Analysis and Perspective
The Yukos Affair And Russian President Putin’s
‘Dictatorship Of Law’: Potential Implications
For The Business And Legal Communities
By Ethan S. Burger, Esq., Scholar-in-Residence, School of International Service, Adjunct Associate Professor of Law,
Washington College of Law, American University, Washington, and Evgenia Sorokina, Esq., Associate, Ludwig & Robinson,
P.L.L.C., Washington. The authors may be contacted by E-mail at ethansb@american.edu and esorokina @usa.net. © Ethan S.
Burger and Evgenia Sorokina 2003.
The Yukos affair highlights the fundamental question of whether a rule of law exists in Russia. The timing of the decision by the Russian
Procuracy (with the support of other law enforcement bodies) to bring criminal charges against former Yukos Chief Executive Officer
Mikhail Khodorkovsky was not accidental. Despite Russian President Vladimir Putin’s attempts to reassure foreign investors that the
country remains economically stable as well as an attractive site for investment, investors will need to proceed with far greater caution
when pursuing business opportunities in the country than in the past, particularly when current or former state assets and special government-issued licenses are involved. The current Yukos episode, irrespective of its outcome, should place a heightened burden on corporate officers and directors, as well as their legal and financial advisors, when evaluating opportunities in Russia.
Until the 1998 Russian financial crisis, the political leadership of major Western countries and many senior officials of the principal international financial institutions refused to offer candid assessments as to the success of Russia’s economic reforms. In such circles, the
view was that the stakes were too high to permit Russia to “fail”—so that, for many years, Russia’s political and economic performance
was not judged by the same standards that were applied to other countries. On January 1, 2000, there was a noticeable sense of relief
among Western political and business leaders when Russian President Boris Yeltsin turned power over to Vladimir Putin.
At a minimum, Mr. Putin was healthy, sober, personable and hard working; the concern about his KGB background was offset, to some
extent, by the fact that he had been educated at Leningrad State University’s Law Faculty
and had served as Chairman of St. Petersburg’s Committee on Foreign Economic Relations
under his former professor, St. Petersburg’s “reformist” mayor, Anatoly Sobchak.
Mr. Putin appeared capable of adjusting to a changing world, where expanding economic
ties with the West supplanted national security issues as the country’s principal concern. In
2001, when he declared his goal of establishing a “dictatorship of law,”1 most observers
Analysis and Perspective
interpreted this as a declaration of his intent to move the country
away from the wild capitalism of the Yeltsin era to one based on
the rule of law, albeit of a distinctly Russian character.
The Russian economy slowly rebounded, aided in part by
increasing energy prices. The 1998 economic crisis made Russian political officials and business leaders increasingly aware of
the importance of increasing the attractiveness of the country to
foreign investment by improving governmental regulation and
strengthening corporate governance. As noted by The Financial
Times’ Andrew Jack, Mr. Putin was skilled at telling foreign investors what they wanted to hear and they seemed eager to believe
him.2
During the first week of October 2003, Moody’s Investment Services upgraded its evaluation of Russian sovereign bonds to
“investment grade.”3 The Russian stock market was booming.
Careful observers of Russia, however, were reluctant to accept
that the country had undergone a complete transformation. Particularly troubling was the Russian Central Bank’s announcement
that capital was leaving the country at a pace not seen since
before the 1998 crash.4 President Putin’s appointment of large
numbers of former KGB officers and persons who had served in
the Soviet Union’s “power ministries” (i.e., Interior and Defense)
to prominent positions in the Russian Government was also a
source of concern to those who feared a decline of support for
economic and legal reform in the country.5
The Possible Significance
Of The Yukos Affair For Russia
During the Soviet era, all economically significant resources were
state-owned. When then-Acting Prime Minister Yegor Gaidar initiated the privatization of such assets in 1992, he was principally
motivated by a desire to prevent any possibility that a command
economy could be reinstituted. The rapid pace of the process
was essential for achieving this objective. Privatization resulted in
an extraordinarily small percentage of the population controlling
the country’s wealth.
