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Miller and Medvedev asked Sechin to hide information about their purchases

Миллер и Сечин просят Медведева скрыть информацию о своих закупках

 

The heads of Rosneft and Gazprom Igor Sechin and Alexei Miller has asked the Prime Minister Dmitry Medvedev to withdraw most of its transactions from the application of the law “On public procurement” for fear of tougher sanctions. The RBC has a copy of a letter with a proposal to change the current law “On procurement of goods, works, services by separate types of legal entities” and to deduce from-under its actions of financial transactions, real estate transactions and intra-group transactions. As reports the edition, Medvedev has instructed the Minister of economy Alexei Ulyukayev and Deputy Prime Minister Igor Shuvalov to “consider the appeal” and to “prepare proposals for improving the rules” of current law on procurement by state-owned companies.

Since the adoption in 2012 the law changed in more than ten times. It provides for advance disclosure of the main terms and conditions of all plan contracts. The application of these requirements in terms of procurement of financial services and the conclusion of other financial transactions by companies in respect of which the sanctions the US and EU, according to the authors, reduces the efficiency and effectiveness of their activities. But also creates risks of using the control authorities in the US and EU disclosures to verify that companies comply with sanctions, moreover, can lead to toughening of sanctions and application of more restrictive measures and penalties.

According to Sechin and Miller, publication of information about transactions, prices, and counterparties “provokes the increased cost of credits and has a significant impact on the Russian financial market, causing price changes of currencies and the rates of loans of a speculative nature”. From the application of the procurement law it is proposed to withdraw transactions with real estate objects and land plots.

“Due to the nature of its activities, oil and gas companies enter into real estate transactions on a regular basis, but with due observance of the procedures of the law of unjustified costs,” the letter reads. The choice of locations for the exploration and development of fields based on the project design and other parameters and due to the boundaries of zones with special conditions of use of territories, therefore, is unique and should not fall under the law on public procurement, the authors of the letter.

Leaders of “Rosneft” and “Gazprom” suggest to deduce from-under actions of the procurement rules intra-group transactions, because they “are not inherently market focused on the movement of wealth within a single business entity” and, therefore, the application of the law again increases costs to companies (amount in letter is not specified).

Representatives “Rosneft” and “Gazprom” have refused comments.

We will add that earlier “Gazprom” and “Rosneft” has asked to soften the law on public procurement. Media reported that in September of 2015 Sechin had sent a letter to Prime Minister Medvedev with the request to allow state-run companies not to publish the initial maximum purchase price unique or technically complex equipment. According to him, this will help to avoid price collusion and allow you to keep a trade secret. The Ministry of economic development and the FAS did not supported the proposal of Rosneft.

“Gazprom” has addressed for comments to the draft amendments, changing the procurement system of state-owned companies, to the first Vice-Premier Igor Shuvalov. The group also provided suggestions to the leadership of the country and the Chairman of the state Duma Sergei Naryshkin.

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