to global challenges of Peter Miklashevich, chairman of the Constitutional Court of contemporary constitutionalism. the Republic of Belarus; Igor Rogov, chairman of the Con- Alessandro Criscuolo noted that in the last stitutional Council of the Republic of Kazakhstan; Andrei decade various factors changed the traditional way of Klishas, chairman of the Federation Council Committee life of both national and supranational communities. on Constitutional Legislation and State-Building, Federal Technological advances, spread of fast and efficient Assembly of the Russian Federation; Vladimir Pligin, chair- means of communication and access to huge amounts of man of the Committee on Constitutional Legislation and information from anywhere through the Internet indicate State-Building, State Duma of the Federal Assembly of the that humanity now faces problems of such a scale that Russian Federation; Dmitry Vyatkin, deputy chairman of the was not even conceivable until recently. The fact is that Committee on Constitutional Legislation and State-Build- distance no longer predefines personal relationships led ing, State Duma of the Federal Assembly of the Russian to overcoming of geographical barriers and creation of a Federation; Aleksei Aleksandrov, first vice-chairman of the global information medium that allows contacts, exchange Federation Council Committee on Constitutional Legislation of opinions and interactive communication of any type.
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This caused an increase in the number of contacts representatives of the Romano-Germanic legal family, the between different cultures and traditions. The current state should clearly define its position regarding the level of generation has seen first-hand the spread of profoundly political and law-making interference into social relations. different cultural models around the world. This process, First of all, it needs to be defined whether in protecting in turn, not only extended the fundamental rights, but also fundamental rights a legal system should refrain from sped up the evolution of traditional legal institutions (e.g. strict regulation of certain activities of individuals, or should civil liability, types of ownership and marriage). it abandon its neutrality and interfere into private relations, Therefore, according to Mr. Criscuolo, there into most minute aspects, perhaps, even substituting the is a need for universal tools for tackling global legal stated will of legal relations’ parties? problems, which states cannot solve alone (mass migration, Traditionally, legal literature states that the cybercrime, etc.). main function of the state, according to classic liberal In his opinion, law as an inalienable element constitutions, is to protect and to guarantee. In post- of social life cannot ignore globalization (which is viewed liberal constitutions, these functions are increasingly often as a framework where various subjects encounter supplemented by a promotional function, i.e. to motivate various legal systems). Simultaneous existence of several and to support. Therefore, it is worth looking at how heterogeneous legal systems has significantly changed the often, for example, in taxation or issues of environmental role of a jurist who should take into account co-existence of protection and energy consumption, in the modern national and supranational law involved in integration and world we see the examples of promotional legislation, of mutual adjustment. Broader relations of different social regulatory acts (and promotion of best practices) whose cultures has hindered the establishment of a universal law. success relies on the so-called positive (encouraging, In these conditions, according to recognized stimulating) liability.
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According to Mr. Criscuolo, definition of a political stating that international conventions and treaties take goal should take into account the fact that in transitional precedence over the national constitution of sovereign times legal norms become a framework that can be filled independent states. with different content and that can adapt to a changing The second tendency is that international treaties context, giving freedom of actions to various legally assume a supra-legislative role but are still beneath important actors. national constitutions. It is the case for most European We should continue to search for the procedures countries, such as Czech Republic, France, Germany, Italy shared by all subjects of the legal sphere, for these and Romania. The same is true for the African region. procedures ensure the broadest possible participation in The third tendency concerns countries where the discussion on the definition of common values, the the constitution does not clearly define the place of most important of which is respect for pluralism. In other international treaties and regulations in the legal system. words, efforts must be made to define the so-called rules They use provisions of such treaties on human rights to of the game to guarantee the rights of minorities and least interpret them in their own way in accordance with the represented subjects. constitutional reality of a specific country. For instance, Particular attention should be given to procedural this is the case of Peru, where the constitution does not regulations that define conditions and ways of decision- define the role of international treaties in the constitutional making, as well as provision and comparison of various system, Greece and many other states. approaches. Political environment should guarantee that Even despite the differences between the natural games of political rivalry are played in a field where described models, it is obvious that the current transparency and behavioural ethics do not allow any form generation of legal scholars witnesses the so-called of arbitrariness. internationalization and globalization of constitutional By comparing the differences and working out law. Boundaries between various levels of law disappear. the criteria and rules preserving political, social and National constitutional structures (in the area of human cultural pluralism, we can develop a compromise using rights protection both on international and national criteria of balance of affected values. From this point of constitutional levels) inevitably converge, because view, the task of law is to create a development path for constitutions and international norms have one goal the co-existing multidirectional forces of the globalized — to protect human and civil rights and facilitate their world (under the understanding that this world is a development. historically evolving one). However, despite the described changes, there At the same time, today a purely legal analysis are still some problematic differences between national of political and legal issues will be incomplete without legal systems and their correlation with international law. various non-legal subjects, as with all issues requiring Sometimes, members of constitutional justice bodies have general scientific, ethical and anthropological knowledge. to apply extraordinary creativity in order to find correlation Therefore, to find optimal solutions, jurists should engage and connection between international and national law, as in an active dialogue and opinion exchange with experts they need to maintain a delicate balance between national from other scientific fields. This will lead to the creation of a legislation and international obligations of a state. And for more complex system of legal norms, but, according to the this they need to actively search for harmony and balance speaker, such a system will better reflect the specificities between constitutional law and international obligations of and diversity of the global world. their countries. Mohamed Achargui drew attention to a particular Petr Miklashevich in his speech focused on issue of modern global jurisprudence — definition of the constitutionalization of foreign relations against the place of international (particularly, humanitarian) law and backdrop of globalization, when new supranational its relation to other legal spheres. institutions appear, with their own legal procedures and In his opinion, there are three main tendencies regulations that, due to their character, are in effect concerning the relations between international and constitutional. The formation of universal supranational constitutional law. constitutionalism helps to develop common approaches According to the first one, international treaties to solving constitutional issues, common methods of on human rights protection should concern supranational interpretation and application of constitutional norms and supra constitutional values. It is important because, and principles, and at the same time, tendencies appear according to Mr. Achargui, there is no constitution clearly to strengthen national traditions of state-building and
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preserve the constitutional and legal identity. With the and that such an idea does not mean forcing a certain state creation of the Eurasian Economic Union, these processes or mandatory ideology of Soviet or any other type upon began to develop at the Eurasian plain as well. society. At the same time, globalisation and regional Andrei Klishas pointed out that in the last few integration call for a review of the issues of state years the Russian state authorities have been constantly sovereignty, its content, limits and specificities of reforming certain public institutions. Sometimes it affects application. All of the above, according to Mr. Miklashevich, the Constitution. The Russian Parliament regards the is an integral part of the constitutional doctrine of a Constitution as a live, active document that first and state and a crucial direction for the development of furthermost should meet the society’s demands. constitutionalism. Moreover, according to Mr. Klishas, the legislator He pointed out that in approaching the issues can do much more to perfect our public authorities, of joining international bodies, Belarus conducts a multi- particularly municipal ones. But parliamentarians think vector foreign policy relying first and furthermost on it is not enough to want to change laws, to amend and its constitution and its values, as well as on the goals, perfect them. Society should clearly state its demand principles and norms of international law. Predictability of for such changes. It is the most important principle of legal regulation, correlation of national and supranational parliamentary work. legislation, unification of legal and economic tools and At the same time, according to Mr. Klishas, development of universal approaches towards social and quite often parliamentarians receive certain signals economic development of the Eurasian Economic Union from society but do not articulate clearly enough the member-states became topical issues for Belarus with tasks that should be addressed with certain legislative its accession to the Union. Republic of Belarus is open to amendments, and this is a serious issue. The most international legal integration and therefore can delegate a recent municipal reform is a good example of this. part of its sovereign powers to supranational international Andrei Klishas believes that municipal government is a bodies. However, supremacy of the constitution requires public authority like any other (and that should be better that they cannot limit the sovereign right of the people reflected in legislation, he thinks). But it all should be of Belarus to determine its development, to change its done in strict accordance with the Constitution of the democratic, social and legal character or to undermine Russian Federation and decisions and legal positions constitutional rights and freedoms of citizens. of the Constitutional Court, which are used increasingly Igor Rogov informed the participants of often by the Federal Assembly. the discussion that in reaction to the current challenges Vladimir Pligin said that most importantly, of the globalized world the Republic of Kazakhstan globalization begins to reshape the life of society. In creates and implements a special programme of drastic simple terms, globalization can be described as absolute modernization of society and the state. President interconnection of all humanity. One part of the world Nursultan Nazarbayev set this goal and formulated the cannot live and develop without others. following objectives. According to Mr. Pligin, it is almost certain Firstly, is forming modern professional that in the future globalization will demand a change autonomous government based on the meritocracy of the current world order and will propose other, principle, i.e. establishment of a special caste (in a good supposedly more perfect, forms of it. A sovereign state is sense of the word) of civil servants. Secondly, provision often viewed as a sacrificial animal of globalization. And of the rule of law. Thirdly, new industrialization and quite often demise of the statehood (its substitution by economic growth based on diversification. Forthly, principle anti-state social communities) is seen as inevitable. Largely of the nation of united future. Fifthly, transparent and because of this many researches treat globalization as a accountable government. threat. Indeed, if we accept the postulate that in response To facilitate the implementation of the to globalization we must establish a single monopolistic modernization programme, President Nazarbayev centre of world governance, globalization should be viewed announced a national idea — “Mangilik El” (“mangilik” as a threat. means “eternal”, “el” means “motherland”, and the phrase Russia proposes a fundamentally different itself in Kazakh has a sacral meaning of eternal foundation approach. Back in the 19th century, a famous Russian of life of the people of Kazakhstan). Mr. Rogov emphasized philosopher Nikolai Danilevskiy in his work “Russia and that a national idea is fundamental for “new democracies” Europe” wrote that progress is not about going in one
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direction (otherwise the world would soon have ended), problems or, to put it mildly, economic changes. The but about walking all over the field that is the history three main reasons of that are as follows. First, apparent of humanity, walking over it in every direction. Globalization exhaustibility of resources and their global deficit. should not come down to a single centre of power, but Second, apparent inability of the current production and should mean a unity of diversity. consumption system to ensure constant economic growth. At the same time, Mr. Pligin believes, in the era Third, obvious disparity between global accumulated of globalization, states are undoubtedly becoming flexible. financial obligations and means of their guarantee and What does flexibility of a state mean? States largely stop fulfilment. controlling their population. Very few states still really do it. Consequently, these flaws of the basis cause Because how can they control their population when many negative changes in the superstructure. The need for mass of the modern states have difficulties, to put it mildly, with industrial production brought the equality of men and controlling their economies? women, as well as other social and political novelties that In the modern world, globalization is manifested ensured participation of every citizen (in the industrial era it in many ways. First of all, in global migration. According was indeed every citizen) in mass industrial production and to the International Organization for Migration, more than its support. Today, however, to ensure economic growth, we 300 million people today are residing outside of countries of need somehow to change not so much the production but their citizenship. the consumption, to make it more universal, which explains In a number of countries, the “exodus” cannot the changes, including the changing values. be stopped. And it is not just the “brain drain”. In many Yes, today’s changing values do not please countries the whole socially active and truly industrious everyone, sometimes causing fear, sometimes anger, population leaves, which, in turn, leads to lumpenization of but it is obvious that current changes of values (further the majority that stays. This process might seem harmless fragmentation and mixing of traditional communities, to the countries that attract “human resources” from a unification of every person regardless of their personal certain state, but only at first thought. Marginalization of preferences) are intended to unify consumption. It will the majority continues, which leads to a total degradation enable the mass producer, now a global one, not to focus of the social system and to appearance of rogue states that on specific groups of people but to cut costs by producing foster the plague of the 21st century — terrorism. universal and homogeneous products that can ensure the The main way to counter such problems, Mr. growth of mass consumption and, therefore, economic Pligin believes, is to restore the principle of unconditional growth. recognition of value of nation-states, including the value of Humanity also faces another challenge: emerging sovereignty of the so-called “rogue states”. areas of global tension, including military conflicts that, Certainly, it primarily means recognition of as many of the speakers pointed out, lead to reshaping state sovereignty in accordance with international law. of the world map, both political and economic. These Unfortunately, however, sovereignty is facing other conflicts (or, in milder terms, “areas of tension”) now affect challenges, first of all the challenges of limited statehood. whole regions, not just one or two countries or their parts. They include what we mean under sovereignty, including Our ability to prevent these conflicts from spreading will the power of legitimate coercion, which is focused on the determine whether we will be able to ensure the growth one and only (in its nature) state authority. Yet, if we analyse that our distinguished colleagues have been talking about: the map of today’s world, we will see that, unfortunately, development of the legal system and implementation we are now dealing with a sovereignty that is primarily of new approaches to national (state) building. Because limited by territory, when the capital de facto does not external military threats and challenges can always control a part (sometimes quite significant) of a country. undermine any attempts of state building based on a First of all, this means that the current map of the world is national idea. Unfortunately, it is true. not stable and it will, unfortunately, continue to “split up”, How does modern society react to global i.e., according to Mr. Pligin, reflect an inevitably growing challenges? According to D. Vyatkin, there are two number of sovereign states). possible reactions. Dmitry Vyatkin presented a detailed model First, focusing regulating centres in one place and of global threat evaluation and possible solution. gradually relinquishing the state’s regulating functions In his opinion, it is quite obvious that the changes and power in general, transferring these functions to now occurring in the world are mainly caused by economic non-governmental communities, organizations and bodies.
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Even now we can see a number of state’s functions being That is why Mr. Aleksandrov expressed his transferred to non-governmental bodies. Profit is not their conviction that all participants of the Forum should try main goal, by far. They are more interested in accumulating to explain to international legal community how dangerous power, ensuring supremacy and redistributing benefits in this crime against the law is. Members of international favour of a certain community. legal community should join forces to save the law. Only Mr Vyatkin prefers the second option. In a certain after that can we hope that the law will save the world. way, it also affects the development of constitutional Nikolai Bondar pointed out that, in his view, principles and, perhaps, will somehow be stipulated constitutionalism is standing on three sacral pillars: in national constitutional or other legislative acts. It authority, property and freedom. And all that is being said is regional cooperation through intergovernmental within the paradigm of constitutionalism is connected agreements and through transferring part of states’ to the issue of collision within unity or, to put it more functions to supranational organizations. bluntly, contradictory development and correlation between There are such examples of international these three phenomena. cooperation with various degrees of association. This is From methodological point of view, correlation the European Union, the Eurasian Union and other forms between the authority and property is both complicated of regional and interregional cooperation based primarily and topical. Authority absorbing property or property rising on economic interests and economic cooperation. above authority is one thing. But the direction of movement In his opinion, jurists specialising in constitutional (one-way or two-way), what should follow what (or what law should admit that transferring economic, tax, financial should develop parallel to what) is also important. (and, perhaps, budget) administrative functions to a In this regard, it is important to remember supranational body will obviously require certain changes in that a unique and universal tool of both protecting and national (state) legislation and, possibly, in constitutional acts facilitating constitutionalism is constitutional justice. regulating this supranational cooperation. There is nothing According to Mr. Bondar, thesis of stability and wrong with that: the challenges mentioned above can only dynamism of constitutional reality can be formulated be countered by joint efforts of many nation-states, and, as a paradox of constitutional justice: dynamism of perhaps, it is better to do it within civilizational communities constitutionalism is a guarantee of its stability. Dynamism developing in the same region over hundreds and thousands ensures stability if these concepts are viewed from formal of years (naturally, with influence of certain time periods and legal aspect (stability) on the one hand, and from social with expansion and contraction of their territories). and cultural (dynamism) on the other. Then constitutional Aleksei Aleksandrov said that five years ago, justice brings life and, therefore, dynamism into when the St. Petersburg International Legal Forum was constitutionalism, which ensures its stability. established, its creators believed that the governing It is very important to view constitutionalism principle of the Forum will be the rule of law, supremacy here in terms of its moral grounds. We often speak (and of democracy, morality, freedom, equality, etc. This was the rightly so) of sociocultural and national origins, but also reason for creation of the Forum and its motto was “Law of constitutionalism as a moral and ethical, or moral and will save the world”. It was a truly lawful ideology. aesthetic, category. And not as an abstract notion, but in Yet now it appears that for the law to save the practical manner, with the help of the tools of constitutional world, somebody has to save the law. And the law can only justice. be saved by jurists, by their unions and by international What place does such an ethical category as legal community. Because apart from the lawful ideology, fairness occupy in constitutional justice? Let us note just there is an unlawful one. It is the ideology of a global one fact out of many: 84% of all decisions made by the dominance by a single superpower, of double standards and Constitutional Court of the Russian Federation in 2014 and all that normal people call unlawful and inhuman. the first half of 2015 contain the category of fairness. It was And after creation of the St. Petersburg viewed not as an abstract notion. It was either an issue of International Legal Forum, its participants witnessed as fair equality, or unfair equality, or fair inequality. Ensuring one democratic and law-governed state with a democratic real legal fairness is the main task of contemporary constitution and a long history of democracy organizes constitutionalism, and it is not an exaggeration! For without an unconstitutional and unlawful coup in another fairness there simply can be no society! democratic and law-governed state in Europe, which led In conclusion, Valeriy Zorkin presented a number to many deaths. of statements summarizing practical development of
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contemporary constitutionalism. For example, he said Therefore, the Russian and international legal that there is a big and complex problem in the sphere of community should develop a framework of Russian constitutionalism. For there is the Constitution and there constitutionalism that would ensure Russia’s sustainable is constitutionalism. Sometimes there is disparity between development based on the rule of law, civic freedom and them, and that brings woe. public consent, and taking into account objective national Countries choose different ways to achieve specificities of state and legal development. conformity between the two. For example, the United The majority of panelists noted the importance Kingdom has no formal constitution, but without a of creative discussion and constructive settlement of doubt this country does have constitutionalism. Yet reasonable and effective limits, means and forms of constitutionalism itself can be interpreted in different ways, adapting high standards of constitutionalism to a very as well. For example, in China, people do not speak of complicated modern life (in particular, determination of the supremacy of human rights, and when asked “what is objective, scientifically grounded and verified criteria of the main idea of constitutionalism”, they answer “it is the necessity and timeliness of amending real constitutional supremacy of the constitution”. and legal matter). But time passes and all of a sudden Chinese Some panellists insisted on paying particular officials propose that China should not alienate itself attention to the lack of comprehensive legitimation from the general interpretation of constitutionalism “as it of constitutional law making and law enforcement both spreads across the planet”. Since everybody understands on national and global scale. what is the Great Dragon, so the phrase “as it spreads At the same time, almost every participant agreed across the planet” can be interpreted very differently... that the current global crisis clearly showed that the role of Nevertheless, in its every form constitutionalism nation-states in the modern world did not diminish. Calls is the real active system of institutions, bodies, norms, etc. for destruction of national constitutionalism in favour of that are implemented in a country, a state or society and some kind of a universal pseudo-legal system absorbing that ensure real supremacy of the Constitution with its national legal orders is a deliberate provocation to sink the main absolute imperative (in the words of Emmanuel Kant), entire system of international law. regardless of the differences between specific normative A number of panellists supported the necessity imperatives in different countries. And this absolute of developing a methodology of constitutionalism to form imperative is the letter of the law as a measure of freedom and protect a balance of rights and interests of states, and equality expressed in the universal principle of equality individuals and social groups (ethnic, territorial, religious, before law and court. Without it there is no Constitution, no professional and other social communities). law, no normative imperative at all. It was also noted that the Constitution (as well During the discussion after the presentations, as its interpretation, doctrine and constitutional law in participants fully supported the interpretation of general) will face major changes of social reality and the constitutionalism as a phenomenon designed to prevent need for their adequate reflection in real legal life. a situation when efforts to ensure the rule of law would During the discussion of identified issues, exceed the limits of the law. These efforts should not participants expressed their grave concern about become a socially suicidal “war of everyone against contradictions between certain approaches to constitutional everyone”. International experience (particularly European) and legal status of individuals and traditional universal clearly shows that in terms of legal development, civilizational human values. evolution is undoubtedly more preferable than revolution. And finally, almost everyone noted that modern Development of European constitutionalism is the beacon bodies of constitutional oversight require, first of all, on this path! fundamental philosophical and legal interpretation of ways Many participants urged the legal community to of law making in accordance with the constitution and view national and supranational aspects of constitutional implementation of this “practical philosophy” in the state’s law through correlation between “universal” and “unique” life through constitutive constitutional and jurisdictional features. This does not mean that all supranational decisions. The global task of bodies of constitutional justice aspects are purely universal and all national aspects are is to defend the universal civilizational values converge with purely unique. In this case, there is a creative synthesis of political and legal regimes of constitutionalism specific for universal and unique in specific provisions of constitutional each modern independent state. norms and doctrines.
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ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 169 Roundtable 2.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
ACTING NOVELS OF THE CIVIL CODE FOR LEGAL ENTITIES
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ST. PETERSBURG INTERNATIONAL LEGAL FORUM 2015 FORUM LEGAL INTERNATIONAL PETERSBURG ST. 171 Roundtable 2.1
MODERATOR SPEAKERS
Andrey Egorov, Аlexandra Makovskaya Alyona Kucher First Deputy Chairman of Head of the Department of Partner, the Board, Alexeev Private Legislation on Legal Entities, Debevoise & Plimpton LLP Law Research Centre under Alexeev Private Law Research the President of the Russian Centre under the President of Federation the Russian Federation
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Aleksandr Kuznetsov, Maksim Bunyakin, Deputy Head of Division of Managing Partner, the Financial and Securities Branan Legal Legislation, Ministry of Justice of the Russian Federation
Vadim Chubarov Rainer Wedde Vice President, Chamber of Counsel, Beiten Burkhardt Commerce and Industry of the Russian Federation
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his panel was organized by the Alexeev Private interested party transactions, optionality of regulation Law Research Centre under the President of the of non-public companies and regulation of non-profit Russian Federation and was moderated by Andrei organizations. Egorov, first deputy chairman of the Board of the Alyona Kucher spoke about reforming the insti- Centre. tution of major transactions and interested party transac- TParticipants included: Аleksandra Makovskaya, tions. She particularly outlined the ways of resolving con- head of the Department of Legislation on Legal Enti- flicts of interest, including preliminary control, follow-up ties at the Alexeev Private Law Research Centre; Vadim control and liability of parties pursuing their own interests Chubarov, vice president of the Chamber of Commerce in prejudice of public interests. Aleksandr Kuznetsov and Industry of the Russian Federation; Aleksandr followed up with a detailed analysis of issues arising in this Kuznetsov, deputy head of Division of the Financial sphere. Rainer Wedde briefly presented the German expe- and Securities Legislation at the Ministry of Justice rience in resolution of conflicts of interest. of the Russian Federation; Alyona Kucher, partner Maksim Bunyakin’s speech sparkled a lively dis- at “Debevoise & Plimpton” LLP and assistant profes- cussion. He analysed the main, in his opinion, issues of ap- sor of Civil Law Department at Moscow State Univer- plying the norms of the Russian Civil Code to legal entities: sity; Maksim Bunyakin, managing partner at “Branan liability of a parent company for transactions of an affiliat- Legal” and an expert on legal support of corporate ed company, plurality of sole executive bodies and applica- procedures; and professor Rainer Wedde, consultant tion of norms concerning complex reorganizations. at “Beiten Burkhardt”. Vadim Chubarov outlined the progress of legisla- Moderator Andrei Egorov invited the experts tive reforms of non-commercial organizations and pre- to discuss the first results of the corporate law reform sented his ideas for its further improvement. and outlined the most topical issues arising in the prac- At the end of the discussion, Аleksandra Mak- tice: status of a legal entity’s sole executive body and ovskaya delivered her speech on optionality of regulation plurality of sole executive bodies, major transactions and of corporate relations.
