Andrey Tsarikovskiy: reaching arrangements at tenders should be difficult and exposing collusions – easy

Lawyers, expertsof Russian antimonopoly authority and international expertsdiscussed some of the most dangerous and hard-to-prove violations of the antimonopoly law – anticompetitive agreements.

On 26 September, the International event “The Russian Competition Week” included an international Round Table on “Bid Rigging”, organized by FAS and the Non-Profit Partnership for “Competition Support in the CIS Countries”.

Monitoring statistical data on the cases opened under Article 11 of the Federal Law “On Protection of Competition” showed that in 2015 the number of cases increased by 68% (409) in comparison with 2014 (243 cases). More than 80% cartel cases (232) concern collusive bids.

Stats-Secretary, Deputy Head of FAS Andrey Tsarikovskiy informed participants that in general competitive bidding transparency should be enhanced. He reminded that information on procurement by the authorities and state-run companies are published on zakupki.gov.ru, competitive bidding by the authorities - torgi.gov.ru, while property trading by state-run companies is not regulated at all.

He pointed out that “FAS goal is to make procurement and sales maximally open. To this purpose all biding should be transformed into an electronic format, tight procedures for procurement by state-run companies should be established and the sales rules should be unified. As a result, it should be difficult to reach arrangements for the companies at tenders, and should be easy by FAS to expose and prove collusions”.

Deputy Head of FAS emphasized that criminal and administrative liability should be introduced for manipulating bids and criminal liability - for collusion between ordering parties and bidders.

The Head of FAS Anti-Cartel Department Andrey Tenishev outlined FAS efforts to counter collusive bids. He stated that making competitive bidding an electronic procedure and using common web-sites for procurement and competitive bidding will help simplify proving violations.

He added that a system of deterrent factors for participants of cartel and other anticompetitive agreement should be developed: “Violations happen when companies are not aware of prohibitions, and there are specific economic incentives as well as lack of risks to be caught and punished”. According to Mr. Tenishev, the problems can be solved out through competition advocacy, promoting compliance, establishing a requirement for top executives to file statements confirming their awareness of cartel prohibition and liability for cartels.  To counter economic advantages for cartel participation, fines upon violations should be increased and the consideration period reduced, while cooperation with the law enforcement bodies will facilitate inevitability of punishment for anticompetitive agreements.

The Round Table participants discussed a hypothetical case on auction collusion and some complex issues of qualifying and proving violations.

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Other Round Table participants included V. Rudomino, who chairs the Council of the Non-Profit Partnership for “Competition Support in the CIS Countries”; Mr Kazuo Oya, a senior planning officer, Japan Fair Trade Commission; Ms. Kurnia Syahranie, Deputy Head of the Commission for the Supervision over Business Competition, Indonesia; Ms. Timosho Sekgobila, an advisor to Deputy Head of South African Competition Commission; Mr. Hynek Brom, First Vice-Chairman of the Commission for Protection of Competition, the Czech Republic.