Russian Government develops detailed regulations for sale of capture quotas and quota shares

According to the order No.602 dated 12 August 2008, Russia's Federal Fisheries Agency has developed new rules for auctions of annual capture quotas and quota shares, the letter to be allocated for a period of 10 years as of 1 January 2009, reports http://www.fishnet-russia.com/ (https://www.fishnet.ru/ ).

The new rules have been drafted so as to take into account the negative experience of the previous quota auctions and to add transparency to the process of selling quotas and shares by auctions.

Under those rules the auctions will be conducted during a 10-year period of the shares' validity and the situations when the rights are subject for auction have been strictly specified. More specifically, the auctions will apply to the following cases:

• termination of the right for capture of aquatic bioresources under agreement between a user of the aquatic bioresources and authorized body of state power;
• termination of the right for capture of aquatic bioresources in case of the user's waiver of the right for their capture;
• termination of the right for capture of aquatic bioresources in case of liquidation of legal entity or in case of death of the person who has been given the right to use the aquatic biological resources;
• coercive termination of the right for capture of aquatic bioresources in case of the need to use the bioresources for state needs;
• coercive termination of the right for capture of aquatic bioresources if the harvest has accounted for less than 50% of the quotas during 2 years running;
• coercive termination of the right for capture of aquatic bioresources if the person enjoying the right for capture of aquatic bioresources has made at least 2 violations of the fishery regulations during 12 months, and those violations have done a large damage to aquatic bioresources, the damage to be estimated according to Article 53 of the Federal Law "On Fishery and Conservation of Aquatic Biological Resources";
• capture of aquatic bioresources, which have not been earlier classified as objects of fishery, or aquatic bioresources in new areas of their capture;
• transfer of the right for capture of aquatic bioresources from one person to another by means of expropriation.

The starting price of quotas and shares put up for sale or transfer shall be set by the auction's organizer based on the resource fees for exploitation of aquatic bioresources as approved by Article 251 of Part 2 of the Tax Code of the Russian Federation. In case when quotas and shares are not sold at the first auction, the organizer can reduce their starting prices for the second auction.

The advance payment for each particular quota or share shall amount to no less than 40% of the starting price as defined by the auction's organizer.