Companies that built fish factories under a quota are seeking protection from the Federal Agency for Fisheries in the government.

Companies that built fish factories under the investment quota program, faced with fines from Rosrybolovstvo for non-compliance with requirements for processing the catch, are looking for support in disputes with the regulator. Companies are asking Deputy Prime Minister Yuri Trutnev to intervene in the situation, warning that fines threaten the closure of enterprises. But other market participants see no reason to revise the terms of the contracts.

Companies that built fish factories under the investment quota program are asking Deputy Prime Minister and Presidential Envoy of the Russian Federation in the Far Eastern Federal District Yuri Trutnev to intervene in the situation with receiving fines from Rosrybolovstvo. Kommersant has copies of letters from the companies Vityaz-Avto (part of Okeanrybflot), Fish Trading Network, Murman Seafood, Kamchattralflot and the Barents group.

The fines of Rosrybolovstvo are related to the violation of a clause in the contract, according to which factories must process at least 70% of the received quota. As noted in the agency’s claim to Vityaz-Avto, in 2020–2021 the company received quotas for 14.2–14.4 thousand tons of pollock and herring and was supposed to produce 9.9–10.1 thousand tons of products, but produced 8.11 thousand and 5.99 thousand tons, respectively. In February 2024, the Moscow Arbitration Court recovered 1.97 billion rubles from Vityaz-Avto at the request of the Federal Fisheries Agency. The agency is collecting 419.7 million rubles each from the Fishing Trading Network company and the Barents group, and 1.2 billion rubles from Russian Cod LLC, owned by Murman Seafood, it follows from the case file. About 1 billion rubles. Rosrybolovstvo demands from the structure of the Russian fishing company “Russian Pollock”.

As noted in the letter from the Vityaz-Avto company, industry standards do not allow for the required 70% of production of highly processed products. Thus, the appeal says, from a 100% pollock catch, only 27.1% fillets and 24.9% minced meat can be released. The Fish Trading Network indicates in the letter that in 2021 it did not fulfill the terms of the contract, since commissioning work was still underway at the plant. In 2023, the company produced significantly more than the required volume, including due to purchased raw materials, the company indicates. The Barents Group writes that restrictions due to the pandemic in 2021 did not allow foreign specialists to set up the supplied equipment on time.

Vityaz-Avto and Kamchattralflot reported that payment of the fine threatens the bankruptcy of the companies. The Fish Trading Network is also talking about a possible shutdown of the enterprise. Murman Seafood cites similar risks in the letter. Companies ask Yuri Trunev to consider reducing or waiving penalties, including by reviewing the terms of contracts. “Kamchattralflot” proposes to secure for investors only the obligation to develop at least 70% of the annual quota.

Yuri Trunev’s office did not provide any comments. Rosrybolovstvo reported that it initiated claims work based on inspections by the Accounts Chamber. They added that the agency acts in accordance with the law on fisheries, and when relevant instructions are received, it will consider them in the prescribed manner.

The President of the Association of Pollock Harvesters, Alexey Buglak, points out that in recent years the financial and economic situation in the fishing industry has deteriorated sharply; some of the enterprises on the “fine list” have seen their revenues halve, and the amount of the declared fine is a multiple of net profit. The President of the All-Russian Association of Fishing Industry German Zverev warns that the bankruptcy of factories threatens the loss of work for several thousand workers and default on loans in the amount of 27–29 billion rubles.

But Kommersant’s source in the industry notes that the investors participating in the program had to understand the risks and there are no grounds for revising the contracts. The companies can challenge the imposed fines in the courts, he noted. Managing Partner of Zharov Group Evgeniy Zharov notes that in the case of Vityaz-Auto, the company did not prove the absence of guilt, the amount of possible losses, and also did not provide evidence of taking all measures for the proper fulfillment of the obligation. If these circumstances are eliminated, there are grounds for appealing the court’s decision, he points out.

Anatoly Kostyrev