Photo: Atle Staalesen

The Murmansk quota-fixers

Powerful fisheries companies in Murmansk fight for lucrative quotas and balance between loyalty to Russian authorities and foreign partners, writes Blogger51.
May 31, 2018

The Russian state is currently in the process of setting the marine fishing quotas for the next 15 years.  And as fish is a very salable commodity, quota recipients have to fight for their pieces of the pie on two fronts. On the one hand, they show loyalty to the Russian government and on the other - to their foreign partners. But they never advertise their relationships to one or the other. And it seems that this situation suits everyone just fine.

At the end of this summer or beginning of autumn, the government will determine what amounts and which fishing companies have the right to do pelagic fishing for the next fifteen years. Previously,  quotas were granted for ten. Fifteen years is more than half a generation.

In the public sphere, this issue is not particularly noticeable and is hidden behind faceless language in the Russian Fishery Agency’s meeting reports that examine the correctness and completeness of the fishing companies’ requests. But the right to catch tens of thousands of tons of cod fish annually over the next 15 years represents a very, very large amount of money. And the sums can be multiplied, after all fish is a foreign currency-industry and there will always be a buyer.

The right to catch tens of thousands of tons of cod fish annually over the next 15 years represents a very, very large amount of money

Currently, the global market price for one ton of cod is close to $4,000. Russian buyers do not have this kind of money, so the fishermen send most of the fish for export.

As a consequence, this market has its fair share of gamesmanship and deal making, as well as jockeying for increased quotas.

Here, fleets can get consolidated or broken apart as different companies with quota rights find themselves under new ownership. Here, businesses can be cut into pieces, and opponents deprive each others’ quotas. The more quotas you have, the richer you are. And not surprisingly, in the fisheries industry there are rich people with huge administrative resources. After all, in what other kind of business are you guaranteed stable profitability for the next 15 years?

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And is really one the requirements for increased quotas the possession of a minor fish processing plant on the shore? Not really.

If the local production unit in itself is unprofitable, it is still needed in order to be able to ask for an increase in catch volume, most of which again, will go for export.

Is it possible to squeeze out a rival business? Apparently, this is exactly what is happening now with Yuri Tuzov’s Nord Pilgrim company.  And is possible to deprive an opponent’s quotas and win the share in an auction? Lets have a look.

The Russian fish producer who has a Maltese passport and lives in Switzerland

Since 2014, the life of the export-oriented Russian businessmen has become somewhat more complicated as it seems to have become uncomfortable for them to be associated with the Russian authorities in the eyes of Western partners.

The life of the export-oriented Russian businessmen has become somewhat more complicated

So, Yuri Prutkov, a former member of regional Duma in two periods, soon became concerned about obtaining a European citizenship as the first wave of sanctions hit Russian elites. And the easiest way was to get a Maltese passport in exchange for investments. This fact was taken advantage of by rivals in the market, who tried to use their administrative recourses to strip Prutkov’s company of its quotas.

However, the arbitrary court saved Prutkov’s business. He did have a double citizenship, he had not had sufficient time to cancel his Russian citizenship. However, documentation [obtained by Bloger51] shows that he does not pay tax in Russia.

A good guess is that fears of being mentioned in connection with sanctions was the cause for several recent strange meetings between the government and business owners who preferred their names not be advertised.

Another important participant in the Russian fish market is Vitaly Orlov, the owner of the Norebo group (previously Karat). He participated in the federal government’s meeting in Kola in late April:

The names of two of billionaire Orlov’s key partners, Alexander Tugushev and Magnus Roth, are available in the public domain.

Mr. Tugushev is now sitting under house arrest for allegedly extorting 33 percent of the shares in the Karat Group. However, Roth’s story is more interesting. From fragments from Orlov’s court interrogation, it follows that Magnus Roth was an important element of Orlov’s business. But as Mr. Roth is a foreigner, which, according to the experience of Mr. Prutkov and his Maltese passport, this could have led to having their quotas removed.

And Mr. Roth was subsequently and unexpectedly outed by media channel Arctic-TV, which talked at length about how he, as a Swedish citizen, conducts business in Norway and Russia, lives in Hong Kong and Switzerland but yet does not pay taxes anywhere:

Perhaps, the owner of Arctic-TV tries was trying to get some revenge on Orlov by attacking his foreign partner. Previously, Arctic-TV was forced to make an amicable agreement personally with Orlov when the billionaire began to sue the TV channel for damages to his business, honor and reputation.

Or perhaps, in this way, Orlov is just trying to distance himself from a recent partner in order to keep the core of the business: the quotas.


This story is originally posted on the Bloger51.ru and re-published as part of Eyes on Barents, a collaborative partnership between news organizations and bloggers in the Barents region

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