Andrey Tsyganov on introducing antimonopoly compliance

On 20 April 2016, the Corporate Counsel Association had a second day of antimonopoly discussions.

Deputy Head of the Federal Antimonopoly Service (FAS Russia) Andrey Tsyganovand an assistant to the Head of the Federal Antimonopoly Service (FAS Russia) Alexei Sushkevich took part in the Round Table.

Andrey Tsyganovfocused on antimonopoly compliance.He gave possible definitions of a concept of “antimonopoly compliance” pointing out that it implies a system of in-house measures aimed at preventing antimonopoly violations. “Essentially, antimonopoly compliance is not different from anticorruption, tax and other compliance systems: it is always a system of control and managing the risks of the measures the state can adopt regarding a particular company (risk management)”.

He emphasized that the efforts to implement compliance are taken around the entire world. In Russia such work started around 2011 with a special OECD Round Table where countries discussed some fundamental issues: is compliance necessary in principle; how regulators should react to it; how to encourage compliance; are there particular sectors of the economy or type of violations that should be focused on, etc. At that period Russia was already actively developing a competition advocacy system, including such preventative measures as warnings and admonitions.

In 2013 FAS included antimonopoly compliance in its long-term strategy as an independent direction and highlighted it as a clear priority for developing the antimonopoly law and enforcement. Soon, companies and their external consultants started showing an evident interest towards antimonopoly compliance.  

Last year, for instance, the issue was discussed at an annual conference where the EC colleagues shared their experience with FAS. Generally speaking, the EC position was that no additional encouragement for the companies to introduce a compliance system is required, and simply reducing the risks for a company should suffice because it enables to promptly reveal and eliminate the fact that can be recognized as a violation and take advantage of a leniency programme in time.  Andrey Tsyganovsaid that overall he agreed with such a standpoint as companies should have enough incentives to implement compliance; however, to accelerate development of this institution in Russia it makes sense to stimulate to invest efforts and money in building up a compliance system as it is a rather expensive step. It can be either a full or partial relief from liability.

Deputy Head of FAS pointed out that in view of the importance of the issue FAS asked the Non-profit Partnership for Competition Support to help with drafting possible changes to the law as well as specific methods of expert examination and evaluating efficiency of the compliance system. After thorough discussions FAS will present its official position in the near future, probably as explanations or a decision of FAS Presidium.

Andrey Tsyganovstressed that compliance has different meanings when applied to different antimonopoly violations. Abusing dominance is the most complex enforcement area for this institution. “It is impossible to issue the same standards for all companies. Each must build up one’s own system in line with their market specifics, counteragents, functions performed by the employees, etc”.

Alexei Sushkevich raised an issue of certifying compliance programmes by a particular body. Perhaps such certification will be quite important upon a fact of committing a violation: an expert evaluates compliance efficiency and offers an opinion, and then FAS takes this opinion into consideration investigating an antimonopoly case but it not bound by it. Nevertheless, it will remain at the company’s disposal whether to apply for certification.