The privatization schemes developed by Mr. Gaidar and
then-Chairman of the Russian Federation State Property Committee and later First Deputy Prime Minister Anatoly Chubais permitted industrial managers to become the owners of the
enterprises they controlled. The “loans for shares” arrangement
was invented to ensure the 1996 re-election of then-President
Yeltsin (whose popularity at the time was in single digits) and to
prevent a possible return to power of the Communist Party, led
by General Secretary Gennady Zyuganov. This resulted in the
“jewels” of the Russian economy falling into the hands of a small
number of individuals, known collectively as the “oligarchs,”6
after the Russian government, as planned, defaulted on the
loans.7
Consequently, this small number of people was rewarded for
their multi-million-dollar “investment” in President Yeltsin’s
re-election with the ownership of enterprises and natural
resources worth billions of dollars. This resulted in one of history’s
most rapid concentrations of wealth. Needless to say, the vast
majority of the Russian population was not pleased with this outcome, but without access to the media, effective representative
government, or assets to bring legal challenges, the situation
was a fait accompli.8
2
Until recently, a modus vivendi seemed to be in place in Putin’s
Russia. As long as the oligarchs stayed out of politics, they could
retain their extraordinary wealth. However, it gradually became
apparent to the oligarchs that if they were to protect their economic interests, their involvement in the political process was
unavoidable, particularly with respect to control over the mass
media.9 Some oligarchs, such as Roman Abramovich, rather
than risk much of their wealth, sought to sell off large stakes of
their holdings, often to competitors or strategic foreign investors.10
Mr. Khodorkovsky “violated” this arrangement by funding opposition parties such as the Union of Rightist Forces, Yabloko, and
the Communist Party for the forthcoming parliamentary elections. He also had indicated that, in 2007, he planned to retire
from business to enter presidential politics.11 In the view of many,
Yukos was targeted precisely because it was a successful model
for modern capitalism, demonstrating that a statist economy
(even though it could be more easily deployed to achieve foreign
policy goals) was now a relic of the past.12
The possibility that Russia may be entering a new period of political and economic instability can no longer be ignored. Alexander
Voloshin, Head of the Presidential Administration, who was generally viewed as a supporter of economic reform, tendered his
resignation.13 Russia’s highly regarded Prime Minister Mikhail
Kasyanov publicly declared his “grave concern” about the manner of the Yukos investigation, the freezing of 44 percent of its
shares (subsequently 4.5 percent of the shares were unfrozen),
and also presumably the detention of Mr. Khodorkovsky.14
President Putin has denied that recent events are a harbinger of
the renationalization of former Russian state assets.15 However,
this possibility cannot be dismissed, as such a step might be
popular not only with many of the Russian president’s key supporters (including many former KGB and MVD officials), but also
with the population as well.16
What are the implications of these recent developments for foreign (and domestic) investors and their professional advisors?
First, it cannot be overlooked that Mr. Putin, along with opponents of privatization, has the legal tools to undo what occurred
in the 1990s. Article 168 of the Russian Civil Code provides that
“a transaction not corresponding to a law or other legal acts is
void, unless a law establishes that such deal is voidable, or envisions other consequences of a violation.”17 There are other provisions within Chapter 9 of the Russian Civil Code (e.g., Article
169, which makes void “a transaction with a goal, knowingly
contrary to legal order [ordre publique] or morality”) that could
also provide a basis for challenging other privatizations, and for
the state to seize property from unfavored individuals (assuming
that the period of limitations has not been deemed to have
expired). Russian Civil Code Article 181 provides for a 10-year
period for bringing a lawsuit, the object of which is to demonstrate that a particular transaction is void as a matter of law.18
This may, in part, explain the timing of the bringing of claims
against Mr. Khodorkovsky.19
Both of these articles are broadly worded and ambiguous. They
have not been authoritatively interpreted or frequently invoked in
Russian judicial cases. Nevertheless, the legal basis for undoing
“tainted” privatizations or the awarding of licenses, at least those
that were undertaken after the enactment of the Russian Civil
Code, appears to exist. This may come into play where the
Analysis and Perspective
federal or local authorities possess sufficient political will and
power to influence judicial outcomes.
Given that many of the most important privatizations involved the
use of insider information or predetermined results with the connivance of state authorities, most “owners” of former state assets
will continue to live with the very real fear that their economic
empires can easily be seized under the color of law. Furthermore,
Russia lacks an independent judiciary to protect private property
rights from politically motivated or unlawful government
actions.20
The Likely Impact Of The Yukos Affair
On Foreign Businesses, Their Officers,
Directors And Other Professional Advisors
Despite reassurances from Mr. Putin and elements of the Russian government that the Yukos matter is a justified law enforcement matter, the reaction of the foreign business community will
be difficult to predict, particularly in light of more demanding
expectations of officers and directors of publicly traded companies as well as their lawyers21 and auditors. In light of recent
developments in Russia, shareholders’ expectations concerning
how officers and directors investigate business opportunities in
Russia will become more demanding. By what standards will
corporate officers and directors be judged now that they have
been reminded that Russian written law and other normative
acts are often ambiguous and inconsistently enforced—making
more likely arbitrary or corrupt actions on the part of officials and
judges?22 They will most likely be judged more harshly than in the
past.
