How international companies circumvent "Crimean sanctions''. Ukraininan and world communities reaction
We continue to inform about the story around the circumvention of the Crimean sanctions by the Ukrainian holding UBC Group, which involved the world's leading beverage producers.
We are talking about how the refrigeration equipment plant in the occupied Krasnoperekopsk (Crimea) continues its work after the annection of the peninsula by Russia. The Ukrainian parent company, Private Joint Stock Company "UKPOSTACH", re-registered it in the Russian Federation in accordance with local regulations under the name of a branch of LLC "U B C KUL-B" - "Refrigeration Equipment Plant". The owners, representatives of the central office of the Ukrainian holding UBC Group, in 2014 announced the transfer of the plant to the mainland of Ukraine, to the Kharkiv region.
However, as can be seen from our investigation, published in August, the Crimean plant is still operating and its products are being successfully sold - thanks to the cover of the Russian gasket by the company "U B C KUL-B", registered in the Belgorod region. The label, which is stuck on the equipment, indicates the legal address of the company's registration - New Tavolzhanka village in the Belgorod region. But if you look at the google map, it immediately becomes clear that there is no production there. This is also confirmed by the information on the website of the Federal State Information Service "Unified Register of Inspections" of the General Prosecutor's Office of the Russian Federation. It says that the LIMITED LIABILITY COMPANY "YUBSI KUL-B" is checked at the place of actual implementation of its activities: 296000, Republic of Crimea, Krasnoperekopsk city, Severnaya street, building 1a.
CRIMEAN PLANT WORKS THROUGH RUSSIAN GASKET
Products manufactured in the occupied Crimea without Ukrainian registration are subject to the sanctions of the European Union, the United States and Ukraine. The Ukrainian holding UBC Group manages to bypass the sanctions by re-sticking labels and substituting data; instead of the place of production, the label indicates the legal address of the company's registration in the Belgorod region. For example, products manufactured in Crimea are labeled with labels stating that they were allegedly made in Russia. It is noteworthy that, at the same time, some of the labels contain telephone numbers for contact in Krasnoperekopsk. So the Ukrainian holding UBC Group decided to bypass the Ukrainian legislation, to deceive the Ukrainian special services and customs officers. And international companies that are clients of the UBC Group holding, knowing about the substitution, deliberately turn a blind eye to it. In the material of the previous investigation, we wrote that in all world companies there is a procedure for checking suppliers at different levels, so they could not help but know where the equipment they order is produced.
These are, in particular, such global beverage production giants as AbInBev, Heineken, SABMiller, Baltika, Pepsi, Red Bull, Efes. We provided evidence that the Belgorod counterparty sells sanctioned Crimean products to international companies. This is confirmed by documents not directly related to the case. For example, in litigation involving the Crimean plant.
The fact that international brands buy the products of the allegedly Belgorod plant, but in fact, the Crimean one, for their Russian and Asian companies, can be traced by deepening the register of court cases of the Russian Federation. There you can glean a lot of information on economic litigation in which the Krasnoperekopsk plant appears. International companies are involved in a dispute with him or in cases where he acts as a third party.
However, if the customs registers are raised, an impressive picture emerges. Buying products from enterprises from the occupied Crimea is a violation of EU legislation, even if it is used on the territory of Russia and the CIS countries. But in violation of the sanctions regulations, European companies went further - the products of the Crimean plant are exported to EU countries.
For a start, just look at the recent statistics on exports from the Russian Federation. The share of LLC "U B C KUL-B" in the export of refrigeration equipment from the Russian Federation is approximately one third. The list of countries to which the branch of LLC "U B C KUL-B" - "Refrigeration Equipment Plant" sends its products, is quite large. In particular, these are the occupied territories of the Donetsk and Luhansk regions.
We still have not received a response from the owner of the UBC Group holding Ihor Humennyi. No reaction from his company or any other reaction. There was no one yet from the Ukrainian law enforcement agencies. However, it would seem that the European Bank for Reconstruction and Development, which is one of the co-founders of the Crimean plant, should be interested in preserving its own reputation. However, we also did not receive a response from either the Ukrainian representative office or from the central office.
INTERNATIONAL REACTION: NO VIOLATIONS
From many embassies of the countries whose companies, as follows from the customs registers, buy the products of the Crimean plant, several have provided the answer. First, embassies answer the question about the involvement of companies registered in their countries.
