m minsk m astana a · 2014-04-03 · competition policy in the framework of the common economic...

Е

CONTROL OVER

COMPLIANCE WITH

PROHIBITIONS ON:

restriction of competition

abuse of dominant position by economic entities

unfair competition

www.eurasiancommission.org

EURASIAN ECONOMIC COMMISSION

2013ANTIMONOPOLYACTIVITIESOF COMMON ECONOMIC SPACE

ASTANA

MINSK

MOSCOW

A

M

MM

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Economic

Commission

B2013


CONTROL OVER COMPLIANCE WITH PROHIBITIONS ON:

restriction of competition

abuse of dominant position by economic entities

unfair competition

EURASIAN ECONOMIC COMMISSION

ANTIMONOPOLYACTIVITIESOF COMMON ECONOMIC SPACE

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Economic

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22013

Editorial Board

ALDABERGENOV Nurlan Shadibekovich

Chairman of the Editorial Board, Member of the College (Minister) for competition and antitrust regulation of the Eurasian Economic Commission

KUANDYKOVBolatbek Bayanovich

Chairman of the Agency of the Republic of Kazakhstan for Competition Protection

TSYGANOV Andrey Gennadyevich

Deputy Head of the Federal Antimonopoly Service of the Russian Federation

AITZHANOVAldash Turdykulovich

President of JSC “Center for Development and Protection of Competition Policy”

DAVYDOVALesya Evgenyevna

Head of the Department for International Economic Cooperation of the Federal Antimonopoly Service of the Russian Federation

SUSHKEVICHAleksey Gennadyevich

Head of the Analytical Department of the Federal Antimonopoly Service of the Russian Federation

Editorial Team

ZHUMARTOVAGulmira Nurgazievna

Head of the Editorial Team

IZDIBAEVAGulsheker Kairzhanovna

Deputy Head of the Editorial Team

KURILCHIKAleksandr Fedorovich

Acting Director of the Department for antitrust regulation of the Eurasian Economic Commission

PARSEGOVBoris Anatolyevich

Deputy Director of the Department on competition policy and public procurement of the Eurasian Economic Commission

KUZNETSOVAElena Anatolyevna

Head of Division in the Department for antitrust regulation of the Eurasian Economic Commission

CHESNOKOVATatyana Nikolayevna

Head of Division in the Department on competition policy and public procurement of the Eurasian Economic Commission

ABRAMENKOAlesia Nikolayevna

Deputy Head of Division in the Department for antitrust regulation of the Eurasian Economic Commission

BASALAYEVAOksana Sergeyevna

Deputy Head of Division in the Department for antitrust regulation of the Eurasian Economic Commission

KOZLOVSKAYATatyana Nikolayevna

Consultant of Division in the Department for antitrust regulation of the Eurasian Economic Commission

MARTYNOVAnton Valeryevich

Consultant of Division in the Department for antitrust regulation of the Eurasian Economic Commission


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Table of contents

PART I

MODEL LAW ON COMPETITION

N. Aldabergenov, Member of the College (Minister) for competition and antitrust regulation of the Eurasian Economic Commission. Common competition policy within the framework of the Common Economic Space

A. Tsyganov, Deputy Head of the Federal Antimonopoly Service of the Russian Federation. Model Law on Competition of CES is a necessity in the face of increasing integration within the CES

A. Matishev, Deputy Chairman of the Agency of the Republic of Kazakhstan for Competition Protec-tion. Speech

K. Emelyanov, Deputy Director of the Department of Small and Medium Business and Competition of the Ministry of Economic Development of the Russian Federation. Speech

B. Kuandykov, Chairman of the Agency of the Republic of Kazakhstan for Competition Protection. On conceptual approaches to development of the Model Law on competition with a glance to interna-tional experience

S. Roumas, Representative of the Republic of Belarus in the Council of the Eurasian Economic Com-mission, Deputy Prime Minister of Belarus on the activities of the Republic of Belarus within the framework of the Union State and the Customs Union and the Common Economic Space, the Com-monwealth of Independent States, the Eurasian Economic Community, as well as the formation of the Eurasian Economic Union, National Coordinator of Belarus on the Commonwealth of Independent States, the Chairman of the Board of the JSC “Development Bank of the Republic of Belarus”. Speech

A. Kurilchik, Acting Director of the Department for antitrust regulation of the Eurasian Economic Commission. Changes to the Anti-Monopoly Policy of the Republic of Belarus in the light of integra-tion in the Common Economic Space

PART IIREGULATORY LEGAL ACTS ON CONTROL OVER THE OBSERVANCE

OF COMMON RULES OF COMPETITION

Criteria for Assigning the Market to the Category of Cross-border Markets

Procedures for Information Exchange and other Interaction between the Eurasian Economic Commission and the Authorized Bodies of the Member-states of the Customs Union and the Common Economic Space under the Agreement on Common Principles and Rules of Competition as of Dec. 9, 2010

Procedures for Handling Applications (Materials) on Competition Rules Violations

Procedures for Carrying Out Investigations on Competition Rules Violations

Procedures for Hearing on Cases on Competition Rules Violations

Rules for Determination of Monopolistically High and Monopolistically Low Prices

Rules of Calculation and Procedure of Imposition of Fines Provided for by the Agreement on Common Principles and Rules of Competition

Rules of Assessment of Competition State

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I believe that competition is the institution of market economy that

every state should immediately adopt. We also accept this principle and implement it, sometimes simply by force.

The President of the Republic of BelarusAlexander Lukashenko

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Of course, as the saying goes, “where there is no competition, you sleep

better, but you live worse”. Competitiveness is not limited only to economy, but covers everything that is related to human resources, knowledge, health, environment, politics, and social stability. The sum of all of this makes the end result.

The President of the Republic of Kazakhstan Nursultan Nazarbayev

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Our plans for the development of competition are divided into two

major blocks. The first block is the protection of competition with actions of antitrust character. In particular, fighting against cartels is supposed to be seriously intensified. The second block is the formation of competitive markets. In the first place, we will focus on the creation of favorable conditions for the emergence of new highly effective economic entities and their entry into markets.

President of the Russian Federation Vladimir Putin

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The Model Law on Competition is the legislative act of advisory nature oriented to approximation of laws regulating economic relations in the sphere of competition of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation

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The model law is indispensable to en-

sure the integration process and the

forthcoming creation of the Eurasian

Economic Union. It is necessary not just to combine

and preserve everything that is efficient in the nation-

al legislation of our three countries, but also to make

a big step forward to lay a new level of regulation of

economic relations in the field of competition.

Chairman of the Councilof the Eurasian Economic

Commission,Deputy Prime Minister

of the Republic of Kazakhstan

KelimbetovKairat

Nematovich

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Member of the College (Minister) for competition and antitrust regulation of the Eurasian Economic Commission

Aldabergenov Nurlan Shadibekovich

We introduce for your consideration the theme-based is-

sue of the magazine devoted to the matters of common

competition policy in the framework of the Common

Economic Space.

Free movement of goods among Belarus, Kazakhstan and Russia per-

formed due to the opening of the borders requires the development of the

common competition rules for the market of the three countries.

Therefore, ensuring the harmonization of legislation of the Member

States of the CES in the field of competition policy is one of the main

objectives that have been set by the Presidents of our countries.

The state of competition characterizes the cultural level of society, and

equality and justice form the basis for fair competition.

Single competition policy targeted at all segments of population and

based on harmonized rules and regulations in national law is the cor-

nerstone of the successful operation and progressive development of the

common economic space.

We know that promoting competition is needed to ensure the efficient

development of the economy, stimulate innovation processes and the

manufacture of quality products. Therefore, the more is the competition

promoted, the better off and the more powerful our countries will be.

Dear readers!

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Head of the Federal Antimonopoly Service of

the Russian Federation

ArtemievIgor

Yuryevich

On behalf of the Federal

Antimonopoly Service of Russia,

I welcome the readers of

“Antimonopoly activities of CES”

Today our countries face major tasks of creating condi-

tions for the development of competition and the conduct

of common competition policy within the framework of

the Common Economic Space.

Formation of uniform legal framework for doing business in the customs

territory of the Republic of Belarus, the Republic of Kazakhstan and the

Russian Federation will help to protect the companies of the Members

States of the Customs Union from unfair business practices that are

transboundary by nature.

Creating favorable conditions for the formation of competitive environ-

ment makes significant contribution to the development of the economic

potential of our countries ensuring their investment attractiveness. After

all, healthy competitive environment is one of the essential conditions for

the development of business.

I am confident that the vast market of the Common Economic Space will

increase the competitive advantage of each of the Member States of the

Customs Union.

I hope that this magazine will become the platform for the discussion and

efficient solution of tasks as to the development of competition policy in

the Common Economic Space.

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Chairman of the Agency of the Republic of Kazakhstan forCompetition Protection

Kuandykov Bolatbek Bayanovich

Before I introduce my publication, let me welcome the

first readers of informational and analytical publica-

tion “Antimonopoly activities of the Common Economic

Space”.

For the first time readers are given the opportunity to find answers to the

questions arising under the Customs Union, to get acquainted with the

work of the Eurasian Economic Commission as to the implementation

of anti-trust regulation, including unimpeded access to the commodity

markets of the three countries.

It is particularly the collection of opinions of the leading experts in the

field of competition policy and the representatives of business environ-

ment that provides the composition of theoretical and practical knowl-

edge so necessary in the context of integration.

For my part, I express my deep appreciation to the editorial staff for the

opportunity to share my practical experience.

Dear friends!

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Minister of Economyof the Republic of Belarus

SnopkovNikolay

Gennadyevich

I am pleased to welcome the introduction of a new publi-

cation, not only because it will contribute to better pub-

lic awareness of the activities of the Eurasian Economic

Commission and National Antimonopoly Bodies, but

also because this edition will be devoted to the problems of competi-

tion. What is competition? This is the specific competitive relationship

between the players in the market, the feature of the market economy, the

rivalry between the old and the new, the force for growth and progress, in

short, this topic is many-valued. In its various aspects, it is of interest to

readers of different circles: businessmen, scientists and, finally, the gen-

eral public. I have no doubt that the range of authors of the edition will

also be wide, and large-scale discussion on the vital issues and burning

problems in the field of competition will be held on these pages. There-

fore, this publication may be another platform for fruitful dialogue and

constructive cooperation between competition authorities and business

community.

Even the content of the first issue suggests that this is modern economic

publication focused on current topics and trends and oriented to the fu-

ture.

I would like to wish many creative achievements to the editorial board

and the authors, as well as many interesting publications to the readers.

“

Dear readers!

162013

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PART I

MODEL

LAW

ON COMPETITION


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Member of the College (Minister) for competition and antitrust regulation of the Eurasian Economic Commission

Aldabergenov Nurlan Shadibekovich

According to the Agreement on Common Principles

and Rules of Competition of December 9, 2010, the

Model Law on Competition is to be signed by the

Presidents of the Republic of Belarus, the Republic

of Kazakhstan, the Russian Federation before

July 1, 2013.

Therefore, the Eurasian Economic Commission and the Competition Au-

thorities of Belarus, Kazakhstan and Russia face difficult task – to com-

plete and submit for signing the coordinated draft of the Model Law on

Competition for signing to the Presidents of the three countries before

July, 2013. This law determines legal rules that will become a model for

the national laws of the Member States and EEA TC.

According to the Agreement on Common Principles and Rules of Com-

petition, the Model Law is the legislative act of advisory nature.

The Model Law on Competition should become the reference point of

the legislative work in the area of competition policy in Belarus, Kazakh-

stan and Russia.

The importance of this document is indisputable, as it reflects the inter-

ests of the three countries in the approximation between legal regulation

of economic relations in the field of competition policy, the provision of

free movement of goods, the freedom of economic activity and the cre-

ation of conditions for the effective functioning of commodity markets

within the Common Economic Space.

Common Competition

policy

within the

Common Economic

Space

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With allowance for this, we consider it necessary

to discuss the pending provisions of the Model

Law with the general public, academic and the

business communities.

The Law should include both the best practice of

the Republic of Belarus, the Republic of Kazakh-

stan and the Russian Federation in the sphere

of legislative regulation of competition policy, as

well as the existing international best practices in

this area.

The analysis of the national legislations of the

Member States of CU and CES in the area of com-

petitive policy has revealed the following strong

points.

In the Republic of Kazakhstan, the distin-

guishing features of competition law are:

1. collegiality of management of the Competi-

tion Authority (the joint management body

of the antimonopoly body is its Board com-

posed of five members: the president, who is

the head of the Competition Authority, two of

his deputies and two representatives from the

Government of the Republic of Kazakhstan.

The members of the Board of the Government

of the Republic of Kazakhstan are appointed

and dismissed by the Government of the Re-

public of Kazakhstan);

2. absence of scheduled inspections of economic

entities by the Competition Authority. The

absence of inspections relieves business from

additional burden. One of the strong points

of the competition law of the Republic of Ka-

zakhstan and the Russian Federation are the

rules for the exemption from liability for the

violation of antitrust laws. In the Republic of

Kazakhstan, the market entity that has com-

mitted anti-competitive concerted actions and

concluded anti-competitive agreements may

be relieved by the judge from the confiscation

of monopoly revenue in case of the aggregate

compliance with the provisions of Article 147

of the Code of Administrative Offences.

For reference

The market entity that has committed administra-

tive offense in the form of anti-competitive agree-

ments or anticompetitive concerted actions, may

be relieved by the judge from the confiscation

of monopoly revenue in case of the aggregate

compliance with the following conditions:

1. by the time when the market entity informs

the Competition Authority of anticompeti-

tive agreements or concerted practices,

the Competition Authority has not received

the information about these anticompetitive

agreements and concerted actions from oth-

er sources;

2. the market entity is taking urgent action to

stop its participation in the anticompetitive

agreements or concerted practices;

3. the market entity delivers full information on

the facts of anticompetitive agreements or

concerted practices throughout the duration

the investigation from the moment of the ap-

plication;

4. the market entity voluntarily reimburses the

damage to caused consumers as the result

of anticompetitive agreements or concerted

practices.

The concepts of warning and caution from the

enforcement practice of the Russian Federa-

tion have been reflected in the draft Model Law.

These regulations in the sphere of the violation of

competition rules are of preventive nature.


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Caution implementation

mechanism

In order to prevent the violations, the Competition

Authority sends caution in written form to the of-

ficial of the economic entity or the governmental

entity about impermissibility of taking the actions

that could lead to the breach of the legislation on

protection of competition. The grounds for send-

ing caution is the public statement of the official

of the economic entity as to the intended behavior

in commodity market, if such behavior may vio-

late the legislation on protection of competition

and there are no grounds to initiate the proceed-

ings and to consider the case on the violation of

legislation on the protection of competition.

