Executive Order of the President of the Russian Federation "On State Competition Policy Guidelines" (Order of 21 December 2017 No. 618)

Non-official translation

Executive Order

of the President of the Russian Federation

On State Competition Policy Guidelines

With the view to strengthening the national economy, further development of competition and non-admission of monopolistic activities, I hereby decree:

1. To consider active promotion of competition in the Russian Federation as a priority area for the activities of the President of the Russian Federation, the Federal Assembly of the Russian Federation, the Government of the Russian Federation, the Central Bank of the Russian Federation, federal executive bodies, legislative (representative) and executive public bodies of the subjects of the Russian Federation, and also bodies of local self-government.

2. To determine that the aims of improving the state policy on the development of competition are:

a) increase of customer satisfaction by expanding the range of goods, works, services, improving their quality and reducing prices;

b) increase of economic efficiency and competitiveness of economic entities, including by ensuring equal access to goods and services of natural monopolies and public services necessary for conducting business activities, stimulating innovation activity of economic entities, increasing the share of science intensive goods and services in the production structure, development of markets for high-tech products;

c) stable growth and development of a multisectoral economy, development of technologies, reduction of costs in the scale of the national economy, reduction of social tension in the society, ensuring national security.

3. To define as the basic principles of the state policy on the development of competition:

a) reduction of the share of economic entities established or controlled by the state or municipal entities in the total number of economic entities operating in commodity markets;

b) ensuring equal conditions and freedom of economic activity on the territory of the Russian Federation;

c) ensuring the development of small and medium-sized businesses;

d) the direction of public investment in the development of competition;

e) ensuring conditions for attracting investments of economic entities in the development of commodity markets;

f) inadmissibility of restraint of economically justified transition of natural monopolies from the state of natural monopoly to a competitive market;

g) state regulation of prices (tariffs), based on the recoupment of organizations that carry out regulated activities, while reducing costs and increasing their efficiency, ensuring the interests of consumers in the long-term perspective;

h) inadmissibility of state regulation of prices (tariffs) carried out by determining (fixing) prices (tariffs) or their limit level in competitive product markets, except as provided for by the legislation of the Russian Federation;

i) development of competition in the spheres of economic activity of state enterprises, enterprises with state participation;

j) combination of preventive and follow-up control for the purposes of protecting competition;

k) stimulation of economic entities, including those that occupy a dominant position in product markets, introducing a system of internal compliance with the requirements of the antimonopoly legislation;

l) transparency of antimonopoly policy;

m) responsibility of public authorities and local governments for the implementation of state policy on the development of competition;

n) measurability of the results of the state policy on the development of competition;

o) government’s stimulation of good practices of economic activity;

p) development of organized (exchange) trade in the Russian Federation;

q) information transparency of the activities of infrastructure monopolies;

r) ensuring transparency in procurement of goods, works, services for state and municipal needs, as well as procurement of goods, works and services by infrastructure monopolies and companies with state participation;

s) introduction of a risk-oriented approach in the activities of state control (supervision);

t) improvement of antimonopoly regulation in the conditions of the development of the digital economy and its globalization in order to effectively suppress transboundary violations of antimonopoly legislation and enhancing the competitiveness of Russian companies in the world markets.

4. To identify the fundamental principles of the activities of federal executive bodies:

a) a prohibition on the introduction and (or) preservation of restrictions that create discriminatory conditions for certain types of economic activity, the production and rotation of certain types of goods, the provision of certain types of services, except for cases provided for by federal laws, legal acts of the President of the Russian Federation, legal acts of the Government of the Russian Federation;

b) a prohibition on unreasonable interference in the free functioning of commodity markets, the promulgation of acts, the adoption of decisions that may lead to the prevention or elimination of competition.

5. To approve the attached National Plan on the Development of Competition in the Russian Federation for 2018-2020 (hereinafter - the National Plan).

6. To the Government of the Russian Federation to coordinate the implementation of activities provided by the National Plan.

