Corporate lobbying in the State Duma: opportunities for institualization

The deputy is endowed with independence so that he/she can adequately fulfill the political will of the people who elected him, which implies the freedom from anyone else's instructions, the possibility of unimpeded exercise of authority, the inadmissibility of undue interference in his activities, freedom from various forms of group pressure - party, corporate, regional, local, etc. Decision of the Constitutional Court of the Russian Federation of February 28, 2012 № 4-P Current Russian regulation forms a kind of balance between these two fundamental principles: the independence of deputies and the leading role of political parties in representation of people interests.

That is being said that the deputy has the right to exit from the faction (answering the independence issue by leaving the legislature) while has no option to change faction or political party.

So before Chamber hearings each parliamentary faction forms own position on whether vote for or against specific draft law, which in current case of United Russia means collective veto-player in the legislative process (in other circumstances factions could form coalitions and thus become partisan veto-player as well). But the crucial point here is that the political position of the faction is often formed on the basis of professional discussions at the committee level (with rare exceptions of high-level policy changing initiatives, which are mostly politically driven) and on relevant expertise and official positions of executive bodies. Assuming the above the responsible committee could be considered as collective veto player as well, which decisions most often are formally re-approved on the next level (Chamber's) of the draft law consideration.

Article 105 of the Constitution states that the laws are adopted by the simple majority from the total number of Duma's Deputies. So the Chamber voting as the sum of voting of all factions on the draft law in the first reading represents formal veto point in the legislative process.

In case the Chamber voting supports recommendation of the responsible committee and approves the draft law in the first reading, the responsible committee is charged with preparing draft law for the second reading. Accordingly starts the count of 15 days (or 30 days for draft laws of joint competence of the Russian Federation and regions) for preparing and proposing amendments to the wording of the draft law to be considered in the second reading.

The following chart (chart 2) summarize the process of the first reading of the draft law and shows identified veto-points and veto-players at this stage of legislative process.



Chart 2. First reading of the draft law

To sum up this part, the first reading procedure meets 4 collective veto players: President, Government, responsible committee and parliamentary factions with only 1 formal veto-point: chamber voting of the first reading of the draft law. However it should be emphasized that factions positions (and thus Chamber voting results) at the large extend is based on responsible committee professional recommendations. If put it simple responsible committee gets all the opinions, arranges its professional discussion and suggests the decision on the draft law. Political factions and the Chamber then approve it (as a general rule). This fact makes responsible committee another important veto player, which activity is not formalized in great details.

2.3 Second reading of the draft law

The second reading procedure is also made at two levels: first responsible committee, then chamber hearings. During the second reading of the draft law the parliament amends the text of the proposed regulation. The amendments to the draft law could be proposed only by those actors who are eligible to introduce draft laws to the Parliament according to the Constitution (those 727 actors mentioned in the beginning of this part).

One of the central issues of the process of the second reading of the draft law is to stay within the concept of the draft law approved in the first reading. There have been numerous cases when draft law amendments significantly extended the scope and the nature of proposed draft law, as well as parties concerned thereof. In 2016 review of the legislative activity Constitutional Court mentioned that most norms which were revealed as not complaining with Constitution had been proposed and introduced during the second reading of the draft laws Information on lawmaking enhancement from constitutional-level legal aspects (basing on Constitutional Court Decisions review for the period 2013-2015), approved by Constitutional Court decision dated June 23, 2016. Notwithstanding the fact that such practice received significant attention and critics from the side of Constitutional Court, it still does exist. For example the draft law #841348-6 initiated by the Government on July 17, 2015 initially concerned national payment system with the concept to regulate relationships between payment service providers and mobile operators. During the second reading of the draft law one of the deputies offered the amendment to authorize government-owned Joint-Stock Company “Alrosa” to have private security staff. The amendment was approved and the draft law was signed into the law on July 03, 2016 http://sozd.duma.gov.ru/bill/841348-6.

Another important issue of the process of the second reading of the draft law is the procedural aspects of proposing and consideration of the amendments. One of the most famous examples relates to Tinkoff Bank's case. In October 2013 Tinkoff Bank publicly offered GDR in London stock exchange, the company was valued at $3,2 bln. https://lenta.ru/news/2017/10/25/tcsgroup_capitalization/ On November 15, 2013 one of the leading Russian business newspaper “Kommersant” reported that one of the amendment to the draft law “On consumer credit” in the second reading prohibits any remote sale of plastic banking cards, which was the core of Tinkoff Bank business https://www.kommersant.ru/doc/2343661. As a result next day, the market capitalization of Tinkoff Bank decreased by USD 1,2 bln in the first 20 minutes of trading https://snob.ru/selected/entry/92686. The reported amendment was not approved and could not even be found in the materials of the draft law at State Duma official site http://sozd.duma.gov.ru/bill/136312-5.

