The role of the French multinational Vinci in construction of Moscow–Saint Petersburg motorway
The case on French company Vinci’s participating in construction of Moscow–Saint Petersburg motorway is to become a legal precedent. The Khimki Forest Defense activists brought the investigating judge Nanter in the exposure of the scheme on withdrawal of Russian public money to various offshore companies.
Russian activists along with lawyers from European anti-corruption organizations Sherpa and CEE Bankwatch Network filed a legal claim against Vinci to the Chief Justice of France. According to experts, it will help establish an important legal precedent in fighting against corruption in Russia. This is for the first time when foreign legal tools are applied to fight the crimes on the territory of Russia and penalize the large foreign business suspected of launching a scheme on stealing cash from Russia and transferring it to offshore areas in Virgin Islands and Cyprus.
It is to be recalled that in 2008, it was LLC Severo-Zapadnaya concessionary company (SZCC) that won a tender for the implementation of the project on construction of a road section from the 15th to the 58th kilometer of Moscow-Saint Petersburg toll highway. Vinci owns 50% of the LLC SZCC. The rest 50% was bought out by Open joint stock company Mototrest in 2012. As for the Mototrest’s beneficial owners’ names, they are lost in numerous offshores. Amongst them, there is reportedly a number of renowned Russian bureaucrats and CEOs, including Arkady Rotenberg, a businessman.
"Bringing in the investigating judge from France, we intend to speed up the process in order to finally reveal what had happened during the construction of Khimki Forest Motorway," - said in a conversation with the CrimeRussia Pippa Gallop, CEE Bankwatch Network research coordinator.
According to the complainants, this motorway construction case was full of a great number of violations from day one. For instance, aсcording to CEE Bankwatch Network, amongst the 12 claimed projects, the tender was won by the most expensive - at the cost of 60 billion rubles - and ecologically unviable project - the one that even at that time caused irreparable damage to Khimki Forest. Thus, Alexey Yaroshenko, head of the forestry program at Greenpeace Russia and Candidate of Biological Sciences, points out that the road building was synchronistic with heat wave in the region. It caused a huge wave of bark beetles and disintegration of forests that lay around the motorway along its entire length.
Besides that, the lack of transparence in this major deal indicates that there has been prepared a scheme on pumping the cash out of Russia’s taxpayers and settling it in Virgin Islands and Cyprus, and finally in certain individuals’ pockets. Being a concession participant of the construction, Vinci does not attract financing, but implements the project on the taxpayers dime, as well as using the pension fund.
According to Evgeniya Chirikova, the leader of the Khimki Forest Defense movement, they applied to a number of domestic court instances requesting the violations investigation, however it came to nothing. That’s way it was decided to go through France with focusing on a foreign company Vinci that is accused by defendants of withholding information on affiliation and bribing foreign bureaucrats in exchange of obtaining the tender for the implementation of the project on motorway construction. The whole thing is contrary to both Law of France and United Nations Convention against Corruption, the number-one global legally binding international anti-corruption instrument. Besides that, the company that is considered the largest participant of infrastructure projects in its native country shall be charged with an uncensorious attitude to environmental protection standards and, as a result, environmental harm in Russia. By the way, it is a quite common practice for Vinci to implement this kind of double standards. For instance, at present, they are in litigation on the case concerning compulsory labour in Qatar’s construction sites within the preparations to the World Cup that is going to take place in 2022.
"The very idea of public and private partnership that is going to be carried out with a company, which organization structure and owners can’t be identified from publicly available sources, shall be a red flag!" - said CEE Bankwatch Network.
Although the first lawsuit was filed by Russian and European activists as early as in summer 2013, the investigation by France law enforcement lingered on with no apparent cause. Bringing in an independent investigating judge shall get things moving.
Investigating judges in France do have a wide range of powers. Although they do not solve criminal cases to all intents, they investigate criminal activities and find fats that may lead to criminal prosecution of law violators. For instance, in Vinci case, the investigating judge will be empowered to question witnesses and litigants - including compulsory questioning through the police, raiding, wiretapping and issuing arrest warrants. He is discretionary and independent of attorney office, and even supervises the execution of the latter.
"While France is improving its regulatory and legal framework in the area of corruption therapy, and French companies are accepting more and more obligations in that respect, France Court System is supposed to detect those responsible for the mess a French company has made in a country hardened in corruption. - CEE Bankwatch Network stated. - Bringing in an investigating judge shall help identify perpetrators in the case."
Corruptive dealings of foreign business in Russia have never been examined this way. However, Sherpa has already followed this scheme as to French companies involved in black-ink operations in African countries. For this reason, the Vinci case has not only local Khimki significance, but also can have a major impact on a fight against cross-border corruption.
