Implementation Of Corruption Prevention Measures In The Private Sector Of Uzbekistan

The article examines the experience of Uzbekistan in preventing corruption in the private sector. It is determined that the negative factors of the spread of corruption among companies leads to a decrease in the competitiveness of the national economy, the quality of public administration, undermines the foundations of free competition, creates threats to the political stability and security of the country. With the spread of corruption, the business climate and the quality of corporate governance deteriorate, the reputation of companies is undermined, and their investment attractiveness decreases. In the markets of goods, works, services, negative selection is taking place, monopoly and protectionism are increasing. It was revealed that corruption in the private sector devalues democratic values, contributes to the spread of legal nihilism, permissiveness, money-grubbing, impunity, etc., causing significant harm to the interests of both society and the state, and the rights of citizens. The thesis is substantiated that the most effective means of preventing corruption in the private sector is the introduction of anti-corruption compliance systems and the corresponding methods of their certification into its subjects. Based on the methods of a comparative study, measures have been identified to introduce anti-corruption compliance in business structures, as well as business entities with state participation. It is determined that international universal, regional and special standards (UN, OECD, GRECO, ISO, etc.) have a significant impact on the development of national legislation and practice of law enforcement in this area. The thesis about the need to improve the legal foundations of the anticorruption compliance system, the need to introduce institutions of responsibility of legal entities in Uzbekistan, prevent illegal lobbying activities, etc.


INTRODUCTION
Nowadays, shadow economy and corruption are one of the main global problems that affect further development of both international community and each country separately. These negative factors undermine economic foundations of countries, distort market mechanisms, adversely affect on investment attractiveness of a country, discredit public policy, complicate business environment, undermine competitiveness of national economies.
Besides, corruption weakens democracy institutions and the rule of law, leads to degradation of public administration and human rights violations, worsens quality of life, significantly increases cost of production, promotes growth of organized crime, terrorism and other threats to international security.
Corruption in the private sector is especially dangerous. According to experts of Deloitte, 30% of total corruption offenses in the world are committed within private sector. On average, each business entity loses 5% of its annual revenue due to corruption crimes, the average loss under one scheme are about $250,000, the average loss incurred due to power abuse of owners/top management are estimated at $573,000, committed by management -$180,000 and committed by employees -$ 60,000 [1]. Analysis of negative impact of corruption among companies shows the following outcomes: sharp reduction of competitiveness of national economy, quality of public administration of the economy, formation of threats to political stability and security, as well as foundations of free competition;  These figures show the necessity of urgent organizational and legal measures aimed at preventing corruption in private sector. In this regard, it is extremely important to take into account the experience of foreign states and international organizations in this area.
In order to prevent corruption in the private sector, a number of foreign countries introduced an effective mechanism called anticorruption compliance designed to identify and analyze corruption-dangerous spheres of activity, assess and manage legal and financial risks in the event of corruption, ensure comprehensive protection of business from various legal, tax, economic, reputation, sanction and other threats [6]. Anti-corruption compliance system was first introduced in the US (1906).
In the result of corruption scandals in private companies in the 1960-70s the adoption "Foreign Corrupt Practices Act" (FCPA) of the US in 1977, that established strict control over accounting and financial records, as well as rules of relationships with government officials [7]. With the adoption of Sarbanes-Oxley Act (SOX) in 2002, financial reporting requirements were significantly tightened, establishing obligation of companies' adopting codes corporate conduct and to report to American regulator. Priority areas of compliance were: Ensuring corruption countering in any of its types (bribery, commercial bribery, power abuse); Ensuring the possibility of identifying and resolving conflicts of interest, including potential ones; Providing employees and third parties with the opportunity to confidentially and, if desired, anonymously report possible violations of compliance standards via hotline or by e-mail; Inevitability of disciplinary measures in case of violation of compliance standards by employees; Implementation of constant monitoring of compliance system in the corporation [8].
In connection with financial scandals that took place in the United States in 2008, the Dodd -Frank Act was adopted in 2010, that set a number of additional anti-corruption measures to ensure transparency in financial markets' operations.
Currently, almost all foreign corporations listed on the US financial market have implemented compliance services. In 2010, the UK Anti-Corruption Act was adopted in order to combat corruption both within the country and abroad [9]. In analogy with the USA and Great Britain, a number of industrialized countries (Germany, France, Japan, the Republic of Korea, etc.) adopted in 2015-2020 legislative acts aimed at combating corruption in the private sector.
International standards in this area also had a significant impact on the development of legislation of many states.  In order to eradicate corruption in all spheres of society, Uzbekistan is taking appropriate legal, institutional and organizational measures. Adopted at the initiative of the President of Uzbekistan, the Law "On Combating Corruption" dated January, 3, 2017, regulated following measures to prevent corruption both in public administration and in the fields of socio-economic development and entrepreneurship: Elimination of administrative and bureaucratic barriers, simplification and improvement of registration, permitting and licensing procedures; Optimization of supervisory functions of state bodies, improvement the inspection system of business entities, prevention of unlawful interference in their activities; Widespread introduction of remote forms of relationships between government bodies and business entities; Creating equal conditions for doing business and preventing unfair competition; Introduction of effective legal mechanisms for public procurement, ensuring publicity, transparency and maintaining a competitive environment in public procurement; Creation of fair conditions and equal opportunities for population in education, health care, social security, public services and other areas of social and economic development, prevention of corruption offenses; Introduction of effective anti-corruption mechanisms in non-governmental organizations etc.
In order to improve efficiency of anticorruption system, create most favorable business climate, promote positive image of our country in the international arena, the State Anti-Corruption Program for 2019-2020 was approved by the Decree of the President of the Republic of Uzbekistan "On measures to further improve the anti-corruption system in the Republic of Uzbekistan" No. UP-5729 dated 05/27/2019. It provides such measures for strengthening anti-corruption in state-shared organizations as introducing anti-corruption "compliance control" system and monitoring its effectiveness, establishing certification procedure for the appropriate anti-corruption standard (ISO 37001). These measures also include active implementation of special anticorruption measures in the private sector by strengthening measures and procedures of internal control, ensuring strict ethical rules when participating in public procurement, encouraging collective anti-corruption actions of business society. As the next logical stage of reforms, The Presidential Decree "On Additional Measures to Improve the Anti-Corruption System in the Republic of Uzbekistan" was adopted (UP-6013 dated June 29, 2020).
In accordance with the Decree, the Anti-Corruption Agency of the Republic of Uzbekistan and National Council for combating corruption were established.
The Agency is a specially authorized state body responsible for the formation and implementation of state policy in the field of preventing and combating corruption.
The agency obeys to the President and reports to the chambers of the Oliy Majlis.
The decree defines the main tasks and activities of the Agency. In particular, the Agency provides a systematic analysis of the state of corruption in the country.
The Agency conducts a comprehensive analysis of the results of the investigation of corruption crimes, primarily harmful to the national interests and international authority of Uzbekistan.
The agency is also granted a number of the following rights: Request, receive and research materials related to budget expenditures, implementation of state assets, public procurement, implementation of investment projects and implementation of government programs; Consider appeals of individuals and legal entities on corruption issues and take measures to restore their violated rights and protect their legitimate interests;

