Beginning of Meeting with Prosecutor General Yury Chaika 2008-10-20 20:07:11 The Kremlin, Moscow President of Russia Dmitry Medvedev: Yury Yakovlevich, we have several subjects to discuss. Some of them we will discuss behind closed doors, but there is one matter I wanted to discuss with you with the media present. I gave you an instruction concerning the situation with ‘aircraft fuel affairs’ in the country and fuelling of planes. The situation is quite unacceptable in my view, and at the very least we need to get to the bottom of how price formation is taking place, who is taking part in these processes, how this affects price policy and what impact it ultimately has on the cost of plane tickets and on carriers’ fulfilment of their obligations towards passengers. Please tell me what has been done so far. Prosecutor General Yury Chaika: Pursuant to your instruction, we set up an inter-ministerial working group composed of specialists from the Prosecutor General’s Office, Interior Ministry, Federal Anti-Monopoly Service, Federal Tariffs Service and other relevant state bodies. We have set up similar groups in the regional prosecutors’ offices, especially in the regions with the most problematic situation. Together with officials from the Federal Anti-Monopoly Service we have carried out checks of how suppliers, fuelling stations and producers are complying with the anti-monopoly laws. The preliminary results so far (we worked on Saturday and on Sunday. We have been working fully over all these days) show that one of the main reasons for the high aircraft fuel prices is that officials and producer companies have been misusing their dominant position in order to impose disadvantageous conditions on airlines. Airlines sign month-long contracts with the fuel suppliers but sell tickets two or three months ahead. Dmitry Medvedev: You are looking at six-month contracts? Yury Chaika: Six months even. Dmitry Medvedev: This is advantageous if the price is decent. Yury Chaika: Of course, and it would be in our citizens’ interests. Furthermore, the suppliers demand full upfront payment for the fuel that they will supply in the future. This of course puts the airlines in a disadvantageous situation. The sharp rise in aircraft fuel prices is one of the reasons for the delays in flights. The violations of our citizens’ rights are above all due to this situation. What have we done so far? We have already submitted 19 reports on eliminating violations in the legislations, issued 15 warnings to officials and started proceedings in several cases of administrative violations. Acting on instructions from the Prosecutor General’s Office, the Federal Anti-Monopoly Service has started proceedings in more than 20 cases of violation of anti-monopoly laws, as well as two criminal cases concerning refusal to provide fuel. One criminal case concerns Krasnoyarsk, and the second concerns Domodedovo. And we have revealed corruption schemes. For several years, one airport was receiving fuel direct from the producer, and there was a middleman firm that made several tens of billions of roubles over this period, with all the money going through shell companies. Criminal proceedings have also been started in this case. I receive daily reports of how the work is going overall. The main problems with passenger flights have already been sorted out, but the investigations will continue. Dmitry Medvedev: Good. My one and only request in this situation is that you take these investigations through to their conclusion and then inform the public of the results. I realise that not everything depends on the suppliers, but they have a decisive impact on the cost of tickets (the fuel suppliers, I mean), and they should behave decently, conclude appropriate agreements and not think only of their own interests but also of the public’s interests. I think therefore that the anti-monopoly measures you have taken together with the Federal Anti-Monopoly Service are necessary and sufficient for now. If other measures prove necessary, we will discuss this later. Yury Chaika: Good, we will see it is all done.