Enforcers Vow to Target Fraudulent Ads

Irresponsible advertisements will start disappearing from Russian media by the end of this month under a presidential decree on truth in advertising, a senior government official said Tuesday.Natalya Fonaryova, deputy head of the State Antitrust Committee, which is in charge of enforcing the law, said that the committee will aim first at two or three investment firms that have been the most flagrant violators."We will make an example of the most impudent firms, such as those still promising an annual return of over 1,000 percent," Fonaryova said. "I'm sure that this will convince other companies to make necessary changes to their advertising strategies."Since voucher privatization began in 1992, hundreds of investment funds have cropped up, many of them promising improbably high returns on deposits in television, radio and newspaper advertisements. Several well-publicized funds have disappeared, duping investors out of millions of dollars in savings.But under a decree signed last month by President Boris Yeltsin, companies can no longer make promises of future performance in advertisements. Fonaryova said that a system to implement the decree will be ready in less then two weeks, after which the committee can actually start revoking the licenses of irresponsible advertisers. More than 80 percent of advertisements for finance and insurance companies currently do not comply with the decree, Fonaryova said. She said that tobacco and alcohol advertisements could also soon be prohibited under a draft law designed to provide a legal basis for the advertising market in Russia. While one version of the draft merely imposes certain limitations on tobacco and alcohol advertisements, a second version completely bans them.Russian advertising companies came out strongly against a ban on tobacco and alcohol ads Tuesday, releasing a study claiming that such a ban would cost Russia $1 billion in investment and tax revenues over the next five years."This kind of advertisement should be controlled just like it is being controlled in all civilized countries," said Igor Pisarsky, president of the Russian Association of Advertising Agencies, which groups 22 Russian ad producers. "No models under 25 years old, no billboards within a certain distance of schools, no actual smoking or drinking as part of advertisements, and so on."The association also proposed an alternative draft law on advertising, prepared by independent experts. Under the draft, said Pisarsky, the advertising market would be controlled by an independent council, not by a government agency. He did not, however, specify any further differences between the association's draft and others to be considered by the State Duma. Fonaryova said that the Antitrust Committee favors more liberal controls on alcohol and tobacco ads, while the Health Ministry supports a full ban. She said it was premature to say which one of the two will be submitted to the Duma.The parliament passed a law last year that prohibited advertising of tobacco and alcohol in the mass media, but the law has never been enforced, Fonaryova said.