The priority areas for the security departments are to ensure economic and information security, counter foreign technical intelligence activities, protect State secrets, provide counter-terrorist protection of enterprises, and take measures to prevent corruption.
The ongoing re-equipment of the Corporation’s main enterprises, the use of new domestic technologies in the construction of ships (often unique in the world), the options for deploying high-precision weapons on new and modernized warships - all of this causes increased interest from foreign potential competitors. Accordingly, the forms and methods, as well as the emphasis in the work of the corporate security service, have been adjusted more than once over the past five years.
From 2015 to 2018, the establishment of an effective vertically integrated security system was completed and uniform operating principles for all security units were developed in the United Shipbuilding Corporation and its subsidiaries. Today, our employees are actively involved in activities to prevent various offenses, identify and document crimes committed against USC subsidiaries and affiliates. They conduct internal investigations and audits on the evidence and cases of economic damage, contribute to its compensation, prepare and send materials to law enforcement agencies to make procedural decisions, represent the interests of the companies in law enforcement and judicial authorities and organize interaction with them on various issues of production activities of subsidiaries and affiliates.
In addition, security employees conduct systematic work to prevent corruption, which includes monitoring compliance with the USC Group companies’ anti-corruption policy developed on the basis of a national anti-corruption plan.
Security of companies is a continuous and complex process, requiring the combined efforts by all stakeholders and a systematic approach. Security units promptly inform the President of the corporation and the general directors of the USC Group companies about various risks of production activities, which allows the management to make informed management decisions, including those concerning the localization of threats of economic or reputational damage, as well as preventing the loss of information and products that constitute State secrets.
Thus, in 2018, as a result of timely measures taken, over 90 million rubles were returned to the companies’ revenue and potential risks of damage amounting to about 2.5 billion rubles were localized. In total, security units reimbursed more than 570 million rubles of the economic damage caused previously to the USC Group companies and prevented damage amounting to more than 5.7 billion rubles between 2015 and 2018.
The main efforts are focused on preventing and deterring various violations and abuses, as well as minimizing damage. This is a common challenge facing the heads of enterprises and production units, as well as security units. At the same time, certain specific issues are resolved by the corporation’s security service units in cooperation with the employees of the regulatory and enforcement authorities of the Russian Federation: the General Prosecutor’s Office, the Federal Financial Monitoring Service, the Investigation Committee, the Ministry of Internal Affairs and the Federal Security Service of Russia.
Unfortunately, despite the measures taken by the management of the Corporation and its subsidiaries and affiliates, there are still cases of non-compliance by individual officials with the requirements of local regulations and abuse of office. In 2017–2018, USC Group companies sent 167 complaints about the cases of material damage totaling more than 893.7 million rubles, on the basis of which 99 criminal cases were initiated. As of January 2019, the courts have completed the consideration of 53 criminal cases, upheld the companies’ claims within the framework of 43 criminal cases and made decisions on partial compensation of material damages.
An illustrative example of joint work with law enforcement agencies was the suppression in 2015 by Sevmash Production Association’s security unit of illegal activities of an organized group that consisted of employees of Sevmash, the Severodvinsk representative office of the Kursk Mayak Plant, and Russian Defense Ministry’s military acceptance officers, which, for personal enrichment, committed theft of funds allocated under the state defense order for several years by submitting false information about the work performed. The total amount of damage to Sevmash amounted to more than 200 million rubles.
As a result of the painstaking work of documenting this criminal activity, by a court decision, all persons involved in the criminal case were sentenced to various terms of imprisonment, and the organizer of the crime was sentenced to nine years with serving in a penal colony.
Another example is the suppression by the Proletarsky Plant’s security unit in 2016–2017 of the illegal activities of Alexander Bolokhonov, Deputy General Director for Legal Affairs, who had planned and implemented a fraudulent scheme of embezzling almost 10 million rubles by transfer of the right to claim debts under a contract with the Zvezdochka Ship Repair Center to a third party using forged documents. The security unit sent a corresponding application to law enforcement agencies, and in July 2017 a criminal case was initiated in connection with this case under the article “Attempted Fraud”.
In total, over 250 investigations and inspections were carried out with the direct participation of the subsidiaries and affiliates’ security units last year which led to disciplinary action against 73 officials. In addition, as a result of internal investigations conducted in 2018 with the participation of the USC security department employees, the director of the Petrovsky Branch of the Zvezdochka Special Design and Technology Bureau, general director of the Proletarsky Plant, general director of the Lotos Shipyard, chief engineer of the Admiralty Shipyards, as well as a number of other managers at various levels were dismissed for abuse of office and non-compliance with corporate local regulations. A decision was made to dismiss an assistant general director of the Sevastopol Marine Plant, a branch of the Zvezdochka Ship Repair Center, for abuses.
