ANTICARTEL PACKAGE IS IN THE FOCUS OF ATTENTION OF THE ANTIMONOPOLY CLUB

“We do not invent a new law but suggest to use what we already have”, said Head of FAS Anti-Cartel Department Andrey Tenishev at an event in Moscow

On 27 February 2020, the Antimonopoly Club held a regular session in Moscow organized by the “Competition and Law” Journal. The participants discussed the themes on the peak of the antimonopoly agenda: FAS anti-cartel package of draft laws, and the practice of interaction between the antimonopoly and the law enforcement bodies in investigating criminal cases against cartels.

The session moderator, Editor-in-Chief of the “Competition and Law” Journal, Elena Sokolovskaya, outlined the key novelties offered by the package of amendments. She listed the most controversial initiatives: assigning FAS the right to seize documents and objects, obtain materials of investigative-and-search operations, as well as the right of access to personal data and information about subscribers of communications services.

“There are a lot of exaggerated concerns and myths around the anti-cartel package”, pointed out Head of FAS Anti-Cartel Department Andrey Tenishev, explaining the expansion of powers of the antimonopoly authority. “At the same time, the suggested initiatives must be considered in the general context with other norms of the current law”.

The speaker gave an example: discussing the FAS right to seize, we should remember Article 27.10 of the Code of the Russian Federation on Administrative Violations that lists all regulators who have the rights to seize objects and documents, which are important as evidence in the cases on administrative violations.

“We do not invent a new law, but suggest using the law that already exists expediently and reasonably”, emphasized Andrey Tenishev, talking about the first myth.

Head of FAS Anti-Cartel Department added that the amendments describe with maximum details the procedural guarantees for the persons, whose documents and objects are seized, in terms of the mechanisms of returning of seized property and appealing actions of the antimonopoly body.

The second myth, according to Andrey Tenishev is that FAS allegedly wishes to obtain powers to carry out search-and investigative operations:

“It is not true; we are not going to obtain the right to carry out search-and investigative operations. We suggest adding the Antimonopoly Service along with the Federal Tax Service to the list of recipients of information from the bodies that exercise such actions”, clarified the speaker. “It concerns only cases when there are elements of a criminally-liable cartel, and the amendments cover only the right rather than an obligation of the law enforcement bodies to forward to us the results of search-and-investigative measures after the materials are declassified”.

Head of FAS Anti-Cartel Department said that the third myth is that the right of the antimonopoly authority, given to it by the amendments, to obtain data about subscribers of communications services trenches on privacy of correspondence and line security protected by the Constitution of the Russian Federation.

He warned that “the electronic format of the procurement system and mobile internet are actively developing. Applications can be filed by unfair bidders via mobile devices.  Moreover, it is through such devices that companies-controlled auction robots and computer programs fulfill collusions. Without the right of obtaining data about legal entities – subscribers of communications services we will not know, who use mobile devices to enter electronic trading sites where public auctions take place, and we can lose antimonopoly control over allocation of around 30 trillion RUB. This is the annual scope of procurement. It is nearly a quarter of the Russian national GDP”.

The moderator drew attention to another moment, which raises concerns of business: the amendments give a new qualification in Article 178 of the Criminal Code of the Russian Federation, increasing criminal liability for corporate top-managers.

She asked Andrey Tenishev: “Why this qualification is introduced and is such an approach expedient when criminal liability depends on a position of a person on the corporate management bodies?”

According to Head of FAS Anti-Cartel Department, the public danger of cartels formed at the level of shareholders and business leaders is definitely higher.  It is not simply an economic conduct, but a corporate policy of the entire company, explained Andrey Tenishev and added:

“We do not introduce new liability in the Criminal Code of the Russian Federation, but differentiate the current one with regard to corporate managers and top-managers. Such construct – special liability for special subjects – is not new for the criminal law”.

It is important to understand, emphasized Head of FAS Anti-Cartel Department, that business owners and managers can be held administratively liable only when there is direct intent of the guilty person, rather than for the fact that they hold a top managerial position. Answering a question from the audience, whether a person in charge of antimonopoly compliance in a company can be criminally penalized if a cartel case is ascertained, Andrey Tenishev stated:

“A person cannot be held criminally liable only due to holding a position of a compliance officer. The same rule applies here: the person’s guilt in committing an offence and direct intent”.

The participants also discussed whether it is expedient to formalize the norm on obtaining preliminary conclusions of the antimonopoly body prior to opening a criminal case.

In the opinion of Andrey Tenishev, the Federal Tax Service already put forward such initiatives investigating tax offences but they were not supported.

He underlined that “we cannot limit procedural independence of investigators with regard to opening criminal cases. However, the idea of transferring criminal cases on cartels to Courts only upon obtaining FAS opinions seems reasonable. To this purpose, amendments to the Criminal Procedural Code of the Russian Federation are necessary”.