Russian state-owned companies spend millions of euros to lobby their interests in the EU

They should officially report on such spending, says Transparency International.
Russian companies are actively lobbying their interests in the EU countries - sanctions did not become a serious obstacle for them, researchers of Transparency International concluded. Despite European sanctions, the EU remains Russia's largest economic partner, in 2015 it still accounted for 44.8% of total Russian exports.
In order to more effectively conduct business and defend interests in Europe, Russian companies resort to standard practice - they hire lobbyists, authors of the study write: both specific people and professional companies. But only about some lobbyists, data are published openly in special EU registries.

The main thing is gas

Most actively lobbies its interests in Europe, "Gazprom", it follows from the report. Only to promote their own interests in the EU, the company spends at least 900,000 euros per year.

The Polish case

Poland is one of the few EU countries where registration of a lobbyist in the register is mandatory, writes Transparency International, and there is not a single Russian company there. But Gazprom, Novatek and Acron interact with the Polish authorities through affiliated structures - EuRoPol Gaz (48% owned by Gazprom), Novatek Polska (Novatek's daughter) and Norica Holding S.a.r.l. (Acron's "daughter"). Representatives of Novatek and Acron did not respond to requests.

Gazprom also attracts lobbyists in certain EU countries, for example in Austria, where its interests are represented by the oil and gas company OMV (a participant in the Nord Stream project, exchanging assets with Gazprom). For lobbying in Austria, Gazprom spends more than 100,000 euros per year. The list of lobbyists does not specify a specific amount, but only a certain threshold of such expenses, the representative of Transparency International explains, this does not mean that so much is spent on lobbying interests.

The French independent association of electricity and gas lobbied for Gazprom's interests in the European Commission, when there were hearings about energy prices, it also organized meetings for the Russian company with deputies.

Slovenian Geoplin d.o.o. Ljubljana lobbied for the South Stream gas pipeline project, in 2013 organized the company's meetings with the Slovenian government, the authors of the study list.

The representative of Gazprom did not respond to the request of Vedomosti. It is strange to interpret the activities of a foreign company (OMV) as Gazprom's lobbying activity, notes the representative of Gazprom's subsidiary, Nord Stream 2 AG: "If you consider the activities of the Berlin office of Mercedes As the lobbying of Russian interests only because they sell a lot of cars in Russia, you will be advised to see a doctor. " Lobbying by Nord Stream 2 AG itself is completely transparent, assures its representative.

Sberbank in Austria lobbies its interests through the "daughter" - Sberbank Europe AG. It interacts with local state bodies and regulators and the bank discloses information about it in the registry according to the requirements of the law, the representative of the bank informs.

Russian Railways, Nord Stream 2 AG and Rosatom's subsidiary Rusatom Overseas used the services of the consulting company Sass Consulting AG to lobby their interests in the EU, the authors of the study say. A spokesman for RZhD denies contact with this company, and a representative of Rosatom explains that the contract in 2014-2015. Was concluded not with Sass Consulting AG, but with Finnish "daughter" JSC Rusatom Overseas - RAOS Voima Oy. The company provided only PR services and had nothing to do with lobbying, he says.

The report says not only about state companies. For example, the Irish alumina plant UC Rusal - Rusal Aughinish is also engaged in promoting the interests of the Russian aluminum company in the country, the authors of the report believe. For example, the Irish government has received an offer from Rusal Aughinish to revise the EU directives on emissions trading, the authors of the report write. Lobbying is welcomed in Europe, says a representative of UC Rusal, but the company only lobbies questions directly affecting the work of UC Rusal in Ireland and does not use the services of professional lobbying organizations.

Alfa Group and LetterOne in 2013-2015. They turned to the services of the Edelman communication agency, the study authors write. The contract was effective from March 2012 to October 2014, the representative of Alfa Bank said. The group studied the possibility of obtaining licenses to open a branch of Alfa Bank in the UK, he says, and Edelman also studied the possibility of positioning Alfa Group in business and political circles in the UK. According to the representative of LetterOne, the data of Transparency International are untrue, Edelman did not lobby LetterOne's interests in the UK and Spain, according to the report.

Secret Millions

These registers give only a small part of the amounts that are spent on lobbying the interests of Russian companies abroad, says Ilya Shumanov, Deputy Director General of Transparency International: the budgets can go up to millions of euros annually. Lobby activities in different EU countries are regulated in different ways, which allows Russians not to disclose all the data.

And large Russian state-owned companies and state corporations do not always defend only business interests, and therefore are often perceived as agents of the Russian state, which makes it difficult for Russian business to cooperate with European authorities and avoid public promotion of their interests, use opaque lobbying practices, the authors of the study indicate.

They are not accountable for lobbying for their interests, the representative of Transparency International points out: Russian legislation does not regulate lobbying practices, there are prerequisites for corruption.

State companies should report on such expenses, the former official agrees: the state would understand what restrictions there are for state-owned companies abroad and how much they spend on overcoming them. Now the law does not provide for the obligation of state companies to report on such expenses, the representative of the Ministry of Economic Development reminds.

The law on lobbyism could solve the problem, discussions about which have been taking place for many years. The need to develop it was pointed out by Russian President Vladimir Putin in one of his plans to counter corruption. But in the last plan he is no longer mentioned, recalls Shumanov. Because of the lack of a law in Europe, European companies can also oppressively lobby their interests, he warns.

The approach to GR in Russia today is no different from international practice, EY managing partner for Russia Alexander Ivlev disagrees, many companies attract consultants who participate in initiatives to change legislation, interact with government officials - from the State Duma to ministries.

The mechanisms that companies use to promote their interests should be transparent and controlled, warns the former official, otherwise there is a risk that the strongest argument in favor of a decision will be financial, and competition can be reduced to the one who motivates the necessary official faster.

The main problem is that key lobbyists - state-owned companies, political scientist Yevgeny Minchenko says, need to provide business with the opportunity to communicate their arguments to officials. "It is more logical not to create a law on lobbying, which will still be largely declarative, but will improve specific subordinate acts," he suggests. When everything is regulated by law and responsibility is borne by business representatives, a lobbying company, the quality of decisions is growing, the former official argues, this is already a competition of arguments and expertise. Although it happens the other way round: products that are obviously damaging, for example tobacco, remain at the market due to them, he concludes.