OPEN JOINT-STOCK COMPANY
OIL AND GAS COMPANY RUSSNEFT
CODE OF BUSINESS ETHICS
Moscow, 2012
Basic terms and definitions
The term
OJSC Oil and Gas
Company RussNeft
(the Company)
Directors
Top management
Employees
Executive officers
Interested parties
Family members
Bribe (commercial
bribery)
Bribery
Risk
Confidential
information
Bribery practices
Definition of the term
Open joint-stock company Oil and Gas Company RussNeft,
including all its business units.
OJSC Oil and Gas Company RussNeft Board members .
The President of the Company, Vice Presidents, Directors of
Departments, Chief Accountant, and other individuals
temporarily performing similar functions.
Individuals (including employees and Directors of Departments)
who are in labor relationships with the Company, or provide
services/ perform work on behalf of the Company under Contract
for Work, Labor and Services made between the Company and
these individuals or any company providing personnel.
Directors, Top management and Employees mentioned jointly.
Any persons or groups of persons whose interests are affected by
the business of the Company: shareholders, investors, business
partners, contracting parties, off-takers, executive officers.
Wedded or common-law spouses; parents, including foster
parents; children, including foster children; whole blood brothers
and sisters or cousins; parents-in-law; son-in-law (brother-inlaw)/ daughter-in-law (sister-in-law) of executive officers.
Money, securities, goods and other material values and material
services provided free of charge for the performance of
knowingly illegal act.
Giving or acceptance of a bribe by the members of the
management body of the Company, employees of the Company
and other individuals, who may act on behalf of the Company in
exchange for some illegal acts or inactivity. Offer, warranty and
giving of a bribe (active bribery); demand for, agreement to
accept or acceptance of a bribe (passive bribery).
Event or condition, which is characterized by uncertainty of the
outcome of a matter and probable adverse effects of it.
Information that has actual or potential commercial value
because it’s undisclosed to the third parties, because of lack of
lawful access to it, and because the holder of such information
provides for its confidentiality.
Giving or acceptance of a bribe, mediation in giving or
acceptance of a bribe, abuse of official position or powers,
commercial bribery, facilitation payments, illegal use by the
individual of his/her official capacity to obtain benefits in the
form of money, values, other property, services, any rights for
Conflict of interests
Gift
oneself and the third parties, or unlawful provision of such
benefits or rights to this individual by other individuals, including
commitment of the said actions on behalf of the Company.
Situation, in which financial or personal interests of the executive
officers, for objective or subjective reasons, affect or may affect
the proper performance of their duties because of contradictions
between interests of the Company and their vested interest.
Item of property or property right (requirement), transferred as a
gift on a gratis basis, or release of a person from proprietary duty
to oneself or to the third party.
Official
entertainment
Various social functions, meetings, visits, panel sessions and
conferences, prize-giving ceremonies, etc., held by the
management body. Official entertainments are arranged at the
expense of sponsor (entertainment expenses) and are generally
associated with promotional gifts giving and obtaining.
Person in charge for
observance of antibribery policy
An employee of the Company, who is assigned by the President
of the Company to ensure observance of anti-bribery policy.
I. Introduction
Business Ethics Code of OJSC Oil and Gas Company RussNeft (hereinafter referred
to as “Code”) alongside with other valid internal documents determining rights, liabilities
and standards of conduct of Executive Officers, regulates standards of ethics of corporate
relationship and is obligatory for the Board Members, the President, Top Management and
all employees of the Company.
The Code corresponds to accepted standards of business behavior and ethics.
The Code is based on views and values of the Company Management. It reflects
commitment of the Company and its management to high ethical standards of honest
business when improving corporate culture, observing best corporate governance practices
and supporting business reputation of the Company and Subsidiaries, included in the
corporate structure of the Company, up-to-the-mark.
Sustainable development of the Company in the longer term is impossible without
confidence of the shareholders, investors, contracting parties, employees and the Company
as a whole. Confidence is achieved by constantly maintaining high ethical standards of
doing business and caring for others. Therefore, the Company in its business practice finds
it necessary and tends to the full extent to take into account socially significant aspects of
business and responsibility of the Company in respect of all interested parties.