Employees of economic security units are involved in the organization of the procurement and contract activities in USC subsidiaries and affiliates on an ongoing basis. All incoming procurement documents and materials in respect of potential counterparties are studied to identify and prevent possible risks of damage to USC companies. Upon detection of cases of unjustified selection of a single supplier, procurement of goods and services at inflated prices, participation of organizations that provided biased documentation in procurement, and threats of non-performance of planned contracts, economic security units, together with relevant departments, take measures to minimize such risks, including preventing the entry into contractual obligations with potentially unscrupulous counterparties.
There are examples of damage prevention in the course of effective interaction between the security units of USC Group companies and the United Shipbuilding Corporation. Thus, as a result of an audit conducted between December 2016 and February 2017 by Sevmash’s economic security unit together with the USC security department, the theft of more than 800 million rubles allocated under the federal target program «Development of the defense-industrial complex Of the Russian Federation for the period 2011–2020” was prevented.
The USC Security Department established that the bank guarantees provided to Sevmash by the head of one of counterparties were forged, and the bank did not actually issue them. Together with Sevmash Production Association’s security unit, it was confirmed that the counterparty had a criminal intent to steal money by deception, coupled with deliberate non-performance of contractual obligations in the field of entrepreneurship. Taking into account this information, Sevmash’s management terminated the contract with the supplier, the inspection materials were transferred to law enforcement agencies.
Last year, a total of over 29,000 draft contracts and supplementary agreements to them were reviewed by employees of economic security units, and about 7% of them were returned for revision for various reasons. More than 20,000 potential counterparties were inspected, of which about 20% were not allowed to participate in the procurement procedures.
USC security units effectively cope with new challenges
During the monitoring of contractors’ performance with the participation of economic security units, cases of payment for unperformed work, unjustified overcharging during construction work, replacement of some materials with cheaper ones, etc. were repeatedly suppressed. In particular, in October last year, in cooperation with the USC’s capital construction department, the case that the Admiralty shipyard transferred about 40 million rubles to a contractor for unperformed work was documented. These funds were returned to the shipyard. During the proceedings, it was established that the contract was not sent for approval to the security unit, which had information about the counterparty’s bad faith and information about its lobbying relations with some of the shipyard’s officials.
In accordance with the USC President’s instruction, the security units, together with the legal units, are also involved in returning overdue and problem receivables. Thus, receivables amounting to more than 453.5 million rubles were collected in 2018 (332.8 million rubles in 2017).
In the past three years, USC Group had made significant efforts to protect secrets defined by the Corporation’s information security concept: government, official, commercial secrets and personal data.
A corporate chain of counteraction to foreign technical intelligence and technical protection of information has been built and functions effectively – it implements the coordinating, methodological and supervisory functions of the parent company in relation to the USC Group companies.
A contract of accession to the common procedure for organizing the protection of confidential information that has been put in place in the Corporation is our know-how. The accession of our companies to this regulation enables them (subject to certain conditions) to exchange confidential information without entering into bilateral information security agreements. Thus, a legal basis has been prepared for building a single information space of the USC Group companies provided for in its information technology strategy for 2017–2021.
We are attentive to the information security of the parent company. In 2018, the certificate of compliance of our local computer network with information security requirements was updated, which made it possible to upgrade the system from Class 3 to Class 2. It became geographically distributed throughout the country. An intrusion and computer attack detection system has been added to the information protection system, which made it possible to detect and block unauthorized access attempts to the corporation system from a corporate data network being developed in the USC Group and from the Internet.
At the initiative of the security service, the parent company has carried out work in a new area related to the protection of the critical information infrastructure of the Russian Federation. The facilities owned by USC were identified and a commission was formed for their categorization. The list of facilities and their certificates were submitted to the Federal Service for Technical and Export Control of Russia.
The issues related to counter-terrorist protection and physical protection of the USC Group companies’ facilities are under regular review by the security service. To improve the enterprise protection system, planned work is underway to upgrade security equipment: alarm, electro-optical surveillance, lighting and communications systems have been modernized at some enterprises. Checkpoints were equipped with access control systems, anti-ram barriers and other security systems.
In accordance with Russian Government Decree No. 1413 of December 18, 2014, security data sheets were developed for all of the USC Group companies to be protected against terrorist attacks and are updated in the prescribed manner.
In 2017–2018, together with the Russian Guard’s Okhrana (Protection) units and the security agencies concerned, inspections of counter-terrorist protection were carried out at most of facilities and measures were taken to eliminate the identified deficiencies.
In view of the specifics of the work done by a number of the USC Group companies, special and constant attention is paid to the protection of State secrets. As practice shows, the challenges facing the security units can be effectively addressed only in cooperation with managers and personnel of companies. And such support is provided to the security service in almost all of the companies. Feedback tools such as telephone and mail of trust have also proven themselves. For example, last year, three internal investigations were conducted at Baltiysky Zavod after reviewing the information received, and ten executives were brought to disciplinary action.
In general, the USC security units effectively cope with new challenges and help the management of the Corporation and its companies to meet the challenges facing them.