Conduct administrative investigations of corruption offenses;
To make binding orders on suspension of execution or annulment of decisions of executive authorities, economic management bodies and their officials if signs of corruption are detected in them.
Main directions of the Agency were defined as follows: Organization of implementation and effective functioning of internal anti-corruption control system ("compliance control") in government and economic management bodies, state enterprises; Carrying out anti-corruption monitoring and compiling a rating in this area on the basis of modern methods and ICTs; In order to accomplish these tasks, the Agency and other interested departments were instructed to take measures for a phased implementation, s well as with involvement of funds from international organizations, in The American Journal of Political Science Law and Criminology (ISSN -2693-0803) Published: December 27, 2020 | Pages: 41-51 Doi: https://doi.org/10.37547/tajpslc/Volume02Issue12-07 -IMPACT FACTOR 2020: 5. 453 2020-2021 in all government and economic management bodies of the internal anticorruption control system ("compliance control").
Adoption of roadmaps is designed to ensure the full implementation of compliance systems , as well as modern information technologies, minimize the "human factor" in the exercise of discretionary powers by authorized officials, create zero tolerance among responsible officials for any facts of antisocial behavior, minimize the risks of corruption, form effective mechanisms of anti-corruption control, etc.
Roadmaps provide for the implementation of about 40 specific measures to introduce departmental anti-corruption compliance systems, including: Analysis of existing problems, and taking measures to minimize them; Determination of corruption risks and composing the list of officials exposed to high corruption risks; Elaboration of departmental anti-corruption strategies and creating units of compliance; Improvement of conflict-of-interest prevention mechanisms; Strengthening measures to protect individuals reporting corruption and unlawful behavior; Establishing systems of internship of skilled workers in the field of combating corruption, developing integrity and honesty skills, raising awareness of consumers; Taking measures to further develop internal anti-corruption control, targeted interaction with civil society institutions, mass media, civil activists etc.
In view of step-by-step implementation of anticorruption compliance systems, extensive interaction is being carried out with most authoritative international organizations such as KPMG, CERT etc.
In conclusion, we should note the actuality of the following targeted measures: A variety of criminal sanctions can be applied to corporations including liquidation, restriction of rights, confiscation of property, fines, compensation for damage, announcement of the judgment, ban on public procurement participation, probation etc.

Suppression of illegal actions in business
relations with government agencies, as well as of illegal lobbyist activity.
There has been an increase in the number of international recommendations and standards in the field of legal regulation of lobbying activities in recent years. In particular, the OECD member countries adopted "10 principles of transparency and integrity in lobbying activities" in 2010 [21]. As of 2020, special laws on lobbying at the national level have been adopted in more than 20 countries -Georgia ( Currently, about 40 countries (Ukraine, Georgia, Azerbaijan, Moldova, Kyrgyzstan etc.) encourage cooperation in anti-corruption practices in the form of charters, codes of ethics conduct business and others.
As an example, we can cite the Charter of Entrepreneurs of Kazakhstan on Combating Corruption, the Anti-Corruption Charter of Russian Business etc.
In a number of states, Chambers of Commerce, Business Ombudsmen, Producers' Associations, consumer protection societies, mass media etc. are involved in combating corruption in the private sector.
Summing up, at the present stage of anticorruption reforms carried out in Uzbekistan, it