Since the concept of caution does not specify the

list of violations for which it can be issued, its

scope is not limited. The issuance of caution is

possible for any violation of antitrust laws, includ-

ing anticompetitive agreements and concerted ac-

tions of economic entities and unfair competition.

The concept of warnings is aimed at removing

the consequences of the violation, as well as

the causes and conditions that contributed to its

emergence, without initiating the proceedings on

competition rules violations.

The provision is made for that warning is issued

by the Competition Authority and sent to the per-

son occupying dominant position, in case there

are signs of abuse of dominant position.

Significantly, the Competition Authority may de-

cide to initiate the proceedings on the grounds of

competition rules violations without giving the

warning and before the end of the period during

which it must be fulfilled, and the person who ful-

fills the requirements of the warning is not subject

to responsibility.

In case of the failure to comply with the warning

within the prescribed period, if there is the evi-

dence of violation of antitrust laws, the Competi-

tion Authority makes the decision to initiate the

proceedings.

The concept of warning also exists in competition

laws of the Republic of Belarus.

Belarusian Competition Authority has the right

to send the letter of warning to the economic en-

tity responsible for the illegal actions violating the

antimonopoly legislation.

Another distinct advantage of the Russian anti-

monopoly legislation is that cases on the violation

of the antimonopoly legislation are considered by

analogy with the arbitration proceedings.

The commission on considering the cases on com-

petition laws violations is in fact a quasi-judicial

body the decisions of which are taken collectively

and by the majority vote of the commission.

Individuals involved in the case on competition

laws violation are empowered to enter motions,

oppose motions, give explanations, ask questions,

submit documents, evidences, and also enjoy oth-

er rights necessary for the full and complete con-

sideration of the case on competition laws viola-

tion.

There is a possibility to prepare clarifications by

the Competition Authority on the Decisions and

Directions issued by the Commission for Com-

petition Laws Violation, as well as to correct the

misprints, typographical errors, arithmetical er-

rors, and the possibility to re-examine the cases

upon discovery of new facts.

The material breach of the procedure and the or-

der of the case consideration by antimonopoly

Competition Authority could lead to the reversal

of the decision made on the case by court, which

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increases the importance of the compliance with

the rules and procedures established by the anti-

monopoly legislation.

Detailed regulation of the procedure and the or-

der of considering antitrust cases in the Russian

Federation by analogy with the case consideration

by arbitration courts ensures the balance of rights

and interests of the persons involved in antitrust

case.

The above peculiarity of the Russian antimonopoly

legislation is its distinguishing feature which pro-

motes the provision of equal rights to the partici-

pants of antitrust case and objectivity in the con-

sideration of the case by the antimonopoly body.

In our opinion the positive experience of the Re-

public of Belarus is prompt review of the applica-

tions for economic concentration, the maximum

term of consideration of which is 30 days with no

right of prolongation.

In the Russian Federation, the person (group of

persons) that voluntarily reported to the Federal

Antimonopoly Authority on the conclusion of

anti-competitive concerted practices and anti-

competitive agreements is relieved from adminis-

trative responsibility (art. 14.32 of the Adminis-

trative Code of Russia).

When preparing the draft of the Model Law, we

have examined international best practices in the

field of competition policy, and we offer the fol-

lowing.

Thus, we suggest to supplement Article 1 with the

following objectives:

consumer rights protection (the experience of the

United States, Great Britain, France, the Republic

of Belarus, the Republic of Kazakhstan) and the

creation of conditions for the development of in-

novations (the experience of China, Singapore).

In a number of leading countries according to the

rating of “Global competition review”, such as the

UK, France, Australia, Korea, the Competition

Authorities carry out control functions for the

protection of consumer rights.

In addition, the UK Competition Authority is em-

powered to conduct investigations and file civil

and criminal actions against those violating the

law on protection of consumer rights.

Taking into account the experience of China, it is

suggested to supplement Article 13 “The actions

(inaction), the agreements, including “vertical”

agreements, the concerted practices, which may

be considered acceptable”, with the actions that

lead to mitigation of the serious decline in sales or

excess production during the recession and (or)

the crisis.

It is suggested to supplement the list of unfair

competition forms with the actions of the legal

owner of trademark leading to unjustified ban on

parallel imports (Japanese experience).

In addition, it is suggested to enlarge the power

of officials of Competition Authorities by giv-

ing them the power to inspect offices and ac-

commodations (with warrant), to seize corre-

spondence, hard drives, to track mobile phones,

to take operational photo and video footage, to

draw up reports on access denial for the subse-

quent imposition of sanctions in cases of non-

admission.


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It is suggested to complement the liabilities for

the violation of competition rules and to provide

for the disqualification of officials of economic

entities. This norm is provided for in the legisla-

tions of the United Kingdom, Australia, Lithuania

and the Russian Federation.

Draft Model Law on Competition includes

the following innovations:

1. Determination of the general principles of

state price control, subject to the provisions of

Articles 17 and 18 of the Agreement on Com-

mon Principles and Rules of Competition and

the law enforcement practice of the Republic

of Belarus.

2. Establishment of control over state involve-

ment in entrepreneurial activities and the

conditions of establishing state monopoly in

the areas of activity in which the sale of goods

on a competitive market could have negative

impact on the constitutional system, national

security, public order, human rights and free-

doms, health of the population, other signifi-

cant objectives, and subject to law enforce-

ment practice of the Republic of Kazakhstan.

3. Exercising control over the provision of state

or municipal preferences without requiring

prior approval from the Competition Author-

ity and subject to the practical experience of

the Russian Federation.

4. Recognition as unfair competition of the ac-

tions of the right holder as to trademark or

other economic entities (market entities),

which have the right to use trademark on the

territory of the Customs Union and the Com-

mon Economic Space on the basis of the con-

tract with the right holder or on other basis,

on arbitrary prohibition and/or restriction

of the release of goods in the territory of the

Customs Union and the Common Economic

Space, as well as the turnover in the territory

of the CU of the goods, on which the trade-

mark is placed by the right holder and which

have been put into circulation outside the cus-

toms territory of the CU by the right holder or

with his consent.

5. The principle of impermissibility of industry

regulators merger and the transfer of control

over the activities of these regulators to the

Competition Authority.

Keeping in mind the volume of the draft Law, we

decided to organize further discussion of the draft

Model Law within six thematic sections, secur-

ing certain block of articles of the Law for each

of them. The results of the work of each section

will be announced by their leaders and will serve

as the basis for rendering the Conference results

in whole.

The Eurasian Economic Commission will hold the

total of five international research and practice

conferences. The final fifth conference in Astana

will be held with the participation of not merely

Belarus, Kazakhstan and Russia, but leading in-

ternational experts on competition policy as well.

We invite you to participate in our events. I thank

you all in advance for your cooperation and work.

In conclusion, I would like to wish successful

work to all participants and to express my firm

belief that the practice of holding such events

aimed at discussing significant draft regulations

with broad business and scientific community de-

veloped and adopted by the Eurasian Economic

Commission will be held on a regular basis.

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Е

INTERNATIONAL RESEARCH

AND PRACTICE CONFERENCES

ON DISCUSSING THE DRAFT

MODEL LAW ON COMPETITION

KAZAN

4–5 APRIL

MINSK

25–26 APRIL ASTANA

22–23 MAY

ALMATY

28–29 MARCH


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NOVOSIBIRSK

14–15 MARCH

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NOVOSIBIRSK

14–15 MARCH

NOVOSIBIRSK 2013

14–15 MARCH

THE FIRST INTERNATIONAL

RESEARCH AND PRACTICE

CONFERENCE ON

DISCUSSING THE DRAFT

MODEL LAW

ON COMPETITION


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Tsyganov Andrey Gennadyevich

Deputy Head of the Federal

Antimonopoly Service

of the Russian Federation,

Ph.D. in Economics,

Honored Economist of Russia

Model Law on Competition of CES

is actual necessity in the face of

the increasing integration within

the CES

Development of model legislative acts serves as

means of harmonization of legislation in various ar-

eas of the states where the relevant regulations are

developed and adopted.

Model legislation is sufficiently developed in the CIS. The CIS

member states have agreed on the intention to develop it in the

Treaty dated 24.09.1993 “On Establishment of Economic Union”

considering this activity area as contributing to the coordination

and convergence of national legislations of Member States.

Harmonization of competition laws of the Member States of the

Common Economic Space (CES) is the necessary condition for

the effective functioning of the CES accompanied by the interpen-

etration of the economies of our countries.

In these circumstances, it is vital to form the uniform legal frame-

work for entrepreneurial activities of economic entities in the

Common Economic Space which will be facilitated by the adoption

of the CES Model Law on Competition (hereinafter – the Model

Law).

For these purposes, the Agreement on Common Principles and

Rules of Competition of December 9, 2010 (hereinafter – the

Agreement on Competition) provides for the adoption of the Mod-

el Law on Competition the development of which is assigned to the

Russian Federation, in accordance with the Schedule of the Devel-

opment of Documents for the Implementation of the Agreements

that Form the CES (approved by the Decision No. 29 of the Council

of the Eurasian Economic Commission on May 14, 2012).

Despite the fact that the Model Law will be advisory by nature,

it will serve as normative and orienting standard for the member

countries of CES in the harmonization of national competition

laws.

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Currently, with the draft Model Law having been

developed, extensive work is being carried out in

terms of discussing it with, among others, wide

range of leading experts in the field of competi-

tion law, representatives of scientific and business

communities of the CES Member-States. For this

purpose, the Eurasian Economic Commission is

conducting series of scientific conferences in the

CES Member-States. The first such conference

has already taken place at the beginning of March

2013 in Novosibirsk, similar conferences will also

take place in Almaty, Kazan, Minsk and Astana.

The drafting of the Model Law has been pre-

ceded by hard work on the study and analysis of

the competition laws of the Member States of the

CES, as well as those of foreign countries.

In the light of the desire of the CES members to

integrate into the world economy, the correlation

of its provisions with the recommendations of the

leading international organizations specializing

in protection of competition, including Organiza-

tion for Economic Cooperation and Development

(OECD), United Nations Conference on Trade

and Development (UNCTAD), International

Competition Network (ICN), was of no little in-

terest in the drafting of the Model Law.

The key block of the provisions of the draft Model

Law is associated with the establishment of pro-

hibitions on anti-competitive practices that are

especially harmful to society and lead to possi-

ble negative effects on competition, particularly,

abuse of dominant position, cartels and monopo-

lization of the market through mergers and acqui-

sitions.

It should be noted that these types of anti-com-

petitive practices are recognized by UNCTAD and

the OECD as the most common and having sig-

nificant negative effect of competition.

One of the important aspects that are reflected in

the draft Model Law is the principle of the admis-

sibility of actions and certain agreements, if they

have serious positive effect which is to be evalu-

ated by law enforcer. It is possible that certain ac-

tions, agreements that at first sight threaten the

competition could bring positive effect which is

more important and more substantial than the

possible harm.

The introduction of such principle is of great

importance to innovations and development,

because very often innovative processes are not

possible all by themselves. Economic entities en-

ter into various agreements that are aimed at con-

ducting joint research, establishing joint ventures

and introducing new technologies.

Other important set of rules of the Model Law is

represented by the regulations establishing con-

trol over economic concentration recognized by

the international competition community as ef-

fective tool to prevent the monopolization of mar-

kets. It is very important that the system of con-

trol over economic concentration does not create

the excessive burden on business and the Compe-

tition Authority.

It should be noted that within the CES the issues

of control over economic concentration are as-

signed to the exclusive competence of national

Antimonopoly Authorities. In this regard, one of

the objectives of the Model Law should be the de-

scription of the procedures of control over eco-

nomic concentration, so that the entrepreneurs of

the CES member countries could act according to

transparent and uniform rules.


27

One of the important activities of the Competi-

tion Authorities all over the world is the work on

the prevention of violations of antitrust laws. At

the same time, by way of carrying out this work

the Competition Authorities can not only reduce

the number of violations, but also improve the ef-

fectiveness of their law enforcement.

A good example in this context is the experience

of the Federal Antimonopoly Service which, with

the adoption of the so-called “third antimonopoly

package”, was given the right to issue warning as

new preventive tool of antitrust laws.

During the application of this tool in 2012, the re-

duction of the number of antitrust cases was reg-

istered, with 75% of the issued warnings (the to-

tal amount being 1,423) having been performed

on time. This means that in over one thousand

cases the employees of the Russian Competition

Authority have prevented the negative effects of

the violations of the law.

Prevention mechanism has proved to be efficient

in Russia, and that gives reason to believe that the

above tool can also be effective when used in Be-

larus and Kazakhstan. In this regard, the relevant

rules are also suggested to be provided for in the

Model Law.

In conclusion, I would like to express hope that

the Model Law will become the best in the world,

since, being the result of joint work of Antitrust

Authorities, the Eurasian Economic Commission,

scientific and business communities of the CES

Member States; it has absorbed the most of the

world’s up-to-date practices.

Speech of A. Tsyganov, Deputy Head of the Federal Anti-monopoly Service of the Russian Federation “Model Law on Competition of CES is actual necessity in the face of the in-creasing integration within the CES” (Novosibirsk)

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Matishev Aliakpar Bolatovich

Deputy Chairman of the Agency of the

Republic of Kazakhstan for Competition

Protection

Speech at the international

research and practice

conference on discussing

the draft Model Law

on Competition in Novosibirsk

The Model Law reflects the major competition is-

sues. The main problem of competition policy is the

lack of understanding of the tasks entrusted to the

Competition Protection Authority and the criteria for

the evaluation of its activities which should focus on

the protection of competition, not the reduction of

price on specific goods and rate of inflation.

Technical differences

In the draft Law, there are differences from the national legislations

provisions in the criteria for determining the dominant position,

non-exclusion of concerted action from the legislative prohibition,

when the combined share does not exceed 20% (paragraph 3 of

Article 12), etc.

It is necessary to provide the existing criteria for each of the parties

separately in the Draft Law, which can cause problems, or make

reference to by-laws of the Model Law.

THE PROVISIONS TO BE ADDED TO THE LAW:

• Powers to develop and form antimonopoly and competition

policy should be passed on to the competence of the Competi-

tion Authority, and the creation of competition in the sectors

and regions through competition policy should also be entrust-

ed to ministries and local authorities. The task of the competi-

tion authority is to protect competition by antitrust laws, not to

develop competition in particular industry or region, as it is still

understood by many people.