Another critical issue is likely to be the proper role of lawyers
when advising clients on their investments or other business
activities. It is indeed possible that outside courts and arbitral
bodies will hold lawyers to a higher standard of competence and
care than in the past. When a client retains a law firm operating in
Russia, it is not merely seeking advice as to the meaning of particular laws or regulations, to be informed of how to deal with
governmental bodies, or to generate documents. Rather, a client’s needs are far more extensive. The client is buying its lawyers’ judgment and regional expertise, both of which are critical
to prevent business losses.
If a contract is not likely to be enforceable in the local courts for
reasons of political interference or corruption, lawyers are likely to
have an ethical obligation to communicate this to their client or, at
a minimum, to put in place mechanisms such as escrow
accounts and the placement of the client’s counterpart offshore
in a jurisdiction where the assets cannot be seized in the event of
a breakdown in business relations.
A law firm operating in Russia must advise its clients of the risks
that their clients’ counterparts may lose title to former state
assets, as well as counsel with respect to the risks of acquiring
state assets. Consequently, if the flow of foreign investment into
Russia declines, Western firms will be faced with a difficult decision—to increase their ability to provide a full range of services (at
a time when the market is shrinking), or to reduce the nature of
services it provides clients and increase the use of local counsel,
particularly when doing business in regions of the country where
the firm does not maintain a permanent presence.
Unless officers, directors, and lawyers for corporations active in
Russia stay abreast of the radical change in the business climate
in the country,23 they are likely to find themselves named as
defendants in future lawsuits (with justification or otherwise).
Judges, like all human beings, are products of their environment.
The public rage over corporate scandals such as Enron,24
Adelphia, WorldCom, and Tyco is not likely to dissipate and may
translate into far greater scrutiny of commercial activities in transitional and developing economies. The common view that what
was not expressly prohibited is permissible will have to be
re-examined in this new environment.
By way of illustration, the American Bar Association recently
voted to amend its Model Rules of Professional Conduct, partly
in response to new U.S. Securities and Exchange Commission
regulations and public pressure. Under the Model Rules, attorneys for an organizational client are required to report certain violations of law to higher organizational authority and are now
permitted to reveal client information to prevent reasonably certain substantial harm to such client where its highest management body does not address a clear violation of law in a timely
manner.25
This attitude represents a landmark change in the nature of attorney-client relations. A similar change may occur where outside
counsel is dealing principally with personnel based in country,
where there is a possibility that headquarters is not well informed
of the political and legal risks they may be encountering. In the
words of William H. Widen, Associate Professor of Law at the
University of Miami, corporations, their officers and directors, as
well as the professionals they retain, have developed the “ethic of
technical compliance.”26 In the Russian context, given the lack of
well-established practice and the pervasiveness of corruption,
there often was no legitimate way to comply with official formalities. It was presumed that if something was not challenged, it
was adequately done. This means those businesses and the
individuals that serve them had become non-accountable, as the
enforcement of the actual rules was arbitrary and the worst consequences of non-compliance often was avoidable through
political intervention.
A potential change in circumstances can have far-reaching implications if the Russian economy heads into a slide and antagonism towards foreign investment grows. The factors defining
what conduct leads to officer and director liability or legal malpractice are likely to increase.
Changes In Judicial Attitudes
And Possible Impact On Corporate Officers,
Directors And Their Advisors
Given this monumental change in expectations of what constitutes effective corporate governance, the standards by which
officers, directors, lawyers, and financial advisors are judged are
likely to undergo significant changes to reflect a growing awareness that business practices abroad are not the same as those
at home—that business risk due to political changes under the
guise of law must be adequately addressed.
