Economics Ministry Officials Caught in Corruption
// Prosecutor makes criminal charges against German Gref's subordinates
The Russian Prosecutor General's Office initiated a criminal case yesterday against a number of employees of the Ministry of Economic Development and Trade. They are accused of exceeding their official authority (article 286 of the Criminal Code) in granting licenses and quotas on meat imports to Russia. The names of the accused officials have not been made public, but Kommersant has learned that they no longer work at the ministry.
The case is being investigated by the Prosecutor General's department for especially important cases. An anonymous source at the prosecutor's office told information agencies yesterday that, as a result of the economics officials,
significant sums in tax and customs payments were not paid to the budget by supply firms.” Preliminary estimates places the material loss from their actions in 2005 at more then ˆ25 million from the import of “a significant quantity of meat.” The investigation is continuing. The FSB is also participating in it.
The names of the accused have not been released. The Economics Ministry's department of state regulation of international trade activities and customs affairs, headed by Alexey Kaulbars, is responsible for the distribution of quotas. In 2004 and 2005, the period of the alleged crimes, the department of non-tariff regulation, headed by Yury Buikin and his deputy Vyacheslav Grushetsky, distributed quotas directly. Kommersant was unable to contact Buikin, who retired last year, and Grushetsky, who was appointed Economics Ministry representative in Canada last November. The Economics Ministry press service told Kommersant yesterday that the ministry had yet to be officially informed of the case.
Meat imported into Russia has been subject to duty (beef and pork) and non-duty (poultry) quotas since 2003. Government resolutions are passed annually determining the size of those quotas and the customs duties. In 2005, the quota on frozen beef was 430,000 metric tons, on frozen pork 467,000 tons and on poultry 1.05 million tons. The quotas were divided by country as well, with the United States accounting for 74 percent of poultry imports and the European Union 18 percent. Beef imported within the quota was charged customs duties about one-third of the extra-quota duty. No poultry imports above the quota were allowed. The Russian meat market consists of approximately 8 million tons, worth $15-17 billion.
The size of the quotas is determined based on data provided by the Federal Customs Service. After that, the Economics Ministry distributes quotas among import companies. The ministry also licenses those companies. A source at the ministry told Kommersant that the criminal case will probably be used against Economics Minister German Gref by his opponents, who want to hinder the minister's efforts to bring the customs service under tighter control. Russian President Vladimir Putin recently expressed his dissatisfaction with e Federal Customs Service, saying that the service and business “have merged into economy ecstasy.” Putin's speech before cabinet members set off a campaign to fight corruption in the customs service.
The prosecutor's attention to meat quotas did not take importers by surprise. “Every year, the distribution of quotas is accompanied by loud scandals… Just remember 2004, when the Economics Ministry had to rewrite the list of importing companies to receive quotas and their sizes three times,” said an importer who did not wish to be identified.
That source told Kommersant that importers always feared receiving illegal and unaccounted for licenses. “Haggling with Economics Ministry officials went on constantly,” the importer said. “In 2004, a meat import license cost $30-50 per ton, and in 2005 those unofficial rates rose to $100-150, depending on the type of meat.” Import duties on beef were 15 percent of the customs value, but not less than ˆ0.20 per kilogram, within the quota and 60 percent, not less than ˆ0.80 per kilogram, beyond the quota, the importer said. That is, with a shipment of 200 tons (ten containers), the importer saves about ˆ120,000. “The officials trading in licenses change very often. At the moment, as far as I know, none of those who were responsible for quotas in 2004 and 2005 remain in the ministry today,” the importer said.
by
Svetlana Mentyukova, Alek Akhundov
All the Article in Russian as of May 05, 2006
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