Damages from cartel agreements amount up to 2% of Russian GDP

| By | FAS Russia
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Head of the FAS Russia Anti-Cartel Department, 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. 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”, commented Head of the 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.

Andrey Tenishev illustrated the importance of the issue:

“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 “.

“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.

SOURCE: fas russia
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