Multiple companies in Russia have either reduced or completely eliminated fines brought against them by the Russian Federal Fisheries Agency (Rosrybolovstvo) after bringing the matters to court.
The Russian government first approved its investment quota program in 2017 and held its first round of auctions in March 2018. At the time, Rosrybolovstvo gave companies a five-year deadline to fulfill their commitment to either build a fishing vessel or a processing facility in exchange for additional fishing quota.
Continued delays at shipyards, as well as delays in constructing facilities, pushed the government to delay that original five-year deadline to seven years, but now, the requirements are coming due and the agency is seeking to fine companies that aren’t complying with some of the requirements.
As Rosrybolovstvo seeks monetary penalties from a number of seafood companies, Fishnews reports some companies have managed to reduce or even eliminate the fines after disputes in court.
For instance, a Moscow court ruled Arkhangelsk Experimental Seaweed did not need to pay a RUB 967 million (USD 9.4 million, EUR 9.2 million) fine related to failing to fulfill its obligations to produce products. Arkhangelsk was given quotas for cod and haddock in exchange for building a coastal facility.
The court found that the company fully complied with the requirements, which require investors to annually produce fish and other products from the catch of the biological resources caught via the quota granted through the program. Rosrybolovstvo originally claimed the company did not meet the terms of the agreement, but the court decided because the company acted in accordance with the terms and took the necessary stems to meet them.
“Taking into account all the factual circumstances of the case, the relevant and admissible evidence presented in the case materials, and the norms of substantive law, there are no legal grounds for satisfying the claims for the recovery of the fine,” the court wrote.
The end of the fine came soon after a different court decision, which found Park, a company in Murmansk, was liable for fines but reduced the total fine from RUB 65.9 million (USD 641,000, EUR 627,000) to RUB 6.6 million (USD 64,000, EUR 62,000), Fishnews reported.
The fine was related to fulfilling the requirements, which, similar to the Arkhangelsk case, was related to producing fish products that were at least 70 percent of the total volume of the investment quotas.
All-Russian Association of Fishing Industry (VARPE) President German Zverev has criticized aspects of the investment quota programs and has called on the government to correct shortcomings in the regulatory framework to prevent future lawsuits.
“The total amount of fines exceeds the annual revenue of these enterprises,” Zverev said.