Like all institutions, corporations, in particular, corporate officers
and boards of directors, can fall victim to the phenomenon of
“group think,” which can lead to breakdowns in corporate decision-making and effective governance. According to Professor
Donald C. Langevoort of the Georgetown University Law Center:
“Studies of corporate boards of directors often observe team-like
traits. Invitations to the board are based heavily on matters like
3
Analysis and Perspective
compatibility and ‘fit.’ The work of the board prizes consensus
not conflict. Absent some sort of crisis, outside members see
their value largely in terms of constructive advice, giving insiders
the benefit of an expert external perspective on the corporation’s
uncertain world.”27
Professor Langevoort notes that corporate governance theory in
the recent past has emphasized teamwork and conflict avoidance.28 Academics and shareholder activists are likely to urge
high standards of care in today’s global economy, and this will
probably translate into changes in the manner in which courts
judge corporate behavior.
The situation described above suggests that we will be entering
a phase where there will be more second-guessing of business
decisions and greater expectations of the role of outside counsel
in protecting corporate interests. The relatively lax standards for
officers, directors, outside counsel and other advisors in connection with commercial activity in Russia is probably a thing of the
past, as those who have warned about legal instability in Russia
are vindicated by current developments. For example, a court
may be less tolerant of instances where independent directors
steer work to their law firms or principal employers, when there
has not been a thorough search for alternative providers of
goods or services. In fact, it may not even be necessary for an
independent director to play a role in the decision-making process concerning the retention of a firm or the purchase of goods
from a business.
sian upgrade sparks euphoria,” The Financial Times, October 9,
2003, at 27.
4
Yulia Latynina, “Flight Capital and Doubling Russia’s GNP,” Moscow
Times, October 15, 2003, available at www. ocnus.net/cgi-bin/
exec/view.cgi?archive=32&num=7694 (accessed November 3,
2003). The Central Bank estimates that U.S.$7.7 billion of private
capital left Russia from July to September 2003. The figure for the last
half of 2003 may be a net figure as high as U.S.$13 billion. In contrast,
in the first six months of 2003, Russia had a net capital inflow of
U.S.$4.6 billion. See Arkady Ostrovsky, “Russia fears $13bn capital
flight,” The Financial Times, November 8/9, 2003, at 6.
5
See Arkady Ostrovsky, “Putin oversees big rise in influence of security
apparatus,” The Financial Times, November 1-2, 2003, at 3. Such
types of persons in general are commonly referred to as “siloviki.” It is
important to note that these labels, while often useful analytically, do
not reflect the complexities involved in behind-the-scenes maneuvering or the reality that persons of the same background may have different views and personal relations.
6
See David E. Hoffman, “The Oligarchs: Wealth and Power in the New
Russia,” (Public Affairs 2002).
7
Through Menatep Bank in December 1995, Mr. Khodorkovsky was
able to begin his acquisition of Yukos by means of the “loans for
shares” arrangement. Menatep provided the Russian government
with approximately U.S.$160 million in loans and received control of
45 percent of Yukos’ shares in the form of a pledge. After the Russian
Government then defaulted on the loans, Menatep acquired an additional 33 percent of Yukos shares for U.S.$150 million during an investment tender. See Leon Aron, “The Yukos Affair,” Russian
Outlook, Fall 2003, at 1-2, available at www.aei.org/publications/filter.,pubID. 19368/pub_detail.asp (accessed November 4, 2003).
8
For a good description of the dynamics of the Russian privatization
process, see Chrystia Freeland, “Sale of the Century: Russia’s Wild
Ride from Communism to Capitalism,” (Crown Publishers 2000). A
particular contribution to the current literature on Russian developments over the last 10 or so years is veteran journalist David Satter’s
candid account “Darkness at Dawn,” in which he offers an insightful,
disturbing and well-researched examination of the complex inter-relationships linking the consequences of Russia’s privatization of state
assets (in human and economic terms), Russian organized crime’s
role in the evolution of the country’s post-Soviet political and economic system, the war in Chechnya and Vladimir Putin’s rise to
power. See David Satter, “Darkness at Dawn: The Rise of the Russian
Criminal State” (Yale University Press 2003). Not surprisingly, according to Leon Aron of the American Enterprise Institute, in a July 2003
poll, 77 percent of Russians regarded “big capitalists” somewhat or
completely negatively. See Leon Aron, “The Yukos Affair,” Russian
Outlook (AOL Online), October 1, 2003, at 8, available at
www.aei.org/publications/pubID19368/pub_detail.asp (accessed
November 3, 2003) (citing “Rossiyane o vozmozhnosti peresmotra
privatizatsii i krupnom kapital” (“Russian Citizens on the Possibility of
the Revision of the Privatization Results and on Big Capital),
Rossiyskoye Obshchestvenennoye Mneniye i Isledovaniye Rynka
(ROMIR, Russian Public Opinion and Market Research), conducted
July 9-14, 2003.
