Andrey Tsyganov: “Implementing compliance will significantly minimize the risks of violating the antimonopoly law”

FAS intends to formalize the system enabling prevention of antimonopoly violations in Russian legal framework

FAS Centre for Education and Methodics in Kazan organized an international workshop on “Promoting business ethics and antimonopoly compliance through efficient corporate management”.

Deputy Head of FAS Andrey Tsyganov; Head of FAS Legal Department Andrey Molchanov; Head of Tatarstan OFAS Alexander Grunichev; Director of FAS Centre for Education and Methodics, Lenar Shafigullin; and OECD international experts – Despina Panchu, William Lou, and Héctor Lehuedé were the speakers at the event. Participants included the largest business-companies in Povolzhie – Kazan, Samara, Penza, etc.

In terms of relations with the antimonopoly policy, compliance is one of the elements of the system of violation prevention and an efficient tool for reducing the risk to become involved in antimonopoly cases, including participation of Russian companies in public procurement and maintaining healthy competitive relations on the market.

As Andrey Tsyganov pointed out, five years ago FAS had considered on average 10,000 cases but due to development of the system of their prevention, their number dropped down by more than twofold.

“Statistics also shows that having received a message from the Antimonopoly Service that their actions contain elements of violating the antimonopoly law, majority of companies endeavour to eliminate these signs as quickly as possible: in 2016 the number of executed warnings was 4215”, said Andrey Tsyganov. It means that in more than 4000 cases they managed to eliminate signs of violating the competition rules as quickly as possible, adjust the market situation, save resources of economic entities and the antimonopoly authority.

The antimonopoly system has a concept of “full confession”: only 28 facts of confessions in 2014 against 91 in 2016. According to Deputy Head of FAS, experts predict around 100 full confessions by the end of the year.

Corporate antimonopoly compliance may mitigate significantly the punishment for an exposed violation. A good example is experience of the largest toy supplier – “Hasbro U.K.” Ltd.: in 2003 the company was pronounced breaching a price-fixing agreement and fined the company 15.59 million pounds. One of the mitigating circumstances, enabling to reduce the amount by 10%, was reviewing and improving compliance.

“Yes, under Russian law compliance is not formalized. There are companies, however, that independently devised and implemented local acts on in-house prevention of violations of the antimonopoly law: “MTS”, “Sibur Holding” PJSC, “Baltika” Ltd., “Uralkalii” PJSC”, statedAndrey Molchanov. At the same time, to achieve efficient and broad implementation of compliance, its concept and recruitments should be formalized in the law and FAS is already undertaking robust efforts in this area.

Statutorization of antimonopoly compliance elements is done in Kazakhstan (a separate Article in the Business Code), Germany and France. In case of compliance sanctions may be reduced in the UK and Italy.

The workshop also analyzed implementing the modern principles of business ethics in regional and foreign companies, particular, the results of 2016-2017 review of “Deloitte”.

The workshop was successful to a considerable extent due to active involvement of Heads of FAS regional Offices from Povolzhie Federal District.