Production localization should encourage competition development

Deputy Head of the Federal Antimonopoly Service (FAS Russia) Sergey Puzyrevskiy made this statement on 19 May at the IV Petersburg International Legal Forum, the session on “Localization of Production in the Russian Federation: Legal and Practical Aspects”.

He advised to carefully handle such measures when a particular company obtains state preferences, since it means the company is guaranteed certain advantages over competitors operating in the same sector.

Sergey Puzyrevskiy outlined two main areas of support that stimulate localization.

First, introduction of “parallel import”: according to Deputy Head of FAS it will encourage production localization in some sectors of the economy. The discussions on the issue continue. Sergey Puzyrevskiy reassured businessmen stating that if a company localized production in the Russian Federation it will be guarantees that the “parallel import” principle shall not be applied to its products.

Second, granting preferences in public procurement and concluding contracts with single suppliers. In accord to Deputy Head of FAS, the main issue is which goods will be supplied to the state or consumers at the time of executing a contract. “It cannot be allowed that government customers get morally obsolete goods because modern technologies moved far on, while the company that became the single supplier was guaranteed advantages and eliminated competition”, said Sergey Puzyrevskiy.

Another direction is agreements on joint operations. After the “forth antimonopoly package” is adopted, companies that decide to form a joint venture, even if they operated on the same market, can reach such an agreement or make such a deal with a preapproval by the antimonopoly body.

“In this case companies get a clear understanding that no antimonopoly control measures will be applied to them”, emphasized Sergey Puzyrevskiy.

Summing up, Deputy Head of FAS once again indicated that the antimonopoly authority is prepared to facilitate production localization if it supports competition, enables introduction of modern technologies and development of new markets.