Peculiarities of Globalisation: German Blanks Acquisition
by Ursula Kampmann
April 6, 2017 – On 7 August 2015, the Russian blanks producer Gurt received the order to produce the blanks for all German 1- and 2-eurocents. This meant more than half a billion 1-eurocent blanks with an optional quantity of up to 950,000,000 and close to half a billion 2-eurocent blanks with an optional quantity of up to 840,000,000 pieces. The reason for the contract award to Gurt was their attractive offer – with the usual restrictions, of course. For instance, there has to be a statement to assert that the supplier has paid all mandated taxes and charges as well as all dues to the statutory social insurance. Obviously, there are also the current embargos and political sanctions, Russia is subjected to.
In terms of pricing, Gurt has numerous advantages. With an average gross salary of €500 per month in 2015, Russian salaries are very competitive. Energy prices are also much lower than in other countries. Thus Gurt was able to offer a price that was low enough to receive the complete order which normally would have been split between the two cheapest suppliers.
The company Freiberger EuroMetall made a plea against this. According to the press office of the Bundesamt für zentrale Dienste und offene Vermögensfragen (Federal Office for Central Services and Unresolved Property Issues), the plea was based, among other things, on the Russia-embargo. “All legal matters have been thoroughly investigated. The economic sanctions of the European Union, especially those concerning the Crimea crisis have been assessed in great detail. It was concluded that the regulations apply to deliveries from the EU but do not include the import of objective coin blanks. Thus objective regulations were not applicable in this case. There were also no traces of further personal or factual entanglement or other reasons, according to EU law and especially the existing economic sanctions, which would stand against the contract award.”
The press office thus elegantly omits the fact that it was probably not only about the embargo. Insider circles claim, Gurt was involved in staggering corruption- and tax evasion scandals. The BADV supposedly had translations of Russian newspaper articles on the matter.
In February 2015 the Moskow Post reported that Gurt was mixed up in tax evasion and misappropriation of funds during their production of blanks for Goznak, which add up to amounts of half a million roubles. Nikolaj Polikarpov reports: “It has come to light that FGUP Goznak had rented out their facilities to Gurt for the long term in 2008. In the years 2009-2011 Gurt was given the order to produce coin blanks ten times in a row, which meant that they received their contractual 4.1 billion roubles from Goznak. The company Gurt had made contracts with Torgovaja kompanija Avanti, Tehnoservicegroup, Kommerzkapital and a series of other companies, which turned out to be letterbox companies. During preliminary investigations, the investigation panel also ascertained that instead of manufacturing the blanks themselves, the company management of Gurt was ordering them at the ZAO D&K and the Mezhregionalnaja metallurgicheskaja kompanija. These companies sold the blanks to the letterbox companies and they gave the blanks to Gurt who then sold them to Goznak, but the manufacturing companies sold the blanks for a different price than that, which Gurt received from Goznak. Thus a total of 3.5 billion roubles of the 4.1 billion roubles, paid by Goznak, was transferred and then branched away as illegal earnings. Allegedly, Gurt’s profit from the contract under which commission is payable on a sale was only between 1.5% and 5% of that sum. Investigators assume that tax evasion was the reason for this.”
Another Russian newspaper, the “Kommersant” reported on 1 June 2015 – two months prior to the German order to Gurt – that criminal investigations against Anatolij Kluban, the CEO of Gurt, had been initiated. At the time, he was suspected of owing 686 million roubles worth of taxes to the revenue board and of detouring 3.5 billion roubles of the payment that had been by Goznak as black money. Charges had not been pressed yet, but Anatolij Kluban was a suspect during the investigations. Meanwhile, according to an expert of the Russian coin market, a condemnation has been issued.
Under German law, suspects are innocent until proven guilty. It is perhaps for this reason that the articles were not of vital interest. The business paper juve summarises the processes: “According to the 2nd Federal Public Procurement Chamber, the Freiberger EuroMetall only expressed suspicions that could not be substantiated.” The Freiberger EuroMetall was forced to retrieve their proposal for further investigation. The order was given to Gurt. It was thus set that the blanks for the German 1 and 2-cent-coins should be produced in Russia.
How astonished were some insiders of coins production when hordes of Russian trucks with 1- and 2-cent blanks arrived in front of a well-known electroplating company in Menden in the summer of 2016. The explanation could be found on the internet. On 4 June 2016 the electroplating facility of Gurt had burned to the ground. In order not to risk contractual penalties, Gurt had promptly ordered a German company to galvanise the German blanks which should have been produced entirely in Russia. It is best not to think about the various problems that arose from this interesting situation at customs.
Anyway, in November 2016, a new call of the BADV for more 1- and 2-cent blanks will end, even before the contract with Gurt has ended. Whatever that means...