7. To the highest officials (heads of the highest executive public) of the subjects of the Russian Federation to intensify work on developing competition in the subjects of the Russian Federation.

8. To recommend:

a) the Supreme Court of the Russian Federation to organize work on further research of the practice of the courts applying antitrust laws, legislation on state regulation of prices (tariffs), legislation on the contract system in the procurement of goods, works, services for state and municipal needs, legislation regulating the purchase of goods, works, services by specific types of legal entities, and explaining its application to the courts;

b) the Prosecutor's General Office of the Russian Federation to coordinate the activities of law enforcement agencies in order to prevent and suppress agreements restricting competition (cartels) prohibited in accordance with the antimonopoly legislation;

c) local authorities to intensify work on the development of competition in municipalities;

d) the National Council for Professional Qualifications of the President of the Russian Federation to consider the possibility of creating a council of professional qualifications in the field of competition law and developing an appropriate professional standard;

e) the Ministry of Education and Science of the Russian Federation to consider the possibility of including in the nomenclature of academic specialties of a particular specialty ("competition law"), according to which the academic degree is awarded.

9. To propose to the Civic Chamber of the Russian Federation the creation of advisory bodies on the development of competition on the basis of Public Advisory Councils of the Federal Antimonopoly Service in all the subjects of the Russian Federation, and also to take part in the work of a collegial coordination or advisory body established in the subjects of the Russian Federation with a high official for introduction of the standard for the development of competition in the subjects of the Russian Federation, approved by the Decree of the Government of the Russian Federation of September 5, 2015 № 1738-p.

10. To offer self-regulating organizations, public organizations, trade unions and consumer councils to:

a) take an active part in the work of advisory bodies on the development of competition;

b) use the mechanism of public control over the activities of public authorities and local self-government to identify acts and actions aimed at restricting competition and creating unreasonable administrative barriers;

c) send annually to the Federal Antimonopoly Service information on the assessment of the state of competition in the Russian Federation and the efficiency of state competition policy for inclusion in the report on the state of competition in the Russian Federation prepared by the Federal Antimonopoly Service in accordance with paragraph 10 of part 2 of Article 23 of the Federal Law "On Protection of Competition";

d) continue work on the formation of an intolerant public attitude towards any manifestations of acts of unfair competition and economic activity aimed at monopolization;

e) take part in interaction with the mass media in information distribution on the implementation of the state policy on the development of competition, on the requirements of the antimonopoly legislation and on the positive experience of citizens opposition and institutions of civil society with manifestations of acts of unfair competition and economic activity aimed at monopolization.

 

President

of the Russian Federation                                                                                                                                   Vladimir Putin

 

Moscow

21 December 2017                                                                                                                                                            № 618

 

 

Approved by the

Decree of the President of the Russian Federation of

December 21, 2017 №618

National Plan

on the Development of Competition in the Russian Federation

 for 2018-2020

 

1. Arrangements of the current National Plan are focused on achieving the following key indicators:

a)      ensuring a minimum of three economic entities with at least one of them belonging to private sector in each economic sector of the Russian Federation apart from natural monopolies and defense-industrial sector;

b)      reducing the number of cases concerning a violation of anti-monopoly legislation by public and self-governing authorities by the year 2020 by not less than twice comparing to 2017;

c)      increasing the proportion of procurements in the sphere of government and municipal order with small business entities and social non-profit entities being the exclusive participants by 2020 by not less than twice comparing to 2017, along with increasing the proportion of procurements made by particular legal bodies with small and medium-sized businesses being the exclusive participants to be equal to 18 percent by 2020.