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ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 175 Roundtable 2.2
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BUSINESS INHERITANCE
29.05
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177 Roundtable 2.2
MODERATOR SPEAKERS
Konstantin Korsik, Daniel-Sedar Senghor, Natalia Rasskazova, President, Federal Notary President, International Union Acting Dean of the Faculty Chamber of the Russian of Notaries of Law - Head of Civil Law Federation Department of the Faculty of Law, Saint-Petersburg State University
Maria Melnikova, Serge Pascault, Counsellor to the Minister Notary, French High Council of Justice of the Russian of Notaries Federation
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Richard Bock, Laurent Besso, Vice President, Federal Partner, de Preux, Chamber of Notaries of Besso & Schmidt Germany
Nicolas Morhun, Alisa Grafton, Vladimir Yarkov, Senior Associate, ATOZ Notary Public, Partner, Member of the Board, Federal Cheeswrights Notaries Public Notary Chamber of the Russian Federation
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t’s better to transfer the company to the heirs during university Natalya Rasskazova, vice-president of the Federal the lifetime. This was one of the points of the Round table Notary Chamber of Germany Richard Bock, notary of Swit- discussion on “Business succession”, which took place on zerland Laurent Besso, representative of the High Council of the 29th of May as part of the V St. Petersburg Internation- French Notariat, notary Serge Pascault, tax consultant from al Legal Forum. Luxemburg Nicolas Morhun, notary of England and Wales Ali- I How to keep existing business in case of death of sa Grafton, president of the Notarial Chamber of Sverdlovsk the owner and the transfer of assets by inheritance? What is region Vladimir Yarkov. the role of the notary in the process of succession of business Konstantin Korsik stressed that the characteristics entities? The unfortunate statistics shows that more than of succession with a foreign element, which is a very impor- 70% of successful business closes within 1-2 years after the tant segment of notarial practice, require a careful study, not departure of the owner. This inevitably causes a whole set of only in the Russian lawyers community. “Perhaps colleagues negative effects, both economic and social properties. The from abroad who have more experience of succession of problem of succession of business concerns not only owners, enterprises, societies and companies will share their experi- but also de facto impact on business workers, contractors ence in conducting hereditary affairs in this sphere”, — said and so on. Experts say that the reasons for such situation are the head of the Notary chamber of the Russian Federation. numerous: it is the absence of desire or the respective abil- Konstantin Korsik also reminded that this year marks the ities of the heirs, distrust of creditors, and risks of the tem- 20th anniversary of the entry of the Russian notaries into the porary abandonment of the business before registration of International Union of Notaries. Over the years, the non- rights. The problems increase when it comes to the transfer budget notariat of the country was formed as a very important of transnational business, the structure of which has assets institution of civil society, which performs such a crucial and abroad, which is not so rare in the modern legal landscape in important public function, such as the security of inheritance. many countries, including Russia. Maria Melnikova, in turn, noted that in this country During the round table discussion the experts-the- the business is based for almost 30 years. During this time orists and notaries-practitioners discussed the problems of a lot of companies were formed, the owners have something succession of business which are typical not only for Russia to hand down, and today the features of these legal relations but also for foreign countries. The impressive scientific-prac- have become very important for the country. Therefore she is tical event of notariat, jointly organized by the Ministry of pleased to present the best world experts to the participants Justice of the Russian Federation and the Federal Chamber of the round table discussion. of Notaries, has become one of the marked scientific and The first opportunity to speak was given to the hon- practical events of the Forum. The composition of speakers orary guest of the Forum, Daniel-Sédar Senghor. He justified was quite impressive: the moderators of the discussion were the importance of the task, encouraged the experts to explain the president of the Federal Notary Chamber Konstantin the political vision of succession of business, to answer the Korsik and Advisor to the Minister of Justice of the Russian question why it is necessary to ensure the secure trans- Federation Maria Melnikova, the speakers were: president mission of business. Realizing that business are the human of the International Union of Notaries Daniel-Sédar Senghor, resources, capital and material component (real estate and director of the Institute of Notariat of the St. Petersburg state equipment), Mr. Senghor suggested to focus on the inher-
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itance of different components. The material components Laurent Besso raised in his speech the following can be inherited without much difficulty, but there are also questions: which way of property transfer is the best, if intangible components, there are factors of economic and so- some of the heirs worked for a company, and are experts in cial problems that affect the functioning of the business. And business, while others have no connection with this business. if they are in the process of succession change fundamentally, In his opinion, in such cases it is possible and even desirable then a successful enterprise may soon cease to exist. to change the business form of legal entity, by means of the Natalya Rasskazova made some significant remarks including of all the heirs to the Board. about the necessity of perfection of the civil legislation to In conclusion, Mr. Besso said a compliment to their distinguish civil-legal relations from others used in business Russian colleagues: “Russian notariat is a very serious com- activity. munity, you can be proud of the professional qualities”. It is necessary, in her opinion, to create a clear dis- Serge Pascault warned his colleagues that when it tinction between the transactions made by a natural person comes to business succession, it maybe too late to change and an individual entrepreneur, to determine the fate of civil anything. It’s necessary to work ahead. A business owner law contracts concluded by the individual entrepreneur, it should think over the transferring of his company, but a nota- is necessary to regulate the impact of death of an individual ry will have to help him. entrepreneur on labour, administrative and other legal rela- So, notaries in France are known to the individual tionships in which he participated. These conditions should entrepreneur is not very well protected, his heirs can inherit promote the preservation of business. the entire enterprise, but it also poses many risks. And it is Richard Bock started his presentation with the better during the life of the entrepreneur to create a Limited statement that notaries in Germany are often involved in the liability company. In France there are sole limited liability business transmission, as the Civil law of Germany provides proprietors, but banks are not eager to provide loans to such for the obligatory participation of a notary in the real estate entrepreneurs. There is also a simplified joint stock company transactions, transactions with shares in the company’s share having its Charter, drawn up in free form. But in the Charter capital, as well as in inheritance. In addition, transactions all the provisions must be very well created to make life easi- on unpaid and partly gratuitous alienation of assets, is also er for the head of the enterprise. Basically, there are so many subject to notarization. opportunities to transfer your business without prejudice, a And in case of a lifetime transfer of property and person need to go to a notary in time and take advantage of in case of a disposition of property in the event of death, his advice to protect one’s property. a notary must be sure that the created contracts and wills are Alisa Grafton spoke about the role of trusts in suc- balanced. cession planning. Listing the main principles of English law So, financial protection for the spouse of the en- applicable to succession law, she touches upon the issues trepreneur in case of death of the entrepreneur should be of inheritance by will, and then focused on the application guaranteed. On the other hand, in respect of a lifetime trans- of trusts. She also told about some benefits of trust, ways fer of property, especially when making a will, the heir must of creating a valid trust, and mentioned some requirements be protected from the complaints of the relatives. Drafting of necessary for preparation of trusts. relevant documents is one of the official duties of a notary.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 181 Roundtable 2.3
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
MANAGEMENT OF CONSTRUCTION AND INVESTMENT PROJECTS
28.05
182 2.3
183 Roundtable 2.3
MODERATOR SPEAKERS
Victoria Tsytrina, Karim Rashid, Head of Legal Department, Industrial Designer, Karim Etalon Group Company Rashid Inc.
184 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 MANAGEMENT OF CONSTRUCTION AND INVESTMENT PROJECTS
Igor Perevoshchikov, Dmitriy Timofeev, Olga Safronova, Head of Division for Legal Legal & Corporate Affairs Head of Legal, North-West Support of Major Projects and Director, ROSVODOKANAL Bank of Sberbank of Russia Integration, Gazprom Neft JSC GROUP
Dmitri Babiner, Roman Bevzenko, Partner, Head of Tax & Law Partner, Pepeliaev Group - Practice in St. Petersburg, EY Professor, Russian School of the Private Law under the Government of the Russian Federation
185 MANAGEMENT OF CONSTRUCTION AND INVESTMENT PROJECTS
he panel was organized and moderated by Victoria problems usually begin at the foreclosure stage in case of Tsytrina, Head of еру Legal Department in “Etalon violation of credit withdrawal procedure. Ms Safronova also Group”. The discussion addressed some of the pointed out the unresolved problem of combination of liens most pressing topics and issues that arise in man- of creditor banks and interest holders that concluded a agement and implementation of investment and shared construction participation agreement with the real Tconstruction projects not just in Russia but also worldwide. estate developer. The discussion revealed a significance The panel included major stakeholders in this area: “Gaz- difference in the ways bank carry out financial project prom Neft”, “Sberbank”, “Etalon Group”, “Rosvodokanal”, evaluation in Russia and the US — in particular, according etc. Karim Rashid, one of the world’s most famous archi- to Karim Rashid, an American bank can refuse to grant a tects and designers, also took part in the discussion. credit for a project if it is not satisfied with the aesthetic After Victoria Tsytrina opened the session, the (architectural) properties of the designed facility, whereas participants immediately engaged in the debate about in Russia they consider only economic properties. most pressing theoretical and practical issues. Igor The participants also addressed an extremely Perevoshchikov, Head of Division for Legal Support of urgent issue that recently arose in big Russian cities, Major Projects and Integration at “Gazprom Neft”, talked relating to construction of social infrastructure facilities at about special aspects of construction contracting in case the expense of private investors. Dmitry Babiner, partner at when the client does not have design documentation ready. “E&Y”, spoke about the need to include expense data in the Considering how often it happens, the experts shared their prime cost of investment construction projects and other views how to minimize the risks when formulating the challenges of tax planning in investment project imple- terms of construction contracts. mentation, particularly the ones with state participation. Then Dmitry Timofeev, Legal and Corporate Then in his presentation partner at “Pepeliaev Affairs Director in “Rosvodokanal Group”, pointed out a group” and professor of Russian School of Private Law very practical issue of needing to calculate electric load Roman Bevzenko talked about the specifics of joint real consumption for new facilities to be connected, because estate development and the principle of the Supreme Arbi- Russian legislation provides for two ways of calculating it. tration Court order No 54 on the sale of immovable prop- Yet these two methods yield completely different results. erty to be built in the future. The participants shared their The speaker also gave account of the existing issue re- ideas about how to protect the rights of investing interest garding the location of utility connection. Considering the holders and about legislative developments in fundraising existing collision in the applicable legislation, Mr Timofeev for real estate development. stated that “Rosvodokanal Group” worked on the issue and In conclusion Karim Rashid made his presenta- urged the participants to come up with a most effective tion. He talked about and demonstrated the latest trends way of solving it and suggest it to the legislator. in design of condominiums and public spaces. The main Olga Safronova, Head of the Legal Directorate, message of his speech was to better study the needs of the “North-Western Bank of Sberbank of Russia”, addressed would-be tenants and clients during design and imple- the current trends in investment and construction project mentation of large-scale projects. According to Mr Rashid, financing and mortgaging. According to her, main practical this is the formula for success of future projects.
186 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 2.3
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 187 Roundtable 2.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
LEGAL REMEDIES IN CASE OF NON-PERFORMANCE OF OBLIGATIONS
28.05
188 2.4
189 Roundtable 2.4
MODERATOR SPEAKERS
Paul Varul, Vsevolod Baibak, Head of the Institute of Private Partner, Iusland Law Offices Law, University of Tartu, Partner, Law Firm “VARUL”
Ilya Nikiforov, Managing Partner, Law Firm “Egorov Puginsky Afanasiev & Partners”
190 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 LEGAL REMEDIES IN CASE OF NON-PERFORMANCE OF OBLIGATIONS
Sunil Gadhia, Pavel Menshenin, Partner of the London Office, Legal Expert, Moscow City Bar Cleary Gottlieb Steen & Hamil- “Delcredere” ton LLC
Denis Philippe, Christian Schmies, Managing Partner, Philippe & Partner, Hengeler Mueller Partners
191 LEGAL REMEDIES IN CASE OF NON-PERFORMANCE OF OBLIGATIONS
he moderator of this panel discussion was Paul and Common European Sales Law. In the case of specific Varul, the Head of the Institute of Private Law, pro- performance, monetary and non-monetary obligations are fessor of the University of Tartu, partner of the law distinguished. If performance of monetary obligations may, firm VARUL. Among speakers were Vsevolod Bai- as a rule, be claimed always then in the case of non-mone- bak, partner at “Iusland Law Offices”; Sunil Gan- tary obligations, the right to enforce performance is signif- Tdhia, partner of the London Office, “Cleary Gottlieb Steen & icantly more limited (C. Schmies, D. Philippe); in the case Hamilton” LLP; Pavel Menshenin, legal expert, Moscow City of damages it is generally proceeded from the principle Bar “Delcredere”; Ilya Nikiforov, managing partner at the of full compensation of damage; however, in many cases law firm “Egorov, Puginsky, Afanasiev & Partners”; Denis it is limited by various criteria, such as foreseeability of Philippe, managing partner at “Philippe & Partners”; Chris- damage, the injured party’s own fault in causing damage, tian Schmies, partner at “Hengeler Mueller”. etc. (I. Nikiforov, S. Gandhia, V. Baibak). What is especially The panel covered all of the most widespread characteristic of termination of contract as a legal remedy legal remedies that are applied in the case of non-perfor- is that this remedy is applicable only in the case of funda- mance of obligations, primarily in case of breach of con- mental breach of contract (P. Menshenin, D. Philippe). The tract. Such remedies are the enforcement of performance right to choose the legal remedy lies on the creditor who (specific performance), withholding performance, price makes his/her decision based on which remedy would ena- reduction, damages, termination of the contract, fine for ble best protection of his/her interests. As a rule, several late payment and contractual penalty. Main attention was remedies may be used at the same time; for example, to focused on the three most relevant remedies — specific claim performance and also compensation for damage performance, damages and termination. Most questions or price reduction or terminate the contract and claim were also asked about those remedies. All remedies were compensation for damage or contractual penalty or fine covered comparatively by analysing Russian, English, for late payment. Of course there are certain remedies that German, French, Belgian and Luxemburg law, but they exclude one another, for example, one cannot, at the same were also analyzed in comparison to Vienna Convention time, claim performance and terminate the contract; when on International Sales of Goods and main international price has been reduced, compensation for damage with model laws such as the Draft Common Frame of Reference respect to that part can no longer be claimed.
192 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 2.4 2.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 193 Roundtable 2.5
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
REFORMING LIABILITY LAW IN RUSSIA: AGENDA FOR 2015
29.05
194 2.5
195 Roundtable 2.5
MODERATOR SPEAKERS
Aleksandr Makovskiy, Ludmila Novosiolova, Guillaume Meunier, Scientific Supervisor, Alexeev Chairman, Intellectual Head of Law of Obligations Private Law Research Centre Property Rights Court Office, Ministry of Justice of the under the President of the French Republic Russian Federation
Аlexandra Makovskaya, Denis Novak, Head of the Department of Vice-Director of the Legislation on Legal Entities, Department of the Economic Alexeev Private Law Research Legislation, Ministry of Justice Centre under the President of of the Russian Federation the Russian Federation
196 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 REFORMING LIABILITY LAW IN RUSSIA: AGENDA FOR 2015
Natalia Rasskazova, Franck Terrier, Andrey Egorov, Sergey Sarbash, Acting Dean of the Faculty Presiding Judge of the 3rd Civil First Deputy Chairman of Head of Department for Gen- of Law - Head of Civil Law Chamber, Court of Cassation of the Board, Alexeev Private eral Problems of Private Law, Department of the Faculty of the French Republic Law Research Centre under Alexeev Private Law Research Law, Saint-Petersburg State the President of the Russian Centre under the President of University Federation the Russian Federation
Eugenia Kurzynsky-Singer, Lorenz Kaehler, Iskender Nurbekov, Senior Research Fellow, Professor, University of Bremen General Council - Head of Law Max Planck Institute for Initiatives, Internet Initiatives Comparative and International Development Foundation Private Law
197 REFORMING LIABILITY LAW IN RUSSIA: AGENDA FOR 2015
he round table was organized by the Sergei Sergei Alexeev Private Law Research Centre; Аleksan- Alexeev Private Law Research Centre under the dra Makovskaya, head of the Department of Legislation President of the Russian Federation and French on Legal Entities, Sergei Alexeev Private Law Research Ministry of Justice. The panel was moderated by Centre; Denis Novak, vice director of the Department Aleksandr Makovsky, supervisor of Sergei Alexeev of the Economic Legislation, Ministry of Justice of the TPrivate Law Research Centre. Russian Federation; Eugenia Kurzynsky-Singer, senior Other participants included: Ludmila Novosiolo- research fellow, Max Planck Institute for Comparative va, chairman, Intellectual Property Rights Court; Guil- and International Private Law; Lorenz Kaehler, professor laume Meunier, head of Law of Obligations Office, Minis- of the University of Bremen; Iskender Nurbekov, gener- try of Justice of the French Republic; Natalia Rasskazova, al council, head of Legal Initiatives, Internet Initiatives acting dean of the Faculty of Law, head of Civil Law Development Foundation. Department of the Faculty of Law, St. Petersburg State Mr Makovsky, the moderator, noted that currently University; Franck Terrier, presiding judge of the 3rd Civ- Russia and France are seeing similar trends related to il Chamber, Court of Cassation of the French Republic; the reform of the liability law. Russia has carried out a Andrei Egorov, first vice chairman of the board, Sergei comprehensive reform of general regulations on liabilities, Alexeev Private Law Research Centre; Sergei Sarbash, while in France, a reform of contract law that has started head of Department for General Problems of Private Law, long ago now has a fixed schedule and is drawing to a
198 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 2.5
close. This makes the discussion of the issues that arise for a weaker part in the contract. Natalia Rasskazova gave during the reform both mutually beneficial and relevant. an overview of approaches selected for the purposes of the The moderator suggested addressing the issues on the reform of liability law to estimate the changes in secu- agenda in keeping with general principles and provisions rity rights. Aleksandra Makovskaya presented a detailed of the liability law. He pointed out several such issues: account of the issues of unilateral change and cancellation protection of a weaker part of an obligation; judicial discre- of contracts. Franck Terrier analysed some aspects of the tion; adoption of foreign legal institutions. reform of French contract law. Sergei Sarbash reviewed Ludmila Novosiolova spoke about the results of the issues of estoppel’s implementation in the Russian updating chapter 24 The Substitution of Persons in Obli- liability law. In conclusion of the discussion, Andrei Egorov gation of Russia’s Civil Code, as well as some provisions summed up the results of lien reform. of § 5 Surety and § 6 Independent Guarantee of chapter 23 Providing for the Discharge of Obligations. Guillaume Meunier gave a brief overview of the history and methods of reforms of the French civil legislation. He specifically pointed out the following goals of the reform: ensuring the understanding and freedom of interpretation of contract law; eliminating legislative gaps; providing the protection
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 199 Roundtable 2.6
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
LIMITED PROPERTY RIGHTS: HOW THE CIVIL CODE IS FAVOURABLE FOR BUSINESSES
28.05
200 2.6
201 Roundtable 2.6
MODERATORS SPEAKERS
Veniamin Yakovlev, Evgeniy Sukhanov, Yury Tolstoy, Adviser to the President of the Deputy Chairman, Presidential Professor of Civil Law Russian Federation Council for Codification Department of Law Faculty, and Enhancement of Civil Saint-Petersburg State Legislation University
Anton Ivanov, Wolfram Manfred Marx, Former Chairman of the Head of Department, Federal Supreme Commercial Court of Ministry of Justice of the Fed- the Russian Federation, Head eral Republic of Germany of the Department of Civil Law, Higher School of Economics
202 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 LIMITED PROPERTY RIGHTS: HOW THE CIVIL CODE IS FAVOURABLE FOR BUSINESSES
Guenther Jannsen, Mariya Abramova, Former Presiding Judge, Director General, Oldenburg Higher Regional Gazpromneft-MNGC JSC Court
Tatiana Kuzmina, Alexander Arsenyev, Deputy Chairman Senior Vice President, General of the Management Counsel, YIT Construction Ltd Board & Head of Legal Unit, Promsvyazbank PJSC
203 LIMITED PROPERTY RIGHTS: HOW THE CIVIL CODE IS FAVOURABLE FOR BUSINESSES
The panel was organized by the Presidential Council rights that would be properly guaranteed. Mr Sukhanov for Codification and Enhancement of Civil Legislation, in his presentation discussed some conceptual ideas Russian Bar Association and Association of Russian Corpo- of property rights modernization and its relevant issues. rate Counsels. Mr Tolstoy analysed the draft federal law regarding the The panel was moderated by Veniamin Yakovlev, amendments of the Russian Civil Code (the part regarding adviser to the president of the Russian Federation and chair- property rights) and spoke about the draft’s structure, man of the Presidential Council for Codification and Im- classification of property rights and legal nature of some provement of Civil Legislation, and Anton Ivanov, head of the specific property rights. Ms Kuzmina in her presentation Department of civil law, Higher School of Economics. also analysed the positive and negative aspects of the Other participants included: Evgeniy Sukhanov, draft law, focusing on reforming of real estate mortgage. deputy chairman, Presidential Council for Codification and Mr Arseniev spoke about new provisions of the draft law Enhancement of Civil Legislation; Yury Tolstoy, professor regarding building lease. of Civil Law Department of Law Faculty, St. Petersburg Mr Jannsen discussed the role of State Cadas- State University; Guenther Jannsen, former presiding judge, tre in the development of property relations and property Oldenburg Higher Regional Court; Mariya Abramova, direc- rights guarantee system based on the analysis of German tor general, “Gazpromneft-MNGC” JSC; Wolfram Manfred experience. Mr Marx’s presentation was titled The System Marx, head of department, Federal Ministry of Justice of of Limited Property Rights or Lease: Pros and Cons. the Federal Republic of Germany; Tatiana Kuzmina, deputy At the end of the discussion its participants agreed chairman of the Management Board & Head of Legal Unit, that in general they support the concept that underpins “Promsvyazbank” PJSC; and Aleksandr Arsenyev, senior the draft law, there are no principal objections regarding vice president, general counsel, “YIT Construction” Ltd. the establishment of limited property rights system, and Mr Yakovlev, the moderator, pointed out that the that discussion concerns only the specific features of some purpose of splitting part II of the Russian Civil Code was to property rights. The experts agreed that the current main expand the set of property rights that can be used in civ- goal is to work out the transitional provisions of the draft il-law transactions. Mr Ivanov spoke about one of the main law in order to minimize the “losses” of the participants tasks of reforming the concept of limited property rights. of civil-law transactions during this period that would be According to him, the task is to create a system of property complete in reasonable time.