• One of the main problems of Competition Authorities is that

it’s quite difficult to find and prove the facts of collusion and

gaining monopoly income, because of the impossibility to ob-

tain the hidden information. Without the powers to conduct the

operational-investigative activity, it is virtually impossible to

prevent covert forms of anti-competitive behavior of economic


29

entities. Therefore, through this Model Law

the proposal can be submitted for consider-

ation of the Member States as to the powers

of Competition Authorities on conducting the

operational-investigative activity.

• Powers to determine the spheres of natural

monopolies, and to introduce effective mea-

sures for their regulation, as well as deter-

mining the range of types of goods, works

for which it is necessary to introduce state-

regulated prices as temporary measure. The

proposal is based on the fact that, while busi-

ness in our countries has moved from exten-

sive to intensive development over the past 20

years and has become more competitive, the

development of the competition in the sphere

of natural monopolies has not occurred, and

they practically remained in the 90s, with the

facts of abuse of dominant position, violations

of the of consumers rights. The reason for

this is that tariff regulators in our countries,

as well as the natural monopolies that are the

infrastructure sectors, are not interested in

creating the pre-conditions and finding com-

petitive environment.

• In doing so, we have to help them through the

provisions of the Model Law which we don’t

have. Unfortunately, over all the years of anti-

monopoly and tariff regulation we have not

had even a single fact of the transition from

the state of natural monopoly to the state of

competitive market.

• Evaluation of the Competition Authorities ac-

tivities in terms of price reduction.

• Independence and verticality of the Competi-

tion Authority with the collegiateness in the

decision-making.

• The powers to promote competition that will

require political and institutional support.

• Collegial body, with the appointment of re-

sponsible executives for a certain period

• State participation in entrepreneurial activi-

ties.

• The requirement for encashment.

THE PROVISIONS NOT TO BE ADDED TO

THE LAW:

• State Price Regulation.

• Price Control of Economic Entities in Domi-

nant Position.

It is important that the Competition Authority is

the body for protection of competition, without

functions of reducing or setting prices.

Such system of the functioning of Antitrust Au-

thorities is widespread among the competition

authorities all over the world and is the best inter-

national practice.

Yet one of the main objectives of the competition

authority is to protect consumers against unjusti-

fied government and monopolies (including in-

dustrial) actions, as well as to ensure equal condi-

tions for business development.

If the competition authority is responsible for

price control, it will result in the disruption of the

checks and balances, and the conflict of interests

will arise in one body. Then what is more impor-

tant: the interests of consumers or those of busi-

ness?

This is what we have got by already in Kazakh-

stan; therefore in 2004 the Competition Author-

ity and the Tariffs Authority were divided, and in

2007 the uncharacteristic powers to set tariffs for

the dominant economic entities, uncharacteristic

of the Competition Authority were transferred to

the latter.

Thank you.

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Emelyanov Kirill Yuryevich

Deputy Director of the Department

of Small and Medium Business and

Competition of the Ministry of Economic

Development of the Russian Federation

Speech at the international

research and practice

conference on discussing

the draft Model Law

on Competition in Novosibirsk

Good day, dear colleagues! First of all, I would like to

tell you how the work on the Model Law is organized

in the Russian Federation.

As it was already mentioned, the Russian Federation was assigned

to be the party responsible for the Law. We have been working on

creating the draft Model Law throughout the whole year, and we

have even prepared two drafts. One of them was the framework

one by nature, the second was the more detailed one, similar to the

structure and the level of detail of the laws of the Russian Federa-

tion and the Republic of Kazakhstan. After discussion, including

the discussion in the Eurasian Economic Commission (EEC), we

have taken the more detailed version as basic one and sent it to the

EEC for further discussion at the end of the last year.

I would like to note right away that this is the draft of Russian posi-

tion. First of all, there the rules fixed by the law of the Russian Fed-

eration were taken into account, but given the fact that the project

will be further developed and supplemented by the best practices

of the other two countries, as well as the countries that are not part

of the Customs Union, the results of the discussion will form the

final position of the Russian Federation. Thus, public experts and

business representatives can participate in this process, and their

proposals will be fully reviewed and considered.

At the suggestion of Nurlan Shadibekovich on one of the video-

conferences, the working group as to the development of the draft

was created in the Russian Federation. It is headed by the Depu-

ty Minister of Economic Development of the Russian Federation

Vladimir Simonenko. The direct work on the draft in the Ministry

of Economic Development of the Russian Federation is carried out

by our Department headed by Natalia Igorеvna Larionovа.

This group includes, first of all, the Federal Authorities: FAS, Min-

istry of Justice, Ministry of Industry, FTS, Ministry of Energy, Min-

istry of Transport, Ministry of Communications and others, that is,


31

the widest possible range of the parties interested

in the rules and regulations to be included in this

Law. In addition, both public and expert orga-

nizations are well represented. These are all the

major federal associations of entrepreneurs and

consumers: Russian Union of Industrialists and

Entrepreneurs (RSPP), Chamber of Commerce

and Industry (CCI) “Business Russia”, “Support

of Russia”. The working group also includes ex-

pert organizations that have long been in contact

with the authorities and know the actual situation

in antitrust law: non-commercial partnerships

“Promoting Competition”, “Promoting Com-

petition in the CIS”, Non-profit Organization

“Agency for Strategic Initiatives to Promote New

Projects“(ASI), the Supervisory Board of which is

headed by Vladimir Vladimirovich Putin.

As for our current work, we can say the following.

Two meetings have already been held at which

a number of proposals was made, including the

ones similar to the proposals and blocks that have

already been announced here.

So, what was the initial situation? That is, how

was this draft formed and what did we start from?

This is our first meeting; we will have 4 meetings

in this format. First, I would like to thank Nur-

lan Shadibekovich for the organization of such

straight, public and most open debate. Our coun-

tries are large enough, the number of the interest-

ed parties from the business side is significant, as

well as from public authorities, and, of course, the

society is ultimate beneficiary of our joint efforts.

In the Russian Federation, the Republic of Belar-

us and the Republic of Kazakhstan, at the time of

the formation of the Common Economic Space,

certain regulatory framework in the field of com-

petition has been developed, which, as was not-

ed, has a number of similarities and differences.

It is only natural that in every country the anti-

trust laws were created, tuned up and improved

to reflect country specifics which were affected by

large number of factors.

In particular, it depended on what kind of the ac-

tual problems were faced by specific countries,

how economic relationships were formed there,

and, in the end, on the economic and geographi-

cal position, on industry structure, on the owner-

ship structure of big and medium-sized business-

es, and other factors.

Over 20 years already separate us from the Soviet

Union; it’s been a long way in terms of the laws

development. For example, the milestones on the

way of changes in the Republic of Kazakhstan, are

noted by years 1991, 2001, 2006, 2008. With that,

in 1998 special law regarding unfair competition

was adopted.

In the Russian Federation those are 1991, 2006

and the past few years, when three major antitrust

packages have been adopted that substantially

supplemented the regulatory framework, and still

there are a number of important additions that are

being discussed.

Concurrently, the set of regulations that form our

Welcoming address of the Governor of the Novosibirsk region

Vasily Yurchenko (from left to right: N. Aldabergenov, V. Yurch-

enko and I. Moroz)

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antimonopoly legislation had different structure.

If in the Republic of Kazakhstan and the Russian

Federation the provisions of law are mostly direct,

the Republic of Belarus has adopted the law of the

framework nature, and a substantial number of

concepts, regulations, definitions and methodol-

ogies are contained in instructions. For example,

such important concepts as the criteria for deter-

mining dominance, monopoly prices, the order of

considering applications on violation of antitrust

laws, and others, exist in the form of instructions.

At the same time, “monopoly” is the concept with

no nationality. Of course, during their develop-

ment the countries faced similar problems and

negative effects of monopolistic activities and un-

fair competition, therefore, the single core of the

regulations, concepts and definitions that are in-

cluded in the antimonopoly legislation, has been

formed.

This is one single platform, the basis on which

we form together the Model Law on Competi-

tion. Dominant position, monopolistically high/

low prices, prohibition on anti-competitive agree-

ments and concerted practices, prohibition of

abuse of dominant position, state control over

economic concentration, unfair competition, spe-

cific functions and powers of competition author-

ities, state and local preferences prohibition of the

actions by the state authorities limiting competi-

tion, this was the basis to build on.

Of course, different approaches to the regulation

of specific subjects of more or less details have

emerged in the countries; the key points were

formed and highlighted differently. We certainly

have a lot to learn, not only abroad, but also from

each other. A number of differences have been

outlined in the report of Nurlan Shadibekovich; I

would also like to point out a few features.

For example, it is the definition of the dominant

position where the thresholds are similar in the

Republic of Kazakhstan and the Russian Federa-

tion. In the Republic of Kazakhstan, they have

both “dominant” and “monopolistic” positions.

In the Russian Federation, there is no such dif-

ference. In the Republic of Belarus, there are dif-

ferent thresholds of the dominance for businesses

that produce consumer goods and for those who

produce goods for industrial purposes.

The important feature of the legislation of the Re-

public of Belarus and Kazakhstan is the definition

of monopsony price which does not exist in the

Russian Federation.

With overall similarity, there exists the specificity

of each of the countries in the procedure of deter-

mining monopolistically high prices. For example,

in the Russian Federation the dominant’s prices

are compared to the prices at comparable market,

and the second criterion is the excess of the price

over the amount of costs and profits needed for

the production and sales.

There is similar provision in the Republic of Ka-

zakhstan, but first they compare the dominant’s

prices to the maximum price of economic entity,

First Deputy Prime Minister of the Novosibirsk Region -

Minister for Economic Development of the Novosibirsk region

A. Strukov and Member of the College (Minister) for compe-

tition and antitrust regulation of the EEC N. Aldabergenov

(Novosibirsk)


33

that is not part in the group of persons with the

dominant, in the same market, the second crite-

rion being the same. And only then, if it is impos-

sible to compare prices in the same market, the

prices are compared with comparable market. In

the Republic of Belarus, the dominant’s price is

compared to the average level of prices for simi-

lar or substitute goods or profitability is analyzed,

and they have set specific quantitative criteria of

25%. That is, the price is monopolistically high,

if the dominant’s price exceeds the average price

level or the average profitability level by 25% or

more. In addition, in Belarus, there are qualitative

criteria. For example, in determining monopolis-

tically high prices, there is the concept of “hidden

price increase”, when, with constant price level,

the quality of goods lowers.

There is specificity regarding businesses agree-

ments that restrict competition. For example,

vertical agreements are not distinguished in the

legislation of Belarus and Kazakhstan. In the Rus-

sian Federation, there is the division of vertical

and horizontal agreements; the essential features

of these types of agreements are defined.

In the Republic of Kazakhstan and the Republic

of Belarus the rules relating to unfair competi-

tion are spelled out in more detail. In this part,

the Russian Federation has a much shorter list of

prohibited practices.

There are differences in the definition of state and

municipal preferences. In the Russian Federation

To provide in the Model Law on

Competition the possibility of issuing

warnings to economic entities upon

detecting the signs of unfair competition, as well as

to public law entities in case of the detection of the

signs of antitrust rules violations in actions (or inac-

tion) and acts.

Doctor of Economics, Professor,

Deputy Director of the Siberian

Management Institute, a branch

of RANHiGS

I. Knyazeva

Press conference of the Member of the College (Minister) for

competition and antitrust regulation of the Eurasian Economic

Commission N. Aldabergenov (Novosibirsk)

“

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the list is the most comprehensive. This concept

includes the provision of benefits or more favor-

able operating environment through the transfer

of property, privileges, guarantees and other ob-

jects of civil rights, to economic entity. In the Re-

public of Kazakhstan, the definition is narrower,

only property and (or) money transfer is provided

for. In the Republic of Belarus there is no such

definition.

As far as the functions and powers of the Compe-

tition Authority, the procedure of consideration

of the cases on violation of the antimonopoly leg-

islation are concerned, I will note that in the Rus-

sian Federation and the Republic of Kazakhstan

there are relevant, sufficiently detailed chapters in

the laws, whereas in the Republic of Belarus the

provisions are more of framework character.

There are a number of rules that are included in

the legislation of one country and are not included

in the legislation of other countries. For example,

in the Republic of Kazakhstan, there is the whole

separate detailed chapter on public participa-

tion in business activity and the interaction of the

Competition Authority with regulatory and law

enforcement agencies. Russia and Belarus have

no such regulation.

I will not list further differences, because our

main goal now is not to focus on this, but instead,

to come to common understanding. In this regard,

I would like to emphasize our vision of the work

in the current conditions taking into account the

specifics of the antimonopoly legislation of the

parties.

Any changes connected with the adoption of the

Model Law in the countries relate both to govern-

ment and business. For the government, it is not

only the adoption of necessary regulations, but its

possible restriction of the system of management

Competition may be viewed, on the

one hand, in statical aspect, that is, the

economic entities must eff ectively lim-

it the ability of each of them to unilaterally infl uence

the general conditions of the circulation of goods,

works and services in the commodity market. On

the other hand, the competition can be viewed in

dynamic aspect, as the procedure for identifying

new uses of the known resources and discovering

new ones.

PhD in Law, Assistant professor

of civil law in Novosibirsk National

Research State University

N. Chernus

“


35

and control. For business, it is both the organiza-

tion of its business processes and economic rela-

tions based on the existing rules, as well as certain

risks associated with the control of these rules.

These processes are quite complex and difficult.

Based on this, I would like to mention, in our

opinion, the main principle and the approach to

the evaluation of all proposals that are going to

emerge. We believe that the most important thing

is namely the respect for the existing regulations

of the legislation of the countries, in order that

our process does not lead to any negative conse-

quences within countries. This can be achieved

through the balanced use of both mandatory and

non-mandatory rules which will be included in

the Model Law on Competition.

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28–29 MARCH

ALMATY 2013

28–29 MARCH

THE SECOND

INTERNATIONAL


CONFERENCE ON


MODEL LAW

ON COMPETITION

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37

Kuandykov Bolatbek Bayanovich

Chairman of the Agency of the Republic

of Kazakhstan for Competition Protec-

tion

On conceptual directions

of forming Model Law on

Competition taking account

international experience

Dear conference participants!

Let me welcome the participants of the present conference and ex-

press my appreciation to the organizers, the Eurasian Economic

Commission, represented by the members of the College, Minister

for Competition Aldabergenov Nurlan Shadibekovich, and Kazakh

National University named after Al-Farabi, represented by the rec-

tor Mutanov Galimkar Mutanovich.

I would like to express special appreciation to Kairat Nematovich

for his interest in our event and the participation in the conference,

despite the workload and tight schedule.

Let me express our special gratitude to the Akim of our southern

capital Akhmetzhan Yesimov Smagulovich who also takes part in

the conference. His participation is particularly remarkable, as the

southern capital is the major business and financial center of Ka-

zakhstan.

