RUSSIA LAUNCHES CRIMINAL INVESTIGATION INTO CEO AFTER POTASH GIANT WITHDRAWS FROM CARTEL

Russia’s Federal Investigative Committee said on 14th October 2013 that it had opened an investigation into Vladislav Baumgertner, CEO of potash producer Uralkali, on suspicion of abuse of power. Russian authorities confirmed that they would be seeking Mr Baumgertner’s extradition from Belarus, where he is currently under house arrest on charges of embezzlement and abuse of power.

The Criminal Code of the Russian Federation outlaws cartel agreements under Article 178, imposing fines of up to one million roubles, maximum seven year prison sentences or three years of compulsory labour.

However, it was Uralkali’s withdrawal from a potash sales cartel with Belarusian producer Belaruskali, leading to a sharp downward slide in prices, which reportedly led to Mr Baumgertner’s arrest by authorities in Minsk in August 2013. Together the cartel controlled approximately forty per cent of global potash exports. Belaruskali and Uralkali are the world’s two largest producers of potash.

Belarus has called for the arrest of Uralkali’s billionaire shareholder Suleiman Kerimov, who has since reportedly entered into negotiations to sell his stake. Potash, a soil nutrient, provides twelve per cent of the state revenue of Belarus and ten per cent of its export income. Uralkali’s withdrawal from the cartel is reported to have been unwelcome news for Belarusian president, Aleksandr Lukashenko, who has urged the two sides to collaborate once again in a cartel once valued at approximately $20 billion per annum.

Latest reports have suggested that Russia’s preparations for an extradition request for Mr Baumgertner are well advanced.

This entry was posted in Europe by Jasvinder Nakhwal. Bookmark the permalink.

About Jasvinder Nakhwal

Jasvinder Nakhwal is a partner specialising in all aspects of business crime, in particular criminal cartel investigations, mutual legal assistance and extradition. Chambers UK 2013 quoted that "Jasvinder Nakhwal continues to impress clients with her extensive experience in cartel defence work"... and has a "thriving extradition practice". Jasvinder trained with Peters & Peters and qualified in 2002 as an Associate. She became a Partner in 2010, in the Business Crime team. Jasvinder has in-depth experience in advising both corporate and individual clients in fraud-related matters, with a firmly-established expertise in respect of criminal cartels, extradition, mutual legal assistance and corruption matters. Many of her cases have a strong international element. Jasvinder has acted for clients who simultaneously face investigation by the European Commission, the US Department of Justice, the Canadian Competition Commission and the Australian Competition and Consumer Commission. She also advises in respect of cash seizure and forfeiture cases brought under the Proceeds of Crime Act 2002, and has acted in cases involving allegations of corruption, money laundering, tax and duty evasion in professional disciplinary matters and in inquests and independent inquiries. Jasvinder is a regular speaker on her areas of expertise.

One thought on “RUSSIA LAUNCHES CRIMINAL INVESTIGATION INTO CEO AFTER POTASH GIANT WITHDRAWS FROM CARTEL

  1. I find it unbelievable in this day and age that a country such as Belarus does not have anti-cartel legislation in place. It is even more shocking that the President appears to be openly promoting and seeking to sustain cartel activities, designed to benefit the economy of Belarus at the expense of the rest of the world. I understand from a quick bit of research that it appears the adoption of anti-cartel legislation is underway in Belarus but whether the President is up to speed on this development or whether he cares appears to be another matter.
    Sid Harding (Ballamy LLP)

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