AK Bars Bank issued bank guarantees to Titan-Polymer under two loan agreements concluded with the Industrial Development Fund. The amount of guarantee support exceeds 1 billion rubles.

Titan-Polymer is implementing an investment project on the creation of a PET granules and BoPET film production complex in Moglino, a special economic zone in the Pskov region. With the funds received, the company plans to purchase two  BOPET film production lines with a capacity of up to 72 thousand tons per year. Upon reaching full capacity, Titan-Polymer intends to take half of the Russian market for BoPET films, as well as start exporting products to Europe and the CIS. This type of film is used for packaging and storage of aliments and non-food products, manufacturing of x-ray film and insulation of electrical wires, etc.

“Attracting financing with bank guarantees contributes to more intensive project implementation, reducing the time it will take to promote a reliable and high-quality supplier of BoPET film,” comments Mikhail Sutyaginsky, Chairman of the Board of Directors of Titan-Polymer.

Based on the information received from AK Bars Bank

Bank guarantees are an increasingly popular financial product.  The development and improvement of the procurement system, the increase in quotas for participation in public procurement for small and microbusinesses, automation and digitalization of registration processes. All these factors trigger the rapid growth of demand for bank guarantees,  the press service of AO Solid Bank reported to PrimaMedia.

Some analysts predicted a slowdown in the bank guarantee market, linking the pessimistic forecast with the amendments of Law 44-FZ, which came into force from June 1, 2019 (71-FZ of May 1, 2019) . But their expectations were not met, and the total guarantee portfolio grew in 2019, with commercial banks demonstrating the most intensive pace. As a result, the share of private banks in the guarantee market has gradually increased to 12% (Expert RA). The attractiveness of the guarantee business can also be explained through the low default rate compared to lending: in average, between  2015 and early 2019, the level of disclosure of guarantees did not exceed 0.5%.

The “I Am a Farmer” accelerator has been launched in Udmurtia, where participants will learn about the specifics of agricultural business in lectures and workshops.

The Ministry of Agriculture of Udmurtia has launched a free educational program for local novice farmers and agricultural cooperators. The accelerator is called “I am a farmer” and includes  a series of training lectures and workshops conducted by representatives of the Gorbatov  Federal Scientific Center For Food Systems  UralBusinessLeasing Inc., MSP Inc., the Moscow Credit Bank (MCB), National Union of Agricultural Insurers, etc.

The first training stage started on February 20 and is planned to last until March 27. This is the time frame for 12 workshops where novice entrepreneurs will receive practical guidance on how to implement their business projects in agriculture. In particular, they will learn about the legal aspects of farming, business planning, the procedure for purchasing land, attracting investment, get acquainted with their peers’ experience, analyze key mistakes in the industry.

The first day of the accelerator was dedicated to the topical issues of the agricultural sector, namely digitalization, support for foreign economic activity, prospects for the development of recycling in the meat industry, etc. Natalia Bakhova, Head of Sales and Development of Products of Documentary and International Business at MCB, told farmers about the tools for supporting and developing foreign economic activity of agricultural companies. In her speech, she drew attention to the fact that to enter a foreign market, it is important not only to offer potential importers high-quality products at a competitive price, but also to take into account the specifics of logistics, infrastructure, and product promotion in the foreign market. Export of grain or fat-and-oil products, which constitute the key export items of the Russian agro-industrial complex, for other products usually does not raise any questions. However, there are economic and political  difficulties and risks that arise with export of other products, especially those with high added value, or with the expansion of the geographic scope.  In particular, it might happen that the shipped product is not paid for.

For the exporters to protect their business, it is advisable for them to cooperate with the banks, insurance companies, and agencies that have the necessary expertise to assess and hedge potential risks. This is especially relevant for SMEs, for they usually do not have full-fledged legal departments, marketing teams, or even translators who could  study the contracts  and analyze the potential market thoroughly. Banks are interested in the quality of this kind of work, since they lend to exporters so that they could generate revenue and therefore must prevent the risk of the company not receiving it. However, it is important for the Bank to have the necessary experience in the implementation of import and export transactions, and to be able to offer a wide range of products: lending, bank guarantees, letters of credit, export factoring, and others, Ms Bakhova listed. During the lecture, she gave examples of MCB’s cooperation with exporters, including, for example: a company from among the top 10 grain exporters; a manufacturer of meat products that supplies them to China; a large retail chain, and others.