 

1. With the view of implementing the main directions of the state policy on the development of competition:

a)      Government of the Russian Federation:

before 1^st October 2018:

specify the list of natural monopolies and other entities that perform alternate regulated activities for which the Government of the Russian Federation conducts investment programme approval and reports consideration;

ensure the implementation of regulations regarding non-discriminatory access to trade markets of public postal service and port facilities provided by natural monopolies;

before 1^st July 2018:

approve the arrangements made for development of competition in the economic sectors of the Russian Federation in 2018-2020 and specify key indicators that among other things ensure attainment of the expected results in the sectors (spheres) of economy (types of activity) and expected results of promoting competition, according to the supplement;

approve the arrangements made for the transition of certain natural monopolies from the state of natural monopoly to a competitive market;

before 1^st February 2019:

submit proposals for the decrease of the level of administrative burden that prevents development of competition;

approve the arrangements made for the consistent development of organized trade on commodity markets, including mechanisms for formation of the key commodity items, determination of market prices for the corresponding commodity groups, incentivizing and engaging economic entities to participate in the exchange trade, taking advantage of the small and medium-sized businesses’ potential to further develop organized trade;

before 1^st March 2019:

take measures to improve the effectiveness of anti-monopoly authorities including:

enable employees of anti-monopoly authorities under the administrative procedures to guide the investigation and make decisions regarding execution of procedural acts in the matter of violations of antimonopoly legislation while exercising their vested powers;

eliminate the possibility of suspension of the orders issued by the antimonopoly authority in respect of state and local government bodies except in cases of court orders;

enable implementation of arrangements aimed at development and adoption by natural monopolies and companies with state participation of (if value of their assets (assets of their group of persons) according to the balance sheet as of the last reporting date exceeds seven billions of rubles or proceeds of these companies (their group of persons) from realization of goods over the past calendar year exceed ten billions of rubles):

rules of non-discriminatory access of suppliers to procurements;

plans to decrease the number of cases where there is only one “sole supplier” in procurement activities;

programs aimed at enhancing management quality in the field of procurement activities that specify development of the measures of efficiency of such programs, evaluation and development of personnel responsible for procurement activities;

take measures to create and organize internal control system of compliance of the work of federal executive authorities with antimonopoly legislative requirements;

before 1^st July 2019 carry out regulatory legal enactments that ensure uniform procedure of development, adoption and control of investment programmes of natural monopolies and entities that perform alternate regulated activities if these investment programmes were funded by means that have already been taken into account when adopting tariffs;

annually perform analysis and evaluation of the performance indicators that were introduced in the arrangements made for development of competition in the economic sectors of the Russian Federation in 2018-2020 in order to appraise the current status of competition and effectiveness of the state policy on the development of competition (with the assistance of business community delegates, experts and expert organizations);

b)      Federal Antimonopoly Service:

upon presentation of the report on the status of competition in the Russian Federation prepared according to the paragraph 10 of part 2 of Article 23 of the Federal Law "On Protection of Competition" to the Government of the Russian Federation (hereinafter     - report on the status of competition), include the following information:

assessment of the state of competition and key development trends in the Russian Federation, taking into account showings of international entities;

data on the implementation of actions (including competition development programmes) and achievement of the key indicators that were introduced in the National Plan;

main problems, trends and proposals of the development of competition in individual industries;

assessment of the state of competition in the subjects of the Russian Federation;

assessment of the state of competition by civil society organizations;

by the agreement with the Ministry of Foreign Affairs of the Russian Federation and the Ministry of Economic Development of the Russian Federation ensure development of international cooperation with the competition authorities of BRICS countries and countries of Eurasian Economic Union, including elaboration and conclusion of international treaties that are aimed at detection and suppression of anticompetitive agreements on transborder markets and cases of unfair competition;

c)      Federal executive authorities:

present before 1^st January 2019:

to the Government of the Russian Federation – report on the correspondence of strategic planning documents and government programmes to the state policy on the development of competition; factors that restrain competition in specified spheres and industry sectors; and actions taken to cancel or alter regulatory legal enactments that lead to excessive governmental regulation in the specified spheres;

to the Ministry of Economic Development of the Russian Federation – proposals for the expansion of the list of socially important markets provided by the standards of competition development in the subjects of the Russian Federation for the following consideration and preparation for corresponding alterations;

ensure cooperation with executive authorities of the subjects of the Russian Federation and local government bodies for the purposes of National Plan;