204 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 2.6
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 205 Roundtable 3.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
LEGAL DEPARTMENT IN THE DIGITAL AGE
29.05
206 3.1
207 Roundtable 3.1
MODERATOR SPEAKERS
Alexandra Nesterenko, Ruslan Ibragimov, Michael Buckner, President, Russian Corporate Board Member — General Counsel, General Counsel Association Vice-President for Corporate Electric Russia/ CIS and Legal Affairs, Mobile TeleSystems OJSC
208 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 LEGAL DEPARTMENT IN THE DIGITAL AGE
Tatiana Odabashian, Legal and Compliance Manager, Heineken Breweries LLC
James Turner, Igor Maydannik, Vladislav Koloskov, Manager of Legal Knowledge, Member of the Board, Deputy Director of Legal Philip Morris International Russian Corporate Counsel Department, Sberbank SIB Association
209 LEGAL DEPARTMENT IN THE DIGITAL AGE
he roundtable discussion arranged by RCCA of RCCA’s board, described new approaches to assessing was dedicated to new trends in the development the performance of a top manager of the corporate legal of legal departments in the digital age. It was department. Not only his or her key performance indica- moderated by Alexandra Nesterenko, RCCA’s tors (KPIs) and individual assignments but also managerial president, who opened the discussion by saying competencies are now taken into account when assessing Tthat by having launched a project called “Lawyers and the performance of such manager. The reputation of a Business” (to study the role the legal function plays in a corporate legal department depends on many factors and company) seven years ago RCCA paved the way for the is one of its core assets. future development of corporate lawyers. By reflecting on Legal departments are increasingly acting as a busi- the place of a corporate legal department and its per- ness function in addition to their traditional legal role. Accord- formance indicators, functionality and team members’ ing to Michael Buckner, general counsel at “General Electric motivation, RCCA sets development trends for the legal Russia/CIS”, most corporate legal departments in the United function that Russian lawyers follow. States have already taken the first steps to improve their KPIs The year 2015 saw a new stage in the development by reducing their costs and enhancing their efficiency. of the legal function, as corporate counsels have to learn Tatiana Odabashian, legal and compliance man- how to work efficiently at the time of crisis, layoffs and cost ager at “Heineken Breweries LLC”, and her team have savings. What new trends for corporate legal departments developed principles for servicing internal clients. While did RCCA’s speakers point out in 2015? there are only six principles, they have reflected a huge Ruslan Ibragimov, vice president for corporate amount of work carried out by Heineken’s lawyers to make and legal affairs at “Mobile TeleSystems” and member a quantum leap in enhancing their performance. As a
210 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.1
culminating point of the evolution of Heineken’s legal de- the creation of a database of court orders and judgments partment, Heineken’s Constitution was adopted to include improve the quality of lawyers’ work owing to process uni- a set of electronic training courses, a “private club” for the fication. Studying the history of similar cases and focusing HR personnel, a database, sections intended for use by on intellectual work instead of routine (automated) opera- various corporate departments, frequently asked questions tions, tracking landmark cases, building defences, and de- (FAQ) and legislative news. The Constitution also contains veloping preventive measures and algorithms for respond- a realty database and all information relating to powers ing to claims and governmental acts — all of this would of attorney and seals. As a result of such efficient work or- strengthen the corporate legal department’s potential and ganisation, seven lawyers now handle the tasks previously contribute to the propagation of best practices to regional assigned to 38 legal staffers at Heineken. legal departments. The benefit of such an approach is ob- James Turner, manager of legal knowledge vious, as it will ultimately increase the company’s goodwill. at “Philip Morris International”, said each team at his Vladislav Koloskov, deputy director of the legal company has its own web portal that enables all users department at “Sberbank of Russia”, told that a biannual to publish documents created in their regions. All of those user satisfaction test is performed in “Sberbank” whereby portals are interconnected and each of them has a search each of the bank’s employees can assess the level of any engine for quick and easy retrieval of a required document applicable service, including legal services, based on var- by a keyword. As regards interactive sessions where the ious criteria. The users are invited make their judgment employees can exchange data, such sessions and their on how clear and convenient a particular service tool is and moderators are announced in blogs. “At the end of each how promptly and politely its providers can respond to session, we ask the participants to vote for the date and users’ requests. subject of the next session,” Mr. Turner added. As we have seen, the legal function is a living Igor Maydannik, member of RCCA’s board, noted organism that keeps changing as time goes by. It depends that the dawning of the digital era enables lawyers to use on the type and scope of business of a company, personal IT products in their everyday activities to optimise their characteristics of its top manager, and ambitions of the business processes. The automation of claims-related head of its legal department. Innovative technologies help work and contacts with governmental authorities and corporate lawyers become more and more productive.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 211 Roundtable 3.2
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
GLOBALIZATION OF PRO BONO
28.05
212 3.2
213 Roundtable 3.2
MODERATOR SPEAKERS
Glenn Kolleeny Konstantin Dobrynin, Ozgur Kahale, Partner, Dentons Europe Deputy Chairman, Federation Pro Bono Counsel Europe, Council Committee of DLA Piper France LLP Constitutional Legislation and State-Building, Federal Assembly of the Russian Federation
Dmitry Shabelnikov, Director for Russia, Global Network for Public International Law Institute (PILnet)
214 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 GLOBALIZATION OF PRO BONO
Kendall Coffey Dmitriy Samigullin Chairman of the Southern Managing Partner, District Conference, Florida Law Office “RBL” Federal Judicial Nominating Commission
Christos Giakoumopoulos Director of Human Rights, Council of Europe
215 GLOBALIZATION OF PRO BONO
lenn Kolleeny, partner at “Dentons Europe”, mod- free legal aid confirms that. Project “Rendering subsidized erated the discussion. Konstantin Dobrynin, the legal aid to socially vulnerable groups” provides for the set- deputy chairman of the Federation Council Com- ting up of demand and supply analytical assessment model mittee of Constitutional Legislation and Statebuild- of free legal aid. In some member-countries of the Council ing of the Federal Assembly of the Russian Feder- of Europe a comparative analysis of such service systems Gation; Ozgur Kahale, Pro Bono counsel in Europe, “DLA Piper will be carried out for that. Within the framework of the France” LLP; Kendall Coffey, chairman of the Florida Federal second stage the model will be tested in two regions with Judicial Nominating Commission in the Southern District; different demographic indicators and different organization Dmitry Samigullin, managing partner at “RBL” Law Office; of systems of free legal aid. Estimation of the results of pilot Dmitry Shabelnikov, director for Russia at Global Network for projects will become the concluding stage; the projects will Public International Law Institute (PILnet); Christos Giakou- be introduced during the conference on the accumulation of mopoulos, Director of Human Rights, Council of Europe; and acquired experience and distribution of best practices to all Elena Dobrokhotova, assistant professor of the Department other regions of the Russian Federation. of labor law and work safety, the director of the SPbU Legal “The project of the Council of Europe and the clinic, took part in the discussion. Ministry of Justice of the Russian Federation supported by The experts noted that pro bono services have the Grand Duchy of Luxembourg regarding provision of free already become a global practice and the new project of the legal aid to socially vulnerable strata of population is to pro- Russian Federation and the Council of Europe in rendering vide access to justice and opportunity to everyone to protect
216 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.2
their rights in compliance with the human rights standards. clinics. “Pro bono studies are the obligatory requirement I think that the development of pro bono services around the for law schools of the USA and UK. And it makes sense. For world is connected with state liabilities to its citizens and example, In New York, there is an obligatory requirement provision of access to legal aid in criminal law domain”, said to provide pro bono services, which are essential for young Christos Giakoumopoulos. lawyers’ education (las schools require a certain number A crucial role in distributing pro bono practice of pro bono hours). I believe this is an important step that around the world was performed by emerging global legal shows future lawyers all the importance of such assistance companies: companies, which have offices not only in their and similar programs,” stated Mr. Coffey. own countries. Such point of view was expressed by Dmitry Experts noted that in the sphere of pro bono Shabelnikov. “I think that to answer the question how and services there also some problems, which according to why pro bono has become a global phenomenon one needs specialists include the quality of the pro bono legal ser- to understand that there are two parallel aspects of globali- vices rendered and the awareness of citizens about such zation — globalization from outside and from inside. When kind of legal aid. “If we take Russia, pro bono topic is an I consider globalization from the outside, I mean global law aspect that should be discussed on an almost everyday firms possessing vast financial and human resources. For basis. People’s awareness, the culture of law and the more than 20 years the American majority of those firms level of legal illiteracy are almost the same as a century has been actively involved in Pro Bono Challenge project. ago. And here we — lawyers — are to blame. We have When signing this “Challenge”, firms make a commitment monopolized the right for law. Citizens are not familiar to do about 3 to 5 per cent of their work pro bono (from 60 to with their rights and the mechanisms of their protection. 100 hours per year calculated as per one lawyer). Another It is worth recognizing that in terms of rendering pro aspect is related to the inside globalization. So called “Pro bono services Russia lags behind most countries. What bono declarations” we adopted about 15 years ago, and de- we need in our country is not globalization but imple- spite the lack of practical application, they represent the tool mentation of pro bono and it should be done by lawyers. for the support of the pro bono principle by the society, state, Pro bono is the legal form that can become another tool and the judiciary system,” said Mr Shabelnikov. of protection and guarantee of citizens’ constitutional The participants also agreed that the participa- rights,” said Konstantin Dobrynin. tion of jurisprudence schools and law societies in pro bono The participants of the discussion concluded that practices is an important prerequisite for the provision of both state subsidized and pro bono services have advan- free legal services globally. According to Kendall Coffey, it’s tages in the legal aid system. They are to supplement each necessary to encourage law school students to create legal other in the harmonious system of legal aid provision.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 217 Roundtable 3.3
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
M&A DEALS AND INVESTMENT MARKET IN RUSSIA IN AN EXISTING ENVIRONMENT
28.05
218 3.3
219 Roundtable 3.3
MODERATOR SPEAKERS
Mikhail Kazantsev, Andrey Tsarikovskyi Tatyana Udaltsova, Partner, Law Firm State Secretary – Deputy Head Member of the Management “Egorov Puginsky Afanasiev of the Federal Antimonopoly Board, Bank of Moscow & Partners” Service of the Russian Federation
Rupert Boswall, Chairman, Reynolds Porter Chamberlain LLP
220 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 M&A DEALS AND INVESTMENT MARKET IN RUSSIA IN AN EXISTING ENVIRONMENT
Robin Wittering, Piotr Marczewski, Partner, Law Firm “Egorov Managing Director, Thomson Puginsky Afanasiev & Reuters Russia & CIS Partners”
Maria Miroshnikova, Wenjing Tian, Parnter, Law Firm Partner, King & Wood “Ivanyan & Partners” Mallesons
221 M&A DEALS AND INVESTMENT MARKET IN RUSSIA 3.3 IN AN EXISTING ENVIRONMENT
he panel session was attended by Andrey development prospects. Piotr noted that in the first quarter Tsarikovsky, state secretary and deputy head of of 2015 showed a 23% rise in deal volume globally, as the Federal Antimonopoly Service of the Rus- compared with the same period in 2014. Andrey Tsarik- sian Federation; Tatyana Udaltsova, member ovsky opened his speech with a summary of the antitrust of “Bank of Moscow” board; Robin Wittering, regulation in the industry, touching on the FAS reforms to Tpartner at “Egorov Puginsky Afanasiev & Partners”; Piotr lower transaction thresholds and extend disclosure re- Marczewski, managing director at “Thomson Reuters quirements, saying that “the FAS is now mostly exercising Russia & CIS”; Rupert Boswall, chairman of “Reynolds preventive control”. The panel participants perked up when Porter Chamberlain LLP”; Maria Mitroshnikova, partner the debate turned to transactions with the participation at “Ivanyan & Partrners”; Wenjing Tian, partner at “King & of foreign investors and prospects for the development Wood Mallesons”. The session was moderated by Mikhail of anti-monopoly legislation in this field. Robin Wittering Kazantsev, partner at “Egorov Puginsky Afanasiev & Part- covered M&A dealings under force majeure and answered ners”, who opened the discussion outlining the topics and numerous questions on the difficulties on dealings re- introducing the speakers. stricted by the sanctions. Maria Miroshnikova referred to Tatyana Udaltsova kicked off the panel, covering the recent amendments of the Russian Tax Code and the the latest M&A market trends and key legislative devel- deoffshorization program, focusing on the difficulties faced opments, trying to forecast the industry development by the business community under the sanctions regime. prospects. Piotr Marczewski focused on reviewing global Rupert Boswall reviewed commented on the volume and and Russian M&A statistics and noted a 58% decrease in the dynamics of investments into Russian companies. Fi- the deal volume. However, he was optimistic about market nally, Wenjing Tian discussed cementing of the Russia-Chi-
222 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.3
na relations and on Chinese business interest in Russia in Russia against all odds. There is a growing interest from the form of infrastructure projects and mining. China, especially in infrastructure projects that are likely Summing up the discussion, moderator Mikhail to be followed by deals. Despite the fact that currently Kazantsev expressed the general view by saying that there are more questions than answers, the participants in spite of the statistics showing a decline in the M&A agreed that thanks to the recent legislative amendments, market, the critical point has already been passed: deals including those to the civil code, and the deoffshorization are happening, and the market has moved to the next program, we may soon expect the number of transactions stage — that of adaptation. Facts and figures suggest that governed by Russian law to increase, and, therefore, law- foreign investors, including those from the USA, come to yers won’t be out of jobs just yet.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 223 Roundtable 3.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
WHICH ROLE FOR INTERNATIONAL LAW IN THE PREVENTION AND SUPPRESSION OF ILLICIT TRADE?
28.05
224 3.4
225 Roundtable 3.4
MODERATOR SPEAKERS
Aleksandr Avdeyko, Stefano Betti, Louise van Greunen, Head of Legal Department, Senior Counsel, INTERPOL Director, Building Respect for Ministry of Internal Affairs IP Division, World Intellectual of the Russian Federation Property Organization
Esteban Giudici, Legal Officer, INTERPOL
226 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 WHICH ROLE FOR INTERNATIONAL LAW IN THE PREVENTION AND SUPPRESSION OF ILLICIT TRADE?
Dmitriy Volchkov, Deputy Head of the Department of Combating International Crime, NCB Interpol of the Ministry of Internal Affairs of the Russian Federation
Konstantin Raynot, Alexey Andronov, Illicit Trade Manager, General Counsel, Trade Philip Morris Company MEGAPOLIS CJSC
227 WHICH ROLE FOR INTERNATIONAL LAW IN THE PREVENTION AND SUPPRESSION OF ILLICIT TRADE?
epresentatives of public authorities, interna- ment of legal solutions: newest approaches and modern tional organizations, and enterprises attended challenges”; Konstantin Raynot, illicit trade manager the roundtable “Prevention and suppression at “Philip Morris”, with the topic “Illegal tobacco trade: of illegal trade: role of international law”. basic tendencies on the way of efficient counteraction”; The moderator of the session was Alexander and Alexey Andronov, general counsel at trade company RAvdeyko, head of the Legal Department of the Ministry “MEGAPOLIS CJSC”, who held a speech on “Practical of the Interior of the Russian Federation. The following implementation of internal rules of companies in order to speakers participated in the work of the section: Betti combat illegal trade”. Stefano, senior counsel at the Office of Legal Affairs, The results of the discussion showed that this Interpol, with the speech “Prevention of illegal trade: Forum’s platform is a unique opportunity to discuss the innovative approaches towards the interpretation of most critical and acute problems of the improvement of international agreements”; Louise van Greunen, director international law and national legislation. at Building Respect for IP Division, World Intellectual The illegal trade is comprehensive in nature and Property Organization, who held a speech on “Role of can be seen in various aspects depending on when would international law in prevention and suppression of illegal be the object or “merchandise” of the illegal sale. trade”; Dmitry Volchkov, deputy head of the Section of An important role in combating illegal trade Combating International Crime, NCB Interpol of the is that of the international law. Universal and regional Ministry of Internal Affairs of the Russian Federation, his international agreements aimed at combating this or that topic’s name was “Capabilities of the Russian NCB Inter- form of illegal trade are an important tool for counter- pol in combating intellectual property crimes”. Moreover, acting crime, while their implementation in national legal among speakers were Esteban Guidici, legal officer in the frameworks gives law enforcement agencies additional Office of Legal Affairs, Interpol, with speech “Develop- capabilities of reacting to criminal activity.
228 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 229 Roundtable 3.5
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
PRODUCT LIABILITY: EFFECT ON THE PRICE
29.05
230 3.5
231 Roundtable 3.5
MODERATOR SPEAKERS
Ken Oliphant, Simon Taylor, Professor of Tort Law, Professor, University Paris Director of Education, Diderot University of Bristol Law School
232 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 PRODUCT LIABILITY: EFFECT ON THE PRICE
Richard Goldberg, Professor, Durham University Law School
Aleksandr Yagelnitsky, Stepan Guzey, Civil Law Department, Partner, Lidings Lomonosov Moscow State University
233 PRODUCT LIABILITY: EFFECT ON THE PRICE 3.5
he session was opened by the moderator, profes- the victims of defective products can be regarded as a sor of the University of Bristol Law School in UK licence fee exacted from manufacturers who, after all, Ken Oliphant, who began by noting that the effect are in business in the pursuit of profit. The question for of product liability on pricing was in fact a crucial the manufacturer will be whether the profits to be derived aspect of the classic justification for strict product from a particular product outweigh the cost of paying Tliability, as expressed in the California Supreme Court by compensation claims. Justice Traynor in Escola v Coca-Cola Bottling Co of Fresno, The effect of product liability on price was also 150 P 2d 436 (1944) (later approved by the entire court in crucial to the enactment of the EU Product Liability Di- Greenman v Yuba Power Products, Inc, 377 P 2d 897 (1963)): rective of 1985,1 establishing a liability on the producer of “I believe the manufacturer’s negligence should a product for damage caused by a defect in it. The Direc- no longer be singled out as the basis of a plaintiff’s right to tive’s legal basis — i.e. the provision in the Treaties that recover in cases like the present one… Even if there is no allowed the then Council of Ministers to act — was the negligence… public policy demands that responsibility be harmonisation of the laws of member states so as to im- fixed wherever it will most effectively reduce the hazards prove the functioning of the internal market.2 It addressed to life and health inherent in defective products that reach the concern that divergences in product liability laws the market… The cost of an injury and the loss of time or between Member Sates could distort product costs and health may be an overwhelming misfortune to the person hence competition and thereby affect the free movement injured, and a needless one, for the risk of injury can be of goods within the EU. The Directive thus had an express insured by the manufacturer and distributed among the economic, rather than social objective. public as a cost of doing business”. Dr Simon Taylor from University of Paris Diderot Traynor J’s suggestion that strict liability is gave an overview of the Directive, with a particular focus simply “a cost of doing business” suggests a ‘licence fee’ on its implementation in France in particular. He high- rationale for product liability: the cost of compensating lighted two issues: the possible effect of the directive
234 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 on price and the extent to which the effect on price, if it to the pharmaceutical. Regarding the case law, Stepan exists, is the same throughout the Member States, i.e. to elaborated in detail on a case, which involved the selling what extent does the directive harmonise national laws? of ampoules mistakenly, filled with the wrong substance, Professor Richard Goldberg from University of which caused 2 deaths and injuries to 23 people. Out- Durham, UK, narrowed the focus still further, looking rageously none of the aggrieved parties received any at the specific context of liability for medicinal prod- compensation and the manufacturer was not sanctioned ucts. Comparing the EU and the US, he inquired into the at all. Stepan Guzey commented that public sanctions for potential effect of different liability regimes on the price production of defective goods in Russia do not function of such products, and examined the empirical evidence properly and effective compensation may be reached (to a thereupon. He convincingly refuted some of the more limited extent) via private law mechanisms. He concluded ambitious claims about that effect and warned legislators that manufacturers in Russia do not consider product to be wary of taking them at face value. liability risks significant and agreed that product liability As to Russian law, Alexander Yagelnitsky, profes- rules alone do not have any effect on price. sor of Lomonosov Moscow State University, began with The session demonstrated that, on the current the development of product liability rules in the Soviet state of the evidence, it is very hard to track differenc- era and then tackled the controversial issues of modern es in substantive law (e.g. the definition of a defect, the product liability regime such as defect/wrongfulness availability of a development risks defense, and principles and causation. He addressed the case law, explained the of causation) or even in procedural law (e.g. the avail- environment and concluded that existing product liabil- ability of class actions or similar devices) onto product ity rules alone likely have very limited impact on price prices, and that more work needs to be done to produce (if any) whereas other factors (such as litigation costs, a convincing evidence base to guide business leaders and under-compensation, high standards of proof) have much law-makers. More broadly, product liability laws have a greater effect. much less significant impact than broader aspects of the The final presentation was given by Stepan legal system and “legal culture” (embracing the whole Guzey, a partner at “Lidings”, who focused on procedural set of attitudes towards, including expectations of, the aspects of product liability litigation and case law relating legal system).
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 235 Roundtable 3.6
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
EXTRATERRITORIAL EFFECTS OF NATIONAL LEGISLATION — TRANSNATIONAL CORPORATIONS’ RISKS
28.05
236 3.6
237 Roundtable 3.6
MODERATORS SPEAKERS
Oxana Balayan, Mark Friedman, Managing Partner, Deputy General Counsel, Hogan Lovells (CIS) Philip Morris
Alan Thompson, Elena Chelembeeva, Director, Russo-British Head of Legal Department, Chamber of Commerce Volvo Group Russia
238 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 EXTRATERRITORIAL EFFECTS OF NATIONAL LEGISLATION — TRANSNATIONAL CORPORATIONS’ RISKS
Andrey Mikonin, Michael Swainston, Attorney at Law, Head of Litiga- Barrister, QC, Brick tion, “S&K Vertical” Court Chambers
Daniel Nuedling, Owner, Supervisory Board, FCN Holding Fulda
239 EXTRATERRITORIAL EFFECTS OF NATIONAL LEGISLATION — TRANSNATIONAL CORPORATIONS’ RISKS
anel discussion on extraterritorial effects of In such circumstances, many foreign companies try to national legislation was organized by “Kom- foresee all possible scenarios. “In order to protect them- mersant” publishing house. The panellists selves, companies increasingly often ask to confirm in discussed specific aspects of doing international which cases we can refuse to represent our client. And in business in the context of extraterritorial effect this case we are supposed to propose a company that can Pof national legislation. The panel’s moderators were Ok- take up and continue this deal,” says Oksana Balayan. sana Balayan, managing partner at “Hogan Lovells” (CIS), Sanctions became an additional driver to devel- and Alan Thompson, director of Russo-British Chamber op the legal side of the Eurasian Economic Union (EEU), of Commerce. thinks Alan Thompson. According to Andrei Mikonin, The main part of the discussion was dedicated to Partner at “S&K Vertical”, an important advantage is transnational corporations’ strategies of doing business protection of entrepreneurs in disputes with internation- in Russia against the backdrop of sanctions. According to al organizations: “EEU can offer new options, including Mark Friedman, deputy general counsel of “Philip Morris”, judicial protection — it helps to defend your interests and it is not just the companies who are subject to risks, but engage in disputes with foreign companies. In terms of in- the ban-imposing states, too. “Sanctions force us to act terest protection, perhaps it makes sense to move several very conservatively with regard to even potential litiga- offices to the Eurasian Union”. tions. The only question that a company management asks Other panellists included Michael Swainston, is, Can I take up such risk, or my business will suffer until barrister at “Brick Court Chambers”, Elena Chelembeeva, the political environment changes?” head of legal department at “Volvo Group Russia”, Andrei Often even the companies that are technically not Mikonin, partner at “S&K Vertical”, and Daniel Nuedling, subject to sanctions still meet the sanction requirements. owner of “FCN Holding Fulda”.
240 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.6
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 241 Roundtable 3.7
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
REGULATION OF PUBLIC PROCUREMENT AND PROCUREMENT BY PUBLIC COMPANIES
28.05
242 3.7
243 Roundtable 3.7
MODERATOR SPEAKERS
Viktor Evtukhov, Andrey Tsarikovskyi, State Secretary - Deputy State Secretary – Deputy Head Minister of Industry and Trade of the Federal Antimonopoly of the Russian Federation Service of the Russian Federation
Oliver Josie, Deputy Commissioner, Competition Commission of the Republic of South Africa
244 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 REGULATION OF PUBLIC PROCUREMENT AND PROCUREMENT BY PUBLIC COMPANIES
Sergey Maksimov , Renaud Sorieul, Director of the Department Secretary, United Nations for Competition and Public Commission on International Procurement Policy, Eurasian Trade Law (UNCITRAL) Economic Commission
Artur Rokhlin, Sergey Pepeliaev, Managing Partner, Managing Partner, CJSC “LEXAR” Pepeliaev Group
245 REGULATION OF PUBLIC PROCUREMENT AND PROCUREMENT BY PUBLIC COMPANIES
anel was moderated by Viktor Evtukhov, state nism, compared the provisions on state procurement of secretary and deputy minister of industry and the Eurasian Economic Union Treaty with the provisions of trade of the Russian Federation. Among speak- international agreements, reviewed supranational reg- ers were Andrei Tsarikovsky, state secretary and ulation of contract system within the EEU and discussed deputy head of the Federal Antimonopoly Service regulation of procurement by public companies. Pof the Russian Federation; Sergei Maksimov, director of the These issues were addressed together, both from Department for Competition and Public Procurement Policy the point of view of the state and supranational governing of the Eurasian Economic Commission; Renaud Sorieul, bodies, and from the point of view of the Russian legal secretary of the United Nations Commission on Internation- consultants and international community. al Trade Law (UNCITRAL); Oliver Josie, deputy commission- Participants mentioned the problems of applica- er of the Competition Commission of the Republic of South tion of contractual system and proposed possible solu- Africa; Arthur Rokhlin, managing partner at “LEXAR”; and tions, which were quite specific and require comprehensive Sergei Pepeliaev, managing partner at “Pepeliaev Group”. analysis of the possibility of their implementation. The issue of public procurement and procurement For example, regarding the application of provi- by public companies is very topical, considering the need sions of the Federal Law No. 44 dd. 5 April 2013 On the to provide Russian producers maximum state support. Contract System in State and Municipal Procurement Public procurement mechanism is the most powerful and, of Goods, Works and Services, there was a proposal to importantly, legitimate instrument of support, considering introduce electronic tenders. This would lower the risk of our WTO membership. collusion and eliminate possibile manipulations with the In a lively and fruitful discussion the panellists content of applications and the order of their submission. reviewed the application of public procurement mecha- It would also make applications’ evaluation more objective.