As you know the development and the adoption of the Model Law

on Competition is provided for by the Agreement on common prin-

ciples and rules of competition.

In accordance with the Agreement, the model law is legislative act

of advisory nature aimed at the approximation of legal regulation

of economic relations in the field of competition policy.

As it was already mentioned, the draft Model Law on Competition

will be adopted by the Heads of the three states of the Customs

Union.

In this regard, despite the advisory nature of the Model law, the

harmonization of national antitrust laws in order to comply with its

provisions will be political by nature.

In order to make comprehensive and qualitative elaboration of the

draft in the Republic of Kazakhstan, the working group is com-

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posed of the representatives of government agen-

cies and business community.

The last conference in Novosibirsk and the meet-

ing in Moscow were attended by Members of the

Parliament of the Republic of Kazakhstan and

representatives of the state bodies of Kazakhstan,

particularly, the Competition Protection Agency,

the Agency for Regulation of Natural Monopo-

lies, the Ministry of Economy and Budget Plan-

ning, and representatives of the business commu-

nity.

In the course of these two events, we have made

the suggestions concerning a number of funda-

mental issues:

• the general principles of state price regula-

tion;

• the control on government involvement in

business activities;

• the functions and tasks of the antimonopoly

authority.

I would like to dwell on the last issue in more de-

tails.

Given that one of the most important objectives

of the Model Law on Competition is to strengthen

the role of competition authorities in the integra-

tion process, I believe that the purposes of the

antimonopoly authority should be set out of the

understanding of the tasks entrusted to the Au-

thority for the Protection of Competition and the

criteria for the evaluation of its activities, which

are to be focused on the protection of competition

by means of non-discrimination of the conditions

of access to commodity markets for more num-

ber of competing market players, but not on lower

prices for specific goods and the level of inflation.

Overall, national antitrust legislation of the three

States of the Customs Union are similar.

At the same time, there are some differences in the

systems of antitrust authority (jurisdiction), the

functions and powers in determining the amounts

of domination shares and others.

In this regard, we believe that the Model Law on

competition must take into account all peculiari-

ties of national legislation and incorporate all pro-

gressive standards of international antitrust law.

For example, the rules governing the participa-

tion of the state in business can be regarded as the

merit of the antimonopoly legislation of the Re-

public of Kazakhstan.

In particular, according to the Law of the Repub-

lic of Kazakhstan “On competition”, the state is

involved in business activity in order to address

the socio-economic objectives defined by the

needs of society and the state, in the following

cases:

From left to right: Rector of the Kazakh State National Uni-

versity named aft er Al-Farabi G.M. Mutanov, Member of the

Board (Minister) of Competition and Antitrust Regulation EEC

N.S. Aldabergenov, Chairman of the Council of the Eurasian

Economic Commission, Deputy Prime Minister of the Republic

of Kazakhstan K.N. Kelimbetov, Akim of Almaty A.S. Yesimov,

Chairman of the Agency of the Republic of Kazakhstan for

Protection of Competition B.B. Kuandikov (Almaty)


39

• the lack of any possibility to ensure national

security and state defense or to protect the in-

terests of society;

• the use of strategic facilities being in state

ownership;

• the availability of public demand for the pro-

duction of goods in the areas of social produc-

tion, in which competition is absent or under-

developed.

The creation of state-owned enterprises, legal

entities with state participation is subject to prior

consent of the antimonopoly body.

In addition, the Institute of Investigation is op-

erating in Kazakhstan, which is effective tool to

prevent and detect the violations of antitrust laws

(as opposed to Kazakhstan, inspections are car-

ried out in Russia and Belarus).

170 investigations have been conducted over the

past year, with the identification of violations of

antitrust laws. Most of the violations out of the

total number of investigations fall on the sphere

of other markets (33%) and fuel and energy sec-

tor (24%).

For example, the Agency has conducted the in-

vestigation on discriminatory access of the power

producing company “Eurasian Energy Corpora-

tion” (hereinafter – JSC) in respect of JSC “Ra-

khat” (domestic manufacturer of confectionery).

In the course of the investigation, it was found

that the JSC refused to supply electric power to

the JSC “Rakhat” due to the lack of spare capac-

ity, but further on it signed contracts for the sup-

ply of electricity with other consumers. These ac-

tions the JSC were qualified by the Agency as the

abuse of dominant position. In March this year,

the EEC Court has made the judgment to use pu-

nitive damages as to this fact with regard to the

above JSC.

In 2012 24 investigations were held with regard

to government authorities to whom anti-trust

measures were also applied.

We defined some paragraphs on the draft with the

direct participation of the representatives of Ka-

zakhstan business community. They refer to the

need to extend the positive experience of the Law

of the Republic of Kazakhstan “On Competition”

on the issues of the shares of domination and eco-

nomic concentration.

Talking about the positive features of Kazakh-

stan’s competition law, we cannot overlook the

recent developments in the field of competition

law which took place just a few days before the

start of our conference.

We are talking about the amendments to the Law

“On Competition” which came into effect on

March 24, 2013, and are aimed at harmonizing

the antitrust laws of the Customs Union, as well

as reducing the overall burden on business.

Th e representatives of the authorized bodies of the Member

States of the Common Economic Space (Almaty)

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First, these amendments are aimed at simplify-

ing and reducing paper formalities for business:

increasing the threshold value of the recognition

of market group of people from 25% to 50% of

shares (share ownership); notification procedure

is introduced for the two types of transactions of

economic concentration; the threshold values as

to the cumulative volumes for the sales of goods

are increased fivefold at which the transaction is

qualified as economic concentration.

Second, a number of exemptions from the existing

restrictions were set for the dominant subjects, in

case of the products sales through commodity ex-

change. The price formed at the stock exchange,

in accordance with the Rules of Exchange Trade

as set by the law, will not be considered exclusive-

ly monopolistically high.

Third, the persons authorized to perform state

functions, and the persons equated with them, as

well as local executive bodies, will also be respon-

sible for anti-competitive actions.

Fourth, the mechanisms for the regulation of the

legal proceedings in the investigation are im-

proved, that is, the procedure of the preliminary

examination of information about the violations

of antitrust laws is excluded.

Besides, I think it necessary to discuss the issue

of optimization of the procedures for granting the

consent for economic concentration in the sec-

tional part of the conference. We are all aware that

the procedures for granting consent takes very

long time, which can have negative impact on the

activity of our market participants. Therefore, I

propose to discuss the possibility of simplifying

the procedures.

I am sure that these innovations in antitrust leg-

islation will exercise a salutary influence on the

process of doing business.

The Federal Law of the Russian Federation “On

the Protection of Competition” arouse great in-

terest, particularly, as the concepts of warning,

disqualification of the official and monitoring the

compliance of the procurement rules.

The essence of the concept of warning is that the

person will not be brought to responsibility with-

out warning.

The introduction of the concept of “disqualifica-

tion of the official” as kind of responsibility is also

attractive and requires more attention.

The criminal legislation of Kazakhstan also pro-

vides for such additional responsibility as “depri-

vation of right to hold specific posts”.

However, this kind of punishment is not provided

for in the administrative legislation.

From left to right: Director of the Department of Competi-

tion Policy and Public Procurement EEC N.B. Slyusar, Deputy

Director of the Department of Small-Sized and Medium-Sized

Enterprises and Competition of the Russian Ministry for Eco-

nomic Development K.Y. Emelyanov and Deputy Head of the

Legal Department of the Federal Antimonopoly Service D.A.

Gavrilov (Almaty)


41

In 2012 the Agency Board decided to initiate 208

administrative proceedings (under Article 147

of the Administrative Code – 154, under Article

147–4 of the Administrative Code – 54).

Since the beginning of 2012, the Agency and the

territorial units have issued 77 orders for the vio-

lations of antitrust laws (12 of them as issued to

the State authority, 65 of them as issued to mar-

ket entities).

The issue of exercising the control over the com-

pliance of procurement rules by competition au-

thorities is also noteworthy, since these problems

are directly related to competition restriction. It

should be borne in mind that the procurement

should be influenced by the competition author-

ity only to the extent of anti-competitive actions

relating to the restriction or elimination of com-

petition. The practice of these complaints shows

that most of the disorders are associated with the

establishment in tender documentation require-

ments precluding competitiveness among the

participants in the procurement and the attempts

to drive these requirements to the wishes of some

certain suppliers.

It is also important to decide whether it is expedi-

ent for the national antimonopoly authorities to

keep the Register of the dominants subjects in the

conditions of the Common Economic Space.

In particular, under the conditions of free move-

ment of goods and the lack of boundaries the is-

sue is whether it is expedient to keep separate na-

tional Registers or it is better to transform them

into the tools of antimonopoly policy.

The main work of the Antimonopoly bodies is

based on the analysis of commodity markets, the

results of which give evidence of the condition

and the level of competition, help to identify the

subjects of the dominant/monopoly, as well as

the possible signs of violations of antitrust laws,

the barriers for competition development. As a

result of this activity, a set of measures aimed at

protecting and promoting competition, prevent-

ing and suppressing monopolistic activity is being

developed.

The main criterion for the analysis on a given mar-

ket is the social significance of this market. The

selection of commodity markets by the competi-

tion authority for the analysis is carried out on

general criteria (social importance of the product,

complaints, appeals of individuals and/or legal

entities, media publications, violations of anti-

trust laws, reorganization of the market through

merger or acquisition, changes in the composition

of market participants, the market share of the

subject, market conditions) and specific criteria.

One of the key elements of the analysis is the iden-

tification of the geographical boundaries of the

relevant product market which are determined by

taking into account the off-the-shelf availability

of goods.

In this regard, the work on the analysis of com-

modity markets would be much more effective if it

was carried out simultaneously in the territory of

other member-States of the Customs Union.

Active and fruitful interstate cooperation on com-

petition issues will result in equal and non-dis-

criminatory access of the entities to the market.

I believe this new conceptual approach, where the

main focus will not be only on price regulation

of markets, will help to develop competition and

provide markets with lower-cost and high-quality

goods.

I hope that most of the aforementioned issues

will be addressed during the sectional work of the

conference.

For these purposes, we have invited the leaders of

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our regional offices to take part in the conference

and its sectional part and to share experiences,

problems and proposals.

It should be noted that the work on the improve-

ment of the draft continues. We study all coming

proposals with great interest.

Another innovation that is offered by the authors

of the draft come under notice. It refers to the

complex and far-reaching issue of consumer pro-

tection.

I would like to note that on this issue the Agency

initiated the development of the draft law on the

protection of consumer rights. The concept of

the draft law was discussed at the Coordination

Council for the Protection of Consumer Rights.

Currently, the development of the draft law is pro-

vided for in the Plan of Legislative Work of the

Government in 2013, with the time of its submis-

sion to the Government being in April, and to the

Parliament in June, 2013.

It should be mentioned that the draft law is de-

signed to meet the President’s instructions on the

development of entrepreneurship as given at the

meeting held on June 22, 2012.

Particularly, the Head of the state remarked that

all the work of the government and business

should be viewed through the lense of the inter-

ests of consumers and the protection of consumer

rights.

In general, the draft law affects a large set of is-

sues related to the activities of various govern-

ment agencies, ministries of agriculture, health

and other bodies. Therefore, these issues require

mutual coordination between government agen-

cies.

I had to give the detailed information on this in-

novation of the draft law in order to let you know

that each new item, each new regulation will be

viewed through the lense of the institutional rela-

tions among state authorities.

The draft contains the rules on which the state

authorities concerned have different points of

view.

For example, in the matters as to the antitrust

regulation of natural monopolies subjects and the

keeping of the register of dominants, the opinions

of antimonopoly authority and the tariff regula-

tion authority are directly opposite.

Therefore I take this opportunity to offer some of

our suggestions to the developers of the draft law.

First, the exchange of views at such events would

be much more effective, if the parties had the op-

portunity to be aware of the new proposals which

are included in the draft or are proposed for dis-

cussion. Such approach would enable the par-

ties to determine its position in advance as to the

proposed issue. Thus, the draft would include the

standards that have been developed and main-

tained by the Parties.

The second suggestion refers to the issue of the

application of international advanced experience

while implementing the draft Model Law. I be-

lieve that in this regard it will be very useful, if

the authors of the innovations send all the sub-

stantiations and the information taken from the

advanced practices of the third countries to the

Parties.

Next, we should avoid the use of such rules and

concepts in the draft that affect the sovereign

rights and interests of the Parties. In my opinion,

such concepts as “supranational body” and, all

the more so, the regulation of its legal status, is

not subject to regulation by the draft law. Even if

there is the need for such bodies, I think that the


43

respective decisions should be made at a higher

level.

Dear participants and colleagues! Let me describe

in a few words the tasks that we are going to solve

in the short term; that might be useful for the au-

thors of the draft while they upgrade the provi-

sions of the Model Law on Competition.

First, we will continue to reduce unnecessary gov-

ernment involvement in business and expect to

continue it within the framework of the program

currently being implemented under the commis-

sion of the Head of the State. This is the necessary

condition for the development of domestic busi-

ness.

The state should be involved in business activi-

ties only in the case of national security, in stra-

tegic sectors, as well as in the industries in which

the private sector is not able to produce enough

quantity of the goods, works and services.

Despite this, now there are a lot companies with

state participation engaged in the provision of

services (production of goods) widely represent-

ed in the competitive environment. Therefore, the

timely implementation of the above commission

will be one of the most effective measures to en-

courage small-sized and medium-sized business-

es.

Second, at the suggestion of the Agency it was

decided to hold round-table meeting on a topic

“Development of the economy through the lense

of fair competition” on May 24, 2013, within the

framework of the ongoing VI Astana Economic

Forum.

The level of professionalism of the participants

and the information awareness on major trends

in competition matters are also confirmed by the

expected composition of participants. Thus, Igor

Artemyev, Head of the Federal Antimonopoly

Service of Russia, agreed to address the meeting

as the moderator of the session. In addition, the

competition authorities of Ukraine, Latvia, the

European Union, Azerbaijan, Japan, India, Ro-

mania and Turkey confirmed their participation.

Also, the representatives of international organi-

zations (UNCTAD, EBRD, WTO), business en-

vironment (Metro Cash & Carry (Franz M ller),

public figures and John Nash, the well-known

Nobel Prize winner who won the recognition for

his “game theory”, were invited to participate in

the event.

Let me take this opportunity to invite all of you to

our round table which will be held in the form of

discussion, where speakers and participants will

be able to express their points of view.

I want to note that we are open to the advanced

experience and proven practices of other coun-

tries, and we are ready to discuss new materials, if

they are useful for our common goal.

I am sure we all are ready to conduct common

policy on all issues while developing our draft.

