FAS SETS NEW REQUIREMENTS TO STATE AND MUNIICIPAL UNITARY ENTERPRISES

To execute the National Competition Development Plan, the Antimonopoly Service has drafted a law prohibiting unitary enterprises on competitive markets.

On 15 January 2018, FAS forwarded its amendments to the Law “On Protection of Competition” to federal executive bodies. The amendments prohibit establishing state and municipal unitary enterprises on competitive markets. Such enterprises will be formed only upon approvals by the antimonopoly authority.

Approvals will be issued on a filing basis. The amendments determine a closed list of documents that should be filed to FAS. Information about such applications must be published on the FAS official web-site.

Within thirty days upon receiving all materials, the antimonopoly body considers them and then makes a decision to allow or dismiss the application, or to prolong the period of its consideration.

Deputy Head of FAS Sergey Puzyrevsky said: “FAS also specifies in the draft law that it may allow the application and approve establishing a state or a municipal unitary enterprise if such an enterprise is being formed on the market where competition is underdeveloped. To this purpose, FAS will perform market analysis”.

“If a state or a municipal enterprise is formed in breach of the procedure, FAS has the right to file a lawsuit to liquidate such enterprises. The draft law also has this norm”, added Deputy Head of FAS Sergey Puzyrevsky.

The Antimonopoly Service would like to remind that unitary enterprises have the most adverse effect upon competitive segments of the economy.  Evidently, the current law in this field needs realignment.

FAS has asked the federal executive bodies to approve the draft law by 22 January 2018.