Policy Statement
Russian Federation

Development of the Russian antimonopoly policy started in August 1990, when the Russian Government created the first competition authority? - the State Committee of the Russian Federation for Antimonopoly Policy and Support of New Economic Structures. The Law ¡§On Competition and Limitation of Monopolistic Activity at Commodity? Markets¡¨ was adopted in 1991.
Since Russian antimonopoly authority was established competition legislation has been developing up to present moment. The law ¡§On Competition¡¨ has been amended in 1992, 1995, 1998, 2000, 2001 and 2002.
The competition authority created initial legislation on natural monopolies and Federal Law ¡§On Natural Monopolies¡¨ was adopted in 1995 and amended in 2001. The law contained definition of a natural monopoly and a list of activities in which prices and tariffs were to be regulated by independent authority. Some important amendments were inserted into the antimonopoly legislation of the Russian Federation in 2002 that were aimed to influence directly at competition law enforcement in natural monopolies sector. Additional legislative drafting was done to fill perceived gaps in legal regulation of market activities.? One of the largest projects was drafting of Federal Law ¡§On Advertisement¡¨ that was also adopted? in 1995.??
In 1999 Federal Law ¡§On Protection of Competition at Financial Markets¡¨ was adopted and amended in 2001. The law has a similar structure to Federal Law on Competition.? It contains provisions covering state actions, unfair competition and abuse of dominance and establishes preliminary controls over agreements involving financial organizations and state purchasing of financial services.
At present Russian competition authority faces several ambitious projects aimed for enhancing the effectiveness of competition enforcement in Russia. Federal Antimonopoly Service of the Russian Federation (FAS Russia) has worked out three new Drafts, specifying brand new features of competition legislation in Russia.
The first Draft ¡§On introducing amendments into Articles 12, 17 and 18 of the Law ¡§On Competition and Limitation of Monopolistic Activity at Commodity Markets¡¨ deals with threshold increase upon control over economic concentration. The mentioned Draft envisages substantial 150 times increase (up to R3 bn and US$100 m) of threshold value of assets of economic entities whose transactions are subject to preliminary approval of antimonopoly body.
The second - Draft New Law ¡§On Competition Protection¡¨, establishes a single legal framework for development and protection of competition on commodity and financial markets and in the sphere of limited natural resources usage, legalize a set of regulations aimed at effective implementation of the right of natural and legal persons to purchase goods and services at a fair market price and the right of economic entities to conduct their businesses in a fair competitive environment.
The new Law is harmonized with European system of competition rules and regulations. It envisages organizational and legal frameworks for government control over economic concentration, legal basis underlying the principles of granting privileges and preferences, as well as other forms of government support (state aid) to individual economic entities or several economic entities. Above all it eliminates excessive governmental interference when protecting competition and introduces new restrictions for anticompetitive actions of municipal and executive power bodies.
The third Draft ¡§On introducing amendments into the Code on Administrative Infringements¡¨ envisages introduction of new articles establishing administrative responsibility for dominance abuse, for agreements and concerted actions restricting competition, as well as for unfair competition. The Draft also envisages increase of the amount of the sanction for violating the order and terms of presenting petitions, applications and data to the antimonopoly body, as well as applying of disqualification towards individuals (six months to three years), performing administrative, organizational and economic functions in the body of a legal entity, or who are members of Board of directors of a legal entity, introduction of new types of penalties (maximum penalty will be up to 10% of production turnover, the basis of penalty evaluation will be the sales proceeds).
The main objective of FAS for a short term period is developing of competition practices, such as non-admission of networks monopolization, including the sectors of natural monopolies. Particular attention is paid to the provisional standards of information disclosure, as at present when performing antimonopoly control over economic concentration FAS Russia do not make decision on a transaction until it obtains full information stipulated by law, including information on real beneficiaries, including offshore companies participating in the transaction.
Adoption of the Draft Law will strengthen the regulatory and legal framework of government support and protection of competitive relations and competition development within the system of the Russian Federation national economy, enable to raise the guarantees of observance of the Russian Federation law by economic entities in the process of their activity and thus lead to an increase of the volume and fair distribution of the national wealth produced in the Russian Federation.
Efficient antimonopoly policy, competition protection and development are necessary conditions for achieving the objective of doubling the national GDP within a decade, set by the RF President.