246 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.7
Participants also discussed whether it was possible to procurement for state companies, including a unified extend the provisions of the Federal Law No. 44 onto state methodology; to establish an exhaustive list of procure- (or municipal) unitary enterprises’ procurements. ment methods; to extend the electronic procurement The Federal Law No. 223 dd. 18 July 2011 On practice; or to introduce stricter punishments for violation Procurement of Goods, Works and Services by Certain Legal of the Federal Law No. 223. Entities currently has a framework nature. Panellists agreed As for supranational regulation, based on the that regulation of procurement procedures, including elec- results of the years 2012-2014, national legislation on state tronic ones, is insufficient, as is the control mechanism. procurement was harmonized and a national regime was Because of it, state companies themselves estab- introduced. Legislation and practice of state procurement lish various demands to procurement, often too high and are being constantly monitored. unlawful. The perspective work in this area must consider Several solutions were proposed: for instance, the stipulations of the EEU Treaty, also in terms of provi- to establish at the state level a unified approach to typical sion of a national regime.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 247 Roundtable 3.8
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
ANTIMONOPOLY LAW ENFORCEMENT IN THE MODERN ECONOMIC CONDITIONS
28.05
248 3.8
249 Roundtable 3.8
MODERATOR SPEAKERS
Sergey Puzyrevskiy, Igor Artemiev, Bukhosibakhe Majenge, Head of the Legal Department, Head of the Federal Chief Legal Counsel, Federal Antimonopoly Service Antimonopoly Service of the Competition Commission of of the Russian Federation Russian Federation South Africa
Lars Kjolbye, Partner, Latham & Watkins LLP
250 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ANTIMONOPOLY LAW ENFORCEMENT IN THE MODERN ECONOMIC CONDITIONS
Oxana Gvozdilina, Sergey Maksimov, Former Judge, Supreme Director of the Department Arbitration Court of the for Competition and Public Russian Federation Procurement Policy, Eurasian Economic Commission
Anna Numerova, Aleksey Dobrynin, Tatyana Kamenskaya, Counsel, Law Firm “Egorov Head of Corporate Crime Managing Partner, Kameskaya Puginsky Afanasiev & Practice, Pen & Paper & Partners Law Firm Partners”
251 ANTIMONOPOLY LAW ENFORCEMENT IN THE MODERN ECONOMIC CONDITIONS
iscussion was opened by Sergei Puzirevskiy, “Pen & Paper”; Tatyana Kamenskaya, managing partner head of the Legal Department of the Federal at “Kamenskaya & Partners”. Antimonopoly Service of the Russian Federation. Igor Artemiev described expected changes in an- He highlighted a number of topical issues of titrust legislation within “the fourth antitrust package” and defining the applicability of the current antitrust highlighted several aspects of international cooperation of Dlegislation, correlation between public and private antitrust antitrust bodies, including countering cartel agreements regulation efforts, as well as international cooperation for on the global market. The speaker’s news on extending the competition protection. practice of warning the businesses that they cannot violate The panellists included: Igor Artemiev, head of antitrust legislation and the topics of parallel import and the Federal Antimonopoly Service and honoured econo- intellectual property particularly provoked the interest of mist of the Russian Federation; Bukhosibakhe Majenge, the audience. chief legal counsel of the Competition Commission of Bukhosibakhe Majenge spoke about South Africa’s the Republic of South Africa; Oksana Gvozdilina, former problems of economic development in view of countering judge of the Supreme Arbitration Court of the Russian monopolies in various economic spheres. He particularly Federation; Sergei Maksimov, director of the Depart- emphasized the mechanisms for combating cartels’ activ- ment for Competition and Public Procurement Policy ities using the example of criminalization of cartel behav- of the Eurasian Economic Commission; Lars Kjolbye, iour and antitrust legislation application to solve not only partner at “Latham & Watkins LLP”; Anna Numerova, economic, but social issues. counselor at “Egorov, Puginsky, Afanasiev & Partners”; Oksana Gvozdilina shared her views on “the fourth Aleksei Dobrynin, lawyer, head of the Crime Practice at antitrust package”. In her speech, she touched upon
252 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.8
pre-trial review of disputes arising from antitrust laws tution of unfair competition and gave examples from foreign violation and gave some examples of the most interesting law-enforcement practices in trademark registration. court decisions. In conclusion, Mr Puzirevsky, the moderator, Sergei Maksimov said that it was necessary to thanked the speakers and other participants for their codify the competition legislation and used the example interest in antitrust regulation and noted high profession- of such a code at the EAEU and the Union’s transition to alism of organizers of the Forum and interpreters. coordinated administrative and criminal legal policy in countering the violations of antitrust legislation. Lars Kjolbye made several statements that sparkled a lengthy discussion on understanding priority tasks of antitrust regulation in terms of finding a balance between ensuring economic efficiency and providing nec- essary protection of consumers’ rights. Anna Numerova shared her opinion on correlation between public and private antitrust regulation efforts. Aleksei Dobrynin spoke about the role of criminal and legal methods of countering the violations of antitrust legislation. Tatyana Kamenskaya deliberated on the issues of unfair competition. She proposed amendments to the insti-
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 253 Roundtable 3.9
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
APPLYING TRADE REMEDIES IN BRICS COUNTRIES: POLICIES, PRACTICES, CHALLENGES
28.05
254 3.9
255 Roundtable 3.9
MODERATOR SPEAKERS
Vladimir Ilichev, Carina Janse van Vuuren, Jitendra Dadoo, Director of the Department Senior Manager, International Joint Secretary for Internal Market Defenсe, Trade Administration of Department of Commerce, Eurasian Economic Commission of the Republic Ministry of Commerce Commission of South Africa and Industry of the Republic of India
Yan Li, Debi Mohapatra, First Secretary of Trade Director, Directorate Remedy and Investigations General of Anti-dumping Bureau, Ministry of Commerce & Allied Duties of the People's Republic of the Republic of India of China
256 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 APPLYING TRADE REMEDIES IN BRICS COUNTRIES: POLICIES, PRACTICES, CHALLENGES
Xiaoyan Zhou, Andrey Zakharov, Hong Lin, Director General of Trade Deputy Director First Secretary of Trade Remedy and Investigations of Department for Internal Remedy and Investigations Bureau, Ministry of Commerce Market Defence, Eurasian Bureau, Ministry of the People's Republic Economic Commission of Commerce of the People's of China Republic of China
Heloisa Pereira, Zoleka Xabendlini, Johann Human, Deputy Director of Department Senior Manager, International Director of Rules Division, of Trade Remedies, Ministry Trade Administration World Trade Organization of Development, Industry Commission of the Republic and Foreign Trade of the of South Africa Federative Republic of Brazil
257 APPLYING TRADE REMEDIES IN BRICS COUNTRIES: POLICIES, PRACTICES, CHALLENGES
he discussion “Applying trade remedies in participants presented national or supranational BRICS countries: policies, practices, chal- decision-making systems for safeguard measures lenges” was attended by the heads and implementation, under which the investigative au- representatives of the following investigative thorities operate. authorities of BRICS countries: International The second session was devoted to the Doha TTrade Administration Commission of the Republic Round negotiations in the context of updating the of South Africa; Department of Commerce, Ministry WTO Anti-Dumping Agreement. Johann Human spoke of Commerce and Industry of the Republic of India; about the mandate on negotiations, discussed issues Department of Trade Remedies, Ministry of Develop- and positions of certain WTO members. Accord- ment, Industry and Foreign Trade of the Federative ing to him, there is preliminary agreement on two Republic of Brazil; Trade Remedy and Investiga- issues, while 12 others still await a consensus. When tions Bureau, Ministry of Commerce of the People’s asked about the influence of WTO judicial practice Republic of China; Department for Internal Market and the global situation on negotiation stance of Defence, Eurasian Economic Commission; and by member-states, Mr Human replied that, contrary to Johann Human, director of the Rules Division of the expectations, the beginning of the financial crisis World Trade Organization. did not entail an increase in applied anti-dumping “The role of BRICS countries in the WTO measures. At the same time, in response to internal is growing. Therefore, dialogue and partnership issues and pressure, certain WTO members amended between our countries is important; it should cover their anti-dumping legislation. Mr Human also noted all issues on the agenda of the multilateral trade that “WTO’s judicial practice brought legal certainty system, including the measures of trade protection. in some cases and legal uncertainty in others.” This panel is a unique platform to exchange experi- Vladimir Ilyichev was concerned that there ence and coordinate positions of BRICS states on im- might be some changes of requirements under the plementation of provisions of the corresponding WTO Anti-Dumping Agreement without actual amend- Agreements,” said Vladimir Ilyichev, director of the ments of its text. He said that in the last two or three Department for Internal Market Defence of EEC and years, decisions of the arbitral group and the Appel- moderator of the session. late body have significantly altered the understanding Discussion consisted of six sessions that cov- of certain principles and regimes of trade remedy ered the most topical issues of conducting safeguard investigations in terms of procedural demands. investigations with consideration of legislation and “BRICS is one of the major global players in practices of BRICS states. During the first session, the field of trade protection. According to WTO, one-
258 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 3.9
third of all safeguard investigations in the world are him, if the acceptance of new information is prohibit- conducted by the BRICS countries, while one-third ed by administrative law or would needlessly prolong of all safeguard measures are applied to products the process, investigative authorities should explain originated in Brazil, Russia, India, China and South to the interested party why the information cannot Africa,” noted Mr Human. be taken into account. If information is accepted, the During the third session, participants pre- other party should be allowed to comment. sented approaches they use to protect confidential The final session was devoted to judicial information. In particular, they reviewed the prin- review of safeguard measures. This is where BRICS ciples and criteria for classifying information as countries have the most differences. Among other confidential, as well as the possibility to reveal this things, legislation of BRICS countries stipulates var- information to an arbitration group within the dispute ious grounds for appeal and consequences of losing resolution mechanism of WTO. the court case. Involvement of an expert group, one of During the fourth session, participants dis- the characteristic features of the EEU Court, particu- cussed the specificities of applying preliminary and larly interested the participants. Johann Human com- retroactive trade remedy measures. South Africa’s mented that anti-dumping measures can be applied representative Zoleka Xabendlini noted that BRICS in different ways, so involving a group of experts is a countries have different decision-making procedures good way of supporting the judges in terms of legal concerning preliminary anti-dumping measures, and technical knowledge. similar to the differences in interpretation of the In conclusion, this panel in St. Petersburg be- Anti-Dumping Agreement. The discussion showed, came the third successful event within the framework for example, the differences in whether it is deemed of the International Seminar on Trade Remedies in necessary to impose preliminary anti-dumping meas- BRICS Countries. It was first held in 2012, during the ures as such, and based on what data this decision is chairmanship of the People’s Republic of China, in being made. Participants also agreed that the notions Beijing and Hangzhou, and then in 2014 in Brazil and of “significantly increased dumping import” and “rel- São Paulo. In 2015, during the Russian chairmanship atively short period of time” require definition. in BRICS, the seminar was organized by the Eurasian Another session was devoted to verification Economic Commission. visits. The discussion was focused on the issue of whether investigative authorities accept new infor- mation submitted after the deadline. Johann Human gave several recommendations on that. According to
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 259 Roundtable 4.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
IS INTERNATIONAL ARBITRATION STAGNATING? WOULD ASIAN ARBITRATION CENTRES POUR NEW BLOOD IN DISPUTE RESOLUTION PROCEDURE?
29.05
260 4.1
261 Roundtable 4.1
MODERATOR SPEAKERS
Renaud Sorieul, Vladimir Khvalei, Sadananda Gowda Secretary, United Nations Chairman, Russian Arbitration Devaragunda Venkappa, Commission on International Association Minister of Law and Justice of Trade Law (UNCITRAL) the Republiuc of India
Kevin Nash, Deputy Registrar, Singapore International Arbitration Centre
262 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 IS INTERNATIONAL ARBITRATION STAGNATING? WOULD ASIAN ARBITRATION CENTRES POUR NEW BLOOD IN DISPUTE RESOLUTION PROCEDURE?
Akira Kawamura, Alexey Kostin, President, Japan Association Chairman, International of Arbitrators Commercial Arbitration Court at the Chamber of Commerce and Industry of Russian Federation
Datuk Sundra Rajoo, Michael Swainston, Ruth Stackpool-Moore, Director, Kuala Lumpur Barrister, QC, Brick Managing Counsel, Hong Kong Regional Centre for Arbitration Court Chambers International Arbitration Centre
263 IS INTERNATIONAL ARBITRATION STAGNATING? WOULD ASIAN ARBITRATION CENTRES POUR NEW BLOOD IN DISPUTE RESOLUTION PROCEDURE?
he SPBILF’s panel on international commercial must administer justice in the broadest possible sense, arbitration featured leading experts and since they themselves are responsible for international representatives of Asian arbitration institutions dispute resolution. Yet as we know, such international insti- who discussed the effect of anti-Russian tutions are private, albeit not-for-profit, and therefore are sanctions on European arbitration institutes and subject to the local legislation. EU-based arbitration insti- Tsuggested considering Asian countries as an alternative tutions are subject to the EU rules, including sanction regu- place for dispute resolution of Russian companies. lations. We know from experience that some decisions have The panel’s moderator was Renaud Sorieul, secre- been significantly delayed or suspended in the cases when tary of United Nations Commission on International Trade one of the parties to arbitration was a Russian company. In Law (UNCITRAL). Among the speakers were Vladimir Kh- some instances, international arbitrators refused to consid- valei, chairman of Russian Arbitration Association; D.V. Sa- er the cases of the companies included in the sanction list. dananda Gowda, Minister of law and justice of the Republic Currently many companies, especially state corporations, of India; Akira Kawamura, president of Japan’s Association are turning to the East, as until now Asian countries did not of Arbitrators; Alexei Kostin, chairman of International support anti-Russian sanctions,” says Vladimir Khvalei. Commercial Arbitration Court at the Chamber of Com- Representatives of Asian arbitration centres merce and Industry of the Russian Federation; Kevin Nash, confirmed the growing number of Russian applications. deputy secretary of Singapore International Arbitration As Datuk Sundra Rajoo has pointed out, good infrastruc- Centre; Datuk Sundra Rajoo, director at Kuala Lumpur Re- ture, case administration procedures and availability of gional Centre for Arbitration; Michael Swainston, barrister all required experts are the factors that attract Russian at “Brick Court Chambers”; Ruth Stackpool-Moore, general companies to Asia. “All Asian centres — Hong Kong, Singa- manager at Hong Kong International Arbitration Centre. pore, our country — have certain advantages. We have the Vladimir Khvalei pointed out that the existing necessary infrastructure, improved and effective rules and practice of applications for arbitration does not indicate its required people. We are competing with each other and stagnation, yet under sanctions Russian state companies you can analyse the big picture first and then make up your increasingly often choose Asian arbitration centres as an mind where to go,” the expert pointed out. alternative to European ones. “The Dubai International According to Ruth Stackpool-Moore large state Arbitration Centre has been created only recently, yet it companies publicly traded on the Hong Kong stock already considers many cases on dispute resolution of Rus- exchange are working with the Hong Kong Arbitration sian companies, since many of them are active in Dubai,” Centre. “In Hong Kong, arbitration is not stagnating. Out says the expert. He highlighted that Russian companies jurisdiction is one of the most developed in the world, and have faced with a number of issues while working with thanks to its liberal legislation, it is easy to do business in European centres. “On the one hand, arbitration institutions Hong Kong. As for the Russian companies, early this year
264 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 4.1
we started working with the companies listed on the HKSE, factors is our expedited procedures, when the decision is such as Novatek, Gazprom Bank and some others. It is im- handed down within six months. Since 2010, he have had portant that Hong Kong did not join the sanctions against over 255 such applications. This is the advantage that the Russia,” said Ms Stackpool-Moore. parties are looking for when they want to have the decision Among other advantages of Asian centres cited as quickly as possible, and six months is a very good time,” by their representatives are possibility for an expedited explained Kevin Nash. review of a case, rich experience of arbitration institutions Akira Kawamura suggested establishing a new and high level of competence of the judges. “Our open regional arbitration centre for Russian and Japanese association includes over 400 arbitrators from 40 jurisdic- companies that could provide its clients more culturally tions, including some prominent jurists. The association’s adapted services. Alexei Kostin also supported the idea of composition ensures the quality of our work and our rep- the greater role of national arbitration centres and pointed utation. What did we do to become such an acknowledged out that one of the world’s oldest and most experienced international institution so quickly? One of the important arbitration institutions is functioning in Russia.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 265 Roundtable 4.2
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
EFFECTIVE CROSS-BORDER EXECUTION OF JUDGEMENTS: NATIONAL OR UNIVERSAL CRITERIA?
29.05
266 4.2
267 Roundtable 4.2
MODERATOR SPEAKERS
Mikhail Galperin, Valery Musin, Renaud Sorieul, Director of the Department Head of the Department Secretary, United Nations of the Economic Legislation, of Civil Procedure, Law Faculty, Commission on International Ministry of Justice of the Saint-Petersburg State Trade Law (UNCITRAL) Russian Federation University
Vasiliy Kuznetsov, Partner, Quinn Emanuel Urquhart & Sullivan LLP
268 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 EFFECTIVE CROSS-BORDER EXECUTION OF JUDGEMENTS: NATIONAL OR UNIVERSAL CRITERIA?
Christophe Bernasconi, Jonathan Kelly Secretary General, Partner of the London Office, Hague Conference on Private Cleary Gottlieb Steen & International Law Hamilton LLC
Patrick Sannino, Artur Parfenchikov, President, French National Director, Federal Bailiffs’ Chamber of Judicial Officers Service of the Russian Federation — Chief Bailiff of the Russian Federation
269 EFFECTIVE CROSS-BORDER EXECUTION OF JUDGEMENTS: 4.2 NATIONAL OR UNIVERSAL CRITERIA?
The roundtable discussion sparkled a lively discussion. about a new project of the Commission, namely about a Mikhail Galperin, director of the Department of the new convention aimed at reconciliation, which is based on Economic Legislation, Ministry of Justice of the Russian international dispute resolution and mediation. The work Federation, moderated the roundtable. He emphasized the on this project began in spring 2015. Mr Sorieul gave a de- importance of this topic because countries, including Rus- tailed list of provisions that will be included in the conven- sia, constantly change their approaches to the execution of tion and named the aspects that require special attention. international court and arbitration judgements. Mr Galper- In conclusion, he said he was pleased to note that Russia in in particular pointed out that the concept of the uniform was well represented in the working group responsible for Civil Procedure Code of the Russian Federation (CPC the convention. RF), currently being in the works, has the provision that Cristophe Bernasconi, Secretary-General of the requires including the clause about the recognition and Hague Conference on Private International Law, reminded execution of international court and arbitration judgements the participants the topic of the discussion and noted that subject not just to international treaties and federal laws, the Hague Conference is committed to universal approach- but also to reciprocity principle. es. In his presentation, Mr Bernasconi briefly outlined the Valery Musin, head of the Department of Civil work of the Hague Conference on two conventions, one of Procedure, Law Faculty of St. Petersburg State University, which should provide the businesses with a proper choice emphasized in his presentation that the issue of execu- of court and is due to come into effect already in October tion of foreign court judgements is characterized by two 2015, while the second one governs the issues of recog- opposite yet related trends: globalization and rapproche- nition and execution of the judgements of foreign courts, ment of various countries on one hand and national sov- including in commercial disputes, and it is still being ereignty on the other. Having demonstrated both trends discussed by the experts. using the example of various conventions, Mr Musin con- Jonathan Kelly, partner of the London Office of cluded that execution of foreign court judgements would “Cleary Gottlieb Steen & Hamilton LLP” in his presentation inevitably become more streamlined. He also mentioned stressed the importance of understanding the philosophic that the draft CPC RF indeed intends to use the reciproc- fundamentals of recognition and execution of the judge- ity principle as a basis even in the absence of any inter- ments of foreign courts, which are especially relevant national treaty, having specifically pointed out that this for the purposes of this panel discussion. Mr Kelly spoke principle is not a new one and reminding the audience mainly about “Aeroflot Russian Airlines v. Berezovsky” case about the court ruling of the Civil Cases Judicial Panel of and demonstrated what practical issues and challenges the Supreme Court of the Russian Federation No 5-ГО2- courts have to face in order to recognize and execute the 64 dd. June 7, 2002 and the judgement of the European judgements of foreign courts in the absence of internation- Court of Human Rights in “Korolev v. Russian Federation” al treaties. in which this ruling was cited. Vasily Kuznetsov, partner at “Quinn Emanuel Renaud Sorieul, secretary of United Nations Com- Urquhart & Sullivan LLP”, agreed with Mr Kelly and mission on International Trade Law (UNCITRAL), spoke noted that the issue of reciprocity in recognition and
270 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 execution of the judgements of foreign courts is a global greatly simplified cross-border execution of court judge- one, due to growing economic complexity and intrinsic ments and became an example for all Europe. Mr Sannino need to consider one case in various countries and to also expressed his doubt about feasibility of full harmo- execute a judgement of one national court in another nization of the approach on the European level and noted country. According to Mr Kuznetsov, “the main thing is that basic standards are the common value shared by the that the courts of various countries, including Russian European countries. ones, should be very careful and thorough in the matters Artur Parfenchikov, director of Federal Bailiffs’ of how a given problem was resolved in another country, Service of the Russian Federation — Chief Bailiff of the what processes other countries have in place regard- Russian Federation, identified three ways of cross-bor- ing certain disputes, and what to do to ensure that the der execution of court judgements (when national court outcome of this process would be taken into account judgement in executed on the territory of a foreign state when considering the case in the respective jurisdiction, without international treaty between these states; with in- including Russian one”. He cited several cases when ternational treaty but without an exequatur procedure; with “Russian courts indeed adopted a very considered and international treaty that requires an obligatory exequa- mindful approach to international processes and foreign tur procedure in order to enforce a judicial act). He also court judgements”. addressed some of the issues regarding the execution of Patrick Sannino, president of the French National court judgements without an exequatur procedure and Chamber of Judicial Officers, is convinced that in recent matters of execution proceedings. years the European Union has managed to achieve a signif- In conclusion, Mikhail Galperin pointed out an icant progress in cross-border execution of court judge- unexpectedly positive nature of the discussion and noted ments. In particular, he noted that in 2015 all judgements that judging by the debate, soon we are going to witness made in any EU member state are automatically recog- various positive legal events in the area of recognition and nized and become enforceable in all member states, which execution of the judgements of foreign courts.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 271 Roundtable 4.3
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
FORENSIC EXPERTISE – FACT-FINDING ON THE BORDER BETWEEN THE SUBJECTIVE AND OBJECTIVE
29.05
272 4.3
273 Roundtable 4.3
MODERATOR SPEAKERS
Svetlana Smirnova Anatoly Nesterov Jan de Kinder Director, Russian Federal Professor of the Department Director General, National Center of Forensic Science of of Judicial Power and Justice Institute of Criminalistics and the Ministry of Justice of the Administration, Higher School Criminology of Belgium Russian Federation of Economics
Ljiljana Trisic, Director, Agency for Forensic Examination And Expertise of Bosnia and Herzegovina
274 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 FORENSIC EXPERTISE – FACT-FINDING ON THE BORDER BETWEEN THE SUBJECTIVE AND OBJECTIVE
Natalia Zamaraeva, Alexander Asnis Head of the North-Western Director, Law Firm Forensic Science Center “Asnis & Partners” (NWFSC), Ministry of Justice of the Russian Federation, Ph.D, associate professor
Sergey Chuprygin, Artashes Javadyan Isidor Borchashvili, Partner, Law Firm “Ivanyan & Director, National Bureau of Director of the Forensic Partners” Expertises of Armenia Expertise Center of the Ministry of Justice of the Republic of Kazakhstan, Doctor of Law, professor
275 FORENSIC EXPERTISE – FACT-FINDING ON THE BORDER 4.3 BETWEEN THE SUBJECTIVE AND OBJECTIVE
As it has become traditional, within the Forum was held fo- the Forensic examination results”. According to the Speak- rensic examination session, which took place in the frame- er, in respect of the certain genera and species of Forensic work of the track “Litigation and arbitration practice”. there is a problem stipulated by the fact that in some cases The Director of the Russian Federal Center of the main source of information are the personal opinions Forensic Science of the Russian Federation Ministry of of the expert’s findings. Justice, Doctor of Law, professor Svetlana Smirnova was President of the European Network of Forensic a moderator of the session. Science Institutes (ENFSI), general director of the National The relevance of the chosen direction of the dis- Institute of Criminalistics and Criminology (NICC) in Bel- cussion “Forensic examination: fact-finding on the verge of gium, Jan De Kinder in his speech on the theme “Tech- objective and subjective” was stipulated by the challeng- nical Competence of the Forensic Laboratory to ensure es of time and the needs of the legal proceedings which objectivity in the expert opinion delivery” emphasized on resulted in the need to move to a qualitatively new level of the human based methods, which certainly are an impor- the Forensic technologies. This is due to the fact that the tant part of the daily practice of the forensic production. Law and Law enforcers impose the more stringent criteria It is particularly significant for the objectification study, to the objectification of the Forensic examination, where the Speaker noted the importance of the validation process the cost of failure today has increased substantially. of the expert techniques. Professor of the Higher School of Economics, Head of the North-Western Forensic Science Doctor of Law, professor Anatoly Nesterov made a pres- Center (NWFSC), Ministry of Justice of the Russian Federa- entation on “Methodology of the objectification in Forensic tion, Ph.D, associate professor Natalia Zamaraeva dwelled activity as a factor increasing the evidentiary meaning of on the relevance of the active introduction of standardiza-
276 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 tion in the activities of experts, which should dramatically the principle of objectivity in the Forensic examination” affect the objectification of the entire judicial process. In continued discussion about the ratio between subjective support of this assertion says the domestic and foreign and objective in the Forensic examination and addressed to experience of implementation the standard procedures in some scientific and methodological aspects of the prob- the various areas of Forensic activities. lem which are actively being developed by the professional The Member of the Presidium of the Moscow City Forensic experts and scientists. Bar Association, director of the law office at “Asnis and Director of the Bosnia and Herzegovina Foren- partners”, Doctor of Law Alexander Asnis in his speech sic Examination Agency Ljiljana Trisic, revealing the topic on the topic “Challenges of the Legal proceedings and “Importance of the Forensic examination for police and law
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 277 278 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 FORENSIC EXPERTISE – FACT-FINDING ON THE BORDER 4.3 BETWEEN THE SUBJECTIVE AND OBJECTIVE
enforcement agencies. Reforms in Bosnia and Herzego- ity of the scientific and methodological provision of the vina”, highlighted the ways to consolidate the procedural Forensic examination through the creation and active requirements, the complex of organizational, legal and tech- using of the authentic and dependable information files nological solutions, issues of professional competence and including Forensic ballistics, cold steel arms, Forensic psychological training of Forensic experts and preventive technical examination of the documents containing a wide measures to improve the objectivity in the Forensic activity. range of Forensic data. Partner of the Law Bureau “Ivanyan & Partners” Director of the Forensic Expertise Center of the Sergey Chuprygin dedicated his presentation to the topic: Ministry of Justice of the Republic of Kazakhstan, Doctor “Forensic examination “in the hands” of unscrupulous of Law, professor Isidor Borchashvili in his speech on the participant of the legal process as an obstacle to the estab- theme “Prospects of the Forensic activity development lishment of objective facts: practical aspects” to the study in the Republic of Kazakhstan” voiced the key issues of of negative phenomena when the Forensic examination Forensic activity development including a merge of the turns out to be in the hands of unscrupulous participants Forensic institutions in the Republic of Kazakhstan into a in the legal proceedings. Informing the law enforcers about single establishment. These structural changes in the Fo- the types of abuses specified by the Speaker will signif- rensic services carry a progressive approach and contrib- icantly constrict the field of activity of the categories of ute to building a Law State. persons named in the statement, as “pocket experts”. Participation in the discussion allowed signifi- Director of the National Bureau of Expertise of cantly advance to the understanding during the search of the Republic of Armenia, professor Artashes Javadyan, optimal boundaries of objective and subjective factors in revealing the topic “Databases as the tool of the objecti- Forensic activity. A wide range of issues and suggestions, fication in Forensic activity”, focused on the information raised in the speeches of the speakers, deserves the most and methodological aspects for increasing the objectiv- acute attention and further study.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 279 Roundtable 4.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
BUSINESS PROTECTION IN CASE OF BANKRUPTCY
29.05
280 4.4
281 Roundtable 4.4
MODERATOR SPEAKERS
Alexandra Nesterenko, Anton Aleksandrov, President, Russian Corporate Partner, Law Firm Counsel Association “Monastyrsky, Zyuba, Stepanov & Partners”
Alexey Kozyakov, Partner - Head of Saint- Petersburg Office, Law Firm “Ivanyan & Partners”
282 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 BUSINESS PROTECTION IN CASE OF BANKRUPTCY
Elena Demina, Valeriy Zinchenko, Senior Partner — Attorney, Senior Partner, Moscow City Bar “Delcredere” Law Firm “Pen&Paper”
Vasiliy Raudin, Akitsuyu Ogawa, Head of Insolvency Group, Member of International Yust Law Firm Committee, Japan Federation of Bar Associations
283 BUSINESS PROTECTION IN CASE OF BANKRUPTCY
“It is easier to prevent bankruptcy rather than to stop it” — business in bankruptcy and at the same time not to put at that was the common approach by the participants of this risk the freedom of its managers, members and, some- roundtable discussion. The lively discussion was mod- times, lawyers themselves. erated by Alexandra Nesterenko, RCCA’s president, with Vasily Raudin described the practical aspects of numerous questions from the audience and an interactive protection against lenders wishing to drive a company to voting on latest amendments to bankruptcy laws and other bankruptcy. He stressed that practice proves that it is eas- topical subjects. ier to prevent a bankruptcy than to stop it. Therefore, any The speakers included Anton Alexandrov, Partner large-scale company needs to develop an anti-bankruptcy at “Monastyrsky, Zyuba, Stepanov & Partners”; Elena Dy- strategy to protect itself from non-amicable bankruptcy. omina, senior partner and attorney at “Delcredere”; Valery Anton Alexandrov’s speech was focused on bank- Zinchenko, senior partner at “Pen & Paper”; Alexey Kozyak- ruptcy-avoiding mechanisms and current rehabilitation ov, partner and head of the St. Petersburg Office at “Ivanyan procedures in Russia. It is a traditional view that existing & Partners”; Vasily Raudin, head of the insolvency group at law-enforcement practices in bankruptcy cases are strong- “Yust”; and Akitsuyu Ogawa, member of the International ly biased towards bankruptcy proceedings and the eventual Committee of the Japan Federation of Bar Associations. winding up of the debtor. This is also proved by modern Elena Dyomina’s speech was dedicated to the statistics according to which commercial courts consid- bankruptcy law as viewed by a debtor. From the RSFSR ering bankruptcy cases in 2012-2014 initiated bankruptcy Law “On Businesses and Business Activities” of 1990 as proceedings in as many as 42,312 instances but applied their first attempt to the current Law “On Bankruptcy” of other rehabilitation procedures in a woefully smaller num- 2002, the Russian legislators switched their preference ber of cases: 2,106 for administration, 1,746 for amicable from protection of lenders’ rights to that of debtors’ ones agreements and 181 for financial rehabilitation. as they suddenly “remembered” that one important goal of However, bankruptcy entails obvious negative any bankruptcy law should be not only to secure lenders’ consequences not only for the debtor being at risk of losing rights but also to preserve debtors as much as possible. its business and held liable under civil or criminal law Valery Zinchenko spoke on the criminal-law risks but also for the lender who normally receives only 4% to that occur in bankruptcy cases. In today’s economic envi- 20% of the claimed amount as a result of the bankruptcy ronment, a lot of businesses are on the brink of bankruptcy proceedings initiated against the debtor. The speaker de- while many others are almost flatlining. Lenders, including scribed the practical aspects of entering into an amicable banks, are hard-edged as debtors make frantic attempts agreement as a key rehabilitation procedure and the diffi- to overcome the economic turmoil. In such cases, the culties the debtor would encounter while making for such principal task of criminal defence attorneys is to protect a an agreement.