Thus, the Embassy of the Netherlands in Russia and Ukraine reported that it is not aware of the facts of purchase by international companies of equipment produced in the occupied Crimea. The embassy forwarded the information to the relevant authorities in their country for further investigation.
According to the Romanian Embassy, Quadrant Amroq Beverages S. R. L. Also has no ties with the Crimean plant, as well as with all the companies of the Green Cool group. The embassy claims that the company, through a Polish company with a similar name (UBC Logistyka Sp.z .o.o), buys equipment brought from Ukraine.
As you can see, the embassies ignore the fact that the products of the Crimean plant can enter the EU through legalization in Ukraine. They are either sure that this does not apply to their country, or they are misled, or they cover up companies that operate on the territory of these states. We hope that new questions will prompt the customs authorities of these countries to study in detail the origin of the goods.
Previously, we published responses to inquiries to several companies that bought (or are buying) the products of the Crimean plant. When asked why the Russian company Rosinka, which is the official representative of one of the Nestle trademarks in Russia, buys these products, we received an answer to this specific case. It states: "Nestlé, as a group, has a licensing agreement under which Societé Produits Nestlé, as a trademark owner, grants Rosinka permission to use one of our trademarks (Nestea). Nestlé is not involved in Rosinka's activities or involved in the import of equipment. which you are talking about, or in any other activity of this company. "
AB InBev assured us that the products that the company buys were manufactured at a plant in the Kharkiv region, where, according to their information, the Crimean plant was transferred. Such a guarantee, according to the representative, was given by the UBC Group. Although, how can it be postponed, if all the facts indicate that the plant in Crimea continues to work. Googling, you can find a sufficient number of fresh vacancies for production in Krasnoperekopsk.
Moreover, the branch of LLC "U B C KUL-B" - "Refrigeration Equipment Plant" is a budget-forming enterprise, actively participates in the public life of the peninsula and supports the occupation power, we wrote about this in detail in the last investigation.
Again, according to a representative of the UBC Group holding, which AB InBev refers to in its response, the products are manufactured at a plant in the Kharkiv region. Even if we assume that this is not a transferred plant, but a newly built one, although there is not a single official message from the holding about this, it turns out that the Russian division of AB InBev should purchase equipment manufactured at a plant in the Kharkiv region? We have not found this confirmation in the Ukrainian customs registers.
So, to our inquiries to international companies and the embassies of European states, we received answers that they are not aware of the facts of the work of their offices with the company "U B C KUL-B" and the purchase of equipment produced in the occupied Crimea.
For this purpose, our Russian sources were asked to check this information.
First, a small raid on trade establishments.
The first supermarket that our friends checked was "Dixie", at st. Boris Galushkin, 12 in Moscow. There is a lot of equipment belonging to AB InBev Efes, the equipment label indicates that it was produced in April 2020 by U B C KUL-B LLC, legally registered at the address already recognizable to us 309255, Belgorod region, Shebekinsky district, with. New Tavolzhanka, st. Pioneer. As we pointed out, in fact, this equipment was produced in the occupied Crimea, at a plant in Krasnoperekopsk.
We look at other Moscow stores, kindly checked by our friends:
- Dixie store, at Muravskaya st., 42, bldg. 1, Moscow
- Dixie supermarket, at st. General Beloborodov, 12, bldg. 1, Moscow,
- Supermarket Perekrestok, Onezhskaya st., 34, bldg. 1, Moscow,
- Dixie supermarket, at st. Petrozavodskaya st., 1, Moscow,
- Shop at 11 Viktorenko Street, Moscow.
All stores have the same picture, some even have several refrigerators belonging to AB InBev Efes, and all of them were produced in the occupied Crimea in April 2020. I emphasize the date. The production does not date back to 2014, when the business was in disarray and UBC had not officially left Crimea yet. Not 2015, when, theoretically, deliveries could still be made under old contracts and obligations. No, this is 2020, the sixth year of Russian aggression against Ukraine, the occupation of Crimea and the operation of the "Crimean sanctions".
It is also not surprising that all equipment is branded with well-known trademarks belonging to the European concern AB InBev Efes: Stella Artois, Hoegaarden, Bud. But they denied their involvement in the procurement of Crimean equipment.