ensure annual submission of information on the assessment of the state of competition in the Russian Federation and the efficiency of state competition policy for inclusion in the report on the state of competition in the Russian Federation prepared by the Federal Antimonopoly Service;

ensure online publishing of the competition development programmes, data regarding dynamics of key indicators of competition development and results of arrangements made for development of competition;

d)      Federal executive authorities, state-owned companies and state-owned corporations in providing procurement activities:

favor non-discriminatory access of suppliers to procurement of goods, works and services;

ensure implementation of performance indicators of procurement of goods, works and services, including subordinate organizations;

e)      Ministry of Internal Affairs of the Russian Federation, Investigative Committee of the Russian Federation and Federal Security Service of the Russian Federation within the scope of their powers should ensure cooperation with federal executive authorities in exposure, prevention, suppression and disclosure of anti-competitive agreements (cartels) that are banned by the antimonopoly legislation;

f)       Highest officials (heads of the highest executive public) of the subjects of the Russian Federation:

before 1^st January 2019 ensure introduction of amendments to the statutes of executive authorities of the subjects of the Russian Federation that stipulate priority of tasks and objectives aimed at competition development of the corresponding commodity markets;

before 1^st March 2019 take steps to introduce a system of internal compliance with the requirements of the antimonopoly legislation of the executive authorities of the subjects of the Russian Federation;

ensure cooperation with federal executive authorities for the purposes of National Plan.

 

1. Recommend local government bodies to prioritize tasks and objectives aimed at competition development of the commodity markets.

 

1. Government of the Russian Federation should before 1^st January 2019 introduce to State Duma of the Federal Assembly of Russian Federation in accordance with the established procedure draft federal laws that stipulate:

a)      restriction of the number of newly created unitary enterprises on the competitive markets;

b)      interdiction of direct or indirect acquisition of stocks and shares of business entities that operate on competitive commodity markets by government and municipal entities (apart from defence complex and other entities of strategic importance for Russian national defence and state security and cases when acquisition of stocks and shares of the corresponding business entities is allowed by the federal laws and acts of the President of the Russian Federation or the Government of the Russian Federation);

c)      possibility of the Government of the Russian Federation for the benefit of national defence and state security, including health and survival of citizens, to allow exploitation of invention, utility model or pre-production prototype without the consent of patentee, yet with noticing him in the shortest time possible and paying an adequate compensation;

d)      reformation of the statutory regulation of the natural monopolies, including exclusion of the capability to declare economic entity natural monopoly if they operate on competitive market;

e)      phasing-out state regulation of prices (tariffs) in the competitive markets based on the analysis of consequences of the termination of such regulation in respect of certain natural monopolies;

f)       strengthening the rights of the consumer council that controls natural monopolies at both federal and subjects of the Russian Federation level, state-owned companies and regulated entities regarding tariffs decision-making and adoption and control of investment programmes;

g)      statutory regulation of the system of internal compliance with the requirements of the antimonopoly legislation;

h)      creating foundation for state regulation of prices (tariffs) using comparable uncontrolled price method and regulatory period not less than five years;

i)       establishing uniform procedure for pre-trial review of arguments that are connected with establishment and (or) application of regulated prices (tariffs).

The list of sectors (spheres) of economy (types of activity) and the expected results of promoting competition

 