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Alexey Kozyakov outlined the schemes for the unscrupulous debtor is siphoning off its assets,” “the lend- protection of the debtor and its founders/members against ers are trying to take over the debtor” or “this is the result unfriendly actions taken by the lender (including any abuse of normal investment activities”), the majority of votes were of rights). cast for the first option. On the second question of whether Akitsuyu Ogawa shared local experience in pro- the current debt ceiling (RUB 300,000) is to be raised to tecting businesses in bankruptcy and peculiarities of the initiate bankruptcy (the offered options being “yes”, “no” Japanese bankruptcy laws. The key procedures include and “the amount of debt is of no significance”), the votes winding up, re-organisation and re-constitution of a com- split almost equally. On the third — and final — question of pany under civil law. While the first procedure leads to the whether the lender should also be deprived of its right to debtor being wound up and its assets sold out, the other suggest an insolvency receiver (such deprivation is currently ones are intended to protect the debtor’s business. applicable to the debtor only), most of the participants voted At the end of the roundtable discussion, the audi- for such deprivation as a balancing tool for the parties in- ence was invited to take part in an interactive voting. On the volved in bankruptcy cases. The results of the voting clearly question of what thoughts the headlines of a high-profile showed how much work is yet to be done to improve the bankruptcy evoke in them (the offered options being “the existing regulations and public perception of bankruptcy.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 285 Roundtable 5.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
TRADEMARKS: SHIELD OR SWORD? CURRENT ISSUES OF LEGAL PRACTICE
28.05
286 5.1
287 Roundtable 5.1
MODERATOR SPEAKERS
Eugene Arievich, Louise van Greunen, Ludmila Novosiolova, Chairman of Commission Director, Building Respect for Chairman, Intellectual Property on Intellectual Property, IP Division, World Intellectual Rights Court ICC Russia Property Organization
Frederick Mostert, Research Fellow, St. Peter’s College of Oxford University
288 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 TRADEMARKS: SHIELD OR SWORD? CURRENT ISSUES OF LEGAL PRACTICE
Oliver Schoen, Alain Girardet, Judge, Land Court of Munich Judge, Court of Cassation of the French Republic
Aleksandr Sergeev, Evgeny Oreshin, Professor of the Department Senior Associate, Goltsblat BLP of Civil Law of the Law Faculty, Saint-Petersburg State University of Economics
289 TRADEMARKS: SHIELD OR SWORD? CURRENT ISSUES OF LEGAL PRACTICE
he roundtable addressed the relevant Russian can be, how much a trademark is worth. And the fact that and international practices regarding disputes it is understood now led to a sharp increase of disputes over acquisition, termination and infringement of regarding protection of trademark rights and disputes trademark rights. related to granting legal protection of such means of indi- In the opening speech the roundtable vidualization,” she stated. Tmoderator Eugene Arievich, chairman of the Commission Judge of the Land Court of Munich Oliver Schoen on Intellectual Property at the International Chamber of stressed that German judges do not often consider cases Commerce (ICC Russia), stressed that with the estab- about unfair registration of trademarks, since the Supreme lishment of market economy in Russia many issues of Court of Germany determined absolutely clear standards legal regulation of trademarks were solved, but the legal in accordance with which registration on unfair grounds practice regarding fair behavior of trademark owners and forms a statutory ground for rejection. other market players is still at the forming stage, and The overview of court practice on this category of such roundtable discussions are aimed at resolving this cases was continued by Alain Girardet, judge of the Court problem. of Cassation of the French Republic, who addressed the The first speaker Louise van Greunen, director modern trends of regulatory enforcement. The judge spe- of Building Respect for Intellectual Property Division, cifically touched upon the issues of protecting well-known WIPO, noted that currently the World Intellectual Prop- trademarks both in France and Europe as a whole, he erty Organization receives more and more requests from stressed that this protection is fairly serious. “It is enough the judicial community to train judges so that they could to prove that this trademark is well-known to a significant consider increasingly more complicated cases related to portion of the population; although the reputation of a trademark infringement. trademark can be limited by the territory of one state, this Ludmila Novoselova, chairman of the Intellectual trademark receives a status of a well-known trademark in Property Rights Court, described in detail the Russian the territory of the EU; this protection covers new trade- practice of disputing trademark registration if it was found marks that are lawfully established on the basis of the old that in the registration of a trademark the right owner well-known trademark,” he said. abused the right or allowed actions that can be qualified as Frederick Mostert, research fellow at St. Peter’s unfair competition. College of Oxford University, gave a special attention to “Only now we began understanding what valuable evaluation of indirect evidence when awarding judgment on asset a good trading name and means of individualization unfair behavior in registration of trademarks: whether the
290 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 5.1
defendant was aware that a trademark was well known, ics, and Evgeny Oreshin, senior associate at “Goltsblat” why that particular trademark was chosen, what further BLP, expressed their vision of the problem and pro- actions the defendant took in order to use it, sudden use posed solutions. of a well-known imaginative trademark in an unusual The general opinion of the roundtable participants context, and the level of resemblance between the two was that in the market economy environment it is hard to trademarks. overestimate the role of trademarks as a powerful legal The issue of so-called Soviet trademarks was monopoly and a competitive weapon. In this relation there discussed separately, since disputes about lawfulness of is a temptation to make the most of trademark benefits, their registration by specific market players or making however sometimes such use steps outside the legal them common by creation of new or use of existing legal boundaries and it is necessary to consistently develop structures are still unabated. unified approaches in similar situations that could ensure Aleksandr Sergeev, professor of the Department greater certainty and predictability for economic agents to of Civil Law at St. Petersburg State University of Econom- exercise their right to trademarks.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 291 Roundtable 5.2
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
PROTECTION OF PERSONAL DATA: THE LEGAL RESPONSE TO THE CHALLENGES OF THE GLOBAL INFORMATION PROGRESS
29.05
292 5.2
293 Roundtable 5.2
MODERATOR SPEAKERS
Alevtina Kamelkova, Vadim Dengin, Uliana Zinina, General Counsel Russia & CIS, Member of Parliament – First Advisor on Legislative and Alcatel-Lucent Vice-Chairman of the State Regulatory Matters, Duma of the Federal Assembly Microsoft Russia of the Russian Federation Committee on Information Policy, IT and Communications
Michael Ronellenfitsch, Commissioner, Data Protection Commission of the Land of Hesse - Professor, Doctor
294 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 PROTECTION OF PERSONAL DATA: THE LEGAL RESPONSE TO THE CHALLENGES OF THE GLOBAL INFORMATION PROGRESS
Dmitry Marinichev, Allegra Meollarini, Ombudsman in the Matters Representative of the Liquidation of of the General Secretariat, Entrepreneurs Rights Violation Ministry of Justice of Italy in the sphere of Regulation, Control and Development of the Internet
Sian Rudgard, Roman Kuznetsov, Michael Yakushev, Of Counsel, Hogan Lovells Head of the legal department, Vice-President, Eastern Europe International LLP Ministry of Communications and Central Asia, Internet and Mass Media of the Corporation for Assigned Russian Federation Names and Numbers (ICANN)
295 PROTECTION OF PERSONAL DATA: THE LEGAL RESPONSE TO THE CHALLENGES OF THE GLOBAL INFORMATION PROGRESS
levtina Kamelkova, member of the Russian and Central Asia at the Internet Corporation for Assigned Corporate Counsels Association’s board and Names and Numbers. general counsel of Russia & CIS department Experts noticed that over the past decade the pace at “Alcatel-Lucent”, acted as moderator of of construction of a global information infrastructure in the the panel. The discussion featured Vadim world had increased exponentially. The complexity of pro- ADengin, first vice chairman of the State Duma of the viding adequate legal personal data protection, both glob- Federal Assembly of the Russian Federation Committee ally and country-wide, increases with a comparable speed. on Information Policy, IT and Communications; Uliana In this situation it is important to secure the balance of Zinina, advisor on legislative and regulatory matters at interests of individuals, whose data is being protected, with “Microsoft Russia”; Dmitry Marinichev, ombudsman in interests of regulators. As Alevtina Kamelkova stressed, the matters of the liquidation of entrepreneurs rights the Russian Law “On Personal Data” had been adopted violation in the sphere of regulation, control and devel- long ago; the recent amendments, however, triggered opment of the Internet; Allegra Meollarini, representa- a very active social discussion of this matter. tive of the General Secretariat of the Ministry of Justice Thus, according to Michael Yakushev, a number of of Italy; Michael Ronellenfitsch, commissioner of the new models and opportunities of the personal data usage Data Protection Commission of the State of Hesse; Sian is increasing. Moreover, currently state cannot control the Rudgard, counsel of “Hogan Lovells International LLP”; way public information in social networking services is Roman Kuznetsov, head of the legal department of the used by its users. Ministry of Communications and Mass Media of Russia; “There is a problem of a large number of viola- and Michael Yakushev, vice president for Eastern Europe tions of law, which may arise because of the “non-regula-
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tion” of issues related to personal data protection. These states about a possible violation of data security. Another include personal data trade, for both political and commer- mechanism of personal data protection, according to the cial reasons. That is why a not controlled expansion of this British expert, might become provision of reports about data violates human rights,” expert says. their transferring. Therefore, regulator will have more As Yakushev believes, the mankind will arrive opportunities to control and protect information. to the point when data is kept on gadgets, which people Vadim Dengin highlighted the cooperation of busi- will always carry with them. Smartphones, paying cards, nesses and state concerning data protection and storage. watches will replace other means of identification. Large He told about the amendments to the law on personal data companies, like, for example, PayPal, are actively working storage and explained that it was aimed at protecting both with these innovations. public and private interests. Sian Rudgard mentioned that in the Great Britain, “For us, as for a state, safety is a priority, while the law on data protection had been functioning for almost business is a secondary issue. Until you suffer from this, a decade. However, the whole complex is out of date and until your personal data is stolen and your credit cards are regulatory documents require further enhancement, used by someone else, you don’t think about it. You are even in spite of the fact that they are based on common ready to discuss, to question everything, but, as soon as fundamental principles. She noted that in the context of your data is stolen and made publicly known, you complete- globalization, when data of the individual from a certain ly agree with the fact that a state should interfere and keep country might have been kept on the territory of another personal data while also controlling it,” the deputy told. state, issues of safety played a leading role. Sian Rudgard At the same time, representatives of business also stressed that companies must notify both users and pointed towards the fact that servers containing infor-
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 297 PROTECTION OF PERSONAL DATA: THE LEGAL RESPONSE TO THE CHALLENGES OF THE GLOBAL INFORMATION PROGRESS
mation about Russian users should be transferred from Dmitry Marinichev didn’t support this opinion of abroad to the territory of Russia, though this might take the panelists. “Internet isn’t a well or an oil pipe, from almost a year. Vadim Dengin replied that foreign compa- which something flows to someone. It is a complex of a nies, for example, the Chinese ones, declared they could huge number of networks, which can exist separately, and transfer servers within three months. He said that this law any localization on a personal data level is impossible. You had been being discussed for a year, and businesses might will yourself allow social networking services to save your have already coped with all the legal difficulties by this personal data. You don’t even think that gadgets have doz- time. However, the politician stated he was always open to ens of devices which can easily identify your pace by means maintain a dialogue with business and would consider all of angular velocity and thus, identify a person. Even if you their suggestions. give your mobile phone to another person, we can identify Roman Kuznetsov agreed with Vadim Dengin. him. This is not a problem. You are going to stand against He was sure that the amendments to the law correctly technological progress which is aimed at helping people,” regulated data protection, and there should have been no the ombudsman explained. reasons for the delay of their enforcement. Roskomnadzor, Summing up the discussion, Alevtina Kamelko- as he explained, agreed with this. “The issues of correction va stressed that only dialogue could help businessmen may be discussed only after a period of law enforcement to express their opinion to law makers and ombudsmen practice. None of various concerns has yet been tested and to be heard in the discussion about personal data adequately,” Roman Kuznetsov added. protection.
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ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 299 Roundtable 5.3
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
NORMATIVE TECHNICAL REGULATIONS AND INNOVATION IN THE DIGITAL ERA: ELIMINATING BARRIERS FOR CREATIVITY AND INNOVATION
29.05
300 5.3
301 Roundtable 5.3
MODERATOR SPEAKERS
Igor Drozdov, Aleksey Abramov, Sergei Matveev, Senior Vice President, Chief Head of the Federal Agency Deputy Head of Department for Legal Counsel, Skolkovo on Technical Regulating and Science and Technology, Minis- Foundation Metrology try of Education and Science of the Russian Federation
302 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 NORMATIVE TECHNICAL REGULATIONS AND INNOVATION IN THE DIGITAL ERA: ELIMINATING BARRIERS FOR CREATIVITY AND INNOVATION
Ekaterina Chukovskaya, Ioannis Lianos, Professor, Moscow Art Professor of Global Competi- Theatre Studio-School named tion Law and Public Policy, Uni- after Vladimir Nemirovich- versity College London - Chief Danchenko Researcher, Higher School of Economics-Skolkovo Interna- tional Laboratory for Law and Development
Pierre Regibeau, Marina Zhunich, Andrey Kolosovskiy, Vice President of European Director of Public Affairs Legal and Corporate Affairs Antitrust Practice, Charles and Government Relations, Director, Microsoft Rus LLC River Associates Google Russia
303 NORMATIVE TECHNICAL REGULATIONS AND INNOVATION IN THE DIGITAL ERA: ELIMINATING BARRIERS FOR CREATIVITY AND INNOVATION
ession was held under the initiative of the interaction at “Google Russia”; and Andrey Kolosovsky, di- Skolkovo Foundation at the St. Petersburg Inter- rector of Legal, corporate affairs and government relations national Legal Forum. It was moderated by Igor at “Microsoft Russia”. Drozdov, senior vice president of the Skolkovo The round table was devoted to the issue of how Foundation. The composition of the speaker technical regulations affect legal regulation in general. Spanel reflected the broad interdisciplinary nature of the Igor Drozdov offered that, “the scope of technical regu- issue. Among participants were: Alexei Abramov, head of lations are often wider than legal ones”. Normalization the Federal Agency for Technical Regulating and Metrolo- in modern society rarely is used as a classic conceptual gy; Sergey Matveev, deputy director of the Department of instrument for the preservation of practices, but such science and technology in Russian Ministry of Education offers clear delineation in terms of the adoption of a fitting and Science; Ekaterina Chukovskaya, professor at the Ne- approach towards creating an environment favorable for mirovich-Danchenko Moscow Art Theatre; Iaonnis Lianos, sustainable economic and social development. professor at the University College London, chief research- Proposed by the moderator, the discussion was er at the Institute for Law and Development of HSE-Skolk- organized around three main aspects. Technical stand- ovo; Pierre Régibeau, vice president of the European Com- ards are embodied in certain industry standards, and petition Practice at “Charles River Associates”; Marina this creates an advantage for individual economic actors. Zhunich, head of the Department for the public authorities “There are cases when companies patent a technical
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solution, and it becomes the standard, which, of course, value, and it is about the economic worth of using the final reinforces monopoly positions”, said Drozdov. In other product, which is only credible when attested by economic words, the establishment of certain technical standards data”. Iaonnis Lianos continued the development of the can be used by companies as an economic tool to achieve theme of competition and standards: “Often, organizations a dominant position in the market; this, coupled with an and multinational corporations who develop standards are impressive portfolio of patents, can permit the concept of biased — they do not include customer perspective in the technical standards to become a serious obstacle to the process of normalization, and their interests clash with development of competitive relations. Where is the balance competition authorities. This could be avoided if the de- between security, public interest and the promotion of velopment of standards from the very beginning was done competition? Pierre Régibeau: “the standard can be based with customer involvement”. on a number of patents, so people and companies applying The second problematic issue is the impact of this standard can thus violate the rights of patent owners. technical norms on innovation and creative activities in Today we see many attempts to establish clearer rules; the cultural sphere, which also has a set of standards for a better system that could work for the settlement of under active development. What reassessment for tech- disputes in this area. The standard, if you will, is about real nical regulation measures is required in connection with
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 305 NORMATIVE TECHNICAL REGULATIONS AND INNOVATION 5.3 IN THE DIGITAL ERA: ELIMINATING BARRIERS FOR CREATIVITY AND INNOVATION the development of new production technologies? Is it es the status of legal culture, and we find ourselves in a possible to include the predevelopment of standards for situation where there is technology beyond the scope of innovations that are not yet implemented in the market, or legal regulation. On the other hand, to consider legisla- should the inheritance of normative standards always be tion without the technical tools for its implementation a game of catch-up? seems moot. When the law is paired with technology — The third aspect is the impact of technical we indeed are looking on new opportunities in societal solutions for legal practice and law enforcement. What of development”. technical standards permitting the implementation of en- Alexey Abramov, speaking on the relationship forcement without human intervention? The introduction of between legal and technical standards, noted that “the technical standards may eliminate human intervention in legalization of the use of normative references to technical the application of legislation, and this raises new questions documents will provide conditions for the use of technical for the business community and legislators. knowledge in legal regulation and reduce cases of substi- Sergey Matveev, speaking on the achievements tution of competencies in technical and legal matters”, and in recent years of the Ministry of Education and Science said that the relevant bill is already in development. in the development of the IP market, said: “The govern- ment is using a technical systems in order to improve the legal culture and create a fully-fledged market for intellectual property”. Matveev sees the future of the law operating purely in close conjunction with technical sys- tems: “the status of technology today seems to surpass-
306 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 307 Roundtable 5.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
NATIONAL EFFORTS TO CONTROL THE INTERNET:???? TO REGULATE OR NOT?
28.05
308 5.4
309 Roundtable 5.4
MODERATOR SPEAKERS
Anna Serebryanikova, Martin Husovec, Kenneth Cavalier, Legal Affairs and Government Doctoral Research Fellow, Researcher, InterPares Trust Relations Director, International Max Planck Re- MegaFon OJSC search School for Competition and Innovation
310 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 NATIONAL EFFORTS TO CONTROL THE INTERNET: TO REGULATE OR NOT?
Steven Alan Crown, Till Kreutzer, Vice President, Deputy General Partner, iRights.Law Counsel, Microsoft Corporation
Giovanni Maria Riccio, Ekaterina Fadeeva, Michael Yakushev, Partner, E-Lex Law General Counsel, Yandex Vice-President, Eastern Europe Firm - Professor of Law, and Central Asia, Internet Cor- University of Salerno poration for Assigned Names and Numbers (ICANN)
311 NATIONAL EFFORTS TO CONTROL THE INTERNET: TO REGULATE OR NOT?
anel was dedicated to the relevant issues of ob- Yakushev, vice president for Eastern Europe and Central servance of national rules regulating the Inter- Asia at the Internet Corporation for Assigned Names and net and legal mechanisms of national markets numbers (ICANN). protection. As participants noted, regulation of the Internet The discussion was moderated by Anna purely within national jurisdictions seems problematic. PSerebryanikova, deputy general manager on legal affairs The Internet is a global network where trans- and government relations at the “MegaFon”. Speakers national corporations function. National acts concerning included Martin Husovec, researcher at the Interna- the Internet are usually ineffective and do not achieve the tional Max Planck Research School for Competition and intended results. For example, bloggers can be obliged to Innovation in Germany; Kenneth Cavalier, researcher at register and receive a status equal to that of mass me- “InterPares Trust” in Canada; Steven Alan Crown, vice dia. However, foreign bloggers will not comply with this president of legal affairs at “Microsoft Corporation”, USA; requirement, but will continue to publish materials at the Till Kreutzer, partner at “iRights.Law”, Germany; Giovanni web sites accessible to Russian Internet users. Another Maria Riccio, partner at “E-Lex” law company and profes- example is the obligation of personal data processors to sor of law at the University of Salerno in Italy; Ekaterina record the information about themselves in the respec- Fadeeva, general counsel at “Yandex”, Russia; and Mikhail tive registries. Russian Internet companies did it with due
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diligence. Yet these registries contain no mention of major case when Microsoft Corporation refused to provide foreign Internet resources that Russians use, including information on American citizens to the US law enforce- social networks. ment officials under the premises of that information Considering the inefficiency of national Internet being stored on the servers located in another jurisdiction regulation, there is a need for international approaches to — in Ireland. key issues of protecting the rights of citizens, businesses International regulation should be based on the and the state. principles of digital sovereignty of states and privacy. The Internet is without borders: information, Participants also concluded that national regula- including personal data, may be created in one country, tion has a big influence on the appeal of Internet business- transferred to another and being stored in the third. The es. States with strict legal regulation of information society global nature of information and communication technolo- have a small presence of transnational Internet companies gies require their supranational regulation. and low interest of foreign investors in the Internet market. For example, the issue of law enforcement agen- Instead of imposing restrictions, states should stimulate cies’ cooperation in terms of providing information re- the development of Internet companies, including innova- quires an international solution. There was a well-known tive startups.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 313 Roundtable 6.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
LEGAL BARRIERS TO ACCESS TO THE WORLD CULTURAL???? HERITAGE. WHETHER IS THERE A SOLUTION?
28.05
314 6.1
315 Roundtable 6.1
MODERATOR SPEAKERS
Mikhail Shvidkoy, Anna O’Connell, Jean-Christophe Barbato, Special Representative of Lecturer, London School Professor of Public Law, the President of the Russian of Economics and Political University of Nantes Federation for International Science Cultural Cooperation
316 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 LEGAL BARRIERS TO ACCESS TO THE WORLD CULTURAL HERITAGE. WHETHER IS THERE A SOLUTION?
Stephen Knerly, Jr Vasilisa Neshataeva, Attorney, Hahn Loeser Associate Professor of & Parks LLP International Law Department, Russian State University of Justice
Anastasia Sivitskaya, Marina Tsyguleva, Advocate, Iniurcolleguia, Head of the Legal Department, Attorneys-at-Law The State Hermitage Museum
317 LEGAL BARRIERS TO ACCESS TO THE WORLD CULTURAL HERITAGE. WHETHER IS THERE A SOLUTION?
he panel was moderated by Mikhail Shvyd- people of various countries can get access to them. koy, special representative of the President The moderator stressed the importance of national of the Russian Federation for international legislation in ensuring free and safe movement of cultural cooperation. cultural property and lack of special guarantees of Among speakers were Anna O’Con- immunity for cultural property on the international Tnell, lecturer at London School of Economics and level, including in the CIS. Political Science; Jean-Christophe Barbato, professor In her presentation, Anna O’Connell spoke of public law at the University of Nantes; Stephen about British laws on immunity of cultural property Knerly, Jr., attorney of “Hahn Loeser & Parks LLP”; from seizure from foreign state and private collec- Vasilisa Neshataeva, associate professor of interna- tions exhibited in Britain as part of cultural exchange tional law department at the Russian Academy of Jus- programmes. According to Ms O’Connell, the exist- tice; Anastasia Sivitskaya, attorney of “Iniurcolleguia, ing special laws of the UK (part 6 of the Tribunals, Attorneys-at-Law”; and Marina Tsyguleva, head of the Courts and Enforcement Act) provide the widest Legal department at The State Hermitage Museum. possible protection of foreign cultural property from Before the discussion, Mr Shvydkoy described seizure on the territory of the UK and ensures its access to the cultural heritage as free movement of safety at the exhibitions even if some protective cultural property between the countries so that the measures can be imposed against a foreign state
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in order to execute the judgement of International both criteria — cultural values must be owned by the Arbitration Court (in particular, in the case “YUKOS v. state and used on the French territory for non-com- Russian Federation”). mercial cultural purposes. Jean-Christophe Barbato in his presentation Stephen Knerly Jr. dedicated his presentation analysed the existing international norms regarding to two US acts that govern the immunity of property the protection of cultural property adopted by the UN of international states — Foreign Sovereign Immu- and EU. He pointed out that there is no international nities Act of 1976 and Immunity From Seizure Act legal acts defining the conditions for the immunity of 1965. He mentioned several judicial cases, well from seizure. In this regard, Mr Barbato identified known in the US, when the courts used these legal the criteria that need to be taken into account when acts: “Malewicz v. City of Amsterdam”, “Chabad v. providing the immunity of cultural property from Russian Federation”, “Magness v. Russian Federa- seizure and developing international acts in this area, tion”. Analysing the use of the Acts of 1976 and 1965 such as identification of the type of ownership of by the American courts, Mr Knerly pointed out that cultural property (state or private) and its usage — every time when cultural property from foreign col- public, non-commercial or third option combining the lections was given immunity from seizure in accord- previous two. In France, special national legislation ance with the Act of 1965, under no conditions could regarding the immunity from seizure needs to include this property be seized on the US soil.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 319 LEGAL BARRIERS TO ACCESS TO THE WORLD CULTURAL HERITAGE. WHETHER IS THERE A SOLUTION?
