ANNA MIROCHINENKO: STOP ULAWFUL ACTIONS AND GET VERBAL WARNING INSTEAD OF ADMINISTRATIVE FINE

Governed by Part 6 Article 14.24 of the Code on Administrative Violations, FAS Presidium made a decision allowing to terminate administrative proceedings if a person stops unlawful conduct and registers all off-exchange contracts (deals) before the administrative procedures commence

FAS has the powers to control execution of the Regulations on submitting information about off-exchange contracts concluded by parties, when contractual obligations provide for transfer of ownership for the goods allowed for on-exchange trading, and to keep the Register of such contracts and provide information from the Register, approved by No. 623 Decree of the Government of the Russian Federation on 23.07.2013.

“FAS is undertaking intensive efforts to expose violations in the course of registering off-exchange deals, the subject mater of which is wheat, grades 3 and 4. The first results gave a high percentage of violations committed by grain market participants. Typically, economic entities, obligated to register off-exchange contracts, simply fail to register them”, points out Head of FAS Department for Control over Agro-Industrial Complex, Anna Mirochinenko.

At the same time, under Part 6 Article 14.24 of the Code on Administrative Violations, if a party to a contract that is not concluded through on-exchange trading breaches the procedure and (or) the deadlines for submitting information that are specified by the Government of the Russian Federation, it is punishable by an administrative fine – from 300,000 RUB to 500,000 RUB upon legal entities.

“FAS does considerable informational and explanatory work to fulfill the requirements on registering off-exchange deals on the grain market. FAS regional offices and regional agro-industrial regulators are involved. The efforts generate positive results: according to the data presented by the “National Mercantile Exchange” JSC, the number of registered grain deals is increasing”, commented Anna Mirrochinenko.

Taking into account a high level of administrative fines, FAS Presidium decided to allow terminating administrative proceedings initiated under Part 6 Article 14.24 of the Code on Administrative Violations, if unlawful conduct is stopped and all off-exchange contracts (deals) are registered before the start of the administrative proceedings. In this case the violators will get verbal warnings (No. 5 Protocol of 11 April 2018 (Sub-Clause 2.1 Clause 2 Section 6).

As Head of FAS Department for Control over Agro-Industrial Complex, Anna Mirochinenko pointed out earlier: “We do not try to fine as many market players as possible. Our goal is not to fine; it is to support the process of registering off-exchange deals”.