IGOR ARTEMIEV HELD ANNUAL BRIEFING WITH THE ASSOCIATION OF EUROPEAN BUSINESS

The subject of discussion of the traditional meeting was the current practice and future plans of the FAS Russia

At the beginning of the briefing, the Head of the FAS Russia discussed law enforcement practices in the field of public procurement control. He commented on the proposals for amendments to 44-FZ and 223-FZ, which provide for the establishment of a certain share of purchases of products made in Russia and produced by member states of the Eurasian Economic Union:

“Any country strives to develop and support domestic production, but it should not be done at the expense of competition, since products must be competitive. Of course, it is only possible to impose any restrictions on public procurement if there is a guarantee that the purchased goods are produced by Russian companies in a sufficient scale, of the necessary quality and at a price that will fit in with the budget. The proposed measures will be of particular importance for procurement for defense and security purposes, as well as in the field of information technology”.

Attention was also paid to consumer goods markets, in particular, signs of unfair behavior of international manufacturers when selling original goods in the territory of Russia that differ by composition and quality from similar goods sold in other countries.

"We demand the strictest execution of technology if the product is sold in the territory of Russia as an original product. I ask all the foreign companies to pay attention to that, since the suppression of unfair competition is one of the priority areas of the Agency's work. Such actions inevitably create serious reputational risks for large multinational companies whose products are widely known in our country," the speaker stressed.

Igor Artemiev also told about the anti-crisis initiative of the FAS Russia to create so-called "purchasing unions", including in order to balance the interests of market participants.

"At the moment, the working group is working on issues related to setting acceptable thresholds for the shares of participants in the joint purchase agreement, determining other border actions and areas where it is permissible to conclude a joint purchase agreement," Igor Artemiev said.

Speaking on the practice of economic concentration control, he noted:

“The topic of mergers and acquisitions will be given increasing attention by antitrust authorities, especially cross-border transactions and transactions in digital markets. Our approach to evaluating transactions is changing and is being structured. Preventive control aimed at preventing market monopolization is becoming increasingly important. We intend to prevent negative practices through regulations when approving transactions. In the context of the globalized world economy and the growing usage of new information technologies, we are actively working in consultation with our partners from the BRICS countries, the European Commission, American regulators and regulators from other countries on the largest transactions in the world. We have already worked out this mechanism. The “big family” of antitrust authorities works very closely in this regard, and we can discuss the details of the regulations that should be issued when approving transactions if we receive wavers. An essential element of our work is an open and constructive approach, consultations with market participants on the terms of transactions”.

Besides, Igor Artemiev assessed positively the work of the Antimonopoly authority in the context of the pandemic, pointing out that the digitalization of approaches to the consideration of complaints and petitions will continue. According to the Head of the FAS Russia, the rapid adaptation of the country to the crisis indicates the development of a competitive economy in Russia:

“Over the past 20-30 years, Russia has become a market-oriented country. Resistance to negative factors and high adaptability are increased, which would not exist in the planned regulation of markets. Of course, even in the current crisis, there were some unscrupulous entrepreneurs who inflated prices, but we quickly managed to stabilize the situation through warnings and admonitions and, most importantly, due to the correct response of businesses, including retail companies”.

The draft National Plan for Competition Development, which will determine the systemic changes in the Russian economy until 2025 drew the particular interest of participants of the briefing. According to Igor Artemiev, the COVID-19 pandemic that emerged in 2020 has become another one challenge for the domestic economy.

In order to support business and, first of all, small and medium-sized entrepreneurship, the draft National Plan was supplemented with a number of anti-crisis measures, including the provision of preferences to SMEs, ensuring equal conditions for companies with state participation and private enterprises, development of small business cooperatives and individual entrepreneurs:

“We consider that it is appropriate to create in the procurement system a register of types of work that can be performed by SMEs,” the Head of the Antimonopoly agency said.

The Head of the FAS Russia addressed the subject of medicine provision, establishing interchangeability and compulsory licensing of drugs:

"After a ten-year struggle, the position of the FAS was adopted at the legislative level. The amendments to the law will have a positive impact on consumers, since they will not allow pharmaceutical manufacturers to unreasonably increase prices or refuse deliveries. It is necessary to create a Register of pharmaceutical products in Russia, where all drugs registered in the territory of the Russian Federation must be contained under the appropriate groups of International non-generic names (INN), indicating their interchangeability, taking into account the existing exceptions. All this will need to be taught to public officials, but companies must also understand what requirements are imposed on them. Therefore, I think it is right to hold a conference in the near future together with the pharmaceutical business, the Ministry of Health, the Ministry of Industry and Trade and other Authorities, so that we can explain how this work progresses. Moreover, the project that the FAS Russia is implementing jointly with Rostec will allow us to receive comprehensive information about the prices of medicines in electronic form based on bidding. We will be able to detect abuse as well as the prices of single suppliers quickly. We will probably be one of the first countries to make such a system national”.

Speaking of antitrust compliance, Igor Artemiev thanked the Association of European Businesses for popularizing this tool for preventing violations of antimonopoly legislation.

“Many AEB member companies have voluntarily implemented such a mechanism, and compliance officers have appeared. The company, which began to use the tool, expect inspections that are more infrequent. We have not abandoned the idea of making amendments to the law for those companies that violate antimonopoly law, but if we find that they supported compliance, then we will be able to consider not the company's liability, but the responsibility of a specific person who violated the law. We want to amend the law so that the proper implementation and support of compliance by the company will be a mitigating circumstance when imposing a fine. We are still working with the Government on the possibility of making such amendments. We think that this will create an additional incentive for companies, ennoble the market, make it more open, honest and transparent,” the Head of the Service added.

The meeting participants also learned the position of FAS Russia on the issues of pot and threshold tariffs in the fuel and energy sector, closed heat supply systems, and mortgage insurance.

“We will strive to establish formula tariffs based on the principle of inflation minus. At the same time, it should be borne in mind that a significant part of decisions in this area are made at the level of the constituent entities of the Russian Federation,” he said.

Summing up the meeting between the FAS Russia and the Association of European Business, Igor Artemiev thanked the participants and once again stressed the importance of creating working groups with business representatives on the priority areas of the Agency's work:

“Now a new Chapter is opening in our economy, and we must work together so that the business community has more answers than questions”.