At a press conference on 15 March 2020, Serbian President Aleksandar Vučić announced that a state of emergency had been declared in the country. He described the fight against COVID-19, which was gaining momentum at the time, as “a war against an invisible enemy that our country must defeat”.
While people’s lives were being radically changed, the state was in a hurry to acquire as much medical equipment as possible.
The National Health Insurance Fund (RFZO) had already announced two public procurements for the purchase of masks, gloves and disinfectants worth more than 1.4 billion RSD.
However, as early as 16 March, RFZO suspended these procurements. The state then decided to buy all medical equipment in secret, away from the public eye.
Now, after three years, people still do not know what happened on 16 March, how the government spent their money, what was purchased at the time and from whom.
The Center for Investigative Journalism of Serbia (CINS) can reveal one of the strictly confidential contracts, worth more than 64 million EUR, which RFZO concluded and which provides some of the answers to these questions. It also shows what lies behind the secret Government decisions, which made secret any information regarding the procurement of medical equipment during the pandemic.
“It is completely clear that the Government exceeded its authority and that it hid more information from the public than was necessary,” Nemanja Nenadić from Transparency Serbia told CINS.
Billions under the radar
In the midst of the pandemic, RFZO decided at meetings within that institution what it would be acquiring and from whom. CINS learned from several unofficial sources that companies that have acquired or can acquire some of the much-needed equipment were invited to the meetings. The state promised them advance payments and transportation assistance. CINS’s sources claim that representatives of the Security Information Agency (BIA) were also present at the meetings.
A representative of Sinofarm was also present at one of those meetings. Although it shares its name with the Chinese company that produces vaccines, it is actually a family business from Belgrade that has been in existence for thirty years. Just one day after the introduction of the state of emergency, Sinofarm concluded a contract with RFZO worth 7.6 billion RSD, that is, more than 64 million EUR (including VAT). For this amount, they sold over 700,000 masks, almost 1.5 million hazmat suits, about 2 million coats and 13 million medical aprons to the state.
RFZO had only one day to decide on Sinofarm’s offer, which was drawn up on the same day as the deal was concluded:
„(…) due to the global demand for products, and especially in Europe. A payment must be made as soon as possible to [foreign] producers in order to secure the stock,” the offer states.
In addition, the offer states that the goods must be paid for in full and in advance.
The business of Sinofarm, which has been engaged in the trade of medical equipment for years, started flourishing in 2020. That year, the company earned 85 million EUR, and just a year before that, it had earned around 5 million EUR.
Sinofarm was also supposed to deliver 400 respirators from China to the state for 8.9 million EUR, which the Balkan Investigative Reporting Network (BIRN) reported about. However, the purchase failed, and the money was returned. Sinofarm's lawyer told the portal that the company was supposed to earn "a small amount" of money for this job, and that the biggest earnings were from other jobs such as purchasing masks and the like.
RFZO demanded urgency as well. Thus, Sinofarm undertook to deliver the goods to clinical centers within nine days of signing the contract, as well as to keep all the data obtained in connection with this operation as strictly confidential.
Even though the goods were manufactured in China, the planes had to be sent to airports in the United States of America and India in addition to Chinese airports.
During the state of emergency, the media reported that the equipment was being delivered to the country via flights organized by the Government, among others. However, it is not clear from the documentation who covered the transportation costs for the goods sold to the state by Sinofarm. While their offer states that the price does not include transportation, the signed contract stipulates that transportation costs are included in the price.
The owner of Sinofarm, Nikola Sinobad, refused to comment on the contract for CINS.
Secret decision is above the law
On the same day when the state of emergency was declared, the Government made a strictly confidential decision, after which the public procurements announced by RFZO were suspended.
Back in 2020, CINS attempted to find out what it says, but without success. Because of this, we sued the Government before the Administrative Court, but a verdict has not yet been made.
The contract between RFZO and Sinofarm, obtained by CINS, reveals that the decision suspended the Law on Public Procurement for the purchase of medical devices and equipment pertaining to the pandemic.
As stated in the contract, the decision was that RFZO, for the needs of state health institutions, without applying the Law on Public Procurement, would provide personal, protective, sanitary, medical and all other necessary equipment necessary to fight the epidemic.
Nenadić explains that the Law on Public Procurement at the time allowed for the most urgent procurements to be made without a tender in cases such as an epidemic, but he says that this did not imply secrecy.
“We had an even more alarming case during the floods, procurements were also made without protocol, but not in secret. Data on these costs were not hidden. An urgent crisis does not entail secrecy.”
RFZO did not respond to CINS’ questions about these procurements, how many contracts it concluded on the basis of a secret decision, and what their total value was, among other things.
They also failed to provide us with the documents that we requested based on the Law on Free Access to Information of Public Importance, but forwarded our request to the Government, given that it was the Government that classified them as confidential.
The Government chose to remain silent this time as well. We did not receive a response to the request or to our questions about the secret decision.
Nenadić believes that if there was any reason to hide this data from the public, when countries were competing to provide protective equipment, there certainly was no reason to do so later:
“It is the Government of Serbia that, by maintaining complete secrecy, is creating suspicion that there is something controversial about these operations.”