Natalia Bakhova also told the novice farmers about the possibility of subsidizing loans for export-oriented agricultural enterprises. The Ministry of Agriculture will compensate them for 90% of the Central Bank’s key rate, with the loan rate remaining fixed ranging from 1% to 5% per annum. Manufacturers can attract both short-term loans for the purchase of goods that are necessary to ensure production or processing and sales, or investment loans for business development purposes, such as purchasing equipment, upgrading production, etc.

This year, it is the second time the “I Am a Farmer” accelerator is being held.  Last year, its participants received 46 grants from Agrostartup for a total amount of 116.5 million rubles, plus 34.2 million rubles for the development of rural cooperation. 37 farms were created from scratch in Udmurtia. This year, new farmers can also apply for participation in the grant competition while they are training. The grant amount is of 120 million rubles,  thanks to which, 36 farms and agricultural cooperatives should be launched in the Republic, according to the calculation of the Ministry of Agriculture.

Despite the fact that Federal Law No. 223-FZ of July 18, 2011 On the Procurement of Goods, Works And Services by Certain Types of Legal Entities (hereinafter, “Law No. 223-FZ”), which entered into force in 2012, is amended annually, and its norms are still far from perfect. Mikhail Evraev, Deputy Head of the Federal Antimonopoly Service of Russia, expressed the same opinion when he spoke at a press conference devoted to the problems of the enforcement of Federal Law No. 44-FZ of April 5, 2013 On the Contractual System for Procurement of Goods, Works and Services to Meet State and Municipal Needs (“Law No. 44-FZ”), Law No. 223-FZ and improving legislation. Therefore, the priorities of the FAS include the promotion of initiatives to change and supplement the rules on procurement for state-owned companies and natural monopolies.

According to the regulatory authorities, the average number of applications under Law No. 223-FZ lags significantly behind those under Law No. 44-FZ. Thus, in 2019 the average percentage of applications under Law No. 44-FZ was 3.12%, while the applications under Law No. 223-FZ only accounted for 1.17%. The total amount of notices published last year in the EIS was of RUB 14.1 trillion. Moreover, auctions accounted for 8.7% of the total procurement amount, tenders, for 17.3%, requests for proposal, for  4.6%, and of requests for quotation, for 3.8%.  The remaining 65.6% were made up by other methods, including purchases from a sole vendor and non-competitive purchases.

In addition, statistics announced by Artem Lobov, Head of the Government Order Placement Control at the  Department of the FAS of Russia, showed a sharp increase in the number of complaints considered under Law No. 223-FZ, which is the double compared to the previous year (7,149 in 2018 vs. 13,674 in 2019). The Agency attributes this trend to the fact that over the past few years, significant changes have been made to the rules for conducting purchases under Law No. 223-FZ, and companies have started to use them.  In case of non-compliance with the new rules, filing complaints is one of the most rapid methods of restoring the procurement participants’ violated rights, amending the procurement documents, etc. It is important to mention that the number of justified complaints increased by more than 30% (2,617 in 2018 compared to 4,371 in 2019). In turn, the number of complaints about inclusion in the supplier blacklist (“the SBL”) increased by almost 70% (972 in 2018 compared to 1,647 in 2019).

During the event, the current problems and gaps in the legislative regulation of procurement under Law No. 223-FZ were discussed. The agenda included:

• lack of uniform requirements for the composition of applications and for participants, or for the application evaluation procedure;
• lack of justification for the initial contract price;
• unlimited purchases from a single vendor and non-competitive purchases.

If the solutions to the first two problems are obvious, namely,  establishing uniform requirements for the composition of bids and for the  procurement participants, as well as  obliging them to justify the initial contract price, several interrelated ideas are being discussed for the latter. First of all, it was proposed to combine the non-competitive purchases with the sole-vendor ones, since there is a very thin line between them, which  sometimes makes it difficult to distinguish them. Secondly, it is planned to establish an exhaustive list of cases when the customer can purchase from a single vendor, as well as to introduce an annual percentage limit (10%) for non-competitive and sole-vendor  purchases (excluding the cases provided for in the exhaustive list in Law No. 44-FZ).