In conclusion, I wish to express confidence that

the conference will provide the opportunity to

find the right answers to the many issues of anti-

trust policy in our countries.

Dear guests, as you know, Kazakhstan is famous

for its hospitality! Our guests today are the repre-

sentatives of our friendly countries, the Russian

Federation and the Republic of Belarus! I want to

take this opportunity to urge you not only to find

the time for fruitful work, but also to enjoy the

sites of our southern capital!

I wish you success.

Thank you!

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Commission

442013

28–29 March 2013, Almaty


45

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KAZAN

4–5 APRIL

KAZAN 2013

4–5 APRIL

THE THIRD INTERNATIONAL


CONFERENCE ON


MODEL LAW

ON COMPETITION

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47

General rules of regulation of the

activity of natural monopolies

subjects should be included in the

Model Law on Competition.

Th e Deputy Head of FAS of Russia

A. Golomolzin

“

To achieve the objectives indicated in

the preamble of the draft of the Model

Law on Competition, it is necessary to

come to common legal regulation of the activities of

fi nancial institutions.Th e Head of antitrust legal team

Yakovlev and Partners”

E. Leonenkova

“

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Th e main task of the development

of competition in the Republic of

Tatarstan is aimed at enhancing the

processes as to the promotion of the producers

from Tatarstan to foreign markets, as well as the

integration with leading foreign companies.

First deputy Minister of Industry and

Trade of the Republic of Tatarstan

R. Kabirov

“

It is necessary to identify the grounds

and conditions of civil liability,

as well as the forms of civil liability,

in the Model Law.

Head of the department of Civil Rights

of “Russian Academy of Justice”, the

candidate of Legal Sciences, docent

R. Zakirov

“

Business should increase cooperation

with the EEC, with the antimonopoly

authorities of the Member States in

the fi eld of protection of competition, intellectual

property, etc.Association of European Businesses

M. Limonnikova

“


49

Legal mechanism of protection from

unfair competition is a key legal

mechanism of the protection of

exclusive rights in the sphere of market relations.

Deputy Head of the Legal Department

of the FAS of Russia

D. Gavrilov

“

Th e practice of EurAsEC Court is

of the determining value for the

regulation of competition, not only in

terms of cross-border markets, but also in the aspect

of application of norms of the national legislation,

the foundations of which are fi xed in the Model Law

on Competition.

Assistant to the judge of the Court

of EurAsEC, representative of

the Department of international law

of the Russian Academy of Justice

E. Diachenko

“

Th e legislation on the protection of

competition of the Customs Union

will be much more eff ective in case of

the adoption of Unifi ed Antimonopoly Code.

Candidate of Legal Sciences, docent of

the Department of civil and business law

A. Mikhailov

“

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MINSK

25–26 APRIL

MINSK 2013

25–26 APRIL

THE FOURTH

INTERNATIONAL RESEARCH

AND PRACTICE

CONFERENCE ON


MODEL LAW ON

COMPETITION

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Rumas Sergey Nikolaevich Representative of the Republic of Belarus

in the Council of the Eurasian Economic

Commission, Deputy Prime Minister of

Belarus on the activities of the Republic

of Belarus in the framework of the Union

State and the Customs Union and the

Common Economic Space, the Common-

wealth of Independent States, the Eur-

asian Economic Community, as well as

the formation of the Eurasian Economic

Union, National Coordinator of Belarus

on the Commonwealth of Independent

States, Chairman of the Board of the JSC

“Development Bank of the Republic of

Belarus”

To the organizers and

participants of International

research and practice conference

dedicated to the discussion of the

Model Law on Competition

Dear friends and colleagues!

I greet you on Belarusian soil, within the walls of the Academy of

Management affiliated with the President of the Republic of Belar-

us and congratulate on the occasion of the beginning of the fourth

international research and practice conference dedicated to the dis-

cussion of the Model Law on competition.

Under the arches of one of the leading economic universities of the

country, I suggest to set the tone for the upcoming substantive dis-

cussions on the provisions of the Model Law in the spirit of the idea

of the classic economic theory of Adam Smith, who formulated his

principle of “invisible hand of the market” through the mechanism

of competition.

Competition is the main element of any successful economy, its

cornerstone. Economic development and growth in prosperity of

society is based on competition.

It may be no accident that harmonization of legislation is conduct-

ed, among the first, in the field of competition and antitrust law of

the Member States of the Customs Union and the Common Eco-

nomic Space.

The need to develop Model Law is defined by the Agreement on

common principles and rules of competition as of December 9,

2010.

The Model Law is based on advanced international practices, in-

cluding the experience of our countries, the European Union,

OECD, UNCTAD and others. I can say with certainty that there

is not a single successful economy in the world, whose experience

would not have been studied by the developers in the course of the

preparation of the draft law.

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For the first time in the practice of legislative ac-

tivity, the draft law is being considered in such

a detailed way at different levels, at the level of

government bodies, scientific circle, the general

public and businesses. Such approach will help to

take into account the interests of all economic en-

tities in a balanced way.

It is noteworthy that the draft law comprehensive-

ly regulates all matters arising in the competitive

markets and contributing to the development and

protection of competition. Not only the illegal

actions that restrict competition are regulated in

details, but we can find the description of the ac-

tions that do not disrupt competition. The prin-

ciples for the activities of the antimonopoly body

and the regulations necessary for its work are set.

As advanced practice, the provisions are retained

in the draft law stating that the actions restricting

competition are not allowed on the part of busi-

ness entities, as well as the government bodies.

Prepared under the coordination of the Eurasian

Economic Commission, the draft legislative act is

actively discussed in the CES member-countries,

Belarus, Russia and Kazakhstan. Three similar

international conferences have already been con-

ducted in Russia and in Kazakhstan.

I am confident that the forthcoming discussions

will result in the constructive solutions that will

allow to improve the content of the Model Law.

I wish fruitful work to the participants of the con-

ference.


53

Kurilchik Alexander Feodorovich

Acting Director of the Department for

antitrust regulation of the Eurasian Eco-

nomic Commission

Changes in antimonopoly policy in

the Republic of Belarus

through the lense of integration

in the Common Economic Space

Recent decades have been characterized by the

interest in regional integration. Today the significant

part of world trade is performed within the existing

trade blocs, and most of the countries of the world

are the members of one or more agreements on re-

gional integration.

On January 1, 2012, is formed the Common Economic Space (CES)

of the three countries, Belarus, Russia and Kazakhstan, was formed,

which was the important step in the development and strengthen-

ing of economic interaction of the above countries. The purpose of

the integration is to create the conditions for the sustainable and

effective development of national economies and to improve liv-

ing standards. The freedom of movement of goods, services, capital

and labor resources across the borders of the member- countries

can be emphasized as one of the key principles of the CES.

The expediency of integration has already been confirmed in practice.

The statistics of foreign and mutual trade of the member states of the

CES shows its growth. The volume of mutual trade for 2012 between

the Russian Federation and the Republic of Belarus amounted to

$ 43.9 billion, the increase being 9.6%, between the Republic of Be-

larus and the Republic of Kazakhstan – to $ 0.9 billion, the increase

being 15.1%, between the Russian Federation and the Republic of

Kazakhstan – to $ 23.8 billion , the increase being 6.8% As com-

pared to January-December 2011, the export of goods from the Re-

public of Belarus to the Republic of Kazakhstan increased by 19.6%

to the Russian Federation – by 12.2%, out of those, the growth of

export as to chemical industry products to the Republic of Kazakh-

stan amounted to 18.1%, to the Russian Federation – to 18.5%,

in terms of machinery, equipment and vehicles, the export to the Re-

public of Kazakhstan increased by 36.7%, in terms of food products,

the export growth to the Russian Federation amounted to 22%.

Let me note that, out of the three countries, the Republic of Belarus

is oriented to the market of the Customs Union to the maximum ex-

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tent. In addition, the growth of the relative share

of bilateral trade in total foreign trade of the Re-

public of Belarus from 46.8% to 48.4% can be ob-

served in 2012, as compared to 2011.

Among the benefits that are gained by Belarusian

economic entities with the entry into the Com-

mon Economic Space one can distinguish the

free access of Belarusian goods to the markets of

Kazakhstan and Russia (the possibility of selling

goods in the market that embraces nearly 170 mil-

lion people) and the price of energy utilities.

Today Eurasian economic integration moved to a

whole new level.

With the formation of the Common Economic

Space of the Republic of Belarus, the Republic

of Kazakhstan and the Russian Federation, 17

agreements among the member-states of the CES

entered into force which provide for phased re-

duction of economic policy to unitary standards.

One of the agreements, which will have an impact

on the macroeconomic in the Republic of Belarus,

is the Agreement on common principles and rules

of competition as of December 9, 2010. The pro-

visions of the agreements are aimed at identifying

and curbing anti-competitive behavior on the ter-

ritory of the Member States of the CES in order

to implement uniform competition policy, to es-

tablish the uniform rules of competition and ulti-

mately, to increase the level of competition within

the CES. In accordance with the Agreement, a

number of powers will be gradually transferred

to the supranational body (Eurasian Economic

Commission) from the national bodies in the

cross-border markets, particularly, in such areas

as unfair competition, cartels, abuse of dominant

position. In turn, the antimonopoly authorities

of the Member States of the CES are intended to

protect the competition based on such principles

as legality, competitiveness, integrity and respect

of the rights of consumers. As to the key positions

are concerned, the Eurasian Economic Commis-

sion is the first structure of such unprecedented

level on the post-Soviet space.

In 2012, harsher punishment for the violations

of antimonopoly legislation and the development

of the draft Law of the Republic of Belarus “On

amendments and additions to the Law of the Re-

public of Belarus “On counteraction to monopo-

listic activity and development of competition”

providing for the presentation of antitrust law in

new edition can be regarded as the most signifi-

cant events in the anti-monopolization sphere of

the Republic of Belarus.

By the provisions of the Presidential Decree No

114 as of March 6, 2012, turnover-based fines,

liability of legal persons and direct-action sanc-

tions for the abuse of dominant position, anti-

competitive agreements (concerted actions),

unfair competition among business entities have

been introduced.

The right to conduct unscheduled inspections,

as well as the right to consider cases on admin-

istrative violations in the field of antitrust law, is

granted to antimonopoly authority.

The draft law of the Republic of Belarus “On amend-

ments and additions to the Law of the Republic of

Belarus “On counteraction to monopolistic activity

and the development of competition” is being un-

der consideration in the Parliament of the Republic

of Belarus, which, in accordance with the Agree-

ment on common principles and rules of competi-

tion and international practice, provides for:

• Bringing up to date:

– the spheres of the application of antitrust law

(now, the current provisions of antitrust law

does not allow fully to implement to the full

extent the functions of counteraction to the

monopolistic activity and the development of

competition in the financial services markets);


55

– the approaches of antitrust authorities to

the control over economic concentration (the

simplification of the procedure as to obtaining

the consent of antimonopoly body is suggest-

ed, as well as the establishment of the thresh-

old values during the transactions on the eco-

nomic concentration);

• the introduction of prohibition criteria with

regard to vertical agreements, co-ordination

of economic activity, state preferences and

discriminatory conditions, and so on.

Within the context of the work of the Eurasian

Economic Commission on the draft Model Law

on Competition, I would like to express my opin-

ion on the necessity to include into the Draft the

better rules of the antimonopoly legislation and

enforcement practice of the Republic of Belarus.

The activity of antitrust authorities in the field of

unfair competition is the most advanced one in

the Republic of Belarus. The sessions of the Su-

preme Court of the Republic of Belarus held over

the past years (2010 to 2012) have positive ten-

dency (the antimonopoly body of the Republic

of Belarus has not had any lost suits as to unfair

competition); for example, in 2011, 8 meetings

of the court sessions resulted in 8 won suits. This

has been achieved, among other things, thanks

to the availability of the broad list as to the forms

of unfair competition directly indicated in antitrust

law. In Belarus, the following actions are particu-

larly associated with unfair competition:

• allegations during the entrepreneurship activ-

ity that may discredit the economic entity, the

goods or business activity of the competitor,

among other things, as the result of:

– dissemination of false statements, misrep-

resentations, false information by the eco-

nomic entity, directly or through other per-

sons in mass media, promotional and other

editions through any electronic media and

other means, as to the entrepreneurial activ-

ity, financial status, scientific-technical and

production capabilities and the products of

the competitor;

– dissemination of statements containing the

information that discredits the business repu-

tation of the economic entity or its founder

(the participant, the property owner) or the

employee, and can undermine the credibility

of the business entity as manufacturer of the

goods, by the economic entity, either directly

or through other persons, in any form and by

any means;

• appeals to other economic entities, other ac-

tions or threat of action on the part of busi-

ness entity, directly or through others, aimed

at boycotting or obstructing the entrepreneur-

ship activity of the competitor acting in the

given market or aspiring to enter it;

• the action of economic entity, directly or

through others, aimed at precluding the for-

mation of business ties of the competitor

for their further disruption or cancellation,

among other things, for the purposes of en-

tering into business relations with his busi-

ness partner;

• the action of economic entity, directly or

through others, aimed at internal disorganiza-

tion of entrepreneural activity of the competi-

tor and (or) its business partner, including the

receipt, use, disclosure, inducement to the dis-

closure of information being the commercial

secret of the competitor, without his consent,

or providing various property and other ben-

efits to the competitor’s employees in order

to induce these workers to the fail to perform

their employment duties or to change over to

the work suggesting such benefits;

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• illegal use by economic entity of the trade

name, trade mark (service mark) that is not

owned by him, appellation of origin on goods,

packaging, signboards, while displaying ex-

hibits at exhibitions and fairs, in advertising

materials, publications and other documents;

• illegal copying of the exterior of the goods of

other economic entity, except for the cases

when the copying of the product or its parts

(components, parts) is conditioned exclusive-

ly by their technical application;

• introduction of the goods of other economic

entity into civil circulation using the proper

means of product appropriation, unless oth-

erwise provided for by the contract concluded

between economic entities.

It seems advisable to expand the block containing

the forms of unfair competition in the draft Model

Law on Competition taking into account the best

practices and legislation.

I think that the rule of disqualification in respect

of the officials of economic entities that materially

breach antitrust laws should also be reflected in

the draft Model Law on Competition.

For example, the Criminal Code of the Republic

of Belarus provides for the deprivation of right to

hold specific posts or engage in specified activity:

• for the establishment or support of monopo-

listic prices;

• for the conclusion and execution of agree-

ments as to the division of markets, or the

elimination of competitors from the markets;

• for the illegal use of the competitor’s business

reputation;

• avoidance of fulfilling the orders of antitrust au-

thorities, or improper or untimely performance

of them, or failure to provide the information to

these authorities necessary for the antitrust au-

thorities to carry out their functions, or provi-

sion of knowingly false data, committed within

one year after the imposition of an administra-

tive penalty.