The two examples above clearly demonstrate that the second reading of the draft law is extremely important in terms of access to the lawmaking for corporate interests.

At the committee level, responsible committee should consider each proposed amendment to the draft law, which has been received within the period stipulated by the Chamber in first reading (usually not less than 15-30 days). Each amendment should be presented to the committee members by the author, discussed and voted. Again at the committee level the discussions have professional (rather than political) nature.

Depending on the decision taken all amendments are grouped by the responsible committee in three tables: (1) table of amendments which are recommended to be approved by the Chamber, (2) table of amendments which are recommended to be rejected by the Chamber and (3) table of amendments which the committee could not make recommendation. The last option is rare enough as discussions at committee level suppose professional (not political) arguments, so all political statements are made later at Chamber hearings independently from which table the commented amendment is.

After considering all the amendments, responsible committee forms the new text of the draft law (changed as per approved amendments) and arranges for the legal expertize from the side of Legal Department of Duma Staff. At the same time the amended text of the draft law is sent to the Government and Presidential staff for review and consideration.

Finally, all tables with recommendations and the text of the second reading of the draft law are sent to the Council of State Duma. Council of the State Duma determines the date of the draft law consideration at the Chamber's meeting in the second reading and sends its text and relevant materials to the President, Federation Council, State Duma deputies, Government not less than 7 days before this draft would be considered at Chamber's meeting. It is worth noting that in current political configuration in parliament President and Government could execute veto power at any level of the draft law consideration in the second reading: either discussion of the amendments at responsible committee meeting or Council of State Duma meeting or Chamber hearing.

At the Chamber hearing of the draft law in the second reading, the amendments and committee recommendations are presented by the committee member. If any Duma deputy is not agree with the recommendations of the responsible committee this deputy could pick up any amendment and request for its separate discussion and voting by the Chamber. If no objections to the responsible committee recommendations are made the Chamber votes in support of the relevant tables of amendments (one for approval, another for rejection). Then the Chamber's voting for the draft law new wording is made. The responsible committee is charged to prepare the draft law to the third, final reading.

The following chart (chart 3) summarize the process of the second reading of the draft law and shows identified veto-points and veto-players at this stage of legislative process.

Chart 3. Second reading of the draft law

The second reading makes all already identified veto players to show up again: President, Government, responsible committee and parliamentary factions. Similarly as in the 1 reading, the 2 reading of the draft law has only 1 formal veto-point: chamber voting. And again the responsible committee should be considered as collective veto player as it gets all amendments and opinions, hosts all professional discussions and prepares relevant decisions for more formal consideration of the Chamber.

2.4 Third reading of the draft law

Third reading of the draft law is also made at two levels (responsible committee and Chamber). During the third reading the text of the draft law is checked for technical, orthographical, grammatical mistakes by the Legal Department of Duma Staff. No substantive changes could be made to the approved in the second reading wording of the draft law.

After the draft law text is ready the committee repeats the procedure described above - sends materials to the Duma Council, which in turn designates the hearing's date and sends material to other interested instances. In addition Article 124 of Reglament states the right of Duma Council to request Government to assess regulatory impact of the draft law, which was accepted in the second reading and primarily aimed to economic activity regulation.

During the Chamber hearing of the draft law in the third reading there should be no specific discussion of the draft law chapters or articles Крашенинников П.В. «Закон и законотворческий процесс» М Статут, 2017, стр. 87. The representative of the responsible committee shortly presents the results of the work, made in order to prepare the final text of the draft law. Afterwards the final voting by the Chapter is made (of course the usual 3 veto-players remain: parliamentary factions, President and Government). If the draft law is supported by the majority of the total number of deputies in the third reading it becomes federal law and in 5 days is to be sent to the Federation Council of the Russian Federation for further consideration.

The following chart (chart 4) summarizes the process of the third reading of the draft law and shows identified veto-points and veto-players at this stage of legislative process.

Chart 4. Third reading of the draft law

The concluding reading of the draft law also requires participation of identified veto players: President, Government and parliamentary factions. But unlike the previous readings the responsible committee does not play any veto role at the third reading. Similarly as before, the 3 reading of the draft law has only 1 formal veto-point: chamber voting.

2.5 Identified veto points and veto-players

As the analysis above shows 3 formal veto-points identified when Lower Chamber votes on the draft law in 3 consequent readings and 4 collective veto-players in the legislative process in the Lower House of Parliament of Russia: The President, the Government, the responsible committee and the political factions (or even one faction of dominant parliamentary party). With possible future increase in political competition in Russian Parliament the latter collective actor could become partisan veto-player (would need a coalition with other factions).

