THE AUTHORITIES OF THE SUBJECTS OF THE RUSSIAN FEDERATION WILL DO INNER MONITORING

States Deputy Head of FAS Andrey Tsyganov

On 16 April 2018, he attended a Round Table “Trends. Practices. Reform. Compliance. Protection” in St Petersburg, organized by the Corporate Counsel Association of Russia with support by the Federal Antimonopoly Service.

Deputy Head of FAS Andrey Tsyganov discussed the National Competition Development Plan and the outcome of the State Council of the Russian Federation on priority areas of the work of the subjects of the Russian Federation towards supporting competition.

Andrey Tsyganov pointed out: “The Presidential Order is not just a “wish-document”. It is a direct precept that developing fair competition is the fundamental principles of the government policy, involving the federal authorities and the authorities of the subjects of the Russian Federation. The Order specifies several norms that directly prohibit the authorities to set particular discriminatory conditions of business operations and prohibit unreasonable intervention in free market functioning by issuing certain acts and decisions that lead to preventing or eliminating competition”.

The speaker emphasized: “In our view, it is important that the President of the Russian Federation instructed federal executive bodies and the authorities of the subjects of the Russian Federation to perform inner monitoring in order to expose the obstacles preventing development of competition in particular sectors of the economy and regions and propose efficient measures to eliminate them. The task is rather complex. Many authorities have never considered their activities through that prism”.

By the end of 2018, each subject of the Russian Federation must draft the so-called Road Map for developing competition. The regional authorities should draft it based on the scope of competences that they possess and the sectors of the economy where they can actually influence. Indicators for developing competition in the regions will be considered as one of the indicators for evaluating the Governors, which is carried out by the Office of the President of the Russian Federation.

Under the National Competition Development Plan, by 1 February 2019 the authorities should propose a set of measures to reduce administrative barriers and to prevent development of competition in the relevant segments of the economy.  According to Andrey Tsyganov, the proposed measures and the level of achieving the competition development indicators will not be assessed behind-the-scenes; it will be done jointly with the business-community.

“That is why professional sectoral associations of businessmen and the “Big Four” Business Associations will be involved in the process. I am confident that we will be engaging associations of corporate counsels in such assessment”, summed up Deputy Head of FAS.

Discussing the outcome of the meeting of the State Council of the Russian Federation on 5 April 2018 – the first one after Presidential elections, Andrey Tsyganov pointed out: “The President was the most serious advocate of pro-competitive development of the economy. He said correct things and did it much harder than we could expect. It is very important for all of us – making the statement that a violation of the antimonopoly law is an offence, which only treason or murder can match, insisting that restriction of competition inflicts colossal damages to the economy and without solving the tasks in this field we will not be able to move forward, criticizing the established style of bureaucratic thinking, preponderance of state and municipal companies on competitive markets and overprotection of  “friends” that distort competitive environment”.

Andrey Tsyganov outlined in detail FAS legislative initiatives – the fifth antimonopoly package focused on “digital economy” and the progress in discussing this draft law.

Alexandra Nesterenko, President of the “Corporate Counsel Association of Russia” Non-Profit Partnership underlined that in February 2018 members of the Association submitted their comments and proposals regarding the fifth antimonopoly package. She pointed out: “Among others, the Corporate Counsel Association warns that full and unconditional abolishment of immunities specified by Articles 10 and 11 of the Federal Law “On Protection of Competition” incurs numerous risks and adverse consequences for bona fide right-holders, and will allow unfair market players to transfer economic disputes from private to public regulation, which ultimately can have a negative impact, particularly, for developing high-tech markets and competition on them”.

Head of FAS Legal Department Artem Molchanov highlighted some aspects of antimonopoly regulation across various fields of the work of the antimonopoly body and Articles of the Federal Law “On Protection of Competition”. He looked into such important issues as explanations of FAS Presidium and use of in-house appeal.

The Round Table also discussed efforts of the antimonopoly body in the subjects of the Russian Federation, improving control-and-supervision and the practice of implementing compliance as a task for the authorities.

“I like that we meet with the Corporate Counsel Association with amazing regularity and discuss not only what we have already done but also what we want to do more, and this is very important”, concluded Andrey Tsyganov.

Head of St Petersburg OFAS Vadim Vladimirov presented the practice of antimonopoly body, with the examples of two high-profile cases investigated by OFAS. “The work of implementing the National Competition Development Plan inSt Petersburg has already started and we already can see the first results. Just a very short while ago our OFAS issued a warning to St Petersburg Legislature. We warned the legislators not to adopt amendments to the city law and assigning exclusive powers to “GUION” St Petersburg State Unitary Enterprise. Members of the Legislature followed our advice, our warning, and we are very pleased with this”.

Another case mentioned by Vadim Vladimirov concerned the decision and injunction issued by St Petersburg OFAS with regard to St Petersburg City Tourism Committee, which had entered into a contract with the “Art.Lebedev’s Studio” Ltd. for developing a tourist logo of St Petersburg without open tenders, thus violating Part 1 Article 15 of the Federal Law “On Protection of Competition”. “On 16 April the Cassation Court recognized legitimacy and re4asonableness of OFAS decision and injunction. So, dear authorities, fair and open tendering even for logo development that costs one Rubles – should be performed!”, summed up Head of St Petersburg OFAS.