Practice definitions by YUST Law Firm partner Anna Kotova-Smolenskaya at the BestLawyers.com published
Anna Kotova-Smolenskaya, Partner of YUST Law Firm, subject to the request of the editors office of the Best Lawyers international guide prepared a specification of the Government Relations Practice and Government Practice that were consequently published on the Best Lawyers website. The target audience of this information is represented by foreign corporate lawyers and businesspeople that want to be acquainted of the legal “rules of the game” in Russia and understand which consultant shall be chosen for business in Russian.
It is important to point out that the abovementioned practices are also interesting because the Russian legislation does not contain their description although de-facto they exist, develop and are extremely significant for the business. The matter is that the Government Relations Practice covers all the issues that are usually settled in western countries by means of lobbyism legislation. As for the Government Practice, it is a wide concept that includes the full range of issues related to state regulation of the relationships between the parties in a number of areas. In such a way Anna Kotova-Smolenskaya presented the information valuable not only for foreign clients desiring to become acquainted of the “worldview” in the Russian jurisdiction with regard to these two practices, but also rather informative for Russian lawyers. The subject of the discussion is the business environment where Russian lawyers live and work and that keeps its dynamic development in our country.
The Best Lawyers is and international guide for law firms’ clients, with main office in the USA. The researchers of the Best Lawyers organize annual inquiry and determine on the basis of these enquiries the best lawyers for every law branch in different jurisdictions. Lawyers fr om YUST Law Firm are among the best in the list of the Best Lawyers year after year.
Please find below the English version of both specifications; the original version may be found on the Best Lawyers webpage (it is necessary to choose in the menu Russian jurisdiction and the name of the relevant practice); the Russian version is given in our site here.
Government Relations Practice – how to promote the interests of individuals and corporations, as well as public associations, in governmental authorities with the purpose to achieve adoption of desirable decisions.
Lobbyism in Russia exists de facto and develops actively, but is not governed by the law in any way. There is not even a legislative definition of lobbyism, not to mention any rules governing the conduct of professional lobbyists. General rule: practically any means of influence on lawmakers and officials by business and other interest groups are admissible - unless inconsistent with the criminal code and, to a certain extent, with informal ethical rules. Meanwhile, the Government Relations practice in Russia has already been formed as of today and requires understanding in every detail.
In general, a lot of specific actions may be required for achievement of the desired goals, including influence on the public opinion, the sentiment and viewpoints of leaders in the relevant branch, including certain officials. In the end, the purpose of all efforts comes down to influence on lawmaking. It concerns both federal laws and regional and municipal legislative acts. In some cases, expert support of preparing executive acts may also be required.
Officials and lawmakers give ear to representatives of lobbying structures, since they are usually far more competent in the relevant branches. In Russia there is a number of structures representing the interests of players in different fields. In particular, it is the Russian Union of Industrialists and Entrepreneurs, Russian Bankers Association, Chamber of Commerce and Industry, Russian Gas Community, Russian Fuel Union, National Association of Stock Market Traders, Union of Alcohol Producers and others. They are trying to build themselves into the system of governmental decision-making on an institutional basis.
Corporations and nonprofit organizations hire special employees (usually lawyers) that specialize in the relevant issues in the interests of their employers. Independent consultants (such as law firms) work in the same way, but they generally are involved in many related issues and often have a much deeper understanding of the client’s problems, since this is what they deal with for most of their working time.
A consultant in the field of Government Relations, apart fr om deep understanding of the law branches in question, must possess a number of special competences. They include: knowledge of business customs and tendencies in the field; knowledge of judicial practice in the field; knowledge of decision-making procedures of legislative authorities and state apparatus. Finally, successful law-making experience is important - that is, preparation of draft laws and other acts that after approval by officials in principle are subject to both political and legal examination. It should be mentioned that in Russia domestic law firms are usually strong in this field - they usually possess considerable experience of government relations activity support including law-making.
Government practice is involved more or less in any case wh ere business needs include cooperation with state authorities, which regulate the respective business field. In general, legal relations between businesses are regulated by the Civil Code of the Russian Federation. But in some cases of business and public relations there are specific features which affect people`s interests, as well as those of the state and businesses themselves and therefore require special regulation apart fr om the civil legislation. Exactly such cases are handled by special state regulators. Thus, you will interact with their representatives.
The best way to show how this system works is through a description of business needs and services rendered by a legal consultant in government practice. A variety of these can be classified in two types. The first one is applied services connected with access to state services necessary for business activities “on the ground”. For instance, registration of a right to real estate or intellectual property, obtaining or renewal of a license, etc. The second type of needs and services is establishing the “rules of the game”, i.e. changing the normative and regulative field in which the client`s business will be functioning thereafter (or the interest groups relating to the client), in other words, rule-making.
There should be a separate mention also to a consulting service of supporting clients in obtaining regulators` interpretations. It is not a unique case wh ere the decision cannot be made because of uncertainty or contradictions in norm construction. To avoid potential problems one might want to have official interpretation from the respective regulator. This is per se the third type of services which helps the client in resolving certain business issues, as well as de facto forms the practice of existing norms construction.
There are intersectoral and sectoral regulators. The first ones are bodies regulating general economic questions. They do not affect decision making process as to certain practice questions, and their influence lies within macroeconomic conditions. These bodies are the Ministry of economic development, Ministry of finance. Second ones also work in the macroeconomic field but focus on creating normative regulation within the framework of a separate industry branch or certain questions. These are such federal bodies, as the Bank of Russia, Ministry of energetics, Ministry of transport, Ministry of agriculture, Ministry of health, Ministry of industry and trade, Ministry of communications and mass media and other.
The only body from the above mentioned ones both performing rule-making and rendering state services is the Bank of Russia. The Central Bank is the so called mega regulator of the financial market in Russia. It is in charge of banking, as well as insurance, securities market, non-state pension funds, microfinance organizations sector and many other. Special departments within the Bank of Russia perform regulation, control and supervision over respective sectors. The Bank of Russia also adopts normative documents, i.e. the “rules of the game” for supervised sectors.
Other bodies` structure includes federal services and agencies which do not create normative framework or state policy, and only render state services and perform supervision. For instance, Ministry of economic development creates norms and rules, while its subordinate Federal service of state registration, cadastre and cartography renders state services (including licensing, registration of rights to real estate) and carries out control over sectoral legislation observance. All in all, there are over 50 subordinate federal services and agencies under federal ministries.
Our experience shows that all important sectors are regulated in Russia rather well and reasonably, but to be successful one needs to be acquainted both with sectoral legislation and internal “rules of the game” of the state officials regulating the sector, wh ere one is developing her/his business. We note that the development of regulation system goes on, what can be easily seen in certain sectors. For instance, recently there has been strengthening of the influence of the Federal service for intellectual property. The role of the Service is enhanced with growth of the business activity in the field of intellectual property transactions. Nowadays it is officially discussed, whether there should be a single mega regulator on the basis of the Service in the intellectual property sphere.
What consultant do you need? Primarily, the consultant that has explicit knowledge of the sector and understands who and how regulates it in Russia. It is very important that your consultant not only has knowledge of sectoral legislation, but also understands the logic and algorithm behind the state officials` work in respective government bodies – otherwise the project will develop slower than it could. Perhaps, a truly reliable legal consultant should be acquainted with the sector, understand your needs, as well as have experience in resolving problems similar to those expected in your project.