It is important to note that mentioned above 4 collective veto-players only formally have the same veto-power. In fact they do have different powers, but each specific weight depends on the matter and the political context. As mentioned previously, in this paper the assumption is made that there is no power struggle between veto-players (except parliamentary factions) due to the nature of the requests that corporate interests mainly address to the authorities, thus all legislative decisions are made with the consent of all major stakeholders. There is still the possibility to change the approved law (by Constitutional court decision for example) but with this rare exception the majority of such decision should be true and valid and reflect consensus of all veto players.

The analyzed procedure illustrates that introduction of lobbyists in this process (in case of possible institualization of corporate lobbying) could not change (remove or introduce new) collective veto players or change formal veto points in the lawmaking procedure at State Duma. Parliamentary - stage lawmaking requires consensus of all major stakeholders, all such decision-makers are collective actors, and the process itself is public and highly formalized.

At the same time the analysis reveals specific interconnected role of parliamentary factions and responsible committee as veto-points in the process of introduction of the draft law (faction discretion) and consideration of draft law (committee professional discussions of the matter).

These informal institutions with veto power currently represent the unregulated points of access to the lawmaking procedure for the lobbyists. The absence of clear regulation of such access can lead to undue lobbyists influence, unfair competition and regulatory capture by the expense of public interest.



3. Current regulation of interaction between corporate interests and lawmakers

3.1 Rules for lawmakers

3.1.1 Anti-corruption norms and preventing conflict of interests' regulations

Lobbying is not specifically regulated by laws in Russia and it is handled by broad anti-corruption measures. The definition of corruption in Federal law “On corruption counteraction” is: “abuse of office, giving bribes, taking bribes, abuse of authority, commercial bribery or other unlawful use by an individual of his official position, contrary to the legitimate interests of society and the state, in order to obtain benefits in the form of money, valuables, other property or services of a property nature, other property rights for themselves or for third parties, or unlawful provision of such benefit to the said person by other individuals” Federal law “On corruption counteraction”, Article 1.

Interestingly to note that international approach to the issue of corruption is different. The OECD, the Council of Europe and the UN Conventions do not define “corruption”. Instead they establish the offences for a range of corrupt behavior, which is wider than in the Russian legislation. Hence, the OECD Convention establishes the offence of bribery of foreign public officials, while the Council of Europe Convention establishes offences such as trading in influence, and bribing domestic and foreign public officials. In addition to these types of conduct, the mandatory provisions of the UN Convention also include embezzlement, misappropriation or other diversion of property by a public official and obstruction of justice http://www.oecd.org/corruption/anti-bribery/39532693.pdf.

The conflict of interests is defined in Russian legislation as a situation where the direct or indirect personal interest (the possibility to receive any income personally or by associated persons, parents, spouses, children, brothers, sisters, as well as brothers, sisters, parents, children of spouses and spouses of children) affects or may affect the proper, objective and impartial performance of official (official) duties (exercise of authority) Federal law “On corruption counteraction”, Article 10.

With regards to the lawmakers, Russian regulations enforce anti-corruption measures in 2 consecutive stages. First of all before entering the office any new member of parliament should disclose incomes, property and liabilities of his/her family (spouse and children under 18 years old).

Another precondition for lawmakers is to close any accounts (deposits) in foreign banks, alienate any foreign financial instruments, including those in trust management, and repay any loans granted by foreign entities before the registration as a candidate in the election of deputies of the State Duma Federal law “"On prohibiting certain categories of persons from opening and owning accounts (deposits), storing cash and valuables in foreign banks located outside the territory of the Russian Federation, and owning and / or using foreign financial instruments”.

At the second stage, during the tenure, the Member of Parliament is subject to the following main anti-corruption measures:

- each year before 1 of April disclose annual information on income, property and liabilities of himself and his family (spouse and children under 18 years old) Federal law "On the status of a member of the Council of Federation and the status of a deputy of the State Duma of the Federal Assembly of the Russian Federation" Article 10;

- each year before 1 of April disclose information on material expenses made in the preceding calendar year by himself and his family's members for the purchase of real estate, vehicles, securities and business interests (capital stakes). Expenses are considered material if totally exceed cumulative income of lawmaker and his spouse for the last consecutive three years Federal law "On control over the compliance of expenditures of persons replacing government posts and other persons with their incomes" Article 3;