Laws of different countries differ from each other, and their enforcement is certainly
necessary but not limiting. The Company has worked out additional standards of collective
and personal ethics that should apply to all activities and transactions performed by the
Company and its employees in any place of the world. Herewith the principle of
observance of the most rigid applicable rules is applied:
 if applicable law imposes restrictions on behavior of Executive Officers heavier
than the Code, Executive Officers must in their actions in specific situation observe the
applicable law;
 if applicable law imposes restrictions on behavior of Executive Officers less heavy
than the Code, the Executive Officers must in their actions in specific situation comply
with the norms of the Code.
The Company approves and follows basic ethical rules and principles of the Russian
Code of Business Ethics (The Chamber of Commerce and Industry of Russia, 1998), the
Corporate Charter of Business Ethics (Russian Union of Industrialists and Entrepreneurs,
2003), the Corporate Code of Conduct (FCSM, 2002).
The Company integrates into its business practice the global principles of sustainable
development and corporate social responsibility. The Company tends to provide high
business transparency and responsibility.
Adherence to ethical standards and principles helps the Company to avoid undue
risks, to maintain long-term economic growth, to strengthen its positions in domestic and
foreign markets, to carry out successful business activity, to increase its capitalization and
profit, as well as to form positive business expectations in respect of behavior of the
participants of corporate relations.
***
The Code is devoted to the most significant matters of business ethics of the
Company. It is a public document and the President of the Company may at any time,
based on changes in the Russian and international legislation, based on interests of the
shareholders of the Company or its partners, make changes and amendments to the Code,
which, however, should not distort the existing standards of business ethics.
The provisions of this Code are worked out with due account for the Civil Code and
Labor Code of Russia, the Federal Law «Joint Stock companies» and the above-mentioned
documents.
When hiring for work, every Employee signs Commitment on Acceptance and
Observance of Business Ethics Code of OJSC Oil and Gas Company RussNeft.
II. Main ethical principles
Executive Officers of the Company undertake to strictly comply with the following
ethical principles in their day-to day activities:
 to fulfill in full the requirements of the applicable law and other legal regulation and
in case of applicable law absence to judge by requirements of good faith, reasonability,
fairness and provisions of this Company Code ;
 to be honest and fair in business relations, to refrain from any unfair business
practices;
 to keep to the principle of rejection of bribery of any kind (“zero tolerance”
principle) in business, including relationship with shareholders, investors, counteragents,
representative of authorities, autonomous bodies, political parties, companies, incorporated
in the Company’s structure and others;
 to respect the right of property, aim for mutual profit balance in business
transactions;
 in case of downside risks rise to make it known to the Company President
immediately;
 not to use employment status, confidential information, tangible and intangible
Company assets for their personal advantage;
 to aim to taking collegial decisions and to afford mutual assistance in making vital
conclusions and in cases of emergency;
 to rely on the results of scrupulous and thorough examination of the situation for
making a decision, to refrain from making decisions on insufficient information basis.;
 to treat colleagues as well as all the customers’ representatives and the Company
business partners irrespectively of employment status, gender, age, nationality or
confession with politeness and respect; to display affability and amiability in business
communication;
 not to supply to their colleagues, management, partners, counteragents’
representatives and others untrustworthy or raw information;
 to react promptly to questions and requests of the colleagues, management, partners,
counteragents’ representatives etc.;
 to refrain in day-to-day life and in professional activity from any illegal actions or
actions which may cause doubts of their legality or ethics;
 to take permanent care of upgrading their professionalism, competence and
qualifications. To use their expertise for most professional and efficient performance of
their duties;
 making decisions to take into account not only economic feasibility but also the
decisions made by other persons as well as interests of other concerned parties;
 to refrain from non-ethical methods of competitive struggle;
 to refrain from action or inaction causing conflicts in business relations, to aim for
settlement of conflicts on the basis of the parties’ interests.
