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.