# US-Russia Code of Business Conduct

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**Foreword
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These*Basic Guidelines for Codes of Business Conduct* have been developed bythe Russian Chamber of Commerce and Industry in cooperation with theU.S.-Russia Business Development Committee (BDC).  These *Guidelines* reflect extensive input from Russianand American trade organizations and businesses provided in the course of roundtables and discussions conducted in Russia and United States.
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TheBDC will work together with the Russian Chamber as well as Russian governmentand U.S. government agencies and international organizations to supportimplementation of the Guidelines in Russia.  Already, the BDC has reached agreement with regional andcity officials on a pilot project in Novgorod.
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Questionscan be addressed to:
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**VladimirA. Bykov**
RussianChamber of Commerce and Industry
Moscow,Russia
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tel.     095-929-0230
fax      095-929-0166
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**IgorY. Abramov**
U.S.Department of Commerce
Washington,DC
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tel.       202-482-1832
fax       202-482-3042
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**AndreiP. Dolgorukov**
Ministryof Trade
Moscow,Russia
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tel.      095-950-1779
fax      095-950-1780
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**Basic Guidelines 
**for 
**CODES OF BUSINESS CONDUCT 
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**Introduction**
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Intoday=s interconnected andinterdependent world, where borders between states are becoming increasinglytransparent, principles in business conduct are becoming criteria for buildinga good reputation in the international business community; they are the basison which first impressions are formed and ongoing relationships maintained. 
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Thepurpose of this set of guidelines is to articulate general principles andstandards that have been accepted in international business transactions.  Although these principles applygenerally, they are not intended to be an all encompassing set of businesspractices and corporate principles. They must be adopted and implemented on a sector‑by‑sector andenterprise-by-enterprise[if !supportFootnotes]>[1][endif]>  basis to take into account applicablelaws, regulations, and other specific circumstances (such as the size of theenterprise).  
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**[if !supportEmptyParas]> [endif]>
**Principles in Personal and Professional Relations
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Nolaws or contracts can anticipate the possible vicissitudes of life.  Very often an entrepreneur must make adecision based on the prompting of common sense and conscience.  The key is to embody ethical and moralprinciples into personal and professional relations, and remember to:
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C         always do businesswithin one=s means;
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C         have respect for thepartners and participants in a shared business venture;
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C         refrain fromviolence or the threat of violence as methods of achieving business success;
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C         resist crime andcorruption, and do one=s part to see that crime and corruption become unprofitablefor everyone; and
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C         live up to the trustplaced in you; trust is the foundation of entrepreneurship and a key tosuccess.  Endeavor to earn areputation for integrity, competency, and excellence.
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**Corporate Governance: Relationships with Shareholders**
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Atrusting relationship between management and shareholders is critical.  Investors and lenders must be satisfiedwith the manner in which shareholders oversee the performance of management andparticipate in key decisions.
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Sound principles ofcorporate governance include the following:
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$        delineating in the companycharter the respective roles and responsibilities of both management andshareholders;
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$        transparency of votingrules;
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$        respect for the rights ofminority shareholders;
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$        open communications withshareholders through the provision of audited accounts, and information aboutthe progress and operations of the company; and
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$        a well‑functioning boardof directors who have the skills, the time, and the access to informationneeded to discharge its responsibilities effectively.  The board will act in a fiduciary capacity on behalf of allthe shareholders. 
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**[if !supportEmptyParas]> [endif]>
**Relationship with Employees**
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Enterprises have animportant responsibility towards their employees.  A number of basic principles typically guide the attitudesof successful enterprises toward their employees:
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C         due regard for laborlaws;
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C         commitment toadequate standards of worker health and safety;
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C         non‑discriminationin the recruitment, compensation, and promotion of employees;
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C         respect for therights of workers to engage in union activity;
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C         effective systemsfor consultation with employees on employment conditions and other issues thataffect the employees;
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C         clearly stated andtransparent policies relating to compensation, benefits, promotions, and otheremployment conditions; and
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C         commitments by theenterprise for contributions to pension plans; and strict protection of  the integrity of company‑sponsoredpension plans.
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These principles do notlimit the right of an enterprise to enforce discipline on its labor force or toterminate workers in accordance with applicable law.
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**Relationship with OtherEnterprises**
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A relationship of mutualtrust in which all parties benefit is the most significant aspect of relationsbetween partners in joint ventures, contractual arrangements or businessrelations with other enterprises. The reputation of a company is its most valuable asset. Once thereputation of an enterprise is tarnished, it is very difficult to gain trustwith the same or other business relations.  A number of basic principles that typically promote mutualtrust in business relations include:
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C         commitment toexcellence in products and services;
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C         commitment to gainrespect and trust in all business relations;
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C         respect for thesanctity of contracts and business relations; 
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C         in case of acommercial dispute, a willingness to negotiate and compromise in order to reachan amicable solution; and
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C         respect for thesanctity of rule of law, including abiding in a timely manner with decisions ofany court, arbitral panels, or other administrative bodies.