The Deputy Head of the Federal Antimonopoly Service of Russia also pointed out the lack of unified approaches to setting qualification requirements for procurement participants. He believes this problem might be solved by introducing of universal and special pre-qualification for the tenders (i.e. automatic screening for experience of performing a contract for a certain amount). Since only the person entitled to bid will be able to lodge a complaint about the tender, this measure will prevent cases of “professional complainants” (organizations and persons who lodge complaints for the sake of receiving money for withdrawing them), according to the FAS.

Another initiative that was proposed  was also the introduction of the  entrepreneurs’ business reputiation rating. Similar to the proposals on Law No. 44-FZ, the assumption is that the rating will be assigned automatically in the Online Public Procurement System, depending on the quality, quantity and cost of the contracts that have been executed. It is planned to be used for admission to the bidding and objective assessment of the bidding participants.  Depending on the rating level (high, basic, or low), it will be possible to reduce the amount of the collateral for the application and the contract.

“It should work as follows: for Law No. 44-FZ, contracts must be accepted for both Law No. 44-FZ and Law No. 223-FZ, and vice versa, for Law No. 223-FZ, contracts must be accepted for both Law No. 223-FZ and Law No. 44-FZ.http://base.garant.ru/70353464/ Perhaps we could also think about how to accept commercial contracts, but it is still unclear how to administer them,” Mr Evraev said.

As for bank guarantees that are provided to secure the application and the contract, it is planned not only to establish unified requirements and approve a single format for them, but also to publish them in the bank guarantee register in the framework of government procurement under Law No. 44-FZ.

Finally, in the list of issues of  procurement legislation under Law No. 223-FZ, Mr Evraev highlighted the absence of the following:

• exhaustive list of electronic trading platforms (it is planned to transfer all purchases to electronic platforms operating under Law No. 44-FZ);
• procedure for entering into and executing contracts (it is proposed to establish a procedure for entering into and executing contracts, as well as to exclude the customer’s ability to change the essential terms of the contract at its conclusion from Law No. 223-FZ);
• the procedure for inclusion in the RNP (it is planned to regulate the actions of the customer and the antimonopoly authority when considering inclusion in the register).

The FAS of Russia also plans to provide e-notifications for procurement process participants through the Online Procurement Portal. This implies not only implementing the possibility of submitting complaints and official notifications for participants through the Online Procurement Portal, but also keeping all kinds of official correspondence (including procurement-related) between the customer and the contractor only via the Online Procurement Portal. There is also an intention to expand the territory of implementation of the remote complaint review mechanism. For customers and entrepreneurs from the Far East and Siberia, this option has already been introduced for the complaints that are considered only in the Central Office of the FAS of Russia (for example, for purchases that are worth more than 1 billion rubles). From March 16, a similar complaint mechanism will be launched for the North-Western and Ural districts. In the future, it is planned to be extended to other districts (including Crimea), and, perhaps, by the middle of 2020, it might be applied to all the federal districts.

In addition, the Deputy Head of the Antimonopoly Service announced the imminent creation of an Expert Council under Law No. 223-FZ, consisting of representatives of the FAS of Russia, government-owned companies, the Association of Compliance Managers and other professional organizations. It is assumed that said Council will not only discuss legislation and the ways to improve it, but also establish relationships with the companies that are interested in fair competition, in order to adopt joint antitrust compliance standards. In this case we are talking about the risk prevention system for the violations of the antimonopoly legislation to be approved in each industry sector (construction, healthcare, etc.).
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Some of the ideas have already been presented as bills, some are still being discussed, and then will be agreed taking into account the positions of other regulatory bodies (Ministry of Finance of Russia and the Federal Treasury). But we can say with certainty that the Federal Antimonopoly Service of Russia has an understanding of the development vector for improving the legislation on procurement of state-owned companies and natural monopolies.

Mikhail Evraev expressed concern that the adjustment of the legislation may take a while (up to a year or two), but said that the FAS is ready to facilitate more rapid adoption of the necessary amendments. However, he called on the state-owned companies and natural monopolies that want to carry out competitive purchases under Law No. 223-FZ not to wait for the amendments to be made, but to join voluntarily the use of standard compliance norms, which will clarify all ambiguities and resolve gaps, upon the parties’ agreement.