9
Russian media magnates Boris Berezovsky and Vladimir Gusinsky
were the first two oligarchs to be targeted by President Putin. Both
now live in exile. See Stefan Wagstyl, Andrew Jack, and Arkady
Ostrovsky, “Comment and Analysis: Russia,” The Financial Times,
November 3, 2003, at 13.
There is no longer a bright red line for officers, directors, and their
lawyers and advisors to avoid crossing with respect to risk avoidance in Russia. Rather, the situation is more analogous to someone trying to judge how close one may walk along the edge of a
cliff without running the risk that the ground under his feet may
collapse. Consequently, as a result of heightened expectations,
persons involved in corporate governance and their advisors
must exercise greater diligence.
Conclusion
Traditionally, foreign investors pursue economic opportunities
where there is political stability. It remains highly uncertain
whether Russia’s “managed democracy,”29 where substantial
and potentially arbitrary power is placed in the hands of bureaucrats, will be able to establish such a condition in the future. It is
indeed likely that this situation will continue to permit corruption
to fester, if not increase—factors recognized as having a negative
impact on foreign investment. Russia’s enactment of new legislation, selective prosecution of low-level government officials on
corruption-related charges, and increasing the salaries of state
officials30 in combination with the new requirements arising from
implementation of the Organization for Economic Cooperation
and Development’s Anti-Bribery Convention31 are unlikely to
change the situation.
10 See Chrystia Freeland and Arkady Ostrovsky, “Comment and Analysis: Russia for sale, the oligarchs who won the battle for strategic assets are now seeking to cash in on their investments,” The Financial
Times, October 6, 2003, at 11.
11 See endnote 9.
1
According to Vladimir Gel’man, Mr. Putin first used this phrase during
the 2000 Russian presidential campaign. See Vladimir Gel’man, “The
Dictatorship of Law in Russia: Neither Dictatorship nor Rule of Law,”
PONARS Policy Memorandum 146, October 2000, available at
www.csis.org/ ruseura/ponars/policymemos/pm_0146.pdf (accessed November 2, 2003).
12 See Leon Aron, “The Yukos Affair,” Russian Outlook, Fall 2003, at 3,
available at www.aei.org/publications/filter., pubID.19368/pub_detail.asp (accessed November 4, 2003).
2
See Andrew Jack, “A smooth-talking hardman,” The Financial Times,
November 1, 2003, at 7.
13 Even Mr. Voloshin’s successor, Dmitry Medvedev, questioned the
decision to freeze the Yukos shares. See Arkady Ostrovsky, Andrew
Jack, and George Parker, “Kremlin split widens as key aide warns
over freezing Yukos shares,” The Financial Times, November 3, 2003,
at 1.
3
See Arkady Ostrovsky, “Russia Makes Investment Grade,” The Financial Times, October 9, 2003, at 17; see also Paivi Munter, “Rus-
14 See Erin E. Arvedlund and Sabrina Tavernise, “Russian Premier
Steps into Fray on Jailed Tycoon,” November 1, 2003, at A1, and
4
Analysis and Perspective
Andrew Jack and Arkady Ostrovsky, “Russian premier ‘gravely concerned’ over Yukos Crisis,” The Financial Times,” November 1-2,
2003, at 1. It is beyond the scope of this article to speculate as to
whether Mr. Khodorkovsky and his associates are guilty of some or
all of the offenses of which they are accused—tax evasion, fraud,
forgery and embezzlement. Furthermore, this article will not examine
the degree to which the Russian law enforcement authorities have
complied with the requirements of the recently adopted Russian
Criminal Procedure Code with respect to its handling of Mr.
Khodorkovsky.
15 For the competing explanations of the motives behind the Yukos
affair, see the websites of President Putin (www. kremlin.ru), the
Russian Federation Government (www. government.ru/government/index.html?he_id=38), and Yukos (www.Yukos.com), (accessed November 4, 2003).
