Authors

  • Davlat Qurbonov
    Samarkand State University named after Sharof Rashidov
  • Shaxzoda Rustamova
    Samarkand State University named after Sharof Rashidov

DOI:

https://doi.org/10.71337/inlibrary.uz.jmsi.118629

Abstract

This article provides a list of heads of State and Government involved in corruption. In Uzbekistan, in accordance with the requirements of the law on corruption, a list of oversight compliance is established; international standards and standards for the supervision of compliance with corruption legislation; international standards for the supervision of compliance with corruption legislation; international standards for the supervision of compliance with corruption legislation; international standards for the supervision of compliance with corruption legislation.


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THE ROLE AND IMPORTANCE OF THE COMPLIANCE CONTROL SYSTEM IN

PREVENTING CORRUPTION RISKS IN THE STATE AND PRIVATE SECTOR.

Rustamova Shaxzoda Aliyevna

3rd year student of Faculty of Law, Samarkand State

University named after Sharof Rashidov

E-mail: shahzoda9007@gmail.com

Qurbonov Davlat Ravshanovich

Docent, Head of the Department of Special Legal Sciences, SamSU

E-mail: kurbanovdavlat73@gmail.com

Annotation:

This article provides a list of heads of State and Government involved in corruption.

In Uzbekistan, in accordance with the requirements of the law on corruption, a list of oversight

compliance is established; international standards and standards for the supervision of

compliance with corruption legislation; international standards for the supervision of compliance

with corruption legislation; international standards for the supervision of compliance with

corruption legislation; international standards for the supervision of compliance with corruption

legislation.

Keywords:

compliance control system, private sector, corruption risks,

The reforms being carried out in the fight against corruption in the public and private sectors are

not only aimed at improving national legislation based on foreign experience, but also at

implementing into national legislation certain international standards that have been used as an

effective system in this area.

One of them is the compliance control system, which is a set of effective and efficient tools that

have been widely used in this area.
The initial elements of the compliance control system are attributed to the establishment of the

Accident Prevention & Insurance Association in Germany in 1884.
However, most foreign literature, in particular, in the scientific book on the history of

compliance by American scientist Martin Kling, states that this system first emerged in 1906

with the establishment of the FDA (Food and Drug Administration), a federal service that

oversees the activities of companies producing food and pharmaceuticals in the United States,

and the need to establish companies and organizations whose activities are aimed at public safety.

The concepts of

“compliance”

or

“compliance control”

emerged in the Anglo-Saxon legal

system at the beginning of the last century and these concepts mean “organizing one’s activities

in accordance with specially established procedures and rules”. “Compliance” means consent,

conformity and acting in accordance with a rule or instruction.

Anti-corruption compliance control

is a preventive system that organizes the activities of state

bodies and business entities, banks in accordance with international standards, laws and other


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regulatory legal acts in the field of combating corruption, including timely identification and

prevention of corruption risks, conflicts of interest, reporting on violations of the law and

corruption-related offenses.

The purpose of introducing compliance control is to prevent corruption risks in the public and

private sectors and to systematically identify areas and areas where such risks exist, to monitor

factors that create conflicts of interest on a legal and financial basis, to create a comprehensive

mechanism for systematically protecting activities from various financial, economic sanctions

and other influences, and to maintain a positive image of the activity.

“Compliance officer”

is an employee of the compliance service responsible for compliance with

laws, regulatory documents, internal regulations, and is responsible for monitoring and

regulating the actions of employees in accordance with established rules.

This concept, which is of particular importance in the fight against corruption, was initially

established in paragraph 21 of the “State Program for Combating Corruption in 2019-2020”,

adopted on the basis of the Decree of the President of the Republic of Uzbekistan No. PF-5729

dated 27.05.2019 “On measures to further improve the anti-corruption system in the Republic of

Uzbekistan”, in order to strengthen anti-corruption measures in organizations with a state share

in the authorized capital, in paragraph 21, the task of introducing an anti-corruption compliance

control system and systematically monitoring its effectiveness was established. The compliance

control system was first reflected in this document under this name.

1

Based on the decree, starting from 2019, within the framework of the implementation of the

UNDP project “Fighting Corruption through Effective, Accountable and Transparent

Governance Institutions in Uzbekistan”, in cooperation with the responsible agencies, including

the Prosecutor General's Office, the Ministry of Justice and based on the specifics of their

activities, the task of introducing a compliance control system to identify and prevent corruption

risks as a pilot project in joint-stock companies and state organizations with a state share of

100% or more than 50% in the authorized capital, as well as large companies operating in

foreign markets or having foreign partners, was set.

