Суд мести

According to information from OAO Apatit, at the end of 2002 the company ZAO FosAgro AG (a specialised management organisation) concluded with OAO Akron and OAO Dorogobuzh contracts for 2003 deliveries of apatite concentrate. However, OAO Akron subsequently began to de facto reject the product by ordering concentrate in less than contractual volumes. A letter was also sent to OAO Apatit offering a ten-year contract for concentrate deliveries at a fixed price that OAO Apatit concluded was not economic. At the same time, OAO Akron and OAO Dorogobuzh declined to avail themselves of their right to take a complaint to the Court of Arbitration about coercive business practice or, as noted above, to approach the Ministry for Antimonopoly Policy in the proper manner.

OAO became part of the OAO FosAgro holding company and transferred to ZAO FosAgro AG the functions of sole executive body with the consent of the Ministry for Antimonopoly Policy, which as required by law placed restrictions on the commercial conduct of its management team, including a ban on unjustified limits on apatite concentrate deliveries to outside producers of phosphate fertilisers and on inflation of prices. The activities of ZAO FosAgro AG are overseen by the central staff of the Ministry for Antimonopoly Policy, with whom the company is obliged to agree beforehand any action listed in articles 17 and 18 of the Russian Federation Law on Competition and Restriction of Monopolistic Activity on Commodity Markets.

The situation regarding supplies of mineral fertilisers for agricultural producers was discussed at a conference held by Deputy Chairman of the Russian Federation Government Mr A.V. Gordeyev with the attendance of interested ministries and departments, the directors of OAO Akron, OAO Akronagrosnab, ZAO FosAgro AF, OAO Apatit, and the deputy head of the Novgorod Region administration. An outcome of this conference was a recommendation that, in order to make mineral fertiliser producers more attractive for investment, OAO Apatit deliver apatite concentrate on the basis of direct long-term contracts. To prevent breaches of antimonopoly legislation, the Ministries of Economic Development, Antimonopoly Policy and Agriculture were instructed to periodically monitor the setting of prices for apatite concentrate and mineral fertiliser.

OAO Apatit's compliance with legislation in its foreign-trade activities and with currency and tax legislation was examined earlier by the tax authorities and the tax police. This revealed breaches of rules for accounting for revenues and expenditures and taxable items but no breach of legislation, and the appropriate fines were imposed on the company.

An investigation by the tax police of Murmansk Region found no breaches or evidence that OAO Apatit was evading taxation through the use of companies registered in the Republics of Kalmykia and Mordovia. As a result of audits carried out by the Inspectorate of the Ministry of Taxes and Revenues in Elista, the companies OOO Formarker, Agrokhimpromkooperatsiya, ZAO Apatit-Treyd and ZAO Gorkhimprom, exporters of apatite concentrate, were held to account as required by tax legislation.

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