- not to be engaged in entrepreneurial or another paid activities other than teaching, research and similar creative activities. At the same time, these activities cannot be financed solely at the expense of foreign countries, international and foreign organizations, other foreign entities or citizens, unless otherwise provided by an international treaty or the legislation of the Russian Federation Federal law "On the status of a member of the Council of Federation and the status of a deputy of the State Duma of the Federal Assembly of the Russian Federation" Article 6;

- not to participate in the management of a business, including executive bodies of a company, neither participate in the general meetings of shareholders of a company;

- not to receive any payments in connection with being in office (including but not limiting to: loans, cash and other remunerations, services, entertainments, recreation, transportation costs refund) from individuals and legal entities. Gifts valued above 3000 rubles and received by a Member of Parliament in connection with protocol events, business trips and other official events are recognized as federal property Such gifts should be handled over to Council of Federation or State Duma and could be re-purchased by the Member of Parliament in the manner prescribed by the internal regulations of Parliament's chamber;

- in connection with being in office not to travel outside Russia at the expense of individuals and legal entities, with the exceptions explicitly provided by the Russian legislation;

- not to open accounts (deposits), store cash and valuables in foreign banks located outside the territory of the Russian Federation, neither own and / or use foreign financial instruments;

- in case if lawmaker or his family member owns securities which could lead to the conflict of interests one must transfer such securities to independent third party asset management entity.

Above of all cited measures there is the requirement to detect and immediately report “any cases of any persons referring to him in order to induce him to commit corruption offenses” and “the conflict of interests that has arisen or about the possibility of its occurrence, as soon as he becomes aware of such” Federal law “On corruption counteraction”, Articles 9, 11.

As it could be easily seen from the description above the regulation of corruption counteraction is clear enough and straightforward: one should not get any personal tangible benefits from any decisions made on behalf of public interest.

At the same time regulation of prevention of conflict of interests is much more shapeless and not clear i.e. “indirect personal interest”, “affect the proper, objective and impartial performance of official duties”, etc.

Similar conclusion comes from independent assessment of Russian anti-corruption norms and regulations preventing conflict of interests. In October 2017 The Group of States against Corruption GRECO was established in 1999 by the Council of Europe, currently comprises 49 member States (48 European States and the United States of America) (GRECO) published the Fourth Round Evaluation Report on Corruption prevention in respect of members of parliament, judges and prosecutors in the Russian Federation https://rm.coe.int/0900001680794c4f.

Regarding members of parliament GRECO among other things recommended to the Russian Federation to adopt a code of ethics/conduct for members of parliament covering various situations of conflicts of interest, which should be made accessible to the public, and that it should be complemented by practical measures for its implementation and enforcement. In addition specific and periodic training should be delivered to all members of parliaments, with a particular focus on new parliamentarians, on ethical questions and conflict of interest.

GRECO reports on different jurisdictions repeatedly demonstrated benefits for parliaments having their own set of common standards and guidelines in respect of ethical principles and expected conduct of their members, as well as in respect of the staff who works for the members.

Such standards should deal with integrity issues such as gifts and other advantages, third party contacts, lobbyists, accessory activities, and post-employment situations. GRECO's experience shows that the mere process of developing such standards raises awareness of integrity matters, assist members of parliament to act proactively in difficult ethical situations and - not least - to demonstrate their commitment vis-а-vis the general public. As a result, such codes and guidelines can contribute to better public confidence in parliamentary institutions in that citizens know what conduct they should expect from parliamentarians and from the staff, assistants, etc. - a concern that has been expressed in several GRECO reports.

Another important GRECO's finding is that in Russia there are no applicable restrictions on the employment of members of parliament after their term of office. Lawmaker could well engage in particular matters (including legislation) in parliament while having in mind interests that would come into play during his mandate or upon leaving parliament or as a future lobbyist.

To conclude this section it should be noted that in Russian lawmaking process there is clear and comprehensive regulation aimed to prevent and counteract corruption among lawmakers. At the same time the issue of conflict of interests is not sufficiently resolved: there are uncertain definitions, there are no ethical standards and guidelines how to practically detect and manage the conflicts, there is no specific training delivered.

The institualization of lobbying could provide lawmakers with clear rules on how to communicate and interact with third parties (lobbyists), including corporate interests. Even more clarity on how to manage conflict of interests in lawmaking would come later as the result of the enforcement practice of the new regulation of lobbying.

3.1.2 Special powers of lawmakers to promote corporate interests

Having reviewed lawmakers' existing rules to restrict abuse of the office in connection with lobbying practices, next part will outline existing special powers of lawmakers in Russia, which could be used to promote corporate interests in order to achieve its own political objectives.