Assistant Professor of Regional Devel-

opment Management Department,

Academy of Public Administration under

the President of the Republic of Belarus,

Ph.D. in Engineering

V. Arsenov

Head of Department of Educational

Establishment “Gomel State Technical

University named aft er P.O. Sukhoi”,

Ph.D. in Economics, Assistant Professor

N. Dragun

Assistant Professor of Civil Law, Belaru-

sian State University

S. Yermakovich


57

Senior Lecturer, Department of Interna-

tional Law of the Russian Academy of

Justice, Senior Researcher at the Institute

of Legislation and Comparative Law

under the Government of the Russian

Federation, Ph.D. in Law

E. Rafalyuk

Deputy Dean of High School of Business

and Management Faculty, Belarusian

State Economic University, Ph.D. in

Economics, Assistant Professor

V. Bakunchik

Head of International Business Depart-

ment of Belarusian State Economic

University; Ph.D. in Economics, Assistant

Professor

G. Turban

Assistant Professor of Agro-business of

Belarusian State Agricultural Academy,

PhD in Economics

A. Timaev

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CHAPTER II

REGULATORY LEGAL

ACTS ON CONTROL

OVER THE

OBSERVANCE

OF COMMON RULES

OF COMPETITION


59

1. The present criteria have been developed on

the basis of Item 3 Article 1 of the Agreement on

Common Principles and Rules of Competition

as of December 9, 2010 (hereinafter referred to

as the Agreement), and, in accordance with Ar-

ticle 15 of the Agreement, they will apply for the

purposes of determining the competences of the

Eurasian Economic Commission in restraining

violations committed by economic entities of the

Member States of the Customs Union and The

Common Economic Space (hereinafter referred

to as Parties).

2. In order to apply common rules on competi-

tion specified in Section III of the Agreement, a

market shall be assigned to the category of cross-

border markets, if the geographic boundaries of

the market embrace the territory of two or more

Parties.

3. The restraining of violations as to the prohi-

bitions specified in Article 13 of the Agreement

committed by economic entities (market entities)

of the Parties1, is carried out by the Eurasian Eco-

nomic Commission, subject to the following con-

dition:

• the economic entity whose actions violate the

prohibition and the competitor (competitors)

entity (entities) who is (are) or is likely to be

harmed, or whose business reputation is likely

to be damaged as a result of these actions, are

registered in the territory of different Parties.

4. The restraining of violations by economic enti-

ties (market subjects) of the Parties as to the pro-

hibitions specified in Article 10 of the Agreement

is carried out by the the Eurasian Economic Com-

mission, subject to the following condition:

• at least two economic entities (market enti-

ties) whose actions lead or may lead to the

violation of the prohibition, are registered in

the territory of different Parties.

5. The restraining of violations by economic enti-

ties (market entities) of the Parties as to the pro-

hibitions specified in Article 12 of the Agreement

is carried out by the Eurasian Economic Com-

mission, subject to the following conditions as a

whole:

• the share of the sales volume or purchases is

not less than 35 percent as to the total volume

of goods circulating in the territory of each

of the Parties affected by the violation, with

regard to the economic entity whose actions

lead to the violation of the set prohibition and

who has dominant position on the market

corresponding to the criteria specified in item

2 of the present criteria;

• the violation of the prohibition leads or may

lead to prevention, restriction or elimination

of competition in the market of goods cor-

responding to the criteria specified in item 2

of the present criteria, or infringement upon

other entities’ interests in the territory of two

Parties or more;

or

• the combined share of the sales volume or

purchases is, for no more than three economic

Criteria for Assigning the Market

to the Category of Cross-border Markets

ADOPTED

by the Decision of the

Eurasian Economic Supreme Council

December 19, 2012 No. 29

1 Provision of these criteria related to economic entities (market entities) refer to a groups of persons as well.

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entities (market entities), not less than 50

percent, or, no more than for four business

entities (market entities), not less than 70 per-

cent as to the volume of commodities circulat-

ing in the territory of each Party affected by

the violation, with regard to several economic

entities, each of those having dominant posi-

tion in the market corresponding to the crite-

ria specified in item 2 of the present criteria,

whose actions lead to the violation of the set

prohibition (this provision does not apply, if

the share of at least one of the indicated enti-

ties is less than 15 percent in the territory of

each of the Parties);

• over a long period (the period of no less than

one year, or, if such period is less than one year,

over the period of the existence of the corre-

sponding market of goods), the relative share

volumes of economic entities are unchanged

or are subject to insignificant changes, where-

as the access to the corresponding market of

goods for new competitors is impeded;

• the goods sold or purchased by economic en-

tities cannot be replaced with other goods in

the process of consumption (including the

consumption for industrial purposes), the

growth of prices for the goods does not con-

dition the lessening of demand for the goods

corresponding to such growth, the informa-

tion as to price, the terms of sales or purchase

of the goods at the corresponding market of

goods is available to indefinite range of per-

sons;

• the violation of the prohibition leads or may

lead to prevention, restriction or elimination

of competition in the market of goods corre-

sponding to the criteria specified in item 2 of

these criteria, or infringement upon other en-

tities’ interests in the territory of two Parties

or more.

6. The present criteria are applied to subjects of

natural monopolies, with due account of the pe-

culiarities specified in the agreements of the Par-

ties related to natural monopolies, among others,

in sectorial (industrial) agreements.


61

I. General Provisions

1. These Procedures were developed under sub-

paragraph 8 of paragraph 1 of Article 29 of the

Agreement on Common Principles and Rules of

Competition (December 9, 2010) (hereinafter –

Agreement) and is used at the interaction of

the Eurasian Economic Commission (hereinaf-

ter – Commission) and the authorized bodies of

the Customs Union and the Common Economic

Space (hereinafter – the Party).

2. These Procedures define the mechanism of in-

teraction of the Commission and the authorized

bodies of the Parties, both before the transfer to

the Commission of the powers to control the com-

pliance of Common Rules of Competition estab-

lished in section III of the Agreement on cross-

border markets in the territory of more than two

Parties (hereinafter – the Competition rules) by

economic entities (market participants) of the

Parties, and after the transfer of the said powers.

3. The interaction of the Commission with the au-

thorized bodies of the Parties is carried out:

1) under the supervision of the Commission for

enforcement of the competition rules by the au-

thorized bodies of the Parties;

2) when the authorized bodies of the Parties make

the decision to transfer the applications (materi-

als) concerning the infringement upon the com-

petition rules (hereinafter – application) to the

Commission;

3) when the Commission takes a decision to trans-

fer to the authorized bodies of the Parties the ap-

plications for consideration;

4) when the Commission investigates the viola-

tions of competition rules;

5) when the Commission examines the cases of

violation of competition rules.

4. The interaction of the Commission and the au-

thorized bodies of the Parties may be carried out

in other forms provided for by Section VIII of this

Procedure.

II. Interaction in the control by the Commission

over the compliance of the authorized bodies of

the Parties with competition rules

5. Prior to the transfer of powers of the Parties to

the Commission to monitor the compliance with

the competition rules by economic entities (mar-

ket participants) of the Parties, the responsible

structural unit of the Commission from among

the departments whose work is supervised by the

member of the Board ensuring the implementation

of the Commission’s functions in the areas of com-

petition and antitrust regulation (hereinafter –

the responsible department), performs monitor-

PROCEDURES

for Information Exchange and other Interaction be-

tween the Eurasian Economic Commission and the

Authorized Bodies of the Member-States of the Cus-

toms Union and the Common Economic Space under

the Agreement on Common Principles and Rules of

Competition as of December 9, 2010

ADOPTED

by the Decision of the Eurasian

Economic Commission Council

November 23, 2012 No. 96

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ing with the view to ensure the compliance with

the competition rules on the part of the autho-

rized bodies of the Parties.

As part of monitoring, the authorized bodies of

the Parties send to the Commission the copies of

the decisions to initiate the proceedings on the

violation of competition (antitrust) law, in case:

1) the applicant and (or) the person, in respect

of which the application has been filed, is operat-

ing on the territory of two or more Parties of the

Agreement;

2) the information is available in the applications

regarding the violation of the rules of competition

in the territory of two or more Parties.

6. The copies of the decisions referred to in para-

graph 5 of this Procedure shall be sent by the au-

thorized bodies of the Parties to the Commission

no later than in 10 calendar days from the date

when the decision was made, accompanied by the

statements which gave occasion to such decision.

7. The member of the Board ensuring the imple-

mentation of the Commission functions in the ar-

eas of competition and antitrust regulation (here-

inafter – the member of the Board) has the right

to submit requests to the authorized bodies of the

Parties to analyze their decisions on the violations

of competition (antitrust) law.

8. The request shall contain:

1) the purpose of the request;

2) the list of information required for the submis-

sion to the Commission;

3) the deadline for the submission of information,

but no less than in 5 working days from the date

of receipt of the request and no more than the pe-

riod specified by the Regulations of the Eurasian

Economic Commission approved by the decision

of the Supreme Eurasian Economic Council as of

November 18, 2011 No. 1.

The information received will be analyzed by the

staff of the responsible department and forwarded

under the signature of the member of the Board

for the attention of the authorized bodies of the

Parties.

III. The interaction of the authorized bodies of

the Parties when making the decisions to transfer

applications for the consideration by the Com-

mission

9. The decision to transfer for the consideration

by the Commission of the application is made by

the authorized body of the Party at all stages of its

review carried out with due regard to the pecu-

liarities of the legislation of the Party.

When making this decision, the authorized body

of the Party shall prepare the appropriate written

request to the Commission.


1) the name of the body that sent the request;

2) the name of economic entity (market partici-

pant), the actions of which showed the signs of

the violation as to competition rules;

3) the description of the action (or inaction) that

contain the signs of violation as to competition

rules;

4) the boundaries of the market which showed

the signs of violation;

5) the rules of the Agreement which, in the opin-

ion of the authorized body of the Party, have been

violated.

11. The request is accompanied by documents

that, upon consideration, showed, in the opin-

ion of the authorized body of the Party the

signs of signs of the violation as to competition

rules.

12. The forwarding of the request to the Com-

mission by the authorized body of the Party, as


63

set forth in paragraphs 10 and 11 of the present

Procedures shall be the basis for the suspension

of the application by the authorized body of the

Party, until the member of the College renders the

decision on holding the investigation of the vio-

lations as to the rules of competition, or on the

transfer of the application according to jurisdic-

tion to the authorized bodies, or on the return of

the application, as provided for by the procedure

for reviewing applications (materials) as to the

violation of the competition rules.

13. The authorized body of the Party shall inform

the applicant of the transfer of his application to

the Commission within 5 working days from the

date of its forwarding to the Commission.

14. Within the period not exceeding five work-

ing days from the date of receipt of the applica-

tion, the member of the College shall notify the

authorized bodies of the Parties and the applicant

about the acceptance of the application for con-

sideration by covering letter.

15. The rendering of the decision by the member

of the College on holding the investigation of the

violations as to the rules of competition or on the

transfer of the application according to jurisdic-

tion to the authorized bodies, as envisaged by the

procedure for reviewing applications (materials)

as to the violation of the competition rules, con-

stitute grounds for the termination of the applica-

tion consideration by the authorized body of the

Party.

IV. Interaction at the Commission’s decision to

transfer applications for consideration to the au-

thorized bodies of the Parties

16. The decision to transfer the application from

the Commission to the authorized body of the

Party can be made at any stage of its review, if

the Commission determines that the restraint of

competition violation is the responsibility of the

authorized body of the Party.

In case of such decision, the responsible staff of

the Department prepare the corresponding re-

quest to the authorized body of the Party which is

signed by the member of the College.


1) the name of economic entity (market partici-

pant) the actions (or inaction) of which showed

the signs of the violation of competition rules;

2) the description of the action (or inaction) that

may contain the violations of competition rules;

3) the boundaries of the market which showed

the signs of violation.

18. The application shall be accompanied by all

the documents necessary for the consideration

by the authorized body of the Party which, in the

opinion of the Commission, revealed the signs of

any violation of competition rules.

19. Within 3 working days from the date of the ap-

plication, the member of the College shall notify

the applicant about the transfer of the application

to the authorized body of the Party.

V. Interaction in time of the Commission’s inves-

tigation of the violation of competition rules

20. In time of the Commission conduct of the in-

vestigation of the violation of the rules of com-

petition, the member of the College is entitled to

send requests for information and documents to

the authorized bodies of the Parties.

21. The request for information and documents

is prepared in writing and contains the following:


2) the number of the case (if any) on which the

information is requested, detailed description

of the offense and other facts relating to it, legal

qualification of the act, in accordance with the

Agreement;

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3) the information about the person in respect of

which the case is under consideration (if the listed

information is available):

– for individuals: surname, first name, place of

residence, nationality, occupation, date and place

of birth;

– for legal entities: name and address;

4) the period within which the information should

be presented, but no less than 10 working days

from the date of the request receipt and no more

than the period specified by the Regulations of

the Eurasian Economic Commission approved by

the decision of the Supreme Eurasian Economic

Council of November 18, 2011 No. 1;

5) the list of information subject to submission.

22. The copies of available documents, to which

references are made in the text of the request, as

well as other documents necessary for the proper

execution of the request should be attached to the

request for information and documents.

23. The authorized bodies of the Parties, in order

to provide information and documents, ensure

the collection of the requested information and

documents, in accordance with the national leg-

islations of the Parties.

24. If the requested information cannot be pro-

vided, in particular, within the period specified

in the request, the authorized body of the Party

within 5 working days from the date of receiving

the request shall inform the Commission about

the failure to provide the requested information,

including the terms set forth in the request, speci-

fying the reasons for the failure to provide the re-

quested information.

25. If any additional information is needed or

clarification of information obtained in execution

of the previous request, the repeated request for

the provision of the information and documents

may be sent to the authorized body of the Party.

VI. Interaction with the Commission when con-

sidering cases of the violation as to competition

rules

26. In cases of violation the competition rules, the

Commission is entitled to send requests for infor-

mation and documents to the authorized bodies

of the Parties.

27. The request for information and documents

is prepared in writing and contains the following:


2) the number of the case (if any) on which the

information is requested, detailed description

of the offense and other facts relating to it, legal

qualification of the act, in accordance with the

Agreement;

3) the information about the person in respect of

which the case is under consideration (if the listed

information is available):

– for individuals: surname, first name, place of

residence, nationality, occupation, date and place

of birth;

– for legal entities: name and address;

4) the period within which the information

should be presented, but no less than 5 work-

ing days from the date of the request receipt

and no more than the period specified by the

Regulations of the Eurasian Economic Com-

mission approved the decision of the Supreme

Eurasian Economic Council of November 18,

2011 No.1;

5) the list of information subject to submission.