International tender processes were held to implement the project in state organizations. The

process was attended by “White and Case” (USA), “KPMG” (Italy) and other international

auditing companies with extensive experience in this field. In cooperation with experts from

KPMG, which was declared the winner according to the tender results, work is underway to

introduce this system as a pilot project in the system of joint-stock companies "

Uzbekneftegaz

"

and "

Uzkimyosanoat

" and the Ministry of Justice of the Republic of Uzbekistan (including the

central office of the ministry, the Samarkand regional justice department, the Jomboy district

justice department, the central office of the State Services Agency, the Tashkent city department

of the agency, the Yunusabad district public services center, the central office of the Intellectual

Property Agency). Also, starting this year, these experiments are being carried out at the

initiative of the Prosecutor General's Office of the Republic of Uzbekistan with the support of the

UNDP, in the Ministry of Construction of the Republic of Uzbekistan, the Ministry of Higher

and Secondary Specialized Education, the Ministry of Health, as well as in state organizations

such as the Tashkent city administration, the Tashkent regional administration, the Mirzo

Ulugbek district and Buka district administrations.

The implementation of the compliance service in the above-mentioned companies and

organizations is carried out in 4 stages:

Stage 1: analysis of the current state of the anti-corruption compliance control service;

Stage 2: development or improvement of anti-corruption measures and control mechanisms;

Stage 3: implementation of the anti-corruption "compliance control" service;

Stage 4: work is being carried out in such processes as assessing the effectiveness of the

implemented anti-corruption "compliance control" procedures.

1

The "State Program for Combating Corruption in 2019-2020", adopted on the basis of the Decree of the President

of the Republic of Uzbekistan No. PF-5729 dated May 27, 2019 "On Measures to Further Improve the Anti-

Corruption System in the Republic of Uzbekistan"


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The UN Convention against Corruption, such as Article 12 “

Private Sector

”, Article 21 “

Bribery

in the Private Sector

”, Article 22 “

Looting of Property in the Private Sector

”, and Article 39

Cooperation between National Authorities and the Private Sector

”, provides recommendations

on identifying corruption risks and implementing a number of preventive measures to prevent

them. In particular, it specifically indicates the need for the state to take measures to ensure the

transparency of accounting and financial reporting, regulate accounting standards and internal

audit against corruption-related offenses in the private sector.

International standards and documents adopted by the Organization for Economic

Cooperation and Development (OECD).

The next category of international standards that play

a significant role in the fight against corruption is the conventions and international

recommendations adopted by the OECD.

The Convention of the Organization for Economic Cooperation and Development on Combating

Bribery of Foreign Public Officials in International Business Transactions, adopted on November

21, 1997, is the Convention of the Organization for Economic Cooperation and Development.

2

Here, we can cite the “

Management Guide on Internal Control, Ethics and Compliance

”,

which embodies the best practices and experiences in compliance services.

The Basel Committee on Banking Supervision, adopted in April 2005 (in a new edition), is a

document on banking supervision

“On Compliance and the Compliance Function in Banks”.

The recommendations of the Basel Committee on Banking Supervision, adopted in April 2005,

include the following recommendations for organizing a compliance control system in banks and

companies and organizing an anti-corruption policy by the compliance service:

create mechanisms to ensure the independence of the compliance service;

if there are cases where compliance control functions are performed by different departments of

the bank, in this case, the management should clearly distinguish between them through internal

documents, in which case it would be appropriate to designate the implementation of compliance

functions as the main activity of this service, since duplication of tasks affects the efficiency and

independent activities of the compliance service;

ensure the right of the compliance service to freely submit and disclose its conclusions on

corruption to executive bodies without any obstacles;

ensure that the compliance service regularly reports to the management on existing corruption

cases;

determine the status of the compliance service as subordinate only to the management, a number

of priority tasks were listed as recommendations.

The development of compliance services on US stock exchanges and in the US economy led to

the adoption of the

Foreign Corrupt Practices Act of 1977 (FCPA).

The FCPA established

strict rules of compliance, including strict requirements for accounting and financial reporting,

and strict rules on dealings with government officials to prevent corruption in the private sector.

In addition, the adoption of laws such as the Sarbanes-Oxley Act in 2002 created a US model of

the compliance control system, mainly for combating corruption in the foreign operations of

companies.

The next example of the formation of a compliance control system to combat corruption in the

global economy is associated with the legislation of the United Kingdom.

