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Working meeting with Deputy Prime Minister Alexander Khloponin

March 30, 2015, The Kremlin, Moscow

Vladimir Putin had a working meeting with Deputy Prime Minister Alexander Khloponin to discuss the preliminary results of the Government’s work on updating licensing agreements.

President of Russia Vladimir Putin: Mr Khloponin, are we going to discuss licences?

Deputy Prime Minister Alexander Khloponin: Yes.

Vladimir Putin: Go ahead.

Alexander Khloponin: Mr President, you signed an instruction on February 12 on updating licensing agreements. The Government has begun carrying out this instruction.

The issue has turned out to be a very complicated matter. To date, we have accorded 7,775 licences, of which 3,329 are for hydrocarbon raw materials and 4.446 for solid minerals. We now need to analyse and update all of these licences.

The work so far has shown that there are three main issues to address.

First, there are the licensing agreements that are difficult to implement at present due to the changing situation on the market, the imposition of sanctions, and difficulty in getting access to credit resources.

This concerns around 800 licences, mostly in the hydrocarbons category. We need to take swift action here so that these companies can continue their development and not have their licences revoked.

Second, we did a random check of 600 licencing agreements (we just took agreements at random), and found that 165 of them contained technical mistakes regarding the coordinates. In other words, these licences…

Vladimir Putin: Were issued with mistakes.

Alexander Khloponin: These are technical mistakes that need some serious correcting. We have passed a law that makes it possible to correct these technical mistakes quickly and enable the companies mining mineral resources to continue their work.

Third, there are a great many licences that were issued before 1990. These are the many licences acquired by companies that continue to work using old methods that do not meet today’s regulations and provisions.

We have already issued our instructions concerning all three areas and are carrying out the updating work. The deadline that you gave us was December 31, 2016. We will work faster in the anti-crisis areas and will have some of the work completed this year. We will report to you once every six months.

I think we are up to the task. The final goal is to bring all the licences into line with a common standard, and simplify the technical regulations and packages of documents that need to be prepared for the licences. I think we will reach our objectives.

Vladimir Putin: When will these new standards and requirements be ready?

Alexandr Khloponin: We have already drafted the requirements. In March, we have been sending the technical requirements out to our companies. This is the list of what they will need to present to obtain licences. We will make our first interim report in May.

Mr Medvedev asked for a detailed list of all the licences that need updating to be ready for his approval by the end of this year. We will complete this task in full.

Vladimir Putin: What will you do about those who obtained licences but are not complying with their terms and in general are not doing anything at all, to put it mildly?

Alexander Khloponin: For those who are not carrying out the terms of their licences, in accordance with your instruction, we will give them a chance, give them a short preferential period during which they can pay their debts on licence agreements the terms of which they have failed to respect. If they do not do so within this short period, then we will revoke the licences. This is also in accordance with your instruction.

One of the points in your instruction was to update licences only for those who are complying with all current demands of their licensing agreements, have no debts to the tax authorities or the federal budget, and are carrying out all of their obligations.

Vladimir Putin: The only thing in this respect is to make sure that violations of the licences are analysed impartially so as to exclude cases where the problems are due to objective circumstances unrelated to the licence-holder’s activities.

After all, there are things that are beyond their control, and then they end up not being able to work because the state authorities do not provide the needed conditions for them to carry out their obligations. This is also something you need to take into account.

Alexander Khloponin: Yes, we will certainly do so.


March 30, 2015, The Kremlin, Moscow