In other regions, our friends also met equipment manufactured at the Crimean plant. So, in Kirovsk in the supermarket "Dixie" at st. Khibinogorskaya 31 our friends discovered the equipment of another world leader in the production of beer - the Heineken company. The equipment was also produced at the same plant in the occupied Crimea in April 2020.
In the Moscow region, our friends also found equipment belonging to UBH (United Breweries Heineken). For example, in the Dixie supermarket, at st. Marshala Katukova, 23, Moscow, refrigerators were seen produced in December 2019 at the Crimean plant LLC "U B C KUL-B".
The purchase of Crimean equipment by international companies is fully confirmed by the bank register. Our friends managed to get access to such a registry. From this information, we saw confirmation of the work of international companies with the UBC Group holding and the purchase of a significant amount of Crimean-made equipment. It is clearly seen from the register that significant funds were received in the form of payments for equipment from a number of international companies to the accounts of "U B C KUL-B LLC" for 2020 and for the first two months of 2021.
A small excerpt from the registry:
If we sum up all payments received during this period from international companies to the address of "U B C KUL-B" LLC, we will see that, for example, AB InBev Efes only in 2020 paid "U B C KUL-B" LLC for the supply of equipment, services for its transportation and maintenance in the amount of more than 8 million euros. And "UBH" LLC (United Breweries Heineken) only for the supply of equipment worth more than 4 million euros. We see other international companies among clients, such as Borjomi IDS and Unilever.
Recall that with such an annual volume of purchases in all transnational companies there are procedures for checking suppliers at different levels - from financial to security. There are global procurement departments whose missions for millions of euros in procurement are to conduct regular supplier audits, visit production sites, and manage the procurement process and quality.
It is hard to believe that none of them checked the presence of the plant in the village Novaya Tavolzhanka, as the equipment manufacturer says on its label. Or did they cynically turn a blind eye to this, receiving financial benefits from the purchase of equipment from the annexed Crimea?
REACTION IN UKRAINE: PROSPECTS
The potential response in Ukraine is more promising. Thus, to the inquiry from Censor.NET, the Representative Office of the President in the Autonomous Republic of Crimea provided an answer that they were examining the available facts.
"... A general analysis of the materials referred to by the editors and open sources of information indicate that the legal entity of the Russian Federation is the "U B C KUL-B" Limited Liability Company, the main state registration number in the Unified State Register of Legal persons of the Russian Federation 1063120016805, contrary to the current legislation of Ukraine, on October 23, 2014, registered its own branch "Refrigeration Equipment Plant" in the temporarily occupied territory of the Autonomous Republic of Crimea.
It is stated that the Representative Office has applied to the Security Service of Ukraine with a request to "take into account the information" contained in the journalistic investigation and verify the stated facts, and also raises the question of the possibility of making proposals on the application of sanctions against these companies.
In addition, the Representation turned to the State Customs Service of Ukraine with a request to check whether the specified legal entities registered in Russia were importing goods into the customs territory of Ukraine and whether the legislation was being observed. A similar request was made to the Ministry of Economy, Trade and Agriculture for the implementation of legal activities by Ukrainian legal entities through the counterparties "U B C KUL-B" LLC and "U B C KUL-M" LLC.
In its reply dated August 2020, the SSU assured that it took the information received into consideration. There is a hope that the appeals of the President's Representative in the Autonomous Republic of Crimea Anton Korinevich prompt the special services to look at this situation in more detail.
Let us remind you that "U B C KUL-B" LLC is a part of the Ukrainian holding UBC Group owned by the Ukrainian businessman Ihor Humennyi. Earlier we wrote that in addition to the supply of equipment from Crimea, which is under sanctions, to the EU and to global companies in Ukraine, Russia, Kazakhstan and the Baltic countries, there are also supplies of equipment to the territory of isolated districts of the Donetsk and Lugansk regions in the customs base of the Russian Federation.
Nothing has changed in response to numerous requests from our editorial staff to the official bodies.
Considering that, albeit thanks to the NSDC decision, Ukrainian law enforcement officers finally "noticed" the Sportmaster stores and other companies operating in the temporarily occupied Crimea, the persistent failure to notice that UBC Group has a plant in Krasnoperekopsk raises more and more questions.
Ihor Burdeliuk, for Censor.NET