The UK Bribery Act

was adopted on April 8, 2010 and came into force on July 1, 2011.

The list of used literature:

1.

1. Timoshkin A.V. "Corporate compliance control as an instrument of economic security":

author's abstract. dis. ... candidate of economic sciences: 08.00.05 / Timoshkin A.V. - Moscow,

2010. - 32 p., [Electronic manba]. URL: https://www.dissercat.com;Primakov D. Compliance

2

Convention of the Organization for Economic Cooperation and Development on Combating Bribery of Foreign

Public Officials in International Commercial Transactions, adopted on November 21, 1997.


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practices: anti-corruption, banking compliance, sanction compliance and asset tracing– М.:

Infotropic media, 2019 – P.36. [Электрон манба]. URL:

https://shop.infotropic.ru.

2.

ISO 37001 - Anti-bribery management systems”//[Электрон манба]. URL:

https://www.iso.org/ru/standard/62342.html

.

3.

ISO 19600:2014 Compliance management systems-Guidelines”//[Электрон манба]. URL:

https://www.iso.org/ru/standard/62342.

4.

Sarbanes-Oxley Act of 2002. Corporate responsibility. // Public law 107. 204-july 30,

2002// [Электрон манба]. URL:

https://www.sec.gov/html#sox2002.

5.

Foreign Corrupt Practices Act 1977 // PL 95 - 213, Title 1; 91 Stat 1494, Dec 19, 1977//

[Электрон

манба].

URL:

https://www.govinfo.gov

/content/pkg/statute-91/pdf/statute-91-pg1494.

6.

The Dodd–Frank Wall Street Reform and Consumer Protection Act 2010// As Amended

Through P.L.115-61, Enacted 2010

[Электрон манба]. URL:

https://www.govinfo.gov

.

7.

UK Bribery Act of 2010

// [Электрон манба].

URL:

http://www.legislation.gov.uk

.

8.

Decree of the President of the Republic of Uzbekistan dated 02.02.2017 No. PP-2752 "On

measures to implement the provisions of the Law of the Republic of Uzbekistan "On Combating

Corruption" // [Electronic source]. URL: https://lex.uz/docs/3105125.

9.

Decree of the President of the Republic of Uzbekistan dated 27.05.2019 No. PF-5729 "On

measures to further improve the system of combating corruption in the Republic of Uzbekistan"

// [Electronic source]. URL: https://lex.uz/docs/4355387.

References

1. Timoshkin A.V. "Corporate compliance control as an instrument of economic security": author's abstract. dis. ... candidate of economic sciences: 08.00.05 / Timoshkin A.V. - Moscow, 2010. - 32 p., [Electronic manba]. URL: https://www.dissercat.com;Primakov D. Compliance practices: anti-corruption, banking compliance, sanction compliance and asset tracing– М.: Infotropic media, 2019 – P.36. [Электрон манба]. URL: https://shop.infotropic.ru.

“ISO 37001 - Anti-bribery management systems”//[Электрон манба]. URL: https://www.iso.org/ru/standard/62342.html.

“ISO 19600:2014 Compliance management systems-Guidelines”//[Электрон манба]. URL: https://www.iso.org/ru/standard/62342.

Sarbanes-Oxley Act of 2002. Corporate responsibility. // Public law 107. 204-july 30, 2002// [Электрон манба]. URL: https://www.sec.gov/html#sox2002.

Foreign Corrupt Practices Act 1977 // PL 95 - 213, Title 1; 91 Stat 1494, Dec 19, 1977// [Электрон манба]. URL: https://www.govinfo.gov

/content/pkg/statute-91/pdf/statute-91-pg1494.

The Dodd–Frank Wall Street Reform and Consumer Protection Act 2010// As Amended Through P.L.115-61, Enacted 2010 [Электрон манба]. URL:https://www.govinfo.gov.

UK Bribery Act of 2010// [Электрон манба]. URL: http://www.legislation.gov.uk.

Decree of the President of the Republic of Uzbekistan dated 02.02.2017 No. PP-2752 "On measures to implement the provisions of the Law of the Republic of Uzbekistan "On Combating Corruption" // [Electronic source]. URL: https://lex.uz/docs/3105125.

Decree of the President of the Republic of Uzbekistan dated 27.05.2019 No. PF-5729 "On measures to further improve the system of combating corruption in the Republic of Uzbekistan" // [Electronic source]. URL: https://lex.uz/docs/4355387.