As an important disclaimer it should be reiterated that all special powers analyzed herein are presumed to be used by lawmakers acting in good faith and in full compliance with applicable anti-corruption legislation.

Another important limitation which is not connected with anti-corruption practices is that a Member of Parliament is not allowed to intervene into the criminal investigation or law enforcement activity or judicial activity neither to participate as a defense counsel / representative in a civil, administrative or criminal case Article 18, Federal law "On the status of a member of the Council of Federation and the status of a deputy of the State Duma of the Federal Assembly of the Russian Federation".

Most powers of members of parliament derive from constitutional status of institutions of parliament and lawmaking. As such the most effective instrument of their activity is to initiate and introduce draft laws, the procedure has already been described in part 3 above. Draft law and lawmaking procedure is public and forceful way to articulate specific issue, to arrange its highest level discussion and to propose relevant solutions.

So the determinative power of a lawmaker to promote interests derives from his ability to deliver public speeches and persuade his fraction colleagues / other members, officials, experts, etc.

In connection with the draft law which is being prepared or has been introduced to the Parliament, the lawmaker has the following powers:

- Send written requests to the Government (Head, Ministers, other Members), to the heads of law enforcement agencies, Central Bank, other state agencies and services with regards to the matters within the competence of these government bodies and officials Article 14, Federal law "On the status of a member of the Council of Federation and the status of a deputy of the State Duma of the Federal Assembly of the Russian Federation". As a rule the official is obliged to prepare the answer to the request within 30 days.

- Government officials both at federal and regional/municipal levels are required to fully assist Member of Parliament by providing promptly all required information, materials and documents IBID, Article 17.

- Member of Parliament has priority to meet in person with government officials and heads of state owned enterprises, agencies and services IBID, Article 16.

Further powers of a lawmaker to promote specific corporate interest are concentrated within lawmaking process which allows the lawmaker to arrange/be involved in relevant discussions in connection with specific issue, in particular any member of parliament has the right to participate, speak and vote (if applicable) in any parliamentary-level committee, commission, meeting, etc. IBID, Article 12

With support of parliamentary committee or political faction in Parliament which only have the authority to settle up working groups, parliamentary hearings, seminars and other specific issue-related discussions, the lawmaker can initiate and lead mentioned discussions.

Another important instrument to influence decision-making process in connection with specific issue or corporate interest, and arguably the most efficient one, - is to be a member of relevant parliamentary committee, which is responsible for concerned legislation (financial, economic, taxes, environmental, etc.).

As it was already mentioned in Part 3 of this paper, according to the Duma's Reglament Article 26, Duma's Reglament, the committee (the head and its members) has additional powers to arrange expert and public discussions of specific issues within committee competence by setting up working groups, public hearings, by inviting government representatives including federal ministers and representatives of law enforcement agencies, business, and other interested parties.

To conclude this part of the paper, it is worth mentioning that existing rules provide lawmakers with the full range of powers necessary to publicly participate in resolving specific issues, including business - related issues or corporate interests. In fact all basic instruments are present - starting from arranging expert assessment of new proposals, through public discussion at different venues at parliamentary platform, and finally to promoting applicable solutions into the laws accompanied by political statements.

So in the context of possible regulation of lobbying activity - no special/additional powers for legislators is needed.

3.2 Rules for corporate interests on how to influence lawmaking

This part of the paper analyzes “another side of the barricade” - existing written rules for business in Russia on how to access lawmakers in connection with their interests in changing laws. Similarly as in previous part it is presumed that corporates and their representatives are acting in full compliance with all applicable rules and regulations regarding anti-corruption matters, which are basically the same as for lawmakers.

As already mentioned, there is no specific regulation of lobbying as such, so below will be described two main ways of business communication with lawmakers: directly and through agents, as provided by selected laws in connection with specific relationships.

3.2.1 Direct access to the lawmakers

The basic right for the people to send appeals to the state authorities is fixed in Article 33 of the Constitution of the Russian Federation, which provides this right both for individuals and groups of people. So if one presumes that legal entity (corporate) is a fiction which unites not only capital but also people on some matters (workers, management, shareholders), this constitutional right is applicable to this group of individuals as well, with the chief executive officer being the formally authorized person who articulates corporate's general interests.

This constitutional right is further detailed in federal laws, which directly reserve the right of legal entities to send appeals to the state authorities and also require government officials to respond to such appeals within 30-days period Article 1 and 12, Federal law #59-FZ “On the consideration of appeals of citizens of the Russian Federation".