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**Relationship with theGlobal Community**
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As a company is an integralpart of the community in which it operates, a sound relationship with thecommunity is essential.  Caring forthe environment is a responsibility of the enterprise towards the immediatecommunity, but it also extends to all communities and areas whose environmentmay be affected by the enterprise=s activities. Enterprises must:
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$        be sensitive to concernsof the local population;
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$        communicate with the localpopulation;
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$        abide by all applicableenvironmental laws and regulations; and
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C         show tolerance forpeople of other cultures, races, beliefs, and countries.
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**Relationship withGovernment Authorities**
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Well‑managed enterprisesare law abiding enterprises.  Tomaintain a sound relationship with governmental authorities, enterprises must:
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$        pay all taxes that areowed and due;
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$        abide by all mandatorygovernment and local regulations;
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$        obtain all governmentalpermits, licenses, and approvals required to do business; 
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$        deal with government authoritieson an arm=s length basis, and make noattempts to improperly influence governmental decisions;
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C         establishtransparent procedures regarding transactions engaged in by enterprises withany government agency or official or in dealings with any enterprise owned orcontrolled by a government agency or official; and
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C         in transactions withany government agency or officials or with any enterprise owned or controlledby government or government official, include appropriate provisions to ensurecompliance with international or national codes against extortion and bribery.
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**Proper Checks and Balances**
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A proper system of checksand balances is necessary to ensure the ongoing integrity of the enterprise andof its relationship with its constituencies.  Such a system must be based on the general principles offull disclosure, management accountability, separation of responsibility, andsound internal controls.  
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An enterprise should have afull disclosure policy concerning:
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$        statements of theenterprise=s strategic aims andpolicies, how these have been achieved in the past reporting period and how theenterprise will act in the future;
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$        prompt reports to theenterprise=s constituencies on eventsthat could have a material effect on the enterprise; and
 
$        prompt disclosure of allimportant relationships between officials of the enterprise and other parties.
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The key element of a systemof checks and balances is that the shareholders are able to monitor  management=s performance and tocondemn poor performance, including through the removal of management.
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**Prevention of Extortion andBribery**
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Principles concerningprevention of extortion and bribery are intended as a method of self‑regulationby businesses.  The voluntaryacceptance of these principles by enterprises will not only promote highstandards of integrity in business transactions, whether between enterprisesand public bodies or between enterprises themselves, but will also protectenterprises that are subject to attempts at extortion. 
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The business communityobjects to all forms of extortion and bribery.  The highest priority should be directed to ending extortionand bribery involving politicians and senior officials.  Bribery and extortion threatendemocratic institutions and cause grave economic distortions.
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All enterprises shouldobserve both the letter and spirit of the following rules:
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C         no one may, directlyor indirectly, demand or accept a bribe;
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C         no enterprise may,directly or indirectly, offer or give a bribe, and any demands for such a bribemust be rejected; 
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C         enterprises shouldtake measures reasonably within their power to ensure that any payment made toany agent represents no more than an appropriate remuneration for legitimateservices rendered by the agent; that no part of any such payment is passed onby the agent as a bribe or otherwise in contravention of these principles;
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C         all financialtransactions must be properly, accurately and fairly recorded in appropriatebooks of account available for inspection by the board of directors as well asby auditors.   Enterprisesmust take all necessary measures to establish independent systems of auditingin order to bring to light any transactions that contravene theseprinciples.  The enterprise mustthen take appropriate corrective action;
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C         the board ofdirectors of the enterprise should periodically review compliance with theseprinciples, and take appropriate action against any director or employee whoacts in a manner inconsistent with these principles; and 
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C         contributions topolitical parties or to individual politicians may be made only in accordancewith applicable law, and in accordance with all applicable requirements forpublic disclosure of such contributions.
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**Creation of a Culture thatFosters Sound Business Standards and Corporate Practices**
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Ultimately, for anenterprise to live by sound business standards and ethical practices itmust  develop a culture thatfosters such standards of integrity. This effort must be led by management and key shareholders.  Steps that management and key shareholdersmay take to promote this positive attitude throughout the company include:
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$        the preparation anddissemination within the company of a code of conduct for employees;
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$        employee training; 
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$        encourage proper conductand sanctions against misconduct; and
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C         creation of anethics office and ethics officers to advise and educate employees, and provideguarantees for confidential counseling.
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**[if !supportEmptyParas]> [endif]>
**Recommendations forImplementation of these Guidelines**
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All enterprises that wishto become part of the international business community are recommended to:
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C         draft their owncodes of business conduct consistent with these principles and apply them tothe particular circumstances in which their business is carried out; and 
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C         develop clearpolicies, guidelines, and training programs for implementing and enforcing theprovisions of their codes.
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The extent to whichenterprises decide to incorporate the above listed guidelines may depend on thesize, specific circumstances, and the business of the company.[if !supportFootnotes]>[endif]>
[if !supportFootnotes]>[1][endif]>**       ****A*****Enterprise******@*****asused in this document means both a legal entity such as an****A****enterprise,****@********A****company,****@********A****firm,****@****or****A****organization,****@****and anindividual or small entrepreneur**.*****************************