Sectors (spheres) of economy (types of activity)	The expected results of promoting competition
1. Healthcare, including markets of medications, medical products and medical services	Enabling markets of medications and markets of medical products to operate according to the principle of interchangeability; Reduction of prices for medications and medical products along with improving their availability for citizens; Non-discriminatory distribution of compulsory health insurance system’s funds for medical services provided to citizens according to the guarantee scheme of free healthcare delivery
2. Social services market	Enabling non-governmental organizations to provide social services on a non-discriminatory basis
3. Agribusiness	Improvement in tradability of the main types of agricultural products, extension of sales geography and nomenclature of agricultural products sold on organized tenders; Reduction of the dependence of domestic market on foreign breeding and genetic materials and associated agrotechnical solutions
4. Road construction	Reduction in the proportion of procurements that were declared void starting from 30 percent in 2017 and decreasing by not less than 5 percent annually; Elimination of particular persons from participating in tender due to anti-monopoly laws; Decartelization of the road construction sector, including state procurements for maintenance, repair and construction of road facilities
5. Telecommunication	Development of innovative infrastructures based on the principle of non-discriminatory requirements for the participants of the market, regardless of the technologies being used over providing services in the sphere of communication; Ensuring that at least 80 percent of cities with more than 20 thousand citizens have no fewer than 3 operators providing communication for signal transmission; Elimination of ungrounded difference in tariffs established by cellular communication services on trips throughout Russian Federation (roaming)
6. Information and communications technologies	Increasing by not less than 10 percent annually proportion of Russian software solutions in the information technologies’ area, including socially important sectors (energy, public utilities, healthcare, education, transport, security) and providing services in “cloud format”
7. Public utilities, including heating, water supply and wastewater disposal	Reduction in the proportion of productive release of inputs, used by state and municipal unitary enterprises from total resources used in the federal entity, up to the following rates (under the condition of non-increase of proportion of productive release of inputs, used by state and municipal unitary enterprises from total resources used in the federal entity, in comparison with the level of 2016 in those federal entities, where the ratings of the first and following years have been already achieved at the moment of the National Plan statement): heating – to 20 percent in 2019 and to 10 percent in 2020 water supply - to 20 percent in 2019 and to 10 percent in 2020 wastewater disposal - to 20 percent in 2019 and to 10 percent in 2020
8. Gas supply	Transition to market-based pricing through the formation of exchange-traded and over-the-counter price indicators for natural gas, including the ones secured by the increased sales of natural gas in organized tenders; Formation of exchange-traded and over-the-counter indices
9.Crude oil and petroleum products	Development of market mechanisms for price determination through the evolution of organized export oil trading and the formation of benchmark for Russian petroleum; Development of terminal market for petroleum products; Development of small-scale organized tenders and formation of market-based price indicators for small-scale market; Deregulation of prices for the transportation of oil products through the main product pipelines, which stipulates maintaining the amount of organized oil tenders at the level not lower than 10 percent of the supplying domestic market; Increase in the amount of export oil transactions
10. Natural monopoly sector	Elimination of tariff discrimination; Transparency and long-term sustainability in tariff regulations
11. Transport services	Fair competition development in the freight market (road, railway, air and water transport) and related services; Further development of cooperation between government and private sector (including council under the market of transport services); Development of electronic systems of transport services, including small and medium-sized businesses, that are provided by transport organizations which are not considered to be natural monopolies or in respect of which price regulations are not applicable, including commissioning an e-trade facility for cargo transportation, and the formation of market price indicators; Monitoring of the level of economic concentration in the area of freight transport; Updating of legal instruments in the freight transportation sector, including drafting of the rules for non-discriminatory access to port services, updating of rules for non-discriminatory access to railway services and disclosure standards; Adoption of a new list of JSC “Russian Railways” tariffs (including the detachment of the locomotive component of the tariff in necessary gross proceeds of the regulated party); Complex development of interregional and municipal carriage by different modes of transport (the development of intermodal competition in passenger traffic area); The development of balance of intermodal competition in the freight transport and passenger traffic areas (including inland water, rail and pipeline transport)
12. Production sector	Creating conditions for the manufacture of Russian products, that will be able to effectively compete with foreign equivalents on both national and overseas markets; Increase in the proportion of Russian goods manufactured for export from the total amount of goods produced in Russian Federation
13. Financial markets	Establishment of competitive grant scheme to make up for the loss of income of Russian leasing organizations while providing a discount to lessee for advance payment according to the leasing agreement; Amend the procedure for the formation of Central Securities Depository Customer Committee in order to create conditions for the maintenance of required influence of users of Central Securities Depository services on its tariff policy and to prevent establishing unjustified prices for its services.