Russia Country Profile

Judicial System

Individual Corruption

More and more people in Russia choose to go to courts in order to resolve disputes, and courts rule in opposition to the state to a larger extent than before. According to Transparency International's Global Corruption Barometer 2009, the judiciary in Russia is prone to corrupt practices. The courts are reported to be more corrupt in the lower echelons of the judicial hierarchy, according to the Bertelsmann Foundation 2010.

According to Freedom House 2009, Russia's reformed criminal procedure code has allowed jury trials in most of the country since 2003. While juries are more likely than judges to find defendants not guilty, these verdicts are frequently overturned by a higher court, which can send a case back for retrial as many times as necessary to achieve the desired outcome.

Business Corruption

The judicial system is still evolving in Russia. The judiciary is independent by law, but unbiased dispute resolution can still be hard to obtain for companies, especially in the regional and local courts where judges can be subject to political pressure. Judges will in some cases trade favourable court rulings for bribes. Small improvements in the level of corruption in the judiciary between the period from 2002-2007 have been reported. Hence, the average bribe to obtain justice in the court decreased from RUB 13,964 to RUB 9,570 in 2005.

According to the Bertelsmann Foundation 2010, in surveys, businesspeople regularly state that court cases against state agencies are more likely to be unfair than cases against rival companies.

To solve investment or trade disputes in Russia, foreign lawyers often refer foreign companies to international arbitration in Stockholm or to courts abroad. However, the problem is that the decisions taken abroad still have to be enforced in Russia. The bailiff system of enforcing court decisions is still not effective, and the bailiff ultimately reports to the Ministry of Justice and not the courts. Consequently, the courts can do little to ensure the actual enforcement of decisions. On some occasions the bailiffs opt not to enforce specific court decisions. Freedom House 2009 reports that only half of Russian court decisions are actually implemented, and creditors typically receive only 20% of what they are owed, according to the Court Bailiff Service.

Political Corruption

Political interference in the selection of judges for individual cases is reportedly the norm. In many instances, judges are pressured to decide in favour of state institutions, or feel associated with the state institution in question. This perception is supported by the findings of the former German justice minister Sabine Leutheusser-Schnarrenberger in Council of Europe Allegations of Politically-motivated Abuses of the Criminal Justice System in Council of Europe Member States 2009 report, in which she alleges widespread political abuse of the Russian courts. The report reveals that the practice of the so-called 'telephone justice' - an official calling and telling a judge how to rule - has evolved for the worse. Hence, according to Leutheusser-Schnarrenberger, Russian judges have become so worried about making a mistake that they call the officials themselves to ask for instructions. Furthermore, the report alleges that defence lawyers are often subjected to searches, seizures and 'other forms of pressure'. Nonetheless, at the same time, the report acknowledges some progress in the judicial system, such as salary raises for judges to reduce their susceptibility to corruption.

In the higher political levels, Russia has seen a number of cases of selective enforcement of law. The most prominent case is that of Mikhail Khodorkovsky, who was sentenced to 8 years in prison on charges of fraud and tax evasion. In the trial, formal court proceedings were violated in the interest of the government, thus revealing the executive influence over the legal system. Critics of the Kremlin argue that the trial was politically motivated, because Khodorkovsky posed a potential threat to President Putin. Khodorkovsky is now on trial on new embezzlement and money laundering charges and faces up to 22 more years in prison if convicted, as reported by ABC News. Another prominent case regards the 'Three Whales' furniture company, where a judge reported being pressured to convict the head of the furniture company. The judge lost her job following the subsequent unravelling of the scandal.

In 2008, prosecutors filed charges against 12,000 officials accused of corruption, and a senior prosecutor said government officials' income from corruption is equal to about one-third of Russia's national budget, according to The Washington Times. In February 2009, the deputy head of the Russian Supreme Court, Alexander Karpov, resigned after his son was arrested on bribery charges. In addition, a senior official from the Federal Financial Monitoring Service, Russia's financial watchdog, was arrested on bribery charges in 2008, while in February 2009 Finance Minister Alexei Kudrin was accused of large-scale theft of state funds by a senior prosecutor.

The GRECO Evaluation Report on the Russian Federation 2008 recommends that Russia strengthens the principle of judicial independence in practice, in particular, in relation to recruitment and promotion procedures and the exercise of judicial functions.

Frequency

The World Bank & IFC: Doing Business 2010:
- Enforcing a commercial contract in Russia requires a company to go through 37 procedures, taking 281 days at a cost of 13.4% of the claim.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the independence of the judiciary from influences of members of government, citizens, or companies a score of 2.7 on a 7-point scale (1 being 'heavily influenced' and 7 'entirely independent').

- Business executives give the efficiency of the legal framework for private companies to settle disputes and to challenge the legality of government actions and/or regulations a score of 2.9 and 2.7 respectively on a 7-point scale (1 being 'extremely inefficient' and 7 'highly efficient').

Transparency International: Global Corruption Barometer 2009:
- 36% of households surveyed consider the judiciary to be 'extremely corrupt'.

- 13% of households who had contact with the judiciary in 2008 report to have paid a bribe.

- Citizens give the judiciary a score of 4.5 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2009:
- Approximately 29% of companies surveyed believe that the court system is fair, impartial and uncorrupted.

EBRD & World Bank: Life in Transition Survey - Russia 2007:
- 5% of household respondents claim they 'always/usually' bribe the courts.

- 65% of household respondents state they 'distrust' the judiciary.

EBRD & World Bank: BEEPS Russia 2005:
- 8% of companies surveyed stated that bribes are frequent in dealing with courts, up from 6% in 2002.

- Slightly more than 30% of the companies surveyed reported that the functioning of the judiciary poses a problem for conducting business.

- 35% of companies stated that they were confident that the legal system would uphold property and contract rights.