The Government of the Canary Islands paid a company four million for some masks that it never received

The Canary Islands Health Service (SCS) paid four million euros in advance to a company called RR7 United SL, which is dedicated to the purchase and sale of vehicles, for the acquisition of one million FFP3 masks that were never delivered. After almost two years of litigation, the Executive resolved the contract for non-compliance and now the Tax Agency is working to recover the money through the enforcement procedure on the assets of the person in charge of this company, according to CANARIAS7.

The regional administration paid this economic amount in two payments, in advance, and without requiring a definitive guarantee from the limited company, as provided for in the Royal Decree on urgent measures in force by the covid, although in this case the merchandise was never delivered. Only one consignment arrived that was destroyed by Customs for not meeting the required requirements.

Subsequently, the successful bidders promised to bring others with a 20% increase in the item in consideration for the delay, but they did not comply and, in addition, there were no signs of life. All of this, despite numerous requests by the Administration to repay the money received as a result of this emergency contract.

RR7 United SL was not notified of the various requirements made by the General Directorate of Economic Resources of the Canary Health Service (DGRE), which even published the resolution of the contract in the Official Gazette of the Canary Islands on April 5, 2021 of supply and the "beginning of the procedure for reimbursement of the funds released in advance" which amounted to the aforementioned four million euros, plus interest. This company has its fiscal domicile in Calle Venegas in the capital of Gran Canaria, July 2016 and has a maximum share capital of 3,500 euros. Its sole administrator is a businessman from Gran Canaria linked, for the most part, to the automotive sector, without any relation to the health sector.

First steps

The litigation had its starting point after the Ministry of Health decreed the "emergency and the execution of the necessary actions" in the face of the critical situation revealed by the cases of coronavirus in two resolutions issued on February 27 and March 18, 2020 .

The shortage of material means caused the SCS to consider the "need to acquire 3M N95 masks", highlight the resolutions of the DGRE, since the supply of these masks was essential to meet the needs of health personnel.

In this way, on May 25, 2020 -within the period of validity of the state of alarm- the DGRE proceeded through the emergency procedure, to formalize an order to RR7 United SL for one million 3M Model 1860 masks for a amount of four million euros. "This material will be exclusively destined for public hospitals dependent on the Canary Health Service, to attend to situations derived from COVID-19," the agreement determined.

On June 4, RR7 United SL issued an invoice with the total amount of the merchandise "for the advance payment of the amount according to a split payment in two transfers of 50%". For this reason, the SCS, through a resolution of August 7, 2020, ordered the “release to justify” the advance payment of two million. But in response to this first subscription, RR7 United SL sent an email on October 19 in which it stated that "given the complexity of acquiring 3M masks through the suppliers of said product", since they alleged a "huge demand of governments and institutional entities", they had to make the full payment so as not to be "at the end of the queue at the reception of the merchandise, in addition to a considerable increase in price".

In this scenario, the successful bidder requested the four million in advance so as not to generate «risk of 'stockage' and 'pricing' with the supplier and also 'legal risks due to breaches of contracts'.

Nine days later, on October 28, the general director of Assistance Programs issued a report in which she recognized "the urgent need to complete the process of acquiring 3M masks for health personnel" of the SCS, for which the On the 30th of the same month, the DGRE ordered the payment of the remaining two million.

But the weeks went by and the SCS did not receive the merchandise purchased from the automotive company and, for that reason, the person in charge of the Economic Resources area at the time, Ana María Pérez, sent them an email on December 3 requesting “information about the approximate date that 3M masks can have entry ». RR7 United SL responded a day later with this message: «The 3M masks are already in the Peninsula waiting for shipment to go to Gran Canaria, the problem of the delay has been due to logistics and transport to here. Next week we will have them here. Sorry for the delay, but it wasn't because of us. I hope to dispatch them in a few days », details the email.

But the days continued to pass until on January 8, 2021, Ana María Pérez turned to the limited company that was breaching the agreement. The response took three days and the administrator said that the solution to the problem was immediate: "Firstly, I apologize for the late delivery of the merchandise due to a problem external to us and an internal problem with the 3M distributor, whose notification has been delayed." delivery. Today they have told us that they confirm the departure with the merchandise that comes directly to Las Palmas de Gran Canaria (by air). I reiterate my apologies again, and today I hope to have the information on the arrival of the masks, thank you.

But these two previous excuses were accompanied on January 15 by another email sent by RR7 United SL to the SCS in which a fiduciary agent who executed the purchase named Charles Douglas warned that the transaction with the 3M company would not be possible. . "After much investment of time and effort," it detailed, RR7 United SL had "been the victim of multiple delays, price gouging, broker misrepresentations and ultimately may be disappointed by the most recent supply chain that had represented," explained Douglas. For that reason and in anticipation of these inconveniences, "a new parallel supply chain had been contracted and prepared in case the newer supply chain could not deliver a timely and risk-free supply," he added.

In view of the facts and the fact that the object of the emergency contract had not "been carried out" and, in addition, the maximum period of three months provided had elapsed, the SCS determined the resolution of the agreement and the "reimbursement" by the successful bidder. of the four million paid in advance, a procedure that began on February 1.

The DGRE sent said resolution by registered letter with acknowledgment of receipt to the address of the successful bidder dated February 2, 2021, but after two unsuccessful notification attempts, a notice of arrival was left in the mailbox for RR7 United SL. “After no representative of the company withdrew the certified letter from the Post Office, on February 17, 2021 the letter was returned by the Post Office,” explained the general director Ana María Pérez, who left the position by own decision in April of 2022.

fake masks

In the meantime, in March 2021, a batch arrived at the airport with the million masks -supposedly from 3M- that those responsible for RR7 United SL had acquired. But the same ones, which arrived from Ethiopia, were seized by Customs for a month until they discovered that the stamps were not original. That is why they were incinerated and the payment for storage and destruction -30,000 euros- was paid by the administrator of the successful bidder. The company offered another type of mask of a different brand and the SCS accepted on the condition that they send them 20% more for the same price.

Given the impossibility of contacting the successful bidder, who did not send the merchandise, the Administration published in the Official Gazette of the Canary Islands (BOC) number 68, of April 5, 2021, granting the administrator or a representative a maximum period of ten business days , counted from the day after the publication so that it appears in the administrative offices of this management center in Las Palmas de Gran Canaria.

On April 22, Ana María Pérez signed a procedure to record that, "after a period of ten business days", no representative of RR7 United SL had "appeared at the offices of the management center to be notified of the full text of the aforementioned resolution ». But it warned that, as it was "an emergency contracting" they did not require the successful bidder "to constitute a definitive guarantee, in accordance with the provisions of article 16.2 of Royal Decree-Law 7/2020, of March 12, by which the urgent measures to respond to the economic impact of Covid-19. This means that the SCS had no way, in the short term, to recover the four million that it had paid in advance to this alleged shell company that, almost a year later, committed this alleged scam.

So that RR7 United SL did not present allegations, an opinion from the Canary Islands Consultative Council was not necessary, so the DGRE of the Canary Health Service issued a resolution on May 13, 2021 in which "the executive period" began, Proceeding to the collection of debts from the Tax Agency "by the enforcement procedure on the assets of the person obliged to pay", that is, the seizure of accounts and possessions worth four million euros, in addition to default interest and the surcharges of the executive period.

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