In case Executive Officers have doubts in regard of correctness of their actions or
doubts in regard of any other ethical matters they shall turn for explanations to the
person in charge for observation of anti-bribery policy.
Directors and Top-managers shall also undertake to strictly comply n their day-today activity with the following ethical principles:
 to set an example of applicable law requirements, ethical norms and business
activity principles observation;
 to provide, in accordance with the existing legislation and by-laws, timely disclosure
of complete and adequate information about the Company, including its financial status,
economic indicators, property and management structure about major shareholders of the
Company, as well as about essential facts affecting its financial and economic activity with
the purpose of giving shareholders, creditors and investors the possibility to make wellgrounded decisions;
 to conduct business taking into consideration social responsibility before the state
and the society;
 to assist implementation of gratuitious financial or other charity support of social,
cultural, educational and other programs;
 to conduct business so as not to damage the environment, to participate in ecological
programs;
 to build up the relations between the Company and its Employees on the basis of
long-term cooperation, community of ideas, respect for and consideration of mutual
interests, conscientiousness and feasibility of assumed obligations and social partnership;
 to create for Employees labor conditions not affecting their health and dignity, to
provide fair salaries, contributing to growth of their living standards;
 to be earnest in communications, to react attentively to the Employees’ proposals,
their ideas, demands and complaints;
 to avoid discriminating policy and ensure the Employees equal rights and
possibilities in labor payment and career growth;
 to avoid decisions resulting in serious and unjustified reduction of employment in the
Company.
III. Conflict of interests
Executive Officers must prevent situations causing or potentially causing Conflict of
Interests. In respect to a Conflict of Interests already developed, Executive Officers shall
completely distance themselves from taking decisions, thus precluding potential claims of
prejudice and partiality in future, and immediately inform the immediate superior or the
person in charge for observation of anti-bribery policy about the Conflict of interests.
Directors, Top- management and their Family members must not:
 have personal interest in the Company competitors’ business activity;
 invest in the companies competing with the Company;
 accept expensive presents, services, consideration and other personal benefits aimed
at inducement of the said people to make decisions for the giver’s convenience.
All the Executive Officers:
 must inform the Board of Directors of their intention to make a transaction coming
within the scope of the definition “an interested party transaction”. The said transactions
shall be made only on the approval of the Board of Directors and/or General Meeting of
Shareholders;
 having access to confidential information may perform operations with the
securities of the Company and the companies incorporated in the Company’s structure
upon prior notice to the Board of Directors and/or the person in charge for observation of
anti-bribery policy.
Directors and Top-management:
 are to inform the person in charge for observation of anti-bribery policy about
outside business interests drawing off a substantial part of their time or attention from
performing their immediate duties;
 are to inform the person in charge for observation of anti-bribery policy about any
offices held by them outside the Company and unknown to the Company, and, before to
agree to holding of such offices are to inform the person in charge for observation of antibribery policy about their intentions;
 are to refrain from participation in outside business project drawing off a substantial
part of their time or attention from performing their immediate duties;
In case of breaking these rules Executive Officers shall immediately inform the
person in charge for observation of anti-bribery policy.
IV. Confidential information
Executive Officers having access to Company’s confidential information undertake
to use such information only in connection of discharge of their duties.
Executive Officers undertake not to disclose such information (even after
termination of their labor relations or employment duties) to third persons, including state
authorities, other Executive Officers and their Family Members if the requests of the third
persons are not legal, unless otherwise stipulated in the Company by-laws or determined
by the applicable law.
The procedure of information disclosure to mass media, shareholders, investors, and
other Parties Involved as well as submitting of necessary reporting to state authorities shall
be regulated by the Company by-laws.