"An attempt to act through French institutions is specifically intended to punish the international mafia," - claimed Chirikova.
According to the experts, in the last few decades, EU large business representatives have launched a number of ‘shadow’ projects in Russia.
Last year, the team published an exploration on nontransparent investment projects by European business representatives in Russia. Attributes of cross-border corruption, in particular, can be seen in implementation of a project on constructing of a gas pipeline Severny Potok (Nord Stream). Besides Russia, a number of the EU countries (Germany, the Netherlands, France) take part in the project. Another example is the nontransparent activity of Closed joint stock company Transmashholding, Russia’s biggest producer of transportation and railway equipment. One of its stockholders is a French company Alstom that was several times accused of giving bribes to foreign bureaucrats. For example, as a result of one of the cases, in 2015 it was committed by the US to pay the fine of $772 million.
"This kind of business is mutually profitable, as it lets European businessmen to make more profit and Russian companies to freely smurf money in Europe," - said Andrey Kalikh, director of research team on fighting corruption of the EU-Russia Civil Society Forum.
Thus, the ‘cross-border corruption’ implies the participation of European companies and its branches, as well as bureaucrats of a number of the EU countries, in corruption projects and deals in Russia. It also implies helping Russian citizens implement this kind of projects and deals abroad. The cross-border corruption makes itself evident in nontransparent capital formation in foreign banks, resort to the use of International Financial Institutions to launder money, giving bribes to foreign bureaucrats and senior executives.
In his opinion, nowadays modern states’ fight against cross-border corruption is ineffective. The problem is in the point that there are no limits for criminals in the modern world, while law enforcement representatives have to act within the law of a particular country. In economic globalization environment it is more and more difficult for countries and international organisations to control the growth of goods and cash being brought through the border. Moreover, acts of corruption are often performed either on the territory of a country by non-citizen, or vise versa, by the citizen of a country, but abroad. Modern-day countries are totally sovereign, so its authorities not always cooperate on investigations of cross-border corruption. According to the experts, various countries not always admit suspicions - not accusations, but just suspicions that have to be examined - of the fact that their citizens took part in a corruption deal on the territory of a foreign country. It may happen that a particular country refuses another country to provide the required documents on the facts with suspicions of cross-border corruption. For example, when a public prosecution office of a particular country requests another country’s office for information on the latter’s citizen, the latter not always provides this information.
"For a European company, working in Russia is quite nice looking opportunity! And this is not just because they can implement major projects, but also because they can get extra illegal profit by acts of corruption," - shared with the CrimeRussia Vladimir Rimsky, Social Science Research Branch supervisor of INDEM Foundation.
"Modern countries normally fight against the cross-border corruption, primarily - the organized one. And they don’t place emphasis on the cross-border aspect as a special form of criminality. The authorities primarily fight against organized criminal gangs involved in the cross-border corruption. And they don’t focus extensively on analyzing and estimation of the activity of a legal private sector that is, regrettably, also involved in the corruption activity and get their extra illegal profit," - said Rimsky.
The EU countries try to coordinate their efforts by mutual agreements - for instance, those on mutual help in the fields of criminal and civil justice, co-operating of judicial organs and investigation bodies, criminal extraditions and transfering of sentenced persons to their homelands. They also rely on international tools of fighting against the cross-border corruption ratifying the UN, Council of Europe and Organization for Economic Co-operation and Development conventions on fights against corruption. But when it comes to a country not included in the EU (Russia, for instance) - in the absence of adequate control - a number of countries for some reason easily slough off their obligations. This is the way Vinci, a legally acceptable French construction company, founded in 1899, one of the leaders in the market of construction services, got involved with the corruption scandal in Russia.
According to Malikov, these kinds of systematical violations are of destructive nature. They disrupt international economic relations. And the losses because of the cross-border corruption are estimated at billions of dollars.
"International fight against corruption does not have a regulatory framework. International agreements regulations in this field are applied partially, while there are no sanctions for the failure to abide them. Problems turn up not only with coordinated persecution of criminals, but also with the extraditions and controlling things that encourage money laundering. It is impossible to fight against transnational crime on your own." - Said Sergei Malikov, Doctor of Juridical Science.
Russian President Vladimir Putin and the head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin, joked, discussing the statement of French President Emmanuel Macron regarding the size of Europe.
Oleg Deripaska withdrew from the board of directors of UC Rusal over US sanctions. A day earlier, the management of the company resigned. Changes in the company's management became a part of the plan to evade the sanctions.