Prime Minister of the Russian Federation allowed state companies to hide their suppliers

Care in the shadow of subcontractors should protect schemes for circumvention of sanctions.
30.11.2017
Vedomosti
Origin source
The chairman of the government, Dmitry Medvedev, released the state-owned company from the obligation to disclose suppliers and contractors receiving contracts. The resolution signed on Monday allows state-owned companies to limit themselves to publishing in the procurement register impersonal information about the results, the method, the purchase price - without the data on the winner. Contracts with subcontractors will go even further into the shadows - the search for information about them is being closed. The measure is temporary until July 1, 2018.

Since 2016, state companies are obliged to publish not only information about contracts concluded, but also their execution and termination, but also the contracts themselves, Ekaterina Smirnova, a partner of the law firm Yakovlev & Partners, recalls. The exclusion of information about contractors and subcontractors from the register of contracts will make it difficult to find data, she warns, in fact this will allow customers to publish only the draft contract.

The need to publish the contracts themselves will remain, the representative of Russian Railways says. But without the automation to look for data on the supplier on contracts - it's like looking for a needle in a haystack, says expert on procurement of the expert council under the government George Sukhadolsky.

For the procurement market, the idea came as a surprise, Sukhadolsky and the head of the purchasing platform admit.

The press secretary of the Prime Minister, Natalia Timakova, representatives of the Ministry of Finance and the Federal Antimonopoly Service did not answer Vedomosti's questions. The state is concerned about the prospect of finding out information about intra-group and financial transactions, says a person close to Rosneft, and information about contractors wants to protect everyone companies that are under sanctions, so as not to disclose schemes that allow these sanctions to be bypassed. Because of sanctions, there are regular problems with working with large contractors, including Russian ones, who are afraid of publicizing cooperation, - it's a question of technologies that are very difficult to replace, says a person close to Roskosmos.

The government's decision to close down data on suppliers of state-owned companies may indeed be related to sanctions, confirms Georgy Sukhadolsky. "The analysis of traffic of the EIS (public procurement site - Vedomosti) shows that a significant portion of requests come from abroad," he said, Western countries are interested in obtaining information on supply chains. State companies are both defense enterprises of Rostecha, subsidiaries of the Defense Ministry, who conduct purchases under general rules, says the top manager of one of the major sites.

Companies already suffered because of working with counterparties who were under sanctions. And since February, the risks will grow even more. Those who after August 2, 2017 made a "significant transaction" with the Russian company from the list compiled by the State Department, face the same sanctions as Russian business (freezing accounts, restricting the export of American goods to the offender, prohibiting loans to the US, refusing in American visas). In the list of Rostekh, Helicopters of Russia, Constellation, Sukhoi, Kalashnikov, Oboronprom, UVZ, Rosoboronexport and other companies. Punishment for a significant deal with them may be suffered by companies or people around the world.

Governance

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