Thieves Stole $100M In Metals From UES

Thieves have stolen some $100 million worth of metal, including 8,000 kilometers of wire, from Unified Energy Systems over the last two years to sell abroad, the national power grid said Wednesday.

Andrei Trapeznikov, a member of the UES board, said that 1,180 accidents occurred in 1999 and 2000 during attempts to steel wire from the power grid — 834 of those resulting in death. The company registered some 43,000 thefts.

The UES announcement came a day before the State Duma was to vote on overturning a presidential veto on a law banning the export of nonferrous metals, from which wire is made. Details of the vote were unavailable at presstime.

The volume of nonferrous scrap exported is estimated at 700,000 to 800,000 tons a year at an average price of $1,000 per ton, according to UES figures. However, law enforcement agencies estimate that only 400 tons of scrap metal is lawfully exported.

In a move to deter thieves, a 50 percent tariff was applied to the export of nonferrous scrap metal last year. Dealers quickly found a way to get around it, however: Sellers melt down stolen metal into ingots, which are taxed at only 5 percent of the declared selling price.

In November 2000, the Duma adopted a law imposing a ban on the export of nonferrous scrap metal until Jan. 1, 2005. However, that law was vetoed by President Vladimir Putin.

According to Sergei Zolotilin, a Duma deputy who co-wrote the draft law, the scrap metal market is so plagued by criminals that the authorities need time to establish an entirely new system for the collection and processing of scrap. And while lawmakers and the government are contemplating the creation of the new system, exports of non-ferrous scrap should be banned, he added.

"I believe it is also necessary to ban the sale of ferrous scrap metal abroad," said Duma Deputy Yaroslav Shvyryayev, another author of the draft law. "Perhaps, under industry pressure, the government will take a more active approach to solving the problem."

However, the Putin administration is pushing a more moderate approach. "In general, proposals to reconsider the customs rates for the export of nonferrous scrap metal and ingots have been submitted to the commission [for protective measures in foreign trade]. But this issue is still being studied," said a member of the commission, headed by Deputy Prime Minister Alexei Kudrin.

Companies involved in the collection and processing of scrap metal strongly oppose the ban. "This is not a solution," said Mikhail Zharkov, press secretary for the industrial group MIAR.

Speaking about the crimes committed in the scrap metal industry, Zharkov said, "They discredit the business and control must be tightened — first of all, over them."