Another form of direct access to the lawmaking process for corporates - is to act at parliamentary venues. State Duma's Reglament offers different opportunities for “experts” to participate in discussions, without defining the nature of such experts (corporate, non-profit, scientific, etc.) neither the procedure of choosing or nomination of such experts. Such “experts” could be invited to committee meetings (article 26), participate in its work (article 27), participate in working groups at committee level while preparing draft law for the 1 reading (article 111), etc.

Further search both in federal laws and Duma's Reglament for other mentions of individual corporate interests in connection with lawmaking process has returned negative result. Aforementioned opportunities for direct access to lawmaking may illustrate low efficiency of such. In first instance - there is complete absence of the informative feedback (communication) in complex multi-actors and multi-stage process, in the second - the lack of clarity of the procedural aspects makes this option exclusive.

3.2.2 “Proxi” access to the lawmakers

According to the existing regulations at federal laws level in Russia there are multiple ways for corporates to articulate their interests to the state authorities, including lawmakers, through the different institutionalized intermediaries.

One of the oldest ways (since 1993) to unite and represent corporate interests in Russia has been The Chamber of Commerce and Industry of the Russian Federation, which is a non-governmental non-profit organization created in the legal form of the union to represent and protect the legitimate interests of its members (regional chambers, single business entities or their associations) Article 1, Russian Law of 07.07.1993 N 5340-1 "On Chambers of Commerce and Industry in the Russian Federation". Among other tasks it is declared in the federal law that the Chamber should “organize interaction between business entities, their interaction with state authorities” by using inter alia the right to “take part in the preparation of draft federal laws affecting the interests of entrepreneurs”, “require from Parliament draft laws and materials for expertize” and “participate at the invitation of the Parliament's committees and commissions in their work in connections with draft laws” IBID Article 16.

The Chamber itself advertises its rule-making services among the members in the following way https://tpprf.ru/ru/about/TPP_brochure_05.05.pdf:

- improving specific industry legislation, as well as tax, civil, land and arbitration legislation;

- monitoring law enforcement;

- delivering official position of the Chamber on draft laws, affecting business interests;

- participating in the regulatory evaluation procedure and actual exposure assessment procedure within the Government-stage preparation of the draft laws.

At the same time there is no official track record of the efficiency of the Chamber's activity in connection with the lawmaking. Interesting results could come however from analysis of annual “legislative plans” of the Chamber which are publicly available. They usually consist of several sections: (1) work on draft laws which are already introduced to the Parliament (the most bulk section), (2) work on draft laws which are being developed by the Ministries/Agencies/Government and (3) draft laws which are being developed by the Chamber itself. While it is practically impossible to assess the role and value of the Chamber's work in the first 2 instances, the third one is easy to investigate.

In Chamber's legislative plan for 2013 were included 10 draft laws to be prepared by the Chamber http://www.auditor-sro.org/activity/uchastie_v_obwestvennyh_organizaciyah/article_20130314_6482/, in 2017 - 12 initiatives https://tpprf.ru/ru/interaction/legislative/174990/. By May 2019 only 2 and 1 out of planned draft laws in 2013 and 2017 accordingly have been approved into the laws.

Obviously these figures illustrate low interests of Chamber's members in Chamber's legislative work rather than the absence of Chamber's involvement in lawmaking process. However the question of its efficiency remains unanswered by adding the fact that very broad representation of business interests in one entity (unites more than 52 thousand legal entities, 300 associations, 180 regional chambers) inevitably raises all aspects of collective action problem: free-riding, games with asymmetric information, multiple principles - agent problem, etc. It is worth mentioning that other forms of business associations in Russia are likely to face the same problem (“Russian Union of Industrialists and Entrepreneurs" (RSPP), "OPORA RUSSIA" (unites small and medium enterprises), "Business Russia") having not been even mentioned at a federal laws level in connection with lawmaking.

Another major form of association of corporate interests in Russia which has been formally regulated by laws since 2007 - is self-regulating organizations. Self-regulation is understood as an independent and initiative activity, which unites corporate interests in specific business sphere in order to develop standards and rules of the said activity, as well as to control over compliance with the requirements of these standards and rules Article 2, Federal law of 01.12.2007 N 315-ФЗ “On self-regulatory organizations".

Special authority of self-regulating organizations in the process of lawmaking is formulated as “the right to participate in the discussion of draft laws” in the concerned business sphere and “the right to send in paper or electronically the results of its independent assessment of draft laws” IBID, Article 5.

Unfortunately further hints on how these rights could be realized in practice are absent both in relevant federal law and Duma's Reglament.