28. The copies of available documents, to which

references are made in the text of the request, as

well as other documents necessary for the proper

execution of the request should be attached to the

request for information and documents.

29. The authorized body of the Party provides the


65

information being at its disposal within the term

as set in the request.

30. In case the Commission sends the request to

provide information and documents of the eco-

nomic entity (market participant) of a Party in

cases of violation the competition rules, the Com-

mission simultaneously sends the copy of such re-

quest to the authorized body of the Party in whose

territory the economic entity (market participant)

is registered.

31. If any additional information is needed or

clarification of information obtained in execution

of the previous request, the repeated request for

the provision of the information and documents

may be sent to the authorized body of the Party.

VII. The information exchange between the Com-

mission and the authorized bodies of the Parties

32. For the application of the competition rules,

the Commission and the authorized bodies of the

Parties define, by way of joint memorandum, the

amount and the list of publicly available informa-

tion of the authorized bodies of the Parties and

the Commission with due regard of the peculiari-

ties of the legislations of the Parties.

Publicly available information of the authorized

bodies of the Parties and the Commission is

placed on their official websites.

33. The requirements for publicly available infor-

mation include, but not necessarily are limited to:

1) accuracy, completeness and relevance of the

information provided;

2) taking away the materials relating to classified

data from the provided information.

34. The placement of the information related to

the activities of the authorized bodies of the Par-

ties and the Commission, their organizational

structure, address and reference information, reg-

ulations governing their activities, the informa-

tion on the programs and projects, as well as the

information about target and actual performance

indicators of the authorized bodies of the Parties

and of the Commission shall be performed in a

timely manner.

35. The list of confidential information of the au-

thorized bodies of the Parties and the Commis-

sion, the procedure of registration of documents

containing confidential information, manage-

ment of such documents and procedures for the

protection of confidential information and the re-

sponsibility for its disclosure is determined by the

relevant agreement.

VIII. Other forms of interaction between the Com-

mission and the authorized bodies of the Parties

36. In order to foster the exchange of experience

in monitoring the compliance with the competi-

tion rules and antitrust legislation of the Parties,

to conduct investigations and to discuss the re-

sults of practical activities, visiting conferences

are conducted under the guidance of the member

of the College at least 1 time per year in the terri-

tory of each of the Parties, with the invitation of

the representatives of the authorized bodies of the

Parties.

37. To enhance the professional skills and quali-

fications of employees of the authorized bodies

of the Parties and international employees of the

Commission in the area of competition policy and

antitrust regulation, the Commission and the au-

thorized bodies of the Parties organize and (or)

carry out joint training events (seminars, confer-

ences, trainings) for the employees.

38. In case of changes in the current antitrust

legislations of Parties, the authorized bodies of

the Parties shall notify the Commission within 5

working days from the date of their official pub-

lication.

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I. General provisions

1. These Procedures were worked out on the basis of part 4 of the Article 5 and paragraph 5 part 1 of Article 29 of the Agreement on Common Princi-ples and Rules of Competition as of December 9, 2010 (hereinafter – Agreement), and are used by Eurasian Economic Commission (hereinafter – Commission) for the reviewing the applications (materials) as to the violation of the competition rules determined in section III of the Agreement (hereinafter – competition rules).

2. In the present Procedures the terms are used as defined in Article 2 of the Agreement.

II. Requirements for applications (materials)

3. The applications as to the violation of competi-tion rules (hereinafter – application) are submit-ted to the Commission by legal entities and indi-viduals.

4. The materials on the violations of competition rules, the review of which falls within the compe-tence of the Commission (hereinafter – the mate-rials), shall be submitted to the Commission by the bodies of state power of the Member States of the Customs Union and the Common Economic Space (hereinafter – the member states), whose functions include the implementation of competi-tion (antitrust) policy (hereinafter – the autho-rized bodies).

5. The application is submitted in writing in no particular form and should contain:

1) the information about the applicant, including:

– for individuals: full name, place of residence and registration, contact information (if available, the phone number, email address, fax number);

– for legal entities: corporate name, residence ad-dress, contact information (if available, the phone number, email address, fax number);

2) the applicant’s information available about the persons in respect of which the application is sub-mitted;

3) the description of the actions (or inaction) of the persons which, in the opinion of the applicant, contravene the rules of competition;

4) the essence of the requirements which the ap-plicant places.

6. Appended to the application should be:

1) for individuals: the copy of the passport or oth-er identity document;

for legal entities: the copy of the certificate of reg-istration and the documents proving the authority of the person to sign the application;

2) documents which, in the opinion of the appli-cant, are relevant to the review of the application.

7. The materials should contain:

1) the authorized body’s available information as to the persons in respect of which the materials are submitted;

2) the description of the actions (or inaction) of the persons which, in the opinion of the autho-rized body, contravene the rules of competition;

3) documents showing the signs of any violation of competition rules;

4) grounds for the submission of the material;

5) the designated employees of the authorized body (with the indication of the position) respon-sible for the interaction with the Commission

PROCEDURES

for Handling Applications (Materials)

on Competition Rules Violations

ADOPTED

by the Decision of the Eurasian Economic

Commission Council



67

during the investigation of the violations as to the competition rules.

8. Where impossible to submit the documents stipulated in subparagraph 2 of paragraph 6 and subparagraph 3 of paragraph 7 of these Proce-dures, the reason for the failure to submit them, as well as the supposed persons and (or) public authorities that may provide the documents.

The list of all documents submitted is attached to the application (materials).

The application submitted by individual and the accompanying documents must be bound, num-bered and authenticated by the signature of the individual.

The application submitted by legal person, and the accompanying documents must be bound, numbered and authenticated by the signature of the senior officer (the authorized person) and sealed by the legal entity.

9. The confidential information contained in the document cannot give occasion for the refusal as to their submission to the Commission. Thereat, the exhaustive list of documents and information containing confidential information is indicated in the application (materials).

The procedure of the protection of confidential information submitted to the Commission and the Commission members’ responsibility for its disclosure is established by the relevant agree-ment of the Member States.

10. The application (materials), as well as the at-tached documents and information, are submit-ted in Russian. If the documents and information are made in foreign language, the duly certified translation into Russian is attached.

III. Procedure for application (materials) consid-eration

11. The Commission shall review the application (materials) within the period not exceeding 30 working days from the date of the registration of

the application (materials) by the Commission.

12. The application (materials) as received by the Commission are forwarded to the member of the Commission College in charge of competition and antitrust regulation, which, within 3 working days from the date of the registration of the ap-plication (materials) by the Commission, sends it to the structural subdivision of the Commission assigned by him as the one responsible for the ap-plication (materials) review.

13. The responsible structural subdivision of the Commission no later than in 2 working days af-ter receipt of the application (materials) from the member of the Commission College in charge of competition and antitrust regulation, send the copies of the application (material), and the at-tached documents to the authorized bodies, as well as to the member of the Commission College supervising the issues of energy and infrastruc-ture, if the application (materials) submitted with respect to the economic entity that is natural mo-nopoly subject.

The copies of the materials are not to be sent to the authorized body that has submitted the ma-terials.

The authorized bodies, within 10 working days of receipt of the application (materials), sends the Commission the available documents and materi-als necessary for full and thorough consideration of the application (materials), as well as suggests to assign the employees of the authorized bodies responsible for the interaction with the Commis-sion over the period of the investigation as to the violations of competition rules.

The member of the Commission College in charge of energy and infrastructure issues, no later than in 10 working days from the date of receipt of the application (materials), sends the member of the Commission College in charge of competition and antitrust regulation the conclusion as to the need of account taken of the peculiarities stipulated in the agreements of the Member States relating to the natural monopolies.

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14. The responsible structural subdivision of the Commission, within the period not exceeding 30 working days from the date of registration of the application (materials) by the Commission, shall consider the application (materials) and render one of the following determinations:

1) to make the investigation as to the violations of competition rules;

2) to transfer the application (materials), in ac-cordance with the jurisdiction, to the authorized bodies;

3) to return the application (materials).

15. The definitions mentioned in paragraph 14 of these Procedures shall be signed by the member of the Commission College in charge of competi-tion and antitrust regulation.

If the determination is rendered on the results of consideration of the application (materials) sub-mitted with respect to the economic entity being natural monopoly subject, it shall be subject to preapproval by the member of the Commission College in charge of Energy and Infrastructure.

16. The determination on making the investiga-tion shall contain:

1) the starting date of the investigation;

2) the information about the officials of the Com-mission conducting the investigation (such offi-cials are the employees of the structural subdivi-sion of the Commission responsible for making investigations and preparation of materials, and during the process of conducting investigation in respect of the entity that is the subject of the nat-ural monopoly, the employees that have charged with the respective tasks by the member of the Commission College in charge of energy issues and infrastructure);

3) the information about the employees of the authorized bodies responsible for the interaction with the Commission during the investigation of the violations of competition rules.

17. The decision to transfer the application (ma-terials), in accordance with the jurisdiction, to the authorized bodies shall be made in case the viola-tions mentioned in the application (materials) do not fall within the competence of the Commission, and in case the conclusion can be made based on the information available in the application (ma-terials) that signs are available as to the violation of the antitrust legislation of the Member State (the Member States). This decision is sent to the appropriate authorized body, with the application of all available documents and the substantiation for the submission of the application (materials) to this authorized body.

18. The determination to return the application (materials) shall be rendered, if there is no infor-mation in the application (materials) provided for by paragraphs 5 to 8 of these Procedures. This decision is sent to the applicant (the authorized body), with the addition of all the documents pro-vided by the applicant (the authorized body), and with the substantiation for the return of the ap-plication (materials).

If the cause for the return of the application (ma-terials) was removed henceforth , the application (materials) may be resubmitted to the Commis-sion together with the accompanying documents.

19. The copy of the determination described in paragraph 14 of these Procedures, no later than in 3 working days from the date of signing its sign-ing by the member of the Commission College in charge of competition and antitrust regulation, shall be sent to the applicant and the authorized bodies, regardless of the basis for the application (materials) consideration.

If the determination is based on the results of consideration of the application (materials), sub-mitted with respect of the economic entity being natural monopoly subject, the copy shall be sent to the member of the Commission College in charge of energy and infrastructure no later than in 3 working days from the date of its signing.


69

I. General Provisions

1. These Procedures were developed on the basis of part 4 of Article 15 and paragraph 6 of part 1 of Article 29 of the Agreement on the Common Principles and Rules of Competition as of December 9, 2010 (herein-after – Agreement) and are used by the Eurasian Eco-nomic Commission (hereinafter – Commission) when conducting investigations of violations of competi-tion rules determined in section III of the Agreement (hereinafter – competition rules).

2. Investigation of the violations of competition rules (hereinafter – the investigation) is conducted in order to:

1) establish the signs of the violation of the of compe-tition rules;

2) determine the economic entities (market partici-pants) in whose actions the signs of the violation of competition rules are contained (appear).

3. The grounds for conducting investigation are as fol-lows:

1) the determination to conduct the investigation, ren-dered on the basis of consideration of the application (materials) concerning the violation of competition rules in accordance with the Procedures for review-ing applications (materials) as to the violation of the competition rules;

2) possible signs of the violation of competition found by the Commission.

4. The terms used in these Procedures are defined in the Article 2 of the Agreement.

II. Conduct of the Investigation

5. The investigation is conducted by the officials of the Commission indicated in the determination about conducting the investigation rendered in accordance with the Procedures for reviewing applications (mate-rials) as to the violation of the competition rules.

The investigation is carried out within the period not exceeding 60 working days from the date of signing of the determination on the investigation.

6. In case of lack of the information that could help to

make the conclusion about the presence or the absence of the violation of the competition rules, the member of the College Commission College in charge of com-petition and anti-monopoly regulation has the right to extend the duration of the investigation period for the collection and analysis of additional information, but no more than for 60 working days. The applicant and the state government bodies of the member states of the Customs Union and the Common Economic Space (hereinafter – the member states), the competence of which lies in the implementation of competition (an-titrust) policy (hereinafter – the authorized bodies) shall be notified in writing about the extension of the investigation period.

III. Request for information

7. During the investigation, the member of the Com-mission College in charge of competition and anti-trust regulation is entitled to request the information in writing (including confidential) necessary for the investigation from individuals, legal entities and the state government bodies of the Member States.

The request should contain the description of the legal basis, the purpose of the request, the required infor-mation and the period during which the information should be submitted.

8. Individuals and legal entities, as well as state gov-ernment bodies of the Member States are required to submit requested information, including confidential, in writing, within the prescribed period.

Original documents as well as the copies of documents may be submitted.

Copies of the documents submitted by legal person should be certified with the signature of the director or authorized person and the seal of the legal person or the authorized person, the copy of the documents submitted by the natural person should be certified with the signature of the individual or the authorized person. Authorized person is understood to be the le-gal or natural person authorized to perform certain actions in accordance with the legislation of the Mem-ber State.

9. The procedure the protection of the provided confi-dential information submitted to the Commission and

ADOPTED


Commission Council


PROCEDURES for Carrying out Investigations

on Competition Rules Violations

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the responsibility for it is established by the relevant agreement of the Member States.

10. Failure to submit the requested information to the Commission provided for by the Agreement, as well as submission of deliberately false data (information) constitute grounds for the imposition of penalties pro-vided for in paragraph 5 of Article 14 of the Agree-ment. The application of the above-mentioned penal-ties is carried out in accordance with the Method of calculation and the procedure of fine imposition un-der the Agreement.

IV. Results of the Investigation

11. Upon the results of the investigation, the member of the Commission College in charge of competition and antitrust regulation shall render one of the follow-ing determinations:

1) to initiate and conduct the proceeding on violation of competition rules;

2) to refuse to initiate the proceeding on violation of competition rules;

3) to transfer application (materials) to the authorized bodies, according to jurisdiction.

If the determination is prepared on the results of the consideration of the application (materials) submitted in respect of the economic entity being natural mo-nopoly subject, it should be approved by the member College of the Commission College in charge of en-ergy and infrastructure no later than in 3 working days from the date of its signing.

12. The determination as to the initiation and conduct of the proceeding on violation of competition rules should contain the following:

1) the information about the applicant;

2) the information about the defendant;

3) the date of the case;

4) the basis for legal action;

5) the provisions of the Agreement in respect of which the signs of violation are revealed;

6) the composition of the Commission to review the cases of violation of competition rules established in accordance with the Procedures for hearing of cases on competition rules violations.

13. The determination as to the initiation and conduct of the proceeding on violation of competition rules is ren-dered imposed if during the investigation the evidences were found of the violations of competition rules.

