Court confirmed legitimacy of FAS warning to the Government of the Ivanovo region

05-10-2017 | 15:53

Actions of the regional authorities may discriminate raw milk producers

On 7 February 2017, the Government of the Ivanovo region passed No. 28-p decree “On approving the Procedure for granting subsidies to increase productivity in dairy cattle breeding”.

Under the new Procedure, the annual subsidies for sold milk or milk (or) milk shipped for own processing are fully granted to agricultural producers on the basis of Q1 results of the current year. Earlier subsidies used to be given to agricultural producers quarterly throughout a year.

In FAS opinion, the new Procedure of granting subsidies can result in discriminating raw milk producers, whose territory was recognized contaminated with cattle leucosis in Q1 of the current year; further on during the same year, however, those agricultural producers were able to meet full requirements set by the Procedure.

FAS issued a warning to the Government of the Ivanovo region to stop the above actions by making the relevant amendments to the Procedure.

The Government of the Ivanovo region attempted to appeal two FAS warnings on similar cases related to the procedures of granting subsidies to raw milk producers.  It concerns two Decrees of the Government of the Ivanovo region that, in FAS view, have elements of violating the antimonopoly law (Clause 8 part 1 Article 15 of the Federal Law “On Protection of Competition”. On 24 August 2017 the 9th Arbitration Appeal Court in Moscow confirmed the legitimacy of the first warning. And now, on 28 September the same Curt ruled that the second warning issued by FAS to the Government of the Ivanovo region is also legitimate.

Deputy Head of FAS Department for Control over Chemical Industry and Agro-industrial complex, Andrey Yerin, pointed out: “In view of Court ruling and the failure to execute the FAS decision within the legal period, we will open a case upon the fact of violating the antimonopoly law”.

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