Numerous state corporations and state development agencies in Russia also have some formal powers to participate in lawmaking in the name of public interest. However such powers mentioned in laws have no material differences with the basic right to send appeals to the state authorities. Some examples follow:

- Federal Corporation for the Development of Small and Medium-Sized Businesses (SME Corporation) has the formal right to “prepare proposals for improving measures to support small and medium-sized businesses, including proposals for improving the regulatory framework in this area.” Article 25.1, Federal law of 24.07.2007 No. 209-ФЗ “On the development of small and medium-sized businesses in the Russian Federation”;

- Federal housing development institution DOM.RF focused on national initiatives that aim to improve housing quality and affordability “prepares proposals on the improvement of measures to support housing construction and mortgage lending, including on improving the regulatory framework in the housing sector” Article 2, Federal law of 13.07.2015 N 225-ФЗ "On promoting development and improving the efficiency of housing management and on introducing amendments to certain legislative acts of the Russian Federation";

- State Development Corporation VEB.RF ensures the coordination of the activities of development institutions on the long-term socio-economic development of the Russian Federation, including “ensures interaction between development institutions and state authorities and the preparation of proposals for improving measures to support the state development institutions” Article 3, Federal law of 17.05.2007 N 82-ФЗ "On the State Development Corporation" VEB.RF ".

Another relevantly new institute in Russian practice was introduced in 2013 - specially designated person to protect the rights of entrepreneurs in the Russian Federation (aka “business ombudsman”).

Apart from the regular right to send proposals to state authorities with the aim to introduce/amend/recognize invalid specific laws, business ombudsman has quite unique power to prepare opinions on draft regulatory legal acts affecting the rights and legitimate interests of business entities. As the matter of law such opinions are mandatory for consideration by the Government of the Russian Federation and other executive branch entities with the requirement to send feedback within 30 days Article 6, Federal law of 07.05.2013 N 78-FZ "About authorized person to protect the rights of entrepreneurs in the Russian Federation".

Unfortunately neither state corporations no business ombudsman have not publicly disclosed any statistical generalizations of their lawmaking efforts, which could illustrate the efficiency of such.

Finally the most effective and most powerful intermediary between Parliament and business interests is Government of the Russian Federation. Government itself has the authority to introduce the draft laws to the Parliament as well as has significant constitutionally-backed powers to influence lawmaking procedure.

However it could also be considered as the intermediary of business interests into the parliamentary-stage lawmaking procedure as it is collective institute (consists of ministers, services, agencies, institutes, and the staff, etc.) which implements and enforces most of the laws.

The efficiency of Government in lawmaking could be illustrated by the following figures. In 5 convocation of State Duma (December 2007 - November 2011) 40% of all approved federal laws was initiated by Government, while approval rate was 94% (628 approved initiatives, 40 - rejected). In 6 convocation of State Duma (December 2011 - October 2016) 52% of all approved federal laws were initiated by Government, with the same approval rate of 94% (1137 approved initiatives, 68 - rejected).

These figures evidence fairly high competence and activity of Government in lawmaking. To look into the essence of this phenomenon below would be considered the lawmaking procedure within the Government.

Federal executive branch of power consists of 22 federal Ministries and 16 federal services and agencies which are controlled directly by the President or the Government. Federal Ministries in their turn control 34 other services and agencies Presidential Decree of 15.05.2018 N 215 "On the structure of federal executive bodies".

In terms of lawmaking activity, all these entities have the authority to formulate state policy and normative regulation within their competence and offer draft laws for the consideration of Government and/or President, which are the constitutional actors able to further introduce the draft laws to the Parliament's consideration.

Initial step of Government's lawmaking procedure is preparation of annual legislative plan. The first draft of this plan is made by Ministry of Justice and includes the initiatives of federal Ministries, federal services and agencies which are controlled directly by the President or the Government.

A proposal to develop a draft law submitted to the Ministry of Justice should contain the working name of the draft law, the approximate time frame for the draft law to be developed, considered and introduced to the State Duma, as well as, if necessary, the concept and draft technical assignment for the development of the draft law. Draft legislative plan together with concepts of draft laws are tentatively reviewed by the Government Commission on legislative activities, after which these plans are approved by the Government Points 76-82, Resolution of the Government of the Russian Federation of 01.06.2004 N 260 “On the Regulations of the Government of the Russian Federation and the Staff of the Government of the Russian Federation".

Simple comparison of Government's cumulative annual legislative plans for 2012 - 2016 (the tenure of State Duma 6 convocation) with the results of the legislative work of Government in 6th State Duma reveals that 1137 federal laws were introduced by the Government and passed through the Parliament while only 407 draft laws (37%) had been totally included in annual legislative plans of the Government in this period.

The figures above show that the formal procedure is not followed properly by the Government and there is plausible explanation for this. In fact the process of development of the draft law and its adjustment within executive branch is very complex and time consuming.

