Tver Authority executed a FAS warning

Earlier Tver Authority assigned the function of a budgetary funds manager, particularly, the function of local self-government bodies on allocating grants from the local budget to an economic entity – non-profit company.  (No. 572 Orderof 4 April 2016).

The Appeal Court confirmed legitimacy of FAS warning to a local self-government body that such actions are unacceptable.

The Decree established the procedure for granting subsidies to non-commercial organizations, under which, based on the results of a tender to determine a grant operator, a non-profit company (a grant operator) was given powers to independently select other non-profit organizations and allocated them grants (subsidies) from the local budget. Following the tender, Tver Authority requested the antimonopoly body to approve a subsidy to the grant operator - the “Institute of Regional Development” Association for Civil Society Development a municipal preference 3,300,000 RUB subsidy for tenders and allocating grants to other non-profit organizations.

FAS found signs of violating Part 3 Article 15 of the Federal Law “On Protection of Competition” since budgetary funds in the form of subsidies (grants) are allocated and their use is controlled exclusively by the authorities and local self-government bodies. Delegating these powers to other persons, including non-profit organizations not specified in the Budget Code of the Russian Federation and the federal laws is not allowed.

Tver Authority filed a lawsuit against FAS warning. The Court of the First Instance and the Appeal Court supported FAS conclusions. The Decree is abolished, executing FAS warning.