Article 18 Prevention of Irregularities, Fraud and Corruption

(1) The Russian Federation shall take appropriate measures to prevent irregularities and fraud.

"Irregularity" shall mean any infringement of this Agreement, implementing contracts, EU or national law resulting from an act or omission by anyone who has, or would have, the effect of prejudicing the funds of the Cooperation Programme.

"Fraud" shall mean any intentional act or omission concerning:

- The use or presentation of false, incorrect or incomplete, statements or documents which has as effect the misappropriation or wrongful retention of Parties' financial contributions;

- Non-disclosure of information in violation of a specific obligation, with the same effect;

- The misuse of such funds for purposes other than those for which they are originally granted.

(2) The Russian Federation undertakes to take every appropriate measure to prevent, detect and punish any practices of active or passive corruption during the implementation of this Agreement.

"Passive corruption" shall mean the deliberate action of an official, who, directly or through an intermediary, requests or receives advantages of any kind whatsoever, for himself or for a third party, or accepts a promise of such an advantage, to act or refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties, which has, or would have, the effect of harming the Parties' financial interests.

"Active corruption" shall mean the deliberate action of whosoever promises or gives, directly or through an intermediary, an advantage of any kind whatsoever to an official, for himself or for a third party, to act or refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties, which has, or would have, the effect of harming the Parties' financial interests.

(3) If the Russian Federation does not take appropriate measures to prevent fraud, irregularities and corruption within the Cooperation Programme, the Managing Authority may adopt precautionary measures.

Those precautionary measures may include:

- Additional first level controls (FLC) or second level audits;

- Special trainings/renewal of training for first level controllers or second level auditors;

- FLC seminar or special guidance on relevant topics for the country/project partners in question;

- Correction report linked to the project's progress report based on findings to avoid the same errors in the future;

- Part-termination of the subsidy contract to exclude the project partners in question.

(4) The Russian Federation shall immediately inform the Managing Authority and the Commission of any element brought to its attention which arouses suspicions of irregularities, fraud or corruption and of any measure taken or planned to deal with them.

(5) The Managing Authority and the Commission shall immediately inform the Russian Federation of any element brought to their attention which arouses suspicions of irregularities, fraud or corruption and of any measure taken or planned to deal with them in case such irregularities, fraud or corruption may affect interests of the Russian Federation and Russian beneficiaries in the Russian Federation while implementing the Cooperation Programme.

(6) The rights and obligations of Germany, as country hosting the Managing Authority, with regard to the prevention of irregularities, fraud and corruption are set out in the Cooperation Programme document and the other documents in the meaning of point (a) of Article 2 of this Agreement which are legally binding for Germany.