16 See Andrew Jack and Arkady Ostrovsky, “Public warms to tough
stance on Khodorkovsky,” The Financial Times, November 1-2,
2003, at 3. For example, of the seven governors appointed by President Putin to head the country’s major political subdivisions, five have
security or military backgrounds. Stefan Wagstyl, Andrew Jack, and
Arkady Ostrovsky, “Comment and Analysis: Russia,” The Financial
Times, November 3, 2003, at 13.
17 The Russian Civil Code was adopted in October 1994, and entered
into force in January 1995.
18 This statute of limitations should apply separately to, on the one hand,
1) the establishment and the initial acquisition of certain state assets,
and, on the other hand, 2) whether Yukos fulfilled its obligations under
various licenses for the development of subsoil assets, such as at its
principal production site at Yugansneftegaz. See Carola Hoyos and
Andrew Jack, “Yukos probes could widen over two years,” The Financial Times, November 13, 2003, at p. 17. This suggests that foreign investors will regard further investment in the Russian energy
sector as involving significantly greater risk, at least in the near term.
19 Under Russian Civil Code Article 200 – Start of the Running of the Period for Limitations of Actions, the period for bringing a lawsuit commences “from the day when a person knew or should have known of
the violation of his [its] rights.” This provision may be difficult to apply in
practice with respect to governmental bodies the conduct of which
was carried out by former officials who may have colluded in an improper privatization or other wrongful act, but where the present government, having learned of such improper conduct, wants to nullify
the transaction.
punity the unique legal and political conditions in the country. Rather,
corporations typically retained lawyers with expertise on issues of
Russian law precisely in recognition that business in a country in transition, without a history of private property, raised more complex issues than those found in countries with market economies.
22 See Steven Lee Meyers, “What Chance Justice is Done? Russia’s
System is Questioned,” The New York Times, November 1, 2003, at
A1.
23 For a discussion of how the Yukos affair is being viewed by some of
the major Western energy companies, see Conrad de Aenlle, “Russia’s Oil Industry, Caught in a Tug of War,” The New York Times (Business Section), November 9, 2003, at 4.
24 See Roger C. Cramton, “Enron and the Corporate Lawyer: A Primer
on Legal and Ethical Issues,” 58 Bus. Law. 143 (2002). This is not to
suggest that these U.S. corporate scandals are comparable to the
Yukos matter. While all seemed to involve individual or corporate misconduct, political objectives did not play a decisive role in the investigations and prosecutions of the aforementioned U.S. corporations,
their officers, directors and outside advisors.
25 See Amendment to the Model Rules of Professional Conduct
passed by the American Bar Association’s House of Delegates on
August 11-12, 2003, available at www. abanet.org/leadership/
2003/journal/119b.pdf;
see
also
www.abanet.org/buslaw/
corporateresponsibility/home.html.
26 William H. Widen, “Enron at the Margin,” 58 Bus. Law. 961 (2003).
27 See Donald C. Langevoort, “The Human Nature of Corporate Boards:
Laws, Norms, and the Unintended Consequences of Independence
and Accountability,” 89 Geo. L. J. 797 (2001) and “Organized Illusions: A Behavior Theory of Why Corporations Mislead Stock Market
Investors (and Cause Other Social Harms),” 146 U. Pa. L. Rev. 101
(1997).
28 Id., at 798.
29 See Timothy J. Colton and Michael McFaul, “Popular Choice and
Managed Democracy: The Russian Elections of 1999 and 2000”
(Brookings 2003).
20 While there is a degree of prosecutorial discretion in all legal systems,
the selective prosecution of enemies of political figures and other
state officials in Russia is commonplace.
30 See Tatiana Smol’iakova, “Povyshenie minimal’noi zara
botnoi platy v oktiabre 2003 roga: Denezhnoe udovol’stvie” [Increase
of the minimum working payment in 2003 in October 2003],
Rossiiskaia
gazeta,
October
3,
2003,
available
at
www.rg.ru/2003/10/13/denejnoeudovolstvie.html (accessed on October 9, 2003) (noting that the salary for the highest-ranked civil servant is R27,000 per month; i.e., the dollar equivalent of approximately
U.S.$900 per month at current exchange rates).
21 That U.S. and other non-Russian courts will apply stricter scrutiny to
the conduct of lawyers working on Russian-related matters should
not be interpreted to mean that, in the past, they could ignore with im-
31 See the relevant section of the OECD’s website dealing with the Convention at www.oecd.org/department/0,2688,en_ 2649_34859_1_1
_1_1_1,00.html (accessed November 7, 2003).
5