Eurasian Economic Union

Competition policy of the Eurasian Economic Union

The Eurasian Economic Union (EEU, Union) came into force on 1 January 2015. By now, it has 5 member states – the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic and the Russian Federation[1].

The main document, which adoption by the member states has defined the beginning of the Union functioning, is the Treaty on the Eurasian Economic Union (hereafter – the Treaty on Union), signed on 29 May 2014 in Astana.

The work on the Treaty on Union was launched on November 2011, when the presidents of three countries noted establishment of the Customs Union and the completion of ratification of international treaties that establish legal framework of the Common Economic Space. The parties stated their readiness to move to the next stage of integration – establishment of the Union in 2015.

The three-year work resulted in the Union Treaty that institutionalizes the “three liberties principle” as the main principle of the EEU functioning: free movement of goods and services, capital and work force. The Union Treaty also provides for the member-states pursuing coordinated, coherent or common policy in the key sectors of the economy.

The main objectives of EAEU include:

-         Creating conditions for sustainable development of the member economies to increase the living standards of their population

-         Establishing the common market of goods, services, capital  and  labour resources within  the Union

-         Comprehensive modernization, cooperation and enhancing competitive ability of the national economies under the conditions of economic globalization.

The Union Treaty determined the status of the Eurasian Economic Union as an international organization of regional economic integration with international legal capacity.

EAEU bodies are the Supreme Eurasian Economic Council (the heads of state level), the Eurasian Inter-Government Council (the heads of government level), the Eurasian Economic Commission and the Union Court. The Union Treaty defines the competences and establishing-and-operational procedures for each of the above bodies.

The Eurasian Economic Commission (EEC) is a standing regulatory Union authority, consisting of a Council and a Collegium.

EEC Council exercises overall regulation over EAEU integration processes and generally guides EEC efforts.

EEC Council includes 1 representative per each EAEU member-state, who are Deputy Heads of Governments vested with the necessary authority in accord with their national laws.

EEC Collegium is EEC executive body that includes representatives of the member-states on the principle of equal representation of the member-states. According to No. 23 decision of the Supreme Eurasian Economic Council of 16 October 2015, from 1 February 2016 EEC Collegium shall have 10 members or 2 representatives from each member-state.

EEC seats in Moscow.

EEC operates within the scope of powers outlined by the Union Treaty and international treaties under the Union framework in several areas, including competition policy, natural monopolies, energy policy, transport and carriage, public and (or) municipal procurement, industrial and agricultural subsidies.

The Union Treaty is a universal document consisting of 28 Sections and 118 Articles. The Union Treaty not only codified antecedent agreements regulating functioning of the Customs Union and the Common Economic Space, but also determined particular steps and the time-frame for further developing EAEU in the next 10 years.

Overall the Treaty codified around 70 documents, particularly, on competition policy. The Union Treaty absorbed the Articles on general principles and rules of competition, regulation of natural monopolies in general and in special areas (energy and transport), public (municipal) procurement, industrial subsidies and state support of agriculture.

Special provisions of the Union Treaty shaped the architecture of the system of antimonopoly regulation and the directions of EAEU competition policy.

This system combines control over meeting competitive conditions within the national jurisdictions on the basis of harmonized laws under the principles formalized in the Union Treaty, and control over observing general rules of competition on the cross-border markets exercised by EEC.  

General competition principles specified in the Union Treaty include, in particular, the principles of:

-         the Laws of EAEU members-states prohibiting agreements between the authorities and economic entities that (have) led or can lead to preventing, restricting, eliminating competition, and prohibiting state or municipal preferences, except particular cases

-         Efficient control over economic concentration

-         Formalizing penalties and applying fines in EAEU member-states

-         Each EAEU member-state having a government body authorized to implement and (or) pursue competition policy with  particular powers determined by the Union Treaty  

-         Informational openness of competition (antimonopoly) policy carried out by the national antimonopoly bodies of EAEU member-states, particular, through publishing information about their work in mass media and on the Internet

-         Cooperation between the national antimonopoly bodies of EAEU member-states.

The Union Treaty clearly determines EEC competence, assigning to it powers to control general competition rules of the economic entities of EAEU member-states on the cross-border markets.

General competition rules prohibit abusing market dominance, anticompetitive agreements and unfair competition.  

The Union Treaty determines specifics of applying general competition rules on the cross-border markets, the procedures for EEC control over their observance, and fines.

Also the Union Treaty determines the procedure for cooperation between national antimonopoly bodies of EAEU member-states between themselves and with EEC, describing in detail the grounds for cooperation and its particular forms. The purpose of such cooperation is to enhance efficiency of antimonopoly investigations on both cross-border and national markets.  

EEC decisions in the field of competition can be appealed to the Union Court, a standing EAEU judicial body. It should be noted, that for EEC decisions on antimonopoly cases there are exceptions from the general procedure for filling claims outlined in the Court Statute.

Any dispute is accepted for consideration by the Union Court only after prejudicial settlement in the form of consultations, negotiations or other methods provided for by EAEU Treaty and international treaties within the Union.

Appeals against EEC decisions on antimonopoly cases are filed to the Union Court without a preliminary stage of prejudicial settlement.

If the Union Court accepts an appeal lodged against an EEC decision on an antimonopoly case, the EEC decision is suspended until the date when the Union Court ruling comes into force.

Provisions of the EAEU Treaty on regulating relations in the fields of natural monopolies, public (municipal) procurement are pro-competitive, and determine the directions of Union competition policy.

Supporting market pricing and competition development instruments is one of the most important principles of regulating natural monopolies in certain fields,  and establishing common markets, for example, energy resources markets and the common market of transportation services.  

Developing competition, supporting informational openness and transparency of procurement, providing national procurement schemes for EAEU member-states, safeguarding obstacle-free access of potential suppliers from the member-states to procurement organized in the electronic form also are some of essential regulatory principles in public (municipal) procurement formalized by the Union Treaty.

To ensure conditions for sustainable, efficient development of EAEU economies and conditions encouraging mutual trade and fair competition between EAEU countries, EAEU member-states have common rules for granting subsidies on industrial commodities and state support to agriculture.

The Union Treaty coming into effect on 1 January 2015 is seen as an important historic event, which took our countries nearly 20 years to reach. The issues of protecting and developing competition are very important for functioning of the Union.