The Antimonopoly Service shall increase prices for cartels

On 25 January 2017, the State Duma of the Russian Federation approved in the first reading a draft law on amendments to the Code of the Russian Federation on Administrative Violations.

Article 14.32 of the Code of on Administrative Violations establishes administrative liability of anticompetitive agreements that lead to competition restriction, unlawful concerted actions or coordination of economic activity.

At the same time, various types of anticompetitive agreements differ by an extent of their public danger, and, therefore, it is necessary to differentiate the fines for such types of violations.

FAS has drafted a law, under which fines will be reduced pro rata to a lower level of public danger.

For instance, it is proposed that the highest administrative liability should be for cartels: for officials – 40,000 - 50,000 RUB fines or disqualification for 1-3 years, for legal entities – fines from 0.03 - 0.15 of the violator’s income gained by selling goods on the market.

Administrative liability for “vertical” agreements will be reduced. The draft amendments to the Code of on Administrative Violations establish administrative liability for officials – from 15,000 RUB to 30,000 RUB, or disqualification for up to 1 year, and legal entities - fines from 0.01 – 0.05 of the violator’s income gained by selling goods on the market.

Administrative liability for the agreements concluded by the authorities will remain the same: liability for officials – from 20,000 RUB to 50,000 RUB 20 or disqualification for up to 13years.

Deputy Head of FAS Sergey Puzyrevskiy emphasized: “Combating cartels is one of the priorities in the work of the Antimonopoly Service. FAS managed to build up an efficient system of countering anticompetitive agreements. The achieved results are comparable with the results in the countries where competition has been applied for dozens or even hundreds years”.