Vasilisa Neshatayeva identified as a “barri- with the protection of cultural property from foreign er to world cultural heritage” a lack of any special collections on the territory of the Russian Feder- supranational dispute resolution mechanism for ation. Without proper legal regulation in this area contested rights to cultural property. She empha- in Russia, parties to the contract have to be guided sized that needs to be a balance of private and public by the principle of good faith and trust each other’s interests. “word of honour”. Yet in many years when Minis- Anastasia Sivitskaya made a presentation try of Culture wrote letters of indemnity containing about the Scythian Gold case. In late November 2014, abstract commitment to provide “state protection” four Crimean museums sued the Court of Amsterdam to cultural property and promptly return it to the a class action lawsuit to Allard Pierson Museum, de- owner after the exhibition, there have never been manding to return the collection of the Scythian gold any legal precedents when cultural values in tempo- from the Netherlands to the Crimea. The exhibition rary exhibitions were arrested or seized in Russia. titled Crimea: Gold and Secrets of the Black Sea was Ms Tsyguleva proposed the following solutions to sent to the Netherlands before Russia’s annexation overcome the “barriers to world cultural heritage” in of the Crimea. In the analysis of the ensuing dispute, temporary exhibitions: respect of foreign states for Ms Sivitskaya identified the problem that has never national sovereignty; availability of specific laws on been solved on the level of international instruments: the immunity of cultural property from seizure, and in the event of secession of a part of a state’s terri- in the absence of such laws — provision of “letters tory, it is not evident that cultural property must be of indemnity” by public authorities of foreign country returned to the former state. Ms Sivitskaya pointed declaring their commitment to ensure the immunity out the importance of the provisions of the Washing- of cultural property and its timely return after the ton Pact of 15 April 1935 for the Protection of Artistic exhibition. and Scientific Institutions and of Historic Monuments In summing up the discussion, Mikhail Shvy- (Roerich Pact) and ethical norms of the ICOM Code of dkoy suggested sending its results to Committee for Ethics for Museums in the absence of special inter- Culture of the State Duma, Ministry of Culture and national legal norms. Ministry of Foreign Affairs in order to study and im- In her presentation, Marina Tsyguleva spoke prove the existing national mechanisms of protection about the current Russian legislation that deals of cultural property.
320 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 6.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 321 Roundtable 6.2
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
STATE PRESERVATION OF THE CULTURAL HERITAGE: HOW IT WORKS
28.05
322 6.2
323 Roundtable 6.2
MODERATOR SPEAKERS
Aleksandr Kibovskiy, Sergey Makarov, Sergey Mirzoyan, Head of the Moscow Chairman, Committee for Deputy Head of Department — Department of Culture, State Control, Utilization and Chief Inspector in the Field of Moscow City Government Protection of Historical and State Protection of Objects of Cultural Landmarks of Saint- Cultural Heritage of the Сity Petersburg City Administration of Moscow, Department of Cultural Heritage of the City of Moscow
324 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 STATE PRESERVATION OF THE CULTURAL HERITAGE: HOW IT WORKS
Natalya Romashova, Gideon Koren, Director of Law Department, Vice-President, ICOMOS Ministry of Culture of the Russian Federation
Dimitrij Davydov, Galina Malanicheva, Vyacheslav Fatin, Chief Legal Officer, President of the Central President, All-Russian Public Regional Association Council, All-Russian Society for Organization “The Union of of Westphalia-Lippe the Preservation of Historical Restorers of Russia” and Cultural Monuments
325 STATE PRESERVATION OF THE CULTURAL HERITAGE: HOW IT WORKS
he panel addressed the most relevant issues of erator pointed out that the views of professional community, enforcement and development of cultural her- public organizations and Muscovites often do not coincide. itage legislation. This session was represented Recently a new phenomenon occurred that was called “so- by various professionals united by the common cial hostile takeovers”. It uses declarative, apparent ideas of challenges of law enforcement in the area of cultural heritage protection to achieve own goals. Tpreservation, promotion and state protection of cultural Sergei Mirzoyan in his presentation spoke about heritage. state supervision, urban planning, land and property legal The panel’s moderator was Aleksandr Kibovsky, relations in the area of cultural heritage. The examples of Head of the Moscow Department of culture at Moscow City legal collisions that he made were particularly interesting Government. Several public officials also took part in the for the audience. session: Sergei Makarov, chairman from Committee for state For instance, Federal law “On the objects of cultur- control, utilization and protection of historical and cultural al heritage” stipulates irrevocable confiscation of land plots landmarks of St. Petersburg City Administration; Sergei from the owners through whose fault an object of cultural Mirzoyan, deputy head of the Department — Chief inspector heritage was destroyed, if it was located on this land plot, in the field of state protection of objects of cultural heritage while the Criminal and Administrative Codes do not. of the city of Moscow, Department of cultural heritage of the The Urban Planning Code of the Russian Feder- city of Moscow; Natalya Romashova, director of Law depart- ation now features a requirement to carry out a historical ment at Ministry of culture of the Russian Federation. and cultural study of design documentation, yet it lacks the Gideon Koren, vice president of ICOMOS, and Dim- provision requiring the approval of such documentation by itrij Davydov, chief legal officer at the Regional Association cultural heritage protection authority. As a result, Russia’s of Westphalia-Lippe, shared their international experience Ministry of Culture thinks that this approval is necessary, in legal regulation. while the Ministry of Construction does not think so. Public organizations and professional communi- Sergei Makarov supported his Moscow colleagues, ties were represented by Galina Malanicheva, president of citing as an example Saint Petersburg’s positive practice of the central council of the All-Russian Society for the Pres- making bilateral preservation obligations that was abruptly ervation of Historical and Cultural Monuments; Vyacheslav interrupted by new federal laws. Now all preservation Fatin, president of the all-Russian public organization obligations are adopted unilaterally by cultural heritage “Russian Association of Restorers”. protection authorities. This innovation is based on the Due to their experience and high professional Moscow practice, but the originally effective mechanism qualification, the panellists addressed many theoretical was distorted in the Federal Law, where main emphasis and practical issues. was laid on handing over the notifications to right holders. In his opening address, the moderator Aleksandr Because of it, cities of federal significance, followed by Kibovsky outlined the main reasons of the existing regu- other regions, now have to focus on dealing with postal latory challenges of cultural heritage protection and em- service and finding the right holders instead of protecting phasized the importance of development of the appropriate the cultural heritage. legislation. It would determine whether the complete set Speech made by ICOMOS’s Gideon Koren was of legal acts that regulate public relations in the area of particularly significant, as it commemorated the 40th an- cultural heritage protection is being formed on the federal niversary of the “Convention concerning the Protection of level, or federal legislation is only limited to stipulating the World Cultural and Natural Heritage”. Mr Koren spoke common regulatory principles and delegates the mandate about global threats to world cultural heritage, namely: not to develop detailed rules of conduct to the regional level. all countries have yet ratified this convention; new objects The reason behind most problems of administra- are added to UNESCO’s World Heritage List only at the ini- tion of the law is in the imbalance inherent in the Federal tiative of the respective states; not all convention members law “On the objects of cultural heritage (historic and have established special services; actions of extremist or- cultural monuments)” of the Russian Federation. This is ganizations in such countries as Syria and Iraq lead to the the imbalance of conceptual norms and norms that closely destruction of objects of world heritage; the only measure regulate the peripheral matters that in the Russian legisla- in case of convention’s violation can be the exclusion of the tion traditionally have been governed by by-laws. respective site from the World Heritage List. Mr Kibovsky also addressed the issue of society’s To remedy this situation, the following measures participation in the protection of cultural heritage. The mod- had been suggested: increase the international status
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of the convention; compel its members to create special of state protection of the objects of cultural heritage. heritage protection services at the threat of banning new Firstly, in collaboration with cultural heritage protection sites from the World Heritage List; not include the sites in authorities, to draft a bill of amendments to the Fed- the list if the state does not have a management plan and eral law No 73 FZ dd. June 25, 2002 No 73-FZ “On the legal protection in place. objects of the cultural heritage (historic and cultural Dimitrij Davydov made a presentation about monuments)” of the Russian Federation, as well as to the tools for cultural heritage protection in Germany. the Criminal and Administrative Codes of the Russian He emphasized the prevailing role of land (regional) Federation in order to eliminate the conflicts in regula- public authorities and local government in these mat- tion of cultural heritage protection. ters. A noteworthy regulatory characteristic of cultural Secondly, to speed up the development and adop- heritage protection in Germany is the administrative tion of legal acts by the Ministry of Culture and submitting character of the decision-making process of the re- for Government’s approval of the drafts acts focused on sponsible authorities, which includes the decisions that implementation of provisions of the Federal Law No 315- restrict the rights of the heritage owners. They maintain FZ dd. October 22, 2014. the right to challenge in court the decisions that conflict Finally, to submit regularly to cultural heritage with their interests. protection authorities the explanations about problematic In summing up the discussion, its members issues arising from their enforcement of the provisions of decided to suggest Russia’s Ministry of Culture the fol- the Federal Law No 315-FZ that do not require the adop- lowing measures to overcome the regulatory challenges tion of any additional by-laws.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 327 ROUNDTABLE 6.3
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
CROSS-BORDER ENVIRONMENTAL???? PROTECTION
29.05
328 6.3
329 Roundtable 6.3
MODERATOR SPEAKERS
Marina Gassiy, Valery Musin, Swatanter Kumar, Legal Support Director, SUE Head of the Department of Chairperson, National Green Vodokanal of St. Petersburg Civil Procedure, Law Facul- Tribunal of India ty, Saint-Petersburg State University
330 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 CROSS-BORDER ENVIRONMENTAL PROTECTION
Kai Kokko, Lyudmila Kanaeva, Professor of Environmental Head of Division of Water Law, University of Helsinki Legislation and Legislation in the Sphere of Specially Protected Natural Areas and Wildlife in the Legal Department, Ministry of Natural Resources and Environment of the Russian Federation
331 CROSS-BORDER ENVIRONMENTAL PROTECTION
arina Gassy, SUE “Vodokanal of St. Peters- tal protection, identified the most vulnerable facets of this burg” legal support director and honored cooperation and outlined its future improvement. lawyer of the Russian Federation, moderated At the end of the panel discussion, its participants the panel discussion. formulated some theses. Among the panelists were Kumar First of all, natural environment has no ad- MSwatanter, chairman of the National Green Tribunal of ministrative and political boundaries, and therefore, its India; Valery Musin, head of the Civil procedure depart- security is a common goal of all states regardless of any ment at the Faculty of Law of the St. Petersburg State ideological, economic and other contradictions that exist University; Kai Kokko, professor of environmental law from between them. International cooperation in environmental the University of Helsinki; Lyudmila A. Kanayeva, head of protection, provision of sustainable and safe use of natural the Department of water and special protected areas and resources are the basis for sustainable development of the wildlife legislation, the Ministry of Natural Resources and modern society. Law serves to improve interaction mech- Environment of the Russian Federation. anisms between different states by supporting the existing The participants of the panel discussion made international structures as well as optimizing national le- presentations on different aspects of the subject the panel gal systems to implement elements of such mechanisms. discussion, expressed their vision of trends and ways of Industrial development and increase in consump- development of the interstate cooperation in environmen- tion are objective processes that can’t be suspended in the
332 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 6.3
modern context. In this regard, protection of the natural nisms, maybe, on the upgrade of their interaction level environment should not hinder its rational use. These and integration of methods that influence public relations processes should not be opposed to each other. In this existing in the area under consideration. The positive situation law should become the basis for mechanisms experience of implementation of integrated water man- to establish practical linkage between natural resources agement (IWM) gained by a number of states, may be consumption and environmental protection. It is necessary taken into consideration when using transboundary water to strengthen the integration of law, natural sciences, bodies. Implementation of IWM may exclude competition economic theory and other knowledge areas that support of different legal systems in terms of protection and use the above processes. of such water bodies; ensure consideration of all aspects Finally, the current level of law development – of access to water resources and smooth over possible both international and national — affords grounds to international contradictions. say that there is no need to form new legal mechanisms aimed at environmental protection. Emergence of new international as well as national organizations may lead to “dilution” of their functions, excessive bureaucratization of environmental protection. At the current stage the focus should be put on improvement of the existing mecha-
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 333 Roundtable 6.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
PROBLEMS OF HARMONIZATION OF ENERGY LAW IN RUSSIA, EU AND EURASIAN ECONOMIC UNION
29.05
334 6.4
335 Roundtable 6.4
MODERATOR SPEAKERS
Alexander Pakhomov, Bernd Meyring, Nikolay Mizulin, Member of the Management Partner, Linklaters LLP Partner, Mayer Brown Board - General Counsel, JSC Inter RAO
336 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 PROBLEMS OF HARMONIZATION OF ENERGY LAW IN RUSSIA, EU AND EURASIAN ECONOMIC UNION
Viktor Myasnik, Viktoriya Romanova, Director of the Energy Head of Energy Law Department, Eurasian Department, Kutafin Moscow Economic Commission State Law University - Member of Ministry of Public Council, Ministry of Energy of the Russian Federation
Evgeniy Sarymsakov, Georgiy Golovanov, Head of International Law Deputy Director of Law Depart- Department, JSC Inter RAO ment, Ministry of Energy of the Russian Federation
337 PROBLEMS OF HARMONIZATION OF ENERGY LAW IN RUSSIA, EU AND EURASIAN ECONOMIC UNION
he annual discussion of energy issues brought discussion of the European Third Energy Package and said together representatives of federal executive that the energy policy of the member states is influenced authorities and practicing lawyers who by such significant aspects as environmental sustainability focused on harmonization of EU laws, legal and energy supply security; they determine the dimensions problems in development of the energy market of interstate energy cooperation. Tof the new economic environment of the EEU, and Nikolay Mizulin, Partner of Mayer Brown, ex- prospects of international cooperation within emerging pressed confidence that Russia is a reliable partner of the international organizations. EU countries in the energy sphere and that the EU energy The discussion was opened by moderator Alex- sector reforms do not have norms that could become bar- ander Pakhomov, Board Member and General Counsel of riers for the Russian export. JSC Inter RAO, he stressed the relevance of this topic and The trend of increasing competition for the access noted that energy markets are a priority for both European to energy markets and the related need to ensure compet- and Asian states; and principles of statutory regulation are itiveness of fuel and energy sectors and strengthen energy based on the national interests of a certain state. “The de- security were described by Viktor Myasnik, Director of the gree of national law harmonization depends on the extent Energy Department, the Eurasian Economic Commission. to which the state parties find common approaches and “Signing EEU agreements is a strategically important solutions in the area of energy supply”, said the expert. solution for these problems, they aim at bringing Armenia, Bernd Meyring, Partner of Linklaters LLP, paid Byelorussia, Kazakhstan, Kirgizstan and Russia to a higher a special attention to the existing legal system of the Euro- level of economic integration”, stressed the expert. In the pean Union in the energy sphere. The speaker focused on speaker’s opinion, these agreements clearly specify the
338 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 6.4
goals and objectives of cooperation between states in the ronment that needs to be systematically implement- energy sphere, namely development of long-term mutually ed in practice. beneficial cooperation in the energy sphere, implementa- Georgiy Golovanov, Deputy Director of the Law tion of the coordinated energy policy, and stage-by-stage Department, the Ministry of Energy of the Russian Federa- formation of the common energy markets. tion, outlined the goals of development of fuel and energy Viktoriya Romanova, Chair of Energy Law Depart- sector regulation in Russia. “The major goals of fuel and ment, Kutafin Moscow State Law University, Member of the energy complex development of the Russian Federation Public Council under the Ministry of Energy of the Russian are the efficient use of the energy potential of Russia, Federation, addressed the topic of international energy law comprehensive integration into the world energy market, unification and harmonization of international energy mar- strengthening the market position, and maximization kets of the member states and described it in the context of benefits for the national economy of Russia with due of the Eurasian economic integration. consideration of the interests of the EEU member states”, The discussion was continued by Evgeniy concluded the speaker. Sarymsakov, Head of International Law Department, Drawing conclusions of the discussion, moderator JSC Inter RAO. He elaborated on the current status of Alexander Pakhomov noted that the topic of law harmoni- the energy dialogue between Russia and the European zation in the energy sphere of the EU and the EEU member Union. According to the expert, the energy strategy of the states is vast, relevant and requires a great number of Russian Federation adopted by the relevant Government discussions in order to develop solutions, which is possi- Decree contains a provision for assistance to formation ble, first of all, with a full renewal of the energy dialogue of the common Russian-European-Asian energy envi- between Russia and the European Union.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 339 Roundtable 6.5
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
DEVELOPMENT OF THE RUSSIAN SUBSOIL USE LEGISLATION:???? EFFORTS TO PROVIDE INFLUX OF INVESTMENT
29.05
340 6.5
341 Roundtable 6.5
MODERATORS SPEAKERS
Victor Nesterenko, Denis Khramov, Sergey Gudkov, President, RusEnergyLaw First Deputy Minister of Natural Director, Rosgeolexpertiza School Resources and Environment of the Russian Federation
Evgeny Mazkov, Roman Kvitko, Deputy Director Head of Legal Directorate, of GR Department, Rosneft Gazprom Neft JSC
342 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 DEVELOPMENT OF THE RUSSIAN SUBSOIL USE LEGISLATION: EFFORTS TO PROVIDE INFLUX OF INVESTMENT
Aydyn Dzhebrailov, Andrey Zharskiy, Partner, Norton Rose Fulbright Partner, ALRUD Law Firm (Central Europe) LLP
Irina Narysheva, Evgeniy Tulubenskiy, Jonathan Hines Partner, KPMG Chief Legal Officer, Partner, Morgan Lewis Corporate and Regulatory Affairs, Nord Gold N.V.
343 DEVELOPMENT OF THE RUSSIAN SUBSOIL USE LEGISLATION: EFFORTS TO PROVIDE INFLUX OF INVESTMENT
he session’s moderators were Victor Nesterenko, Sergei Gudkov, director of the “Rosgeolexper- president of the “PravoTEK” school and edi- tiza”, addressed one of the most interesting topics: sub- tor-in-chief of the “Neft, Gaz i Pravo” magazine, soil use license updating. According to him, an important and Evgeny Mazkov, deputy director of GR aspect of updating is transfer of the list of obligations, department at “Rosneft”. Both senior public of- including the types, scopes and time terms of geolog- Tficers and representatives of major extraction companies ic surveys, from licenses into project documentation. made their presentations, making the discussion lively Mr Gudkov also spoke about licence amendment proce- and relevant. dure and new laws in this area. The session was opened by Denis Khramov, First Aydyn Dzhebrailov, partner at the “Norton Rose Deputy Minister of Natural Resources and Environment Fulbright (Central Europe)” LLP, mentioned some incon- of the Russian Federation, who pointed out that his sistencies and deficiencies of subsoil legislation, drawing ministry is currently working on three major issues: to everyone’s attention to the lack of harmony among by-laws create an adequate environment on the existing deposits, and federal laws. He also suggested introducing a new stat- carry out geological survey in new regions lacking the ute of limitation into Russia’s Arbitration Procedure Code infrastructure, and develop hard-to-recover and uncon- for better protection of the interests of subsoil users who ventional resources. suffered from licensing errors made over ten years ago.
344 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 6.5
Andrei Zharskiy, partner at the “ALRUD” law regulatory affairs at the “Nord Gold N.V.”, identified the firm, in his presentation spoke about environmental pro- current challenges that would require reviewing the legis- tection and emphasized that currently there is a large- lation on subsoil plots of the federal importance. He also scope legislative review under way that will introduce pointed out that tax disputes remain one of the principal many new features. stumbling stones. Roman Kvitko, head of legal directorate at the Jonathan Hines, partner at “Morgan Lewis”, spoke “Gazprom Neft”, mainly spoke about legislative improve- last. He reached a conclusion that all problems can be ment in order to introduce effective contractual modes of solved, despite the current situational instability. joint subsoil use. To tackle these issues, he suggested intro- At the end of the panel, on behalf of the Ministry ducing into Russian legislation such contractual structures of Natural Resources and Environmant of the Russian as risk-based operating agreement and joint development Federation the participants congratulated the “Neft, Gaz agreement, which are successfully used internationally. i Pravo” magazine on its 20th anniversary and presented Irina Narysheva, partner at the KPMG, spoke about its chief editor Victor Nesterenko with an honorary certifi- her experience of dealing with foreign investors and the chal- cate confirming his invaluable personal contribution to the lenges that they face when working with Russian projects. development of Russian subsoil legislation and professional Evgeniy Tulubenskiy, chief legal officer of corporate and training of miners and oilfield workers.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 345 Roundtable 7.1
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
JOINT VENTURING WITH A FOREIGN INVESTOR: HOW TO MAKE A PARTNERSHIP WORK
29.05
346 7.1
347 Roundtable 7.1
MODERATOR SPEAKERS
Cornelia Topf, Svetlana Gerbel, Suren Gortsunyan, Partner, Gleiss Lutz Vice-President, Head of Legal Partner, Akin Gump Strauss Department, Siemens LLC Hauer & Feld LLP
348 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 JOINT VENTURING WITH A FOREIGN INVESTOR: HOW TO MAKE A PARTNERSHIP WORK
Alexey Malovatsky, Elizaveta Koryagina, Executive Vice-President, Head of Corporate and M&A Holding Company “Sistema” Legal, PJSC “MegaFon”
Oxana Balayan, Arman Berdalin, Managing Partner, Hogan Partner, Sayat Zholshy & Lovells (CIS) Partners
349 JOINT VENTURING WITH A FOREIGN INVESTOR: HOW TO MAKE A PARTNERSHIP WORK
nternational lawyers from leading law firms and inhouse Balayan noted a kind of “success or love formula” which counsel from international enterprises shared their includes to having the best team on board. In this regard experience on cross-border joint ventures between local Svetlana Gerbel explained that Siemens is usually ap- enterprises and foreign investors. Cornelia Topf, part- pointing so-called integration managers in a joint venture ner at “Gleiss Lutz”, Germany, moderated discussion. who help to deal effectively with conflict situations. Oxana IAmong speakers were: Svetlana Gerbel, vice-president and added: “With the right structure of corporate governance head of legal at “Siemens”; Suren Gortsunyan, partner at and control you will most likely not be eaten up”. Is there “Akin Gump Strauss Hauer & Feld”; Elizaveta Koryagina, a sort of blue print, which we can use for setting up a joint head of corporate and M&A legal at “MegaFon”); Alexey venture? “No” said Elizaveta Koryagina and explained: Malovatsky, executive vice president of “AFK Sistema”; ”Each company is unique and it is necessary each time to Oxana Balayan, managing partner at “Hogan Lovells”; and start from your goals”. Arman Berdalin, partner at “Sayat Zholshy & Partners”, Alexey Malovatsky noted that financing is a topic Kazakhstan. which often causes conflicts: “Philosophy of any joint ven- Cornelia Topf started with an introduction and ture is based on two basic things: the pooling of financial pointed out that there are more than 20.000 companies ex- resources of the parties and the allocation of financial isting in Russia with foreign investment. Stressing the role results of a joint venture”. He strongly recommended that of sound corporate governance in a joint venture Oxana the financing should be discussed at the very beginning of
350 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7.1
a partnership and agreed in detail in the agreement. “Part- Gortsunyan, exit provisions give stability to a joint ven- ners should at maximum be open to each other,” he said. ture and allow creating the basis for future negotiations. Based on a case study Svetlana Gerbel explained He pointed out that simple exit mechanisms like rights of how Siemens as international investor coped with a first offer and tag rights are more often used than fancy deadlock situation in a joint venture. She compared joint shoot-out mechanics. ventures with families and cited Leo Tolstoj: “Happy Having been asked on 50/50 joint ventures, Eliza- families are all alike; every unhappy family is unhappy in veta Koryagina noted that those could be like a “union of its own way.” Svetlana noted that court proceedings can two hearts which are looking in the same direction. But be a good opportunity to strengthen its own position in the to be successful the partners of a joint venture of equals negotiations, but do not always solve the problem. “But it must have the ‘right’ joint goals”. According to Alexey, in is extraordinarily important to continue negotiating and a 50:50 scenario companies should be even more careful compromising” she said and recommended to involving with choosing the right partner, because “at some point all potential beneficiaries, including local municipalities, partners always understand that one of them is contribut- to solve conflicts. While extensive deadlock mechanisms ing more than the other”. in the joint venture agreement do not always help, Mr. Finally, Cornelia asked all speakers to discover Malovatsky pointed out that the deadlock issue should their individual recipe of how to make a joint venture work. definitely not be left open und should be set out in detail in Both Svetlana and Arman agreed that it is crucial to do an agreement to give the partners guidance, even if they a proper background research on the potential partner later deviate from that. Svetlana noted that in any event at be-forehand. Elizaveta added: “You should carefully carry a very early stage the partners’ teams on the ground must out all preparatory work and use your own experience and be made familiar with the deadlock provisions they have to expertise of lawyers to competently and correctly draw follow. Elizaveta agreed and continued that it would always the documents”. Finally, Suren concluded: “Have a clear be better not to end up in a deadlock situation at all, but to understanding of the roles of partners and of what each avoid it beforehand by agreeing on all foreseeable issues. partner brings ‘to the table’ and precisely structure your And to be prepared for the unexpected, you should always documentation”. think of how an exit can look like. According to Suren
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 351 Roundtable 7.2
“Gazprombank” (Joint-stock Company)
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
RUSSIAN-CHINESE COOPERATION: FROM WORDS TO ACTION
29.05
352 7. 2
353 Roundtable 7.2
MODERATOR SPEAKERS
Ekaterina Trofimova, Xiaoping Wang, Wenjing Tian, First Vice-President, Member Partner, Grandall Law Firm Partner, King & Wood of the Board, Gazpombank Mallesons
354 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 RUSSIAN-CHINESE COOPERATION: FROM WORDS TO ACTION
Aleksandr Dolgov, Artem Sokhikyan, Partner, Hogan Lovells Deputy Director of the Department of Direct Investment, Export and External Economic Action Promotion, Ministry for the Development of the Russian Far East
355 RUSSIAN-CHINESE COOPERATION: FROM WORDS TO ACTION
t. Petersburg International Legal Forum host- The phrase “from words to action” was not acci- ed a panel discussion titled “Russian-Chinese dental: speakers and askers from the audience focused pri- cooperation: from words to action”. Ekaterina marily on practical aspects of Russian-Chinese cooperation. Trofimova, first vice president and member Xiaoping Wang, having first given the account of of the “Gazprombank” Board, moderated the the history of economic and legal cooperation of Russia Sdiscussion. Several Russian and Chinese speakers took and China, pointed out that it is several centuries old part in the discussion: Xiaoping Wang, partner at the already and over this period of time the two countries have “Grandall” law firm; Wenjing Tian, partner at the “King concluded numerous bilateral (in such areas as invest- & Wood Mallesons”; Aleksandr Dolgov, partner at the ment, taxation and justice) and multilateral agreements. “Hogan Lovells”; and Artem Sokhikyan, deputy director of The Chinese expert specifically mentioned the interna- the Department of Direct Investment, Export and External tional treaties made within the framework of BRICS and Economic Action Promotion, Ministry for the Development SCO. Mr Wang noted that the New Development Bank, of the Russian Far East. sometimes not quite correctly called the BRICS Bank has
356 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7. 2
“very good prospects” and can become “a solid financial well as the matter of possible state financial guarantees foundation for relations” between the two countries. to investors. The panellists have also discussed a number Aleksandr Dolgov answered these questions when of specific infrastructure projects to be implemented in he said that since 2014, according to the amendments to the RF and PRC. In particular, they discussed a concept the Federal Law On Concessionary Agreements, standard financing, design, construction and operation project concessionary agreements had lost their enforceability of the Moscow-Kazan’ high-speed toll railway (the VSM and became indicative. Moreover, even before the adoption project), in which Chinese investors and financing organ- of the amendments, the actual agreements were largely izations are ready to invest over RUB 350 bln. Wenjing different from the standard ones, granting the parties addi- Tian announced some crucial points for the Chinese tional rights and guarantees adequate to market require- investors: the issue of freedom of parties when defining ments and best international practices. For this reason the terms of concessionary agreements and enforceabil- “today it is possible to spread the risks among the parties ity of the terms of model concessionary agreements, as to concessionary agreement in a correct, balanced and just
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 357 RUSSIAN-CHINESE COOPERATION: 7. 2 FROM WORDS TO ACTION
manner,” the speaker emphasized. This is also the driver sary funding for proper elaboration of such projects and of a rapid increase in concessionary projects in Russia in subsequent attraction of private investments, including transportation, social and other areas. The same can be from commercial banks. In particular, Ekaterina Trofimova said about the PPP projects implemented in accordance confirmed the interest of “Gazprombank” to the Rus- with regional legislation. PPP-based federal law, to be sian-Chinese infrastructure and other investment projects adopted soon in Russia, will become an additional impetus at an appropriate level of readiness. to develop such projects1. As for the financial guarantees for investors, as Establishment and proactive cooperation of new Aleksandr Dolgov pointed out, Russian legislation provides international financial institutions such as the New Devel- for the protection of concessionaire’s rights by setting opment Bank and Asian Infrastructure Investment Bank a minimum amount of guaranteed income, concessor’s can speed up the preparation and implementation of the payment, guaranteed compensation in case of an early Russian-Chinese projects. By using the financial resources termination, and tax remissions. Currently the Tax Code and expert teams of these banks and working togeth- amendments are being considered that will ensure a bet- er with the long-established international development ter tax treatment for the high-speed railway project. banks showing interest in this region (such as the Eurasian Mr Dolgov also highlighted that while a lot is Development Bank, European Bank for Reconstruction and being said and done about the Russian-Chinese me- Development, International Finance Corporation, Asian ga-projects (such as the VSM project), still more attention Development Bank), it is possible to obtain the neces- should be paid to the mid-level projects (worth $150–300
358 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 mln). Artem Sokhikyan spoke about this issue in more nine registered TPDs, and, as Mr Sokhikyan notes, right detail when he presented the opinion of the Russian now Chinese investors are not as active as their Japanese state authorities on attracting foreign capital (including counterparts are. Chinese) to the Russian Far East and gave a detailed After the presentations, there was a Q&A ses- report on the so-called territories of priority development sion during which the speakers provided some additional (TPD) that are supposed to become developmental drivers information about the so-called Silk Road Economic Belt for the Asian part of Russia. According to Mr Sokhikyan, (transport artery between Europe and Asia that was sup- Far East “requires unorthodox solutions,” and the TPD posed to cross ten states, including Russia) and prospects law is exactly one such solution. New provisions of the of Russia-Chinese infrastructure projects. In conclusion law will drive down the costs of investing companies for the moderator stated that she would “leave open the pan- the connection to transport and utility infrastructure, el,” hoping to discuss next year the concrete cases of pilot as well as tax and customs expenses, and bureaucratic projects. Let us wait for the practical results of Russia’s hurdles (thanks to the “one-stop-shop” approach of the realignment to the East, with successfully implemented Far East Development Corporation). Currently there are Russian-Chinese projects among them.
