PRESS RELEASE (Czech version): Despite the EU sanctions, the number of public tenders awarded to companies with Russian influence remains stable. Czech analytical company Datlab identified tenders at a monthly volume of 293 mil. EUR, being awarded to companies under Russian control or with a recently recorded tie to a sanctioned person. These should, in theory, be banned from public tenders.
“We examined the ownership structures of public procurement winners in the last two years. We observe almost no impact of sanctions on the procurement market. Either the sanctions do not work as intended, or all the Russians immediately managed to get rid of their shares. The second option, however, seems less likely - as the act of buying the share may alone violate the sanction rules,” comments Jiri Skuhrovec, the lead author of the study.
In practice, we observe beneficiary owners being replaced by proxies or hidden in complex tax-haven structures. In other cases, the position of sanctioned persons gets blurred, so the ban enforcement gets legally questionable. For instance, a 28 % share in EU-wide concern Strabag is still owned by sanctioned Oleg Deripaska. The company has cut him off the profits and control, yet his share still gains in value as the company keeps winning public tenders.
Datlab works with top resources in the field - company database Orbis and sanction lists OpenSanctions among others. It has identified 36.370 companies within the EU with recorded ties to Russia or sanctioned persons. Even though most of these companies do not do business with the public sector, at least 242 do - at an unchanged rate. Arguably, public buyers lack the tools and evidence to identify and cut these companies off.
Datlab is closely monitoring the Czech market. It is a provider of a free sanction screening tool recommended by the Czech government. Its NGO partners have also surveyed how public authorities apply the sanctions. “To our knowledge, no company was effectively banned from a public tender in Czechia due to sanctions. Our results suggest that the situation in other countries might be similar,” summarizes Skuhrovec.
ENGLISH: Full analysis (PDF), Press release
CZECH: Full analysis (PDF), Press release
In EU we found:
- 6.278 companies tied to EU-sanctioned persons,
- 3.165 other companies tied to persons on Navalnyj’s FBK list or sanctioned by other countries but not by the EU,
- 30.092 companies controlled from Russia.
Consequently, 36.370 companies should not be getting any above-threshold public tenders in the EU. However, they seem to do so at a nearly unchanged rate:
(Source: TED, Orbis, OpenSanctions, Datlab calculations. Figure based on a sample of 242 reliably identified companies. Real volume might be considerably higher.)
We get similar results for Czech EU subsidies, yet these are subject to weaker regulations.
Want further reading? Here is how we learned to track ownership of tender suppliers in tax havens: https://datlab.eu/blog/eu-tenders-to-tax-havens/