OREANDA-NEWS. December 13, 2013. The majority of the members of the Expert Council at the Federal Antimonopoly Service (FAS Russia) for developing competition in fishery are in favour for correcting the existing procedures for allocating quotas between persons that have the right to get quotas under the historic principle.

The Expert Council met to discuss whether the historic principle and the procedures for allocating quotas between persons that have the right to get quotas under the historic principle should be abolished or preserved and the need to correct it. Stats-Secretary, Deputy Head of FAS Andrey Tsarikovskiy pointed out that expert opinions on the highlighted issues are important for FAS.

FAS representatives explained to the expert community that the antimonopoly authority understands by the issues of the historic principle: This is a definition of the circle of persons that will get the right for formalizing their quotas in 2018 and determination of the quotas.

Members of the Expert Council unanimously decided to preserve the best what is in the historic principle.

In the FAS opinion, the historic principle of quota allocation must encourage the owners of the quotas that were involved in bona fide fishery during ten years, by granting preferential rights for harvesting water biological resources for a new ten-year period without competitive bidding but at the same time it must not be extended to quota traders who were allocated by the state free-of-charge.

Today in most cases quotas are owned not by the persons to whom they were allocated in 2008 due to repeated reorganizations and transferring quotas to other persons, that is, by latent sales of quotas. For instance, the companies that obtained quotas formed new legal entities, which did not even have vessels for catching, transferred to them the right for catching, after which such companies were sold, emphasized Andrey Tsarikovskiy.

He also explained that in case of reorganization only the right for catching biological water resources is transferred from one person to another and the volume of catch by the pervious person cannot be accounted for in calculating the volume of catch by a new person, in quota allocating. Thus, in 2018, if applications are filed by persons formed by reorganization a year before quota allocation, 100% quotas will be distributed between those persons on the basis of catch volume completed within a year.

He pointed out that a company that has been fishing for a year will be able to obtain an enormous part of the quota, for instance, 50%, 60% and more, only because it caught more fish during a year than a company that had a smaller part of the quota but it was doing its business in good faith during the entire nine years.

FAS thinks that granting preferential rights for concluding a contract without competitive bidding to the companies that on the date of allocating quotas were fishing, its already sufficient state preference. However, a part of the quotas for such companies must depend on the volume of catch relative to the total catch of water biological resources under this quota by all fishermen in nine years, otherwise such procedures put other candidates for the right to catch under the quota in unequal conditions. The remaining quotas must be sold through auctions and every fishing company should be able to buy them on equal conditions.

Representatives of the expert community made reports and comments as well as put forward additional proposals for correcting the procedures for allocating quotas between persons that have a right for obtaining quotas under the historic principle. For instance, experts proposed not to take into account the volume of catch by time-charter ships in quota allocation, and take into account the on the ships on lease.

Summing up the meeting, all members of the Expert Council decided on additionally experts work on the put forward proposals and discussing the positions at the next Council meeting.

Reference:

Attendees of FAS Expert Council for developing competition in fishery t included representatives of the Ministry of Agriculture of the RF, Union of Fishery Managers of the West, the Association of Crab Harvesters of the Far East, National Research Instituted of Fishery and Oceanography Federal State Unitary Enterprise, Visokoe Kachestvo Ltd., Fish Union Non-Commercial Organization, the National Association of Fish Entrepreneurs and Exporters, SOYUZOKEAN Ltd., the Association of Production and Sales Enterprises on the Fishery Market, Promoting Competition Non-Commercial Partnership, a Public Council at the Federal Fishery Agency, Murmanseld-2 CJSC and the Association Fishing Industry Holding Karat CJSC.