1. The bill was approved by the State Duma in its second reading on June 30, 2015.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 359 Roundtable 7.3
“Gazprombank” (Joint-stock Company)
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
INVESTMENT IN INFRASTRUCTURE AS A DRIVER OF ECONOMIC GROWTH IN DEVELOPING COUNTRIES
29.05
360 7. 3
361 Roundtable 7.3
MODERATOR SPEAKERS
Aleksey Chichkanov, Vladislav Zabrodin, Mikhail Markov, Executive Vice-President, Managing Partner, Capital General Counsel, Russian Head of the Public-Private Legal Services Direct Investment Fund Partnership Centre, Gazprombank OJSC
Alisa Mityaeva, Deputy Head of Investment Projects Legal Support Division, Leader CJSC
362 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 INVESTMENT IN INFRASTRUCTURE AS A DRIVER OF ECONOMIC GROWTH IN DEVELOPING COUNTRIES
Anton Dzhuplin, Alexandra Doytchinova, Partner, ALRUD Law Firm Partner, Schoenherr
Mikhail Popov, Dmitriy Timofeev Director for Legal Affairs, Legal & Corporate Affairs RT-Invest Transport Director, ROSVODOKANAL Systems LLC GROUP
363 INVESTMENT IN INFRASTRUCTURE AS A DRIVER OF ECONOMIC GROWTH IN DEVELOPING COUNTRIES
leksey Chichkanov, executive vice president and In addition, considering the short timeframe for head of the Public-Private Partnership Centre the authorized body to examine the project proposal, it at “Gazprombank”, was a moderator of the would be logical to adopt legal acts on the level of the Rus- panel discussion on the theme “Investment in sian Federation, the regions and municipalities as regards Infrastructure as a Driver of Economic Growth in the procedure for interaction of the executive authorities ADeveloping Countries”. when examining the proposal. Among speakers of the panel were Vladislav Zabro- Mikhail Markov reported on recent success of the din, managing partner at “Capital Legal Services”; Mikhail Russian Direct Investment Funds on the infrastructure Markov, general counsel at “Russian Direct Investment investments market. In particular, Mikhail referred to Fund”; Anton Dzhuplin, partner at ALRUD law firm; Alexan- infrastructure projects “Liquidation of Digital Inequality” dra Doytchinova, partner at “Schoenherr”; Alisa Mityaeva, implemented by Rostelecom, OJSC and “Construction of deputy head of investment projects legal support division at Smart Grids” implemented by Russian Grids, OJSC that “Leader” CJSC; Mikhail Popov, director for legal affairs at are remarkable due to the fact that funds of the National “RT-Invest Transport Systems” LLC; and Dmitriy Timofeev, Wealth Fund (NWF) have been allocated for the first time legal & corporate affairs director at “ROSVODOKANAL”. for the purposes of investing into self-supporting project. Vladislav Zabrodin made a presentation on “Pri- Mikhail’s report was supported by Anton Dzhuplin, vate initiative when entering into public private partnership who made a presentation on “Approaches to structuring (PPP) agreements”. He stated that the mechanism of pri- the infrastructure deals: alternative to PPP”. vate initiative for entering into PPP agreements was first Considering that PPP instruments are currently used in Great Britain approximately 20 years ago and today developing, market participants understanding that it will is often used in different countries, first of all, in Asia. take time to have these instruments eventually formed, On May 1, 2015 amendments to the Russian fed- often use alternative means of structuring infrastruc- eral law “On concession agreements” entered into effect, ture projects such as structuring in the civil law frame- granting the party interested the opportunity to initiate work with various corporate instruments (joint ventures, a concession agreement by sending a relevant proposal to shareholder / corporate agreements, option agreements the authorized state body. The authorized body then has etc.). Such corporate forms are quite successfully used in 30 days to examine the proposal and, if it deems possible practice for implementation of infrastructure projects, spe- to sign the agreement, it posts the initiator’s proposal cifically in the light of recent changes in the Civil Code that and draft agreement on the website http://torgi.gov.ru/. expanded the opportunities for their application. If within 45 days no other proposals from other entities are The NWF and Russian Direct Investment Fund submitted, the concession agreement is signed with the play a special role in implementation of PPP projects: two party that sent the private initiative. infrastructure projects have been recently implement- The fact of the private initiative becoming available ed with the participation of the said institutions (Mikhail is an important step in the development of PPP in Rus- Markov, General Counsel, Russian Direct Investment Fund sia. However, in order for the private initiative to become has earlier described these projects). successful, certain improvements to the law are needed, Corporate forms are more flexible mechanism in namely, as follows: transparent examination of the initiative comparison with PPP, allowing investors to withdraw from proposal, with specific requirements for such proposal and a the project with a guaranteed income, to obtain control detailed list of grounds for denial to implement the initiative; over the project company, to attract foreign investors to open information concerning the project through obligations the project and to use bank financing. At the meantime, for the state on providing information at the state’s disposal corporate forms have a number of drawbacks that in some that is necessary for preparing the proposal, and publishing cases can make PPP mechanisms more appropriate for a notice that the initiative proposal has been received; guar- the implementation of specific infrastructure projects. antees for the project initiator in the event it participates in Alexandra Doytchinova made a presentation on the tender, as compared to other participants; compensation “Structuring of Infrastructure Investments (with focus of the initiator’s expenses on preparing the project docu- on PPP Energy Projects in SEE)”. She presented certain ments in the event a different entity wins the tender; oblige specifics of the structuring of the investment vehicles the initiator to enter into the agreement after the decision is with a focus on the energy sector in SEE. She reported adopted on expediency of the project, for example, in form of of the failed attempt to introduce a PPP Act in Bulgaria. an independent guaranty. Public-private partnerships are regularly structured
364 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7. 3
as joint ventures under general corporate laws. The cantly, expand legal framework to attract private investors choice of the private partner is often made in a private and ensure their property interests. tender (thus, limiting the possibility for appeals). The The project for creation and operation of toll private partners are usually responsible for arranging collection system in respect of compensation for harm the project financing. The contribution of the public to federal highways caused by vehicles weighing over partner is typically existing infrastructure, obtaining of 12 tons (SVP), implemented under the terms of concession the required permits and the expropriation of land. The agreement, led to the need for the answers to a number of state support to the public-private joint venture, e.g. in theoretical and practical issues requiring a comprehensive the form of long term power purchase agreements with approach to address them, including those related to the a state owned electricity off-taker, could constitute state legal nature of payment on account of compensation for aid which may be inadmissible under the EU and the damage, the characteristics of the status of SVP opera- national competition laws. tor against the users of this system, the legal status of Mikhail Popov noted that attracting investments, concession object in view of its complex nature etc. In ad- including through PPP mechanisms, into sectors of funda- dition, the development of SVP could be regarded as one of mental importance for socio-economic development in the the first steps in the transition from equalization payments long term, such as transport system, is one of essential to the “User pays” principle, and the complex study of tasks of the state in conditions of economic instability. the legal mechanisms applied to this project will allow to Being focused primarily on large infrastructure continue to form the basis for the further extension of this projects, PPP institution can enrich legal practice signifi- principle in following PPP projects.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 365 Roundtable 7.4
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
INTERNATIONAL EXPERIENCE OF TAX RULING AND THE POSSIBILITY???? OF ITS IMPLEMENTATION IN RUSSIA
28.05
366 7. 4
367 Roundtable 7.4
MODERATOR SPEAKERS
Sergey Arakelov, Vellore Anandarajan, David John, Deputy Head, Federal Tax Joint Secretary CEE Managing Partner Tax and Service of the Russian (Tax Policy & Legislation) Legal Services, PwC Federation of Department of Revenue, Government of India
Timothy McDonald, Vice President — Finance & Accounting, Global Tax, Procter & Gamble
368 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 INTERNATIONAL EXPERIENCE OF TAX RULING AND THE POSSIBILITY OF ITS IMPLEMENTATION IN RUSSIA
Chirachawee Intachan, Dmitriy Kornev, Secretary, Central Tax Court Director of Tax Administration of the Kingdom of Thailand and Treasury Department, Mobile TeleSystems OJSC
Sergey Ovsyannikov, Peter Reinhardt, Associate Professor of the CIS Tax & Law Leader, E&Y Department of State and Administrative Law, Saint-Petersburg State University
369 INTERNATIONAL EXPERIENCE OF TAX RULING 7. 4 AND THE POSSIBILITY OF ITS IMPLEMENTATION IN RUSSIA
he roundtable discussion was moderated by “Since the introduction of the ‘internal review’ sys- Sergei Arakelov, deputy head of the Federal Tax tem, the number of appeals and disputes submitted to tax Service of the Russian Federation. Speakers authorities has dropped significantly,” Mr Arakelov added. included: Vellore Anandarajan, joint secretary Peter Reinhardt, in turn, presented the formats of on Tax Policy & Legislation of Department of IRS consultations available to tax payers. They include pri- TRevenue in Government of India; David John, managing vate letter ruling, closing agreement, determination letter, partner on tax and legal services, PwC; Chirachawee information letter and oral advice. The expert discussed Intachan, secretary at the Central Tax Court of the King- each of them in detail and explained the rules and proce- dom of Thailand; Dmitry Kornev, director of Tax Admin- dures for getting appropriate help. istration and Treasury Department at “Mobile TeleSys- David John gave an overview of the British system tems” OJSC; Timothy McDonald, vice president on of tax clearance and the system of non-statutory decisions, Finance & Accounting, Global Tax at “Procter & Gamble”; where anyone can address tax authorities and confirm Sergei Ovsyannikov, associate professor of the Depart- one’s legal position. ment of state and administrative law at St. Petersburg Chirachawee Intachan, secretary at the Cen- State University; and Peter Reinhardt, CIS Tax & Law tral Tax Court of the Kingdom of Thailand, and Vellore leader, “E&Y”. Anandarajan, joint secretary (Tax Policy & Legislation) of Tax ruling is widely used worldwide; it is a proce- Department of Revenue in Government of India presented dure of evaluation of tax results by tax authorities following a useful insight regarding the implementation and applica- the transactions (operations) up to their conclusion. Tax- tion of tax-ruling procedures, including mediation. payers ask tax authorities for a legal position on taxation of Timothy McDonald, representative of Procter & a planned transaction and receive preliminary conclusions Gamble, stressed that “in order to make ‘tax ruling’ more on qualifications for the purposes of a certain transaction efficient for a big company, it would be useful to create a (operation). uniform model of interaction with tax authorities within This allows taxpayers to forecast financial the conglomerate and to move to the governmental level of outcomes and determine the amount of tax liabilities. discussion in advance.” At the same time, tax authorities receive information on In his speech, Sergei Ovsyannikov recommended future transactions and, therefore, better understand to consider the experience of foreign colleagues who do business processes of a specific taxpayer or a certain not limit the subjects with the access to “tax ruling,” but industry. Advance tax ruling increases transparency of instead limit the scope of issues that require such appeals. legal regulation and it is an effective way of non-judi- Dmitry Kornev, representative of Mobile TeleSys- cial resolution of tax disputes. Russian tax legislation tems OJSC, noted, “In tax dispute resolution, other coun- lacks the institution of advance tax ruling. However, the tries tend to decrease the number of court procedures. order to explore the possibilities of introduction of the One trend today is the development of out-of-court ways advance tax ruling institution in Russia is mentioned in and mechanisms of tax dispute resolution. The other is the roadmap titled The Improving of Tax Administration, abandonment of post control in favour of the preliminary which was ratified by the government decree dated Feb. or ongoing one. This is the tendency we must take into 10, 2014, No. 162-p. account. Otherwise our business will suffer”. Moderator Sergei Arakelov noted, “During the last Speakers discussed the main conceptual sugges- five years, Federal Tax Service has been purposefully devel- tions, which were developed during the production of the oping out-of-court procedures of tax disputes resolution.” draft law, and examined foreign experience in implementa- In 2009, an institution of mandatory pre-trial appeal was tion of mechanisms of tax ruling in other countries. introduced in legislation, and since 2014, it applies to all tax Study of foreign experience allows developing disputes and issues of registration. a proper mechanism suitable for the Russian tax system.
370 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 371 ROUNDTABLE 7.5
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
GLOBAL RECESSION AND PROSECUTION???? FOR FINANCIAL CRIMES
29.05
372 7. 5
373 ROUNDTABLE 7.5
MODERATOR SPEAKERS
Natalya Shatikhina, Gandolfo Iacono, Managing Partner, General Director, LexisNexis CLC Law Firm Russia & Eastern Europe
374 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 GLOBAL RECESSION AND PROSECUTION FOR FINANCIAL CRIMES
Jonathan Kelly, Partner of the London Office, Cleary Gottlieb Steen & Hamilton LLC
Pavel Livadnyy Vasiliy Pozdyshev, State Secretary — Deputy Deputy Governor, Director, Federal Financial Bank of Russia Monitoring Service (Rosfinmonitoring)
375 GLOBAL RECESSION AND PROSECUTION FOR FINANCIAL CRIMES
he round table discussion was moderated by business support are becoming the main challenges for CLC’s managing partner Natalia Shatikhina. the financial system of a country. Thus, the clearness and The guest speakers included Gandolfo transparency of business arrangements are coming under Iacono, general director of “LexisNexis Russia & pressure from opposite sides. The temptation to increase Eastern Europe”; Jonathan Kelly, partner of the profitability by reducing requirements for financial and TLondon office of “Cleary Gottlieb Steen & Hamilton” LLC; legal reporting is very high. Pavel Livadnyy, state secretary and deputy director of the However, different countries experience the Federal Financial Monitoring Service; and Vasily Pozdy- effects of the global recession in different ways, differing shev, deputy governor of the Central Bank of the Russian in the state of their economies, the level of legal develop- Federation. ment, culture and traditions. Naturally, the response of The global recession has an impact on each and business to the general decline varies from one coun- every economy. An increased financial burden on business try to another. is driving companies to optimize financial costs. Often, this The development of an international legal involves arrangements with questionable transparency and framework for the prevention of financial crime has been legality. At the same time, governments have to support particularly successful in the last 20 years. The integration the increasing burden of social spending. Tax collection of market participants has grown incredibly, meaning an rates, the attractiveness of the investment climate, and increased importance of jurisdictional issues. Therefore,
376 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7. 5
when taking certain steps, each country has to measure its plementation process. The risks of anti-money laundering actions against both international standards and national compliance that banks are exposed to as credit institutions laws of individual countries. are particularly relevant today. The speakers raised the issues of finan- Given that a huge number of Russian disputes cial monitoring of crime and optimization of banking are resolved in the United Kingdom in accordance with costs; discussed the powers of the Central Bank of the English law, Jonathan Kelly’s presentation of some facts Russian Federation for taking supervisory measures about the application of anti-corruption and anti-money directly against governing bodies of a credit institution, laundering laws in the United Kingdom in recent years and the responsibility of bank executives; and spoke was very engaging. about compliance standards and different aspects of Perhaps the most anticipated speaker was Pavel due diligence. Livadnyy who talked about de-risking issues, future The presentation of Iacono Gandolfo was mainly anti-money laundering activities of financial intelligence focused on the scope, approaches to, and methods of due units, and, certainly, the coming capital amnesty. Business diligence, including nation-specific aspects. Of great inter- risks associated with the latest developments in this field est was the discussion on the powers of the Central Bank are truly a terra incognita. Lawyers still have to find safe of the Russian Federation for the evaluation of collateral solutions in this area, and the discussion participants and assets of banks from the perspective of the IFRS im- offered some directions of the search.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 377 ROUNDTABLE 7.6
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
MAIN ISSUES OF NUCLEAR NEW BUILD???? PROJECTS
28.05
378 7.6
379 ROUNDTABLE 7.6
MODERATOR SPEAKERS
Andrey Popov, Ilya Smirnov, Director for Legal and General Counsel, Akkuyu Corporate Affairs and Nuclear JSC Property-related Issues, Director of the Department for Legal and Corporate Affairs, State Atomic Energy Corporation “Rosatom”
380 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 MAIN ISSUES OF NUCLEAR NEW BUILD PROJECTS
Andrey Korolenko, Head of International law Department, JSC “NIAEP”
Ahab Abdel-Aziz, Konstantin Kryazhevskikh, Partner, Gowling Lafleur General Counsel, Rusatom Henderson LLP Overseas JSC
381 MAIN ISSUES OF NUCLEAR NEW BUILD PROJECTS
oundtable was moderated by Andrey Popov, Di- energy projects, which doubtlessly include nuclear new rector for Legal and Corporate Affairs and Prop- builds, have much better chances to be successfully com- erty-related Issues, Director of the Department pleted if they have state financing. for Legal and Corporate Affairs, State Atomic Yet even despite the fact that the state can and Energy Corporation “Rosatom”. should provide financial support, a common problem in RSpeakers of the roundtable discussion on the main NPP construction projects is increased construction cost issues of Atomic Power Stations building projects included amounting to over 200 per cent from the initial planned Ilya Smirnov, legal & corporate affairs director at “Akkuyu value. The second important conclusion is that a project’s Nuclear” JSC; Andrei Korolenko, head of international law success is defined by contractor’s financing proposal. directorate at “NIAEP”; Konstantin Kryazhevskikh, legal It has to be as well grounded and realistic as possible and & corporate affairs director at “Rusatom Overseas” JSC; take into account, among other things, various risks aris- and Ahab Abdel-Aziz, partner and director of the nuclear ing during the NPP construction phase. energy practice at “Gowling Lafleur Henderson” LLP. Apart from the aforementioned financial risks, The panel addressed various ways of financing of the panellists have also identified the following ones: nuclear power plant construction. This can be state-only project delay, changes in project design and additional financing (with budget money from the client or contractor expert appraisals, changes in legislation or requirements state), joint financing by client and contractor using the of regulators, political risks, etc. Only the client state can EPC approach to the construction limited by the construc- take the majority of these risks, and previous experience tion end date. This can be state financing at the first stage of nuclear builds showed that only the projects with state with client’s financing at the second one and future opera- involvement had been most efficient. That is why imple- tion of the NPP by an engineering company, jointly owned mentation of large investment projects like nuclear power by the client and contractor (BOO project). From this, a first plant construction is impossible without the active support conclusion can be drawn that large-scale infrastructure of the state in which this project is carried out.
