Andrey Tsyganov: FAS is unifying the principles of tariff regulation

The antimonopoly body presented a new concept of stimulating tariff regulation at a regional workshop in Orenburg

A workshop on “Practice of applying the antimonopoly law. Antimonopoly and regional tariff regulation in the housing & utility sector. Law enforcement and judicial practice” opened on 25 May 2017 inOrenburg. The event was attended by over 170 representatives of the antimonopoly, judicial and executive bodies.

Deputy Head of FAS Andrey Tsyganov and the Governor of the Orenburg region, Yuri Berg, opened the workshop.

Deputy Head of FAS pointed out that Russian antimonopoly law conforms to the best world practices.

“FAS has accumulated a colossal enforcement experience. In 2016 we opened over 9000 cases upon violations of the Law “On Protection of Competition”, considered around 60,000 complaints upon signs of violations in public procurement. And this is only part of our work because our control expands to the Law on trade, issues related to advertisement and unfair competition”, continued Andrey Tsyganov. “Two years ago the President of the Russian Federation made a decision to transfer to FAS powers in public defence procurement and tariff regulation”.

“With all diversity of our functions, the main objective of FAS work is to develop competition. And here the main problem arises: with good law and efficient enforcement practice competition is underdeveloped”, deplored Deputy Head of FAS. “The solution will be to engage all federal and regional authorities in competition development. To involve them in this process, we have drafted the National Competition Development Plan, which has already passed nearly all stages of approval. Hopefully, in the near future it will be adopted. The regional Competition Development Standard is already in effect”.

Andrey Tsyganov pointed out that based on the outcome of the Report on the sate of competition in the Russian Federation that FAS had submitted to the Government last autumn, sectoral ministries were instructed to prepare “Road Maps” for developing competition.

“Such documents are already approved for the markets of financial services and labour. We will undertake all possible efforts to prevent formalization of such documents and make sure that adopting them, will bring positive consequences for competition”, reported Deputy Head of FAS.

“One of items on our event agenda is discussing the best practices for adopting the Competition Development Standard in the regions. It is a very important document. Government bodies jointly with citizens and the business community define and solve various tasks towards developing competition in the regional markets”, emphasized Andrey Tsyganov.

In the second part of his report Andrey Tsyganov discussed tariff regulation. “FAS carried out inspections in the subjects of the Russian Federation and exposed numerous violations in tariff-setting. In particular, there are significant differences between tariffs in the neighbouring regions or regions in comparable conditions. Thus, the main FAS goal for 2017 is to complete the draft Federal Law “On state regulation of prices (tariffs)”. It will help determine unified approaches to tariff regulation and formalize the tariff-setting rules, control over their enforcement and dispute settlement. In the opinion of the antimonopoly body, the document will ensure a higher level of guarantees for the rights of consumers and regulated organizations, eliminating the current gaps”, concluded Andrey Tsyganov.

Head of FAS Department for Regional Tariff Regulation, Yulia Yudina, continued the discussion. She stated that consumers should become actively involved in tariff-setting, which will make tariff regulation contestable and stimulating. Yulia Yudina explained to the workshop participants that the tariff-setting procedure should be computer-assisted. A tariff application must be published in the informational system and subjected to expert evaluation by the regulator. Such operations will create new controllers – consumers, including citizens, mass media, NGOs, that can look in detail into the expenditure items of natural monopolies and ask them questions regarding efficient use of financial assets in their operations.

“Tariff-setting rules should become clear and understandable, first of all, for our citizens to increase trust in the housing & utilities sector”, added Yulia Yudina.

Artem Molchanov, Head of FAS Legal Department, described in detail the existing and future changes to the antimonopoly law. He refreshed the main provisions of the “forth antimonopoly package” and gave statistical data on its enforcement.

Deputy Head of FAS Department for Regulation over the Housing & Utilities Sector, Alexander Fedyakov, informed about the Governmental Decrees on the “tariff in exchange for investment’ principle.  For instance, in spring 2017 a document was passed enabling not to account the estimated business profit in the tariffs of state and municipal unitary enterprises, which will reduce the tariffs for consumers.

At the workshop Deputy Head of FAS Andrey Tsyganov awarded Head of Orenburg OFAS Vladimir Oreshkin FAS Certificate of Merit for special services in developing competition.