There are numerous procedures which should be followed at different levels of decision-making: first agency (service), then Ministry, and finally Federal Government-level, including, inter alia:

- The draft law should be agreed by at least 3 heads (deputies) of Ministries, which are mainly concerned by the concept of proposed law, provided that the following procedures are completed IBID, point 57;

o public discussion procedure,

o regulatory impact assessment,

o independent anti-corruption expertise (including publication in Internet),

o get a conclusion of the Expert Council

o discussions with public councils at federal executive bodies.

- The results of the previous stage should be send to the Ministry of Justice for legal and anti-corruption expertise;

- In certain instances the draft law and the materials should be agreed with Ministry of finance (in case of any changes in government spending), Ministry of economic development (in case of any change in regulation of economic activity), Ministry of informational technologies (in case of IT issues involved), etc. IBID, points 60, 60(1), 60 (2)

Upon completing all required procedures, the draft law is introduced at Government's consideration and in case of approval, it is officially passed as Government's legislative initiative to the State Duma.

If once again to have a “helicopter view” at the described Government's legislative procedure several conclusions arises. First of all, the sum of collective efforts and competences of different executive branch entities indeed should lead to relevantly high quality of the daft laws prepared by the Government and fairly high success rate of approval of such initiatives.

The second conclusion is that this process is complex, time consuming and involves multiple actors, which raises the issues of collective action: asymmetric information, principal-agent, etc. Finally, there is clear issue of “department interests” in Government's lawmaking, which could be easily illustrated by the problems with the reform of control and supervisory functions of the state.

All new proposals are sent to the Ministry/agency/service itself, which does not have any incentives to cut or remove these functions and does not agreed such proposals to proceed further.

Another example is the executive branch services that carry out protective functions, which often see predominantly threats and risks in the development of new technologies, blocking their introduction into the legal field (for instance, bitcoin).

To conclude this part of the paper it should be noted that in Russia there are multiple options for corporate interests to declare and promote their interests in lawmaking. However the efficiency of such is questionable.

Direct appeals to the Members of Parliament are lacking of the informative feedback, as the lawmaking process is complex and involves multiple agents. Furthermore single corporates often does not have competence in preparing draft laws and materials with sufficient legal quality.

“Proxy” access to the lawmaking through the numerous agents (self-regulation organizations, business associations, state development institutions) could be good in collective protection of industry's interests, however hardly could efficiently help in promoting narrow-interest initiatives due to collective action problems (asymmetric information, principal-agent problem, conflict of interests among members).

Another problem is corporatist nature of the collective representatives of business interests, as they primarily seek not to conflict with the state bodies and agencies.

Government's venue being the most effective in terms of results also has some material flows to be added to previously mentioned collective action problem: it requires broad consensus among different agencies (due to “department interests” issue) and it is time consuming by adding numerous inter-ministries consultations to the parliamentary stage lawmaking procedure.

From the analysis made it could be suggested that no other forms of representation of corporate interests in lawmaking procedure are actually needed, as all virtually possible forms already exist (collective - individual, proxy - direct).

Instead having in mind “lobbying as legislative subsidy” concept, the possible regulation of corporate lobbying should be aimed at the increasing of the efficiency of existing forms of corporate interests' representation.



4. Why proposed regulation of lobbying in Russia has been rejected so far?

State Duma archive database shows that there have been 5 attempts to introduce regulation of lobbying in Russia.

The very first proposal (project 96700123-2) was made in 1996 in the 2 convocation of State Duma http://sozd.parliament.gov.ru/bill/96700123-2.

Unfortunately there is no track of the draft law text and relevant materials so no further analysis of this project could be made except the fact that this initiative was revoked by the authors in the beginning of 2002.

The second draft law (project 97801795-2) was also introduced in the 2 convocation of Duma in 1997 and was entitled “On legal base for lobbying activity in federal bodies of government” http://sozd.parliament.gov.ru/bill/97801795-2. .

One of the authors of this draft law was V. Zorkaltsev, the Chairman of the Committee on affairs of religious and public associations. This project represents stand-alone and complex regulation of the lobbying, which was defined as “interaction of legal entities and individuals with federal authorities and their representatives with the aim of influencing the development and adoption of legislative acts, administrative, political and other decisions in their interests or in the interests of specific clients”.

Lobbyists who proposed to be subject to special licensing and accreditation could act in legislative and executive branches of state power (not in judicial one). In order to perform specified lobbying activities (submission of information and draft decisions, participation in committees, faction and other meetings, communication with decision-makers, etc.) lobbyists are supposed to be granted a set of specific rights (mainly physical access to the information, decision makers and relevant premises).

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