382 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 383 ROUNDTABLE 7.7
“Gazprombank” (Joint-stock Company)
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
ROLE OF CREDIT UNIONS IN LEGAL ENTITIES’???? BANKRUPTCY: MYTHS AND REALITY
29.05
384 7.7
385 ROUNDTABLE 7.7
MODERATOR SPEAKERS
Ekaterina Trofimova, Alexey Guznov, First Vice-President, Member Head of Legal Department of the Board, Gazpombank of the Bank of Russia, Central Bank of the Russian Federation
386 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ROLE OF CREDIT UNIONS IN LEGAL ENTITIES’ BANKRUPTCY: MYTHS AND REALITY
Rodrigo Kaysserlian, Stuart Lawson, Member of FraudNet Executive Director, Head of UK Business Center, E&Y
Alla Maslennikova, Natalia Peksheva, Deputy CEO, Head of the Department JSC Rosgosstrakh Bank of Tax Instruments Operations, BCS Financial Group
387 ROLE OF CREDIT UNIONS IN LEGAL ENTITIES’ BANKRUPTCY: MYTHS AND REALITY
he roundtable discussion was moderated by Eka- of the topic, as stated in the title, “Take the definition of terina Trofimova, first vice president and mem- bankruptcy itself: there are so many true and false stere- ber of the Board of “Gazprombank”. Opening the otypes that distort the final result of the process and can session, moderator noted the systematic impor- have unpredictable outcomes”. Therefore, the moderator tance of the topic of discussion for economy: suggested to discuss the prospects of banks and financial T“In my opinion, this is the most intriguing topic, institutions and try to find a balance between protecting and in the current macroeconomic conditions it is, per- interests of different sides. haps, the most pressing one, not only in terms of ensuring The agenda included economic, organizational and the success of a certain project or organization or return of legal measures aimed at increasing efficiency of economic investments itself, but from the socio-economic and polit- relations regulation. Current bankruptcy regulation is still ical point of view as well. Bankruptcy becomes front-page nowhere near perfect and requires improvements both at news, it is mentioned by policymakers of the highest rank the legislative and law-enforcement levels. At the same and it often arises on international level. Our discussion is time, effective and efficient bankruptcy procedure is a sign going to extend beyond specific questions, so we tried to of financial and investment well-being of a country. gather a group of prominent speakers representing various Alla Maslennikova presented the statistics on bank- interests, competencies and points of view”. ruptcy in Russia, noting the increased number of such cases Speakers included: Alexei Guznov, head of Legal in arbitration courts. She also spoke about an interesting Department of the Bank of Russia; Rodrigo Kaysserlian, novelty: a procedure of assets replacement regulation. member of “FraudNet”; Stuart Lawson, executive director Еkaterina Trofimova agreed with the speaker and and head of UK Business Center at “E&Y”; Alla Maslenniko- stressed, “Bankruptcy is painted black from the start, but va, deputy chairperson of the Board of JSC “Rosgosstrakh an effective bankruptcy system is a guarantee of economic Bank”; and Natalia Peksheva, head of the Department growth and credit growth revitalization”. of tax instruments operations at “BCS Financial Group”. Alexei Guznov, representative of the mega-regu- Еkaterina Trofimova highlighted the mythological side lator, presented the Bank of Russia’s approach to regula-
388 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7.7
tion of credit organizations’ activities, to 2014 changes in riented. The speaker also proposed initiatives to improve bankruptcy legislation and to consolidation of bankruptcy investors’ position. norms. According to him, the general approach of the “One of the ideas that arose after working with law on bankruptcy does not depend on which organiza- debt market defaults and bonds restructuring is to create tion went bankrupt, but strives for a balance between a public platform for an open restructuring of the public public and private interests, between the interests of part of our companies’ debts under the auspices of the the debtor and the creditor. Speaking of the role of the Central Bank and involving experts and economic stake- Bank of Russia he noted, “There is a myth that the Bank holders that can help to make this process quick and effi- of Russia’s regulation stimulates the banks to use their cient”. The platform is to be called The Russian Creditors’ bankruptcy procedures. This is not quite true. The Bank Club and it will be open for all creditors after a default. of Russia, first of all, maintains financial stability in gen- Rodrigo Kaysserlian shared Brazil’s experience eral and financial stability of individual financial institu- in trials of bankruptcy cases and corruption schemes in tions, reducing the risks and appetites of individual credit courts. He presented several cases studies and stressed institutions”. that such cases require trust and reputation. The speaker explained this policy by a big delay Stuart Lawson, on the contrary, called for new ap- in performance of obligations on mortgages and consum- proaches to solving this problem, without involving the court. er loans, noting at the same time that individual debts “Courts require many resources; therefore, we to banks result from the impact at the local level, at the need to find other solutions. At the same time, everyone level of individuals. To avoid such problems, “The Bank of should play by the same rules. If you restructure your Russia restrains appetites for consumer lending,” Alexei debts in one way and your competitors, another bank, in Guznov concluded. another, the concept of maintaining the value of a legal In her speech, Natalia Peksheva stressed that entity becomes void”. The speaker said that, for example, the Russian financial market is very young, and during in London there is a set of measures allowing to maintain a default the majority of investors are scattered and diso- the value of a specific company or to minimize losses.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 389 ROUNDTABLE 7.8
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
PUBLIC TALK “CAPITAL AMNESTY: GUIDE FOR ACTION”
28.05
390 7. 8
391 ROUNDTABLE 7.8
MODERATOR SPEAKERS
Oleg Fursov, Andrei Makarov, Head of Multi Family Office, Chairman, Committee Financial Group “BCS” for Budget and Taxes of the State Duma of the Russian Federation
392 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 PUBLIC TALK “CAPITAL AMNESTY: GUIDE FOR ACTION”
Mikhail Orlov, Partner — Head of Tax and Legal, Russia & CIS, KPMG
Ekaterina Lazorina, Dmitry Mikhailov, Partner - TLS Leader, PwC Partner, Law Firm “Ivanyan & Partners”
393 PUBLIC TALK “CAPITAL AMNESTY: GUIDE FOR 7.8 ACTION”
he so-called capital amnesty bill, adopted by the need one, yet it will help to relieve you from responsibility, State Duma, raises questions among entrepre- should any problems with law enforcement bodies arise. neurs and lawyers who consult them, but it can According to Mr Orlov, asset declaration law does not still create a comfortable enough environment for increase the degree of trust to the state and does not make those who chose to use it and disengage from the the economy more transparent, yet it does create a “cer- Tfiscal and legal risks connected to the purchase of foreign tain convenience”. property. Such conclusion can be drawn from the panel Ekaterina Lazorina, partner at “PwC”, thinks discussion on capital amnesty organized by “BCS Ultima that the amnesty is connected to the increased informa- Bank” within the framework of the V St. Petersburg Inter- tion exchange between fiscal bodies of various countries national Legal Forum. — both as part of international treaties and automatically The panel’s moderator was Oleg Fursov, head of (its trial version launches in 2017). Ms Lazorina believes the Multi Family Office at “BCS Financial Group”. In his that currently a new environment is emerging with the welcome address, Mr Fursov spoke about international purpose to control those who do not wish to disclose experience of tax amnesties, reasons of the failure of the their foreign activities, so the amnesty provides a unique 2007 tax amnesty in Russia and expectations of the new bill. opportunity to cover certain fiscal and legal risks related Co-author of the bill, Andrei Makarov, chair- to the acquisition of this property. Dmitry Mikhailov, man of the Committee for Budget and Taxes of the State partner at “Ivanyan & Partners” law firm, emphasized Duma, chose not to answer the main question whether the importance of the Fiscal Code amendment, which there will be those willing to take advantage of the law. exempts from tax all property but money after the liq- “Trust to the state and tax system is not defined by the uidation of a controlled foreign company. According to bill,” explained the deputy. him, return of assets to Russia is further facilitated by Mikhail Orlov, head of Tax and Legal Consult- the risks of claims of foreign tax authorities against the ing, Russia & CIS at “KPMG”, compared foreign property backdrop of sanctions and the need to cut the costs of declaration with an insurance policy: you will probably not asset administration.
394 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 395 ROUNDTABLE 7.9
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
WHICH PENSION SYSTEM IS RIGHT FOR MODERN RUSSIA?
28.05
396 7.9
397 ROUNDTABLE 7.9
MODERATOR SPEAKERS
Yuriy Voronin, Alexander Egorov, Head of Staff of the Accounts Head of Social Security Section Chamber of the Russian of International Labour Federation Standards Department, International Labour Organization
Elena Machulskaya, Professor, Lomonosov Moscow State University
398 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 WHICH PENSION SYSTEM IS RIGHT FOR MODERN RUSSIA?
Hans-Horst Konkolewsky, Almas Kurmanov, Secretary General, Chairman of the Committee International Social Security for Medical Service Payments, Association Ministry of Healthcare and Social Development of Kazakhstan
Konstantin Ugryumov, Vladimir Chistyukhin, President, National Association Deputy Governor of the Bank of Non-State Pension Funds of Russia, Central Bank of the Russian Federation
399 WHICH PENSION SYSTEM IS RIGHT FOR MODERN RUSSIA?
evelopment of the Russian pension system and the pension system in this form has a low replacement its optimal model in the modern social and rate. To date we fall short of 40% replacement rate — the economic situation was discussed today by minimum level required by Convention 102 of the Inter- participants of the roundtable moderated by Yury national Labour Organization. This situation gives an Voronin, Head of Staff, the Accounts Chamber of impression of an endless circle”, stressed the head of the Dthe Russian Federation, as part of V St. Petersburg Inter- Accounts Chamber. national Legal Forum programme. The expert emphasized that the multi-level pen- The following experts took part in the discussion: sion system was chosen in Russia in 2002, although heated Alexander Egorov, Head of Social Security Section of Interna- debates emerged around the issue whether the cumulative tional Labour Standards Department, International Labour component fits this model. Yury Voronin reminded that Organization; Hans-Horst Konkolewsky, Secretary General, currently citizens may choose between the insurance and International Social Security Association; Almas Kurmanov, cumulative components, since the latter became voluntary Chairman of the Committee for Medical Service Payments, from 2014 , and the former is used as mandatory provision. Ministry of Healthcare and Social Development of Kazakh- People tend not to think about the future, that is why they stan; Elena Machulskaya, professor, Lomonosov Moscow do not want to participate in this model independently and State University; Konstantin Ugryumov, President of the Na- voluntarily, stressed Yury Voronin. tional Association of Non-State Pension Funds; and Vladimir The experts also touched upon an issue of the Chistyukhin, Deputy Governor of the Bank of Russia. required balance between labour market, financial market Yury Voronin drew attention of the experts to and budgetary model. They expressed an opinion that the urgent issues of selecting a pension system model and cumulative component does not provide safeguards for emergent controversies in the expert community. “If we pension funds in real terms, and the pension fund lacks re- look at the relevant agenda of the discussion, we will see sources to perform insurance liabilities. In this regard the that the same question is negotiated again and again: the required formation of long-term money extends the budget financial sector is concerned that the social insurance transfer. At the same time, in Vladimir Chistyukhin’s opin- model with cumulative elements is expensive and defi- ion, Russia should be more than satisfied by preservation cit-affected, but budget spending that the state has to of the cumulative component. provide has been growing from year to year with the ageing “We need to remember that practically all previous population. This is a general message. On the other hand, years the state provided minimal annual yield for people to
400 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7.9
be paid at least something. We will need a bigger number of to reconsider the roles of these people in generation of fi- steps to adjust it and realize if we are right when we invest nancial resources. What should be done if a person worked in infrastructure bonds. I believe the model can be right in for a short period or when a family loses the breadwinner? the long run when non-state pension funds and managing There should be a basic social insurance pension and an companies are not bound by rigidly formalized require- additional cumulative component. We need to perceive ments. They have their internal audit and controls. But the it as an additional opportunity for the individual to have fund must ensure maximum stability of its reserves through a comfortable income in retirement”. The experts also a mechanism of warranties”, said Vladimir Chistyukhin. stressed that discussion of the pension system reforms As for accountability of managing companies, the should be on a continuous basis. “I believe financing is not society must make claims to non-state pension funds, and most important, rather, it is significant that the retirement it should also be capable of referring to the Criminal Code. age corresponds to the economy and society. It is neces- This will require significant changes in legislation. At the sary to discuss at least the retirement age reform. There same time we should not forget that not all budgetary ob- is a question of equality and difference between men and jectives are related to increasing yield for pensioners; this women, what is the basis for it? How such reforms can means that the money can be used for other purposes, not be implemented? Our recommendation is to implement related to pensions, said Vladimir Vhistyakov. such reforms during 20-30 years, and not use it as a shock “In order to have the voluntary component, em- therapy”, concluded Secretary General of the International ployers need to have available surplus funds and people Social Security Association. need to develop a habit of insuring their old age. Partly, this Drawing conclusions of the discussion, Yury Vor- does not exist because historically people do not trust the onov stressed that people should have a possibility to retire state”, concluded Deputy Governor of the Bank of Russia ahead of time, they cannot be dismissed due to the costli- The experts also discussed a relevant topic of ness of pension provision. He said that the only possibility retirement age. Hans-Horst Konkolewsky noted that of implementing adequate pension reforms is indexation every person must be guaranteed a basic social insurance of pension rights not on the basis of wage increase, but pension. “How can we balance the adequacy of the pension retirement age factor. The most important thing, accord- system with its sustainability? There are several ways to ing to the Head of the Accounts Chamber, is to restore the do it; we need to review its structure, the roles of individ- tradition of deep professional gerontological research that uals, the state, employers and employees. It is necessary can show when people need to retire.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 401 ROUNDTABLE 7.10
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
DEVELOPMENT OF JAPANESE-RUSSIAN INVESTMENT PROJECTS: PRACTICAL ISSUES
29.05
402 7.1 0
403 ROUNDTABLE 7.10
MODERATOR SPEAKERS
Vasily Rudomino, Rafael Valiullin, Evgeniy Zhilin, Senior Partner, Law Firm Government Relations Managing Partner, “ALRUD” Director, Hitachi Construction Law Firm “Yust” Machinery Eurasia Manufac- turing
404 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 DEVELOPMENT OF JAPANESE-RUSSIAN INVESTMENT PROJECTS: PRACTICAL ISSUES
Eiji Kobayashi, Partner, Anderson Mori & Tomotsune
Egor Nuzhdin, Artem Sokhikyan Tomohiro Tsuchiya, General Counsel - Russia & Deputy Director of the Depart- Partner, Mori Hamada CIS, AGC Glass Russia ment of Direct Investment, & Matsumoto Export and External Economic Action Promotion, Ministry for the Development of the Rus- sian Far East
405 DEVELOPMENT OF JAPANESE-RUSSIAN INVESTMENT PROJECTS: PRACTICAL ISSUES
enior partner of the “ALRUD” law firm Vasily development of the Russian Far East; plant construction Rudomino appeared as a moderator of the projects in Russia — experience of Hitachi; prospects of round table on development of Japanese-Rus- development of Japanese-Russian investment projects sian investment projects and its practical — opinions of lawyers of Japanese and Russian law issues. firms; and the main obstacles for the development of SThe following speakers participated in the Japanese-Russian investment projects. discussion: Rafael Valiullin, GR director at “Hitachi The moderator of the round table Vasily Ru- Construction Machinery Eurasia Manufacturing”; domino opened it. In his opening remarks, Mr Rudomino Evgeniy Zhilin, managing partner at “YUST” law firm; Eiji covered indicators of trade between Russia and Japan Kobayashi, partner at “Anderson Mori & Tomotsune”; as well as import — export structure between these Egor Nuzhdin, general counsel (Russia & CIS) at “AGC two countries. The moderator pointed out a number of Glass Russia”; Artem Sokhikyan, deputy director of the outstanding and successfully implemented investment Department of direct investment, export and external projects of Japanese companies in Russia: automotive economic action promotion at Ministry for the Develop- plants of Toyota and Nissan near Sankt-Petersburg, ment of the Russian Far East; and Tomohiro Tsuchiya, Mitsubishi plant in Kaluga region, newly built Hitachi partner at “Mori Hamada & Matsumoto”. excavators’ plant in Tver region, Yokohama tire plant in In the course of the round table its participants Lipetsk region. At the same time, Mr Rudomino paid at- discussed several issues, as practical problems of tention to obstacles that hinder investment activities of Japanese investments into the Russian economy and Japanese companies in Russia. Considering Russian Far new opportunities, old problems and risks; plans for East projects, there are two main obstacles: low market
406 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 7.1 0
capacity comparing to regions of Central Russia and into Russian regions and supposed that such projects will Ural, and underdeveloped infrastructure. As a common increase number of Japanese investors in Russia. problem of all Russian regions, Mr Rudomino named Japanese experts expressed their readiness for frequently amended and unpredictable legislation in the overcoming difficulties and working on projects in Rus- field of commercial activities results in material inves- sia. Mr Kobayashi pointed need for close collaboration tors’ losses. Mr Rudomino also named main driver for between Russian and Japanese lawyers when working increase of investments into Russia — predictable rules on cross-border transactions. Mr Tsuchiya ascertained of play and reduction of administrative hurdles. interest of Japanese business in working in Russia de- Speakers covered different aspects of collabo- spite the political situation and economic sanctions. At ration between Japanese and Russian companies during the same time, he stressed that some Japanese compa- their presentations. For instance, Rafael Valiullin shared nies hesitating to enter the Russian market due to pos- experience of construction of Hitachi excavators’ plant sible bureaucratic hurdles. Egor Nuzhdin drew attention on the territory of “Raslovo” industrial park located in to the problems investors experience when carrying out Tver region. At the same time, representative of Minis- “greenfield” industrial projects: absence of clear regula- try for the Development of the Russian Far East Artem tions on land transactions and problems with approval of Sokhikyan addressed his speech to Territories of Accel- resources supply (first of all, electricity and gas). erated Development (hereinafter — the “TAD”) in the Far Many round table participants remarked need East. Realization of projects on the TAD means oppor- for taking into account difference in mentality and tunity to receive tax and customs preferences, network approach to running the business in Russia and Japan. access, as well as simplified procedure for receiving Japanese companies need quite long period for getting building permit. internal approvals on all levels, however, once the deal Topics covered during the round table came was concluded, another party may rely on Japanese home to its participants: they noted high potential for partners. developing of Russian-Japanese relations, mutual invest- Finally, all the participants noted importance of ments and sales turnover. Evgeniy Zhilin marked practical holding events alike the round table for sharing opin- importance of creating TAD for developing investments ions, experience and elaborating cooperative initiatives.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 407 ROUNDTABLE 7.11
NORILSK NICKEL
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
DEVELOPMENT OF REGIONS AND INVESTMENT CLIMATE: NEW LEGAL SOLUTIONS
29.05
408 7.1 1
409 ROUNDTABLE 7.11
MODERATORS SPEAKERS
Elena Bezdenezhnykh, Oleg Fomichev, Sergey Valentey, Deputy General Director — Secretary of State — Academic Adviser, Head of Corporate Governance, Deputy Minister of Economic Plekhanov Russian University Asset Management and Legal Development of the Russian of Economics Unit, OJSC Norilsk Nickel Federation
Vladimir Emelyantsev, Yury Lapshin, Deputy Director, Institute Deputy Chairman, Government of Legislation and Comparative of the Krasnoyarsk Region Law under the Government of the Russian Federation
410 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 DEVELOPMENT OF REGIONS AND INVESTMENT CLIMATE: NEW LEGAL SOLUTIONS
Jiansheng Li , Anna Izotova, Leonid Akimov, Dmitriy Pronchatov, Official of Political Department, Director of Legal Department, Head of Legal Department, Deputy Head of Federal Ministry of Justice of the Federal Tariff Service of the JSC “Russian Grids” Road Agency People’s Republic of China Russian Federation
Natalia Omelekhina, Dmitriy Pogorelyy, Alexander Zavtrik, Seung Min Lee, Deputy Head of Government Director, State-Legal Head of Legal Department, Attorney, Jipyong Law Firm of Novosibirsk Region — Department of the Yamal- OJSC “MMC “Norilsk Nickel” Minister of Justice Nenets Autonomous District of Novosibirsk Region
411 DEVELOPMENT OF REGIONS AND INVESTMENT CLIMATE: NEW LEGAL SOLUTIONS
s part of the round table led by Elena Bez- Justice of the People’s Republic of China; Anna Izotova, denezhnyh, deputy general director and head head of Legal Department of the Federal Tariff Service; of Corporate, Property and Legal Matters of Leonid Akimov, director of the Legal Department of PJSC PJSC “MMC “Norilsk Nickel”, and Vladimir “Rosseti”; Dmitry Pronchatov, deputy head of the Federal Yemelyantsev, deputy director of Institute of Road Agency; Yury Lapshin, deputy of the Krasnoyarsk ALegislation and Comparative Law under the Government Region Government; Natalia Omelekhina, deputy of the of the Russian Federation, as the discussion modera- Novosibirsk Region Government, Minister of Justice of tors, there have been debated the pros and cons of such Novosibirsk Region; Dmitry Pogorely, director of the mechanisms to attract investments into the regions as State-legal Department of Yamalo-Nenets Autonomous special economic zones, public-private partnership, Region; Alexander Zavtrik, director of the Legal Depart- regional investment projects and areas of advanced state ment of PJSC “MMC “Norilsk Nickel”; Song Min Lee, social-economic development. The round table featured barrister of “Jipyong” law firm. presentations by Oleg Fomichev, state-secretary, Dep- During the debate upon the need for advanced de- uty Minister of Economic Development and Trade of the velopment of the territory of the Arctic zone, the Far North, Russian Federation; Sergey Valentey, supervisor of the Eastern Siberia and the Far East, Oleg Fomichev expressed Russian Economic University of G.V. Plekhanov; Ziansh- the thesis of the feasibility of setting up a unified integrat- en Lee, advisor of policy department of The Ministry of ed system of all forms of regulatory projects.
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The representatives of the Government Au- as well as the improvement of mechanisms of the state thorities of Krasnoyarsk Region, Novosibirsk Region administering of regional projects; on drafting of the sys- and Yamalo-Nenets Autonomous Region have shared tem of investment projects with regard to the introduction their experiences of the implementation of investment of tax exemptions at the stage of building of the investment projects; the representatives of the Ministry of Justice projects; on termination of limitations on disposal of the of the People’s Republic of China and South Korea have legal regime of the regional investment project by partici- described best world practices. pants of consolidated group of taxpayers and participants To the attention of the community of experts there with separate structural units; on lifting the moratorium was brought by Alexander Zavtrik, the comparative legal on creation of territories of the advanced development in analysis of the present legislative constraints in mecha- other regions of the Russian Federation, exclusive of the nisms of attraction and retention of regional investments Far East Autonomous Region and monocities. as well as solutions for improvement of the investment The mentioned solutions were considered to be and legal regimes. sent to the State Duma, Federal executive government Participants have developed several solutions bodies and public communities of business society. upon changes to Investment legislation: on developing the unified system of regulatory control of investment activity,
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 413 ROUNDTABLE 7.12
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015
WORLDWIDE LEGAL SERVICES FOR HIGH-NET-WORTH INDIVIDUALS
29.05
414 7.1 2
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MODERATOR SPEAKERS
Alessandro Varrenti, Saverio Lembo, Yulia Chekmaryova, Partner, CBA Studio Legale e Partner, Baer & Karrer Head of Non-profit Organi- Tributario Law Firm Law Firm sations Practice, Ivanyan and partners, Attorneys-at-law
Silvije Cvjetko, Partner, Wolf Theiss Law Firm
416 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 WORLDWIDE LEGAL SERVICES FOR HIGH-NET-WORTH INDIVIDUALS
Hardy Fischer, Karl Binder, Olivier Peclard, Partner, P+P Poellath+Partners Partner, Wolf Theiss Law Firm Partner, Bonnant, Warluzel & Law Firm Partners Law Firm
Martin Lewis, Andrey Babiyan, Dmitry Galkin, Partner, Rubinstein Phillips Head of “Alfa Wealth” Pro- Executive Director, Lewis Law Firm gramme, Managing company Gazprombank Private Banking “Alfa Capital”
417 WORLDWIDE LEGAL SERVICES FOR HIGH-NET-WORTH INDIVIDUALS
en experts from seven jurisdictions shared their in the applicable EU directives, are very broadly formulat- experience in providing legal services to private ed which results in an increasing number of transactions clients with international business and person- verified and reported as suspicious in Europe, in particular, al interests. The panel focused on the issues due to the identity of ultimate beneficial owners. He also relevant to the clients from Russia. In their drew attention to the fact that control over the transactions Tpresentations summarised below the panellists discussed had been in fact passed by the state bodies to the agents a number of important issues and highlighted the latest and intermediaries, including banks. In Switzerland, it is trends. also obvious that there is a tendency towards tightening Combating money laundering and terrorism legislation in the field of combating money laundering. financing in the European Union and Switzerland: verifica- In particular, as pointed out by Saverio Lembo, partner tion of transactions at “Bär & Karrer” law firm in Switzerland, from 1 Janu- EU money laundering legislation has been consid- ary 2016 the tax offences will be considered as predicate erably extended over the last twenty years, and currently offences for the purposes of money laundering. That might has a strong influence on the activities of the clients and change a lot in the compliance practices. their advisors. Alessandro Varrenti, partner at “CBA Studio Major recent developments in the Russian legisla- Legale e Tributario” law firm in Italy and the moderator of tion: currency controls, “Russian FATCA” and the rules on this panel, noted that the AML requirements established controlled foreign corporations
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Russian regulations in those fields develop along approaches to the wealth management for private clients. the lines set by the European and the US precedents, Tax issues, likely to be of interest to Russian although some peculiar features of the Russian legislation private clients, have been raised by Hardy Fischer, partner deserve special attention. Yulia Chekmaryova, head of at “P + P Pöllath + Partners”, Germany; Karl Binder and Non-profit Organisations Practice at “Ivanyan and Part- Silvije Cvjetko, partners at “Wolf Theiss” law firm, Austria; ners”, touched on Russian currency control and currency and Olivier Peclard, partner at “Bonnant, Warluzel & Part- regulations. While old-fashioned and redundant require- ners” law firm, Switzerland. Hardy Fischer spoke about the ments of the currency regulations are being gradually advantages of the German tax legislation in terms of acqui- abolished, certain legislative initiatives aim at tightening sition of real estate by foreign nationals (reduced tax rates control over foreign assets of Russian residents. The and limited tax liability). Karl Binder proceeded by describ- requirements of tax legislation are becoming stricter as ing Austrian jurisdiction as one of the most favourable and well: Russian tax residents now are obliged to pay tax on attractive for investments due to the absence of inher- undistributed income obtained from controlled foreign itance and gift taxes and a relatively small real estate tax. companies, while foreign banks are required to disclose in- Forfait tax regime available to the permanent residents of formation about foreign accounts of Russian tax residents Switzerland was discussed along with German and Aus- (the Russian equivalent of FATCA — Foreign Account Tax trian taxation. Forfait regime often enables to reduce the Compliance Act). These changes significantly influence the amount of taxes payable since the tax base is calculated
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 419 420 ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 based on the taxpayer’s incurred living expenses instead of Since representing private clients does not taxpayer’s income. Silvije Cvjetko from the Croatian office only involve collaboration of professionals from differ- of Wolf Theiss outlined the peculiarities of Croatian tax ent countries but also from different areas of practice, legislation concerning investments into real estate. banking representatives, Andrey Babiyan, head of “Alfa Martin Lewis, partner at “Rubinstein Phillips Wealth” direction at “Alfa Capital”, and Dmitry Galkin, Lewis”, UK, spoke about the trust, one of the most executive director of “Gazprombank Private Banking”, developed and internationally recognized creations of spoke about legal issues they encounter while providing the English law. Trusts allow accumulating wealth and services to their private clients. In particular, the clients transferring it to an efficient assets manager with a high seek advice on matters related to the purchase of real es- level of protection from any infringement by a third party. tate, taxation, opening foreign bank accounts, and assets In his speech, Mr Lewis described the main principles structuring. Mr Galkin and Mr Babiyan also presented the that might be useful to legal practitioners from civil law private wealth programmes offered by their respective countries in their work with trusts. He also pointed out banks. They identified particular areas where they have the risks that may arise in case of implementation of to cooperate closely with law firms and explain how this trusts in Russia. cooperation is arranged.
ST.PETERSBURG INTERNATIONAL LEGAL FORUM 2015 421 ПЕТЕРБУРГСКИЙ МЕЖДУНАРОДНЫЙ ЮРИДИЧЕСКИЙ ФОРУМ 2015
422 2015 ФОРУМ ЮРИДИЧЕСКИЙ МЕЖДУНАРОДНЫЙ ПЕТЕРБУРГСКИЙ