V. “Know your contractor” principle
Executive Officers make reasonable efforts to minimize the risk of business
relationships with contractors who may be involved into corrupt activities. For this
purpose the Company implements measures implemented based on “know your
contractor” principle according to which the Company:
 conducts inspection of contractors to define presence of their own anti-corruption
procedures and/or policies, their willingness to adhere to ethical principles and
requirements of the Company as well as to provide mutual support for ethical conduct of
business and prevention of corruption;
 monitors transactions with contractors in compliance with ethical principles and
requirements of the Company;
 makes reasonably possible efforts to include in the treaties signed by the Company
provisions aimed at preventing bribery, corruption and legitimization of income obtained
by illegal means.
VI. Giving (accepting) gifts and entertainment
Gifts on behalf of the Company to third parties in the form of monetary means (either
cash or non-cash) irrespective of the currency and financing of charitable and sponsorship
projects with the purpose of obtaining commercial preferences are not allowed.
Gifts which may be given by Executive Officers and other persons who may act on
behalf of the Company, or received by them, shall match the totality of criteria:
 to be directly connected with the legal purposes of the Company’s business
activity, e.g. with protocol events, with a presentation or completion of
business projects, successful fulfillment of contracts, or with national
holidays including such as the New Year Day, International Women’s Day,
professional holiday, etc.;
 to be reasonably founded, equitable and no luxury items;
 not to be a hidden consideration for a service, action, omission of action,
connivance, protection, grant of rights, taking a certain decision about a
transaction, agreement, license, permission etc. or an attempt to
assert
influence over the receiver with some other illegal or unethical purpose;
 not to create a reputation risk for the Company, members of its management
bodies and the Company’s employees in case of disclosure of the information
about the gifts;
 not to contradict to the standards of anti-bribery policy, other by-laws of the
Company and applicable legislative rules.
Executive Officers and other persons who may act on behalf of the Company are
prohibited to give (accept) gifts if they do not match at least one of the above mentioned
criteria.
Executive Officers and other persons who may act on behalf of the Company in
their activity shall make decisions and act, assessing the risk level and match their own
capabilities to lowering this level, ensuring safety, with priority of conduct, readiness for
emergencies.
Risk management involves:
 assessment of professional situations and planned actions with due account
for the risk level contained herein, probability of success and failure;
 decision making and performance of necessary actions only at an acceptable
and negligibly small risk level;
 taking security measures in all cases that reduce the risk level frontier and
increase success probability;
 strengthening the measures to reducing the risk level as approaching the
insurmountable level;
 vigilance and alertness in all cases as the risk of emergencies always exists.
In case of any doubts or questions regarding the validity and admissibility of
receiving a gift arise, the Company’s Employee shall contact the Person in charge for
observance of anti-bribery policy.
In case a gift was sent by mail, delivered by courier and does not meet the
abovementioned criteria, the Company’s Employee is obliged to return it to the donator.
In case of impossibility of return of such present to the donator, the Employee of the
Company is required to inform the Person in charge for observance anti-bribery policy and
follow his instructions.
Internal response procedures to identified risks and violations of anti-corruption
norms:
a) Person in charge for the observance of anti-bribery policy, in case of identifying
substantial risks and/or violations, initiates an official investigation, the results of
which are sent to the President of the Company in order to make a decision on
the application of disciplinary measures to the violator (including termination of
employment or civil law contract), continuation or termination of further
cooperation with partners, representatives of the State and municipal authorities
as well as the transfer of materials to the law enforcement bodies of the Russian
Federation.
VII. Compliance with the Code
All Executive Officers must comply with the present Code and undertake to inform
the Person in charge for the observance of anti-bribery policy of any cases known to them
of already committed or potential violations of requirements of the present Code or
applicable laws, rules and regulations.
The Company will not allow retaliatory actions in respect of bona fide individuals
who report such violations. All reports of violations (already committed or potential ones)
are subject to immediate investigation and, if necessary, correcting measures are taken.
Executive Officers involved in the violation of applicable laws, rules and
regulations of the present Code, depending on the circumstances of the case, are subject to
appropriate disciplinary actions in accordance with the Company’s current regulations and
rules of applicable law.
The Person in charge for the observance of anti-bribery policy should be addressed
to in case questions arise in compliance with the present Code.