Throughout the year, the Bank’s client wired money to their accounts with other banks. But the last transaction occurred shortly before the introduction of the temporary administration, which allowed the manager to have it recognized as invalid within the framework of the bankruptcy case. The Economy Board revised this decision.

Background

A few days before the arrival of the provisional administration, Nota-Bank, on behalf of ST-Auto, transferred 25.7 million rubles to accounts in other banks. The Bank had conducted this kind of transactions before. But shortly after the last ones took place, the Central Bank intervened in the Bank’s work and revoked its license. The transfers were disputed for having been made with preference in the Nota Bank bankruptcy case (no. A40-232020/2015).

The County Court decided that the disputed transactions were performed with preference over other creditors of the debtor despite the presence of a card index of outstanding payment documents in the bank, which means that they go beyond the normal economic activity. Under these conditions, the district court declared the disputed transactions to be invalid.

ST-Auto did not agree and filed a complaint to the Supreme Court. The Applicant stated that during a year, he had repeatedly performed similar transactions. In addition, the funds were wired to the company’s current account with another Bank because of the need to comply with the requirements for the level of turnover so that they could provide bank guarantees under government contracts.

The subject of the complaint interested Mr Oleg Sviridenko, Head of the Board of Economic Disputes, who submitted it for consideration.

Orderly Transaction

At a hearing in the Supreme court, the transaction was “defended” by Anna Vereshchagina, acting on behalf of ST Auto. According to her, the case materials provided evidence to confirm that the transactions were made in the framework of normal business activities. They were payment orders for monthly transactions of similar amounts. The district court did not take this into account. “Those were regular transactions  both the debtor and the defendant. The transfers were made monthly, ” the lawyer assured.

In her opinion, the district court should have taken into account the explanations of the Plenum of the Supreme Court No. 63 on the orderliness of the disputed transactions. In addition, the company provided their agreements with VTB-24 and bank guarantees to confirm the “orderliness” of transactions, according to which the company was obliged to maintain a balance on current accounts that would be equal to the amount of the bank guarantee. This is why the money was transferred from the current account in Nota Bank.

The company’s representative also assured that ST-Auto did not know about what was happening in the Bank. “When the dispute was first considered, we requested the information on debit payment sequences from the Bank.  They replied that the information was not available and therefore could not be provided. In fact, the only proof the Bank manager was able to provide was the card file formed with a positive balance, ” Ms Vereshchagina said. In her opinion, there were numerous violations in how the card file was formed: the account balance was RUB 800,000,000, and the liabilities made up RUB 600,000,000.

Extraordinary

A representative of the Deposit Insurance Agency said that the decision of the lower instance was legitimate. The presumption of the existence of a card index of outstanding payment orders cannot be rebutted by the arguments presented by ST-Auto. Moreover, being a fire truck manufacturer, the company had information of Nota Bank being on the verge of bankruptcy.  With “such an important social function,” the company has to monitor the stability of the bank where we keep our money, the lawyer said.

The ASV representative is sure that all ST-Auto was doing  was trying to save their money.

According to him, the company’s payments were not systematic. Their amount increased as revocation of the Bank’s license approached, and the company did not provide any evidence on why this happened. “The Applicant received the money before those who should have received the money according to the card file. The Bank had to make payments to a number of other companies before paying the Applicant, ” he continued.

The representative of ASV also criticized the Company’s argument that the money was transferred to VTB-24 to comply with the terms of the bank guarantee, saying, “The transfers were non-standard. Normally, any bank guarantee provides for specific amounts to be paid according to specific schedules. There is no such schedule here.”  For further confirmation of the “unorderly” nature of the transaction, the ASV representative said, “The payments from less “important” organizations as of the previous day [October 5] were not executed. Some of them were, and some of them were not.”

The Supreme Court: the Index Cards Are Sufficient

The Economic Dispute Panel recognized the position of the district court to be correct, after having examined the dispute. Three judges led by Judge Denis Kapkayev pointed out that the presence of an index file of outstanding payment documents in itself indicates that the transaction goes beyond the normal business activities. However, until proven otherwise, the lack of money in the bank account is assumed to be due to the fact that the orders of other clients remain unfulfilled, as was the case.

Since ST-Auto failed to refute the fact that at the moment when the disputed payments were made, the Bank already had the index file, which kept only growing, the conclusion of the district court on the invalidity of these payments is legitimate.