ANDREY TENISHEV: DAMAGES FROM CARTELS ACCOUNT UP TO 2% OF GDP
Andrey Tenishev took part in a coordination meeting in Nizhny Novgorod
"Every year FAS opens about 400 cartel cases. The total sum of administrative fines varies from 2 to 4 billion RUB annually”, Andrey Tenishev illustrated the importance of the issue. “Up to one third of Russian GDP is allocated through public procurement reaching last year around 25 trillion RUB. In case of bid-rigging price reduction is maximum 0.5%. Our analysis shows that truly competitive bidding gives up to 20-22% reduction. Extrapolating it to the sum of all procurement the economy will get a colossal effect”.
"Cartel is a latent crime so interaction with the law enforcement bodies on inspections and obtaining operation search and investigation materials is essential as well as unifying the criminal and administrative laws”, reminded Head of FAS Anti-Cartel Department. Head of Samara OFAS Leonid Pak and Head of Kostroma OFAS Mursal Ismailov presented some cases. Productive experience with law enforcement bodies enabled to open criminal proceedings in one of the cases discussed, the violators in other sentenced to imprisonment.
"At the coordination meeting we discussed how we can together expose cartels, how to punish the violators not only administratively but also criminally”, explained Andrey Tenishev to journalists at a briefing. “There is an explosive cartel growth in procurement of medical equipment. Medicines, roads, construction, food products for children and social facilities – are the pain spots that are first of all inspected in Russian regions. In the Nizhny Novgorod region these sectors also will be inspected carefully engaging the arsenal of the law enforcement bodies since price collusions are formed secretly, latently. No better method is invested in the world rather than exposing cartels through investigative searches. FAS does not have such powers but our colleagues from the law enforcement bodies have. We just need to establish effective ".
"We have come up with working scenarios of exposing and suppressing cartels punishing the violators in accord with the law. We had to learn how to solve the puzzle of operative data and information that we possess today”, explained Mikhail Teodorovich. “A new period starts. In front of you, I am signing an order to open a case upon signs of a cartel on the market of medical equipment and medical products. It is a very capital-intensive market and very socially sensitive. Our attention should focus, first of all, on such markets, under the National Competition Development Plan and the May Order of the President of Russia ".
"Cartel members cynically encroach on the money allocated for medicine. I think they will suffer punishment. It will be a logical outcome of the work done, in particular, today", confirmed Andrey Tenishev.