BRICS COMPETITION AUTHORITIES TO JOINTLY COMBAT CROSS-BORDER CARTELS

Taking into account the current situation on different markets the BRICS countries often face with cross-border cartels formed by major international companies which lead to overcharging and infringement of the competitiveness of national suppliers. 

Considering that about 40% of the world's population lives in the BRICS countries, the costs of the “predatory” behavior of cartels are colossal and have macroeconomic consequences. Experts point out that the average surcharge for goods and services because of national cartels activities is about 18.8% while the surcharge for goods and services from the activities of cross-border cartels is significantly higher and amounts to about 31%. 

At the national level the BRICS Competition Authorities are elaborating a set of legal and investigative tools designed to identify cross-border cartels and to eliminate their negative consequences for national economies. Leniency policy serves as an example of such tools. Most of the major cross-border cartels were revealed due to this mechanism. 

“The BRICS Competition Authorities shouldn’t stand aside. Antimonopoly authorities should motivate cartel participants to reveal their collusion through leniency programs in several or all of the BRICS member countries”, – pointed out Andrey Tsarikovsky, the Stats-Secretary, Deputy Head of FAS Russia. 

He asked to support the FAS Russia initiative to create a joint document of the BRICS Competition Authorities on leniency programs. Its goal is to strengthen information transparency, to set out clear and predictable procedures for providing leniency programs across the BRICS countries. 

According to Andrey Tenishev, the Head of the Anti-Cartel Department of the FAS Russia, “establishing such an instrument will increase the level of confidence between competition authorities and potential applicants, it will bring law enforcement practices and methodology closer together. It is also going to motivate cross-border cartel participants to apply for leniency in several jurisdictions”. 

The active participation of the FAS Russia in fighting against cross-border cartels also resulted in the inclusion of the issue of combating cross-border cartels into four priority areas of UNCTAD work for the next five years. 

“International cartels are our common evil. Due to this fact we are actively involved in the work, both on the development of documents that will help to increase efficiency in the fight against cross-border cartels and on discussing general issues, the advancement of ideas and useful initiatives”, – believes Lesya Davydova, Head of the Department for International Economic Cooperation of the FAS Russia. 

“For example, the FAS Russia in conjunction with the competition authorities of France and Italy is the co-chair of the International Competition Network (ICN) Cartel Working Group. The organization includes competition authorities from 130 countries. The FAS Russia plays a significant role in organizing practical work and forming the agenda of this organization. In addition the FAS Russia participates in the UNCTAD and BRICS working group on cross-border cartels which was created to analyze common practices, accumulate experience, facilitate information exchange and carry out consultations. Practical cooperation is also implemented within the framework of the Organization for Economic Cooperation, Eurasian Economic Union, International Road 

Transport Union, in the framework of bilateral agreements with individual countries in order to converge law enforcement practices and methodology while investigating cartels”, – stressed Lesya Davydova.