14. The determination to refuse to initiate the pro-ceeding on violation of competition rules shall be rendered in case of absence on the part of economic entities (market participants) of the signs of violation of competition rules. In this case, the determination should include substantiation for the refusal to initiate the proceeding.

15. The determination to transfer application (materi-als) to the authorized bodies, according to jurisdiction shall be made, if during the investigation it was re-vealed that the respective violation is not the responsi-bility of the Commission, and based on the conducted investigation the conclusion was made as to the pres-ence of the signs of violation of the antitrust legisla-tion of the Member State (Member States).

The determination should be accompanied by the ap-plication (materials), documents and information that served as grounds for rendering the determination to transfer the application (materials) to the authorized bodies.

16. The date of the rendering of determination is the date of its signing by the member of the Commission College in charge of competition and antitrust regula-tion set forth in paragraph 11 of these Procedures.

17. As provided for in paragraph 11 of these Proce-dures, the copy of the determination is to be sent to the applicant and to the authorized bodies, regardless of the basis for the investigation conduct, within 3 work-ing days from the date of its signing by any available means allowing to determine whether the copies of such determination have been received.

If the above determination is based on the results of the investigation in respect of the economic entity that is the subject of natural monopolies, the copy is sent to the member of the Commission College in charge of energy and infrastructure, not later than in 3 working days from the date of its signing.

18. The preparation of the materials for cases involv-ing the violations of competition rules is performed by the structural subdivision of the Commission ensuring the the conduct of investigations and preparation of the materials for cases involving the violations of com-petition rules.


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1. These Procedures were prepared on the basis of part 4 of Article 15 and paragraph 7 part 1 of Article 29 of the Agreement on Unified Principles and Rules of Competition dd. 9.12.2010 (herein-after – Agreement) and is used by Eurasian Eco-nomic Commission (hereinafter – Commission) during proceedings of the violation of competi-tion determined in section III of the Agreement (hereinafter – competition rules).

2. The case of violation of competition (herein-after – case) is initiated and considered, if signs of violation of competition are available based of the determination to initiate and consider the case which is rendered following the results of conduct-ing the investigation on violation of competition in accordance with the Procedures of carrying out investigation on competition rules violations.

3. The definitions used in Article 2 of the Agree-ment are implemented in these Procedures.

II. Commission on proceedings of violation of competition

4. The case is considered by the commission on proceedings of violation of competition (herein-after – commission on proceedings) which con-sists of the Chairman and the members of the commission on proceedings.

5. The Chairman of the commission on proceedings is the member of the Commission College super-vising the matters of competition and antimonop-oly regulation (hereinafter – member of College) or the Director of the Commission department un-der his instructions, whose job is supervised by the member of the Commission College.

6. The members of the commission on proceed-ings are the officials of the Commission. The quantity of members of the commission on pro-ceedings should be no less than 3 persons.

The officials of the Commission who conduct the investigation of violation of competition cannot be included in the commission of proceedings.

7. The commission on proceedings is legally quali-fied to consider the case, if no less than two-thirds of the total number of members of the commis-sion of proceedings are present at the session.

8. In case of lack of a quorum for considering the case and (or) the absence of the Chairman of the commission on proceedings, the members of the commission on proceedings who are presented on session render the determination to adjourn the case consideration and to settling the new date of consideration which should be documented in the determination.

9. The commission on proceedings has the right to perform shorthand record, audio and video re-cording of the sessions.

10. One of the members of the commission on proceedings keeps the minutes of the session.

The shorthand record, audio and video recording of the sessions in permanent form should be at-tached to the case materials.

III. Bodies participating in the proceedings

11. The bodies participating in the proceedings, are:

1) Claimant – the body submitting the applica-tion;

2) Defendant – the economic entity, in respect of which the case was initiated and considered;

3) Concerned parties – the bodies whose rights and legitimate interests are affected due to the ini-tiation and consideration of the case;

4) the state government bodies of the Member States of the Customs Union and the Common Economic Space, the competence of which lies

PROCEDURES

for Hearing on Cases on Competition Rules Violations

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in the implementation of competition (antimo-nopoly) policy (hereinafter – Authorized bodies), regardless of the grounds for the case initiation.

12. During the proceeding, the bodies partici-pating in the proceedings are entitled to exercise their rights and duties independently or by proxy the powers of which are documented according to the legislations of the Member States of the Cus-toms Union and the Common Economic Space (hereinafter – Parties).

13. Starting from the moment of the case initia-tion, the bodies participating in the proceedings have the right to familiarize themselves with all materials on the case, to make notes from them, to present evidence, to familiarize themselves with evidentiary material, to interrogate other bodies participating in the proceedings, to file motions, to give verbal or written explanations, to produce reasons for all issues appearing during the pro-ceeding, to become familiar with the motions of other bodies participating in the proceedings, to take exceptions and arguments against other bod-ies participating in the case.

14. If any confidential information is used during the proceeding, the Chairman of the commission on proceedings renders the determination about the prohibition of audio recording, photo and video recording to the bodies participating in the case, whereof the respective note in the minutes is made.

15. Audio recording, photo and video recording, radio and television broadcasting can be allowed by the Chairman of the commission on proceed-ings.

In case of audio recording, photo and video re-cording, radio and television broadcasting, the re-spective note in the minutes is made.

IV. Consideration of the case

16. The consideration of the case is carried out at the session of the commission on the case con-sideration . The term of consideration of the case can’t exceed 60 working days from the date of

rendering the determination about the initiation and consideration of the case. In case of obtain-ing additional information for decision-making, the term of consideration of the case can be pro-longed for no more than 30 working days.

17. The bodies participating in the consideration of the case should be informed about the time and place of the consideration by the determination as to the initiation and consideration of the case ren-dered according to Procedures for carrying out investigations on competition rules violations. In case of the failure of the bodies participating in consideration of the case to come to the session of the commission on proceedings, who have been informed in any way available allowing to estab-lish the fact of the receipt of notice copy by them, the commission on proceedings has the right to consider the case in their absence.

18. When considering the case, the commission on proceedings has the right to involve experts, translators, and also the persons who possess the information on the circumstances of the consid-ered case, whereof the respective determination should be rendered, the copy of which should be sent to them within 3 working days from the date of rendering.

19. Chairman of the commission on proceedings:

1) opens the session of the commission on pro-ceedings;

2) announces the composition of the commission on proceedings;

3) assign one of members of the commission on proceedings to keep the minutes;

4) announces the case subject to consideration;

5) checks the attendance of the session of the commission on proceedings by the persons par-ticipating in the consideration of the case, exam-ines their powers, ascertains the fact of obtaining the copy of the determination by the persons who did not show up at the session of the commission on proceedings, and verifies the information as to the reasons of their absence;


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6) explains to the persons participating in the con-sideration of the case their rights and obligations;

7) clears up the issue as to the possibility of con-sideration of the case;

8) defines the sequence of actions during the con-sideration of the case;

9) conducts the session of the commission on proceedings, provides conditions for comprehen-sive and complete review of the evidence and cir-cumstances of the case;

10) takes measures to ensure good order at the session of the commission on proceedings.

20. At session of the commission on proceedings:

1) the persons participating in the consideration of the case, are heard;

2) the motions are heard and discussed, decisions on them are made which are reflected in the min-utes;

3) evidence is examined;

4) opinions and explanations are heard of the persons participating in the consideration of the case concerning the evidence produced by other persons participating in the case;

5) opinions of the experts involved in making the conclusions are heard and discussed;

6) the persons possessing the information on the circumstances of the considered case are heard;

7) upon the application of the persons participat-ing in the consideration of the case, or at the ini-tiative of the commission on proceedings, the is-sues of the grounds and the necessity to announce the break in the session of the commission on proceedings, of the postponement or the stay of action are discussed.

21. During the case consideration, the commis-sion on proceedings has the right to request the documents, data and explanations, in written or verbal form, on the issues arising during the case consideration from the bodies participating in the case consideration.

22. Failure to submit to the Commission of the required data (information) provided for by the Agreement, as well as the submission of know-ingly false data (information), is the ground for the application of the penalties provided for by item 5 of article 14 of the Agreement. The above penalties are applied in the order established by the Calculation methodology and the order of im-posing penalties, provided for by the Agreement.

23. After the examination of the case evidence, the statement of opinions by the persons participating in the consideration of the case, expert opinions, carrying out interrogation of the persons who possess the information on the circumstances in-vestigated by the commission on proceedings, the Chairman of the commission on proceedings de-clares the consideration of the case finished.

V. Break in the session of the commission on pro-ceedings

24. The commission on proceedings, upon the ap-plication of the persons participating in the con-sideration of the case, or at its own initiative, has the right to declare the break in the session of the commission on proceedings for the term not ex-ceeding 3 working days.

25. If the break in the session was announced, the respective note is made in the minutes, with the indication of the date and time of the announce-ment of the break in the session, file numbers, the persons participating in the consideration of the case, the date and time of the case resumption. The given data documented in the form of partial record from the minutes should be immediately brought to the attention of the persons participat-ing in the consideration of the case against signa-ture.

26. Consideration of the case by the commission on proceedings is resumed after the break in the session, from the moment when it was interrupt-ed. Re-examination of the evidence which was in-vestigated before the break in the session of the commission on proceedings, is not applicable.

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VI. Adjournment or suspension of the case

27. The commission of proceedings has the right to adjourn the consideration of the case:

1) upon the application of the person participat-ing in the consideration of the case, in view of the failure of this person or his representative to show up at the session for a good cause confirmed by the relevant documents;

2) due to the need of obtaining additional evi-dence;

3) for bringing experts, translators, and the per-sons possessing the information on the circum-stances of the considered case to the participation in the session of the commission on proceedings.

28. The commission on proceedings is obliged to adjourn the consideration of the case in case of bringing into proceedings as the defendant in case of the person who has not participated in the case earlier or participated in other status, and also in case of detection during the consid-eration of the case in the actions (inaction) of the defendant in case, of the signs of the viola-tion of the rules of the competition, other than the violation in respect of which the proceedings were initiated.

29. At the adjournment of the case consider-ation, the running of review duration should not be interrupted. Consideration of the case at the new session of the commission on pro-ceedings is resumed from the moment it was adjourned.

30. The commission on proceedings has the right to suspend the consideration of the case in cases and for the term:

1) of the consideration by the authorized bodies, the Court of the Eurasian economic community, the Party court, the law enforcement agencies of the Party of other case which is important for the consideration of the given case;

2) of carrying out expertise.

31. If the consideration of the case is suspended,

the running of the review duration is interrupted and is resumed from the moment of the renewal of the consideration of the case.

32. The commission on proceedings renders the determination as to the adjournment, the suspen-sion and the renewal of the consideration of the case, and also the commissioning of expert evi-dence, the copy should be sent to the persons par-ticipating in the consideration of the case within 3 working days from the date of its rendering. The copy of the determination as to the commission-ing of expert evidence should be sent to the expert within 3 working days from the date of the ren-dering of such determination.

VII. Integration of cases and singling out case (cases) for considering in a separate procedure

33. The commission on proceedings of the case has the right, upon the application of the persons participating in the consideration of the case, or on its own initiative to integrate two and more cases and also to single out one or several cases for considering in a separate procedure.

34. The determination as to about the integration of cases should be rendered, if:

1) some similar cases are being at hand in the Commission;

2) it promotes full, comprehensive and objective consideration.

35. The determination as to the integration of cases is rendered by the commission on proceed-ings on which the determination as to the initia-tion and consideration of the case has been ren-dered before the rest.

36. The singling out of the case (cases) for con-sidering in a separate procedure is rendered:

1) if the new signs of violation of the rules of com-petition have been detected during the consider-ation of the case, which are sufficient for singling out the case (cases) for considering in a separate procedure;

2) if it promotes it promotes full, comprehensive


75

and objective consideration of the case (cases) singled out in a separate procedure.

37. When integrating cases and singling out case (cases) for considering in a separate procedure, the commission on proceedings renders the cor-responding determination. The copy of the de-termination should be sent to the persons par-ticipating in the consideration of the case within 3 working days from the date of its rendering.

38. After the integration of cases or singling out case (cases) for considering in a separate proce-dure, the consideration of the case (cases) should be performed from the very beginning.

The term of consideration of the integrated case or the case (cases) singled out for considering in a separate procedure, is calculated from the date of rendering the determination about the initiation and the consideration of the case initiated earlier than other cases subject to integration or singling out for considering in a separate procedure.

39. The composition of the commission on the consideration of the integrated cases or the cases singled out for considering in a separate proce-dure is defined during the rendering of the deter-mination specified in item 37 of the present Pro-cedures.

VIII. The acts adopted by the commission on pro-ceedings

40. The commission on proceedings renders de-terminations.

41. The determination contains the following data:

1) the date and place of rendering the determina-tion;

2) the composition of the commission of proceed-ings;

3) the file number;

4) the names of the bodies participating in the consideration of the case;

5) the issue on which the determination (the

scheduling of a case for hearing, the case adjourn-ment, suspension of consideration and on other issues) is rendered;

6) the reasons for the rendering of the determina-tion (the need for full and comprehensive consid-eration of the case, the need for obtaining addi-tional evidence and other reasons).

42. The determination is documented in the form of separate report which is signed by the Chairman and the members of the commission on proceedings. The determination as to the consideration of the integrated cases or the cases singled out for considering in a separate proce-dure is signed by the Chairman of the commis-sion on proceedings.

43. The copies of the determination by the com-mission on proceedings are forwarded to the bod-ies participating in the consideration of the case in any way available to them, allowing to estab-lishing the fact of receipt of the copy of such de-termination.

44. Upon the completion of consideration of the case, the commission on proceedings prepares the draft decision of the Commission College on the case. The Commission College makes the deci-sion on the case.

The draft decision of the Commission College on the case is submitted by the member of Board for the consideration of the Commission College session and is accepted in the order provided for by the Regulations for the work of the Eurasian economic commission approved by the Decision of the Supreme Eurasian Economic Council at the highest level on November 18, 2011 No. 1.

The Commission College does not make the deci-sion on the case, if the issues are raised requiring additional elaboration, whereof the respective note is made in the minutes of the Commission College.

The additional elaboration of the issues estab-lished by the Commission College is carried out by the commission on proceedings which has pre-

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pared the draft decision on the case for the Com-mission College.

For the additional elaboration of the issues estab-lished by the Commission College, the commis-sion on proceedings resumes the consideration of the case. The respective determination is rendered as to the renewal of consideration of the case.

The consideration of the resumed case is carried out in accordance with the rules established by these Procedures. The resumed case is considered within the time not exceeding 30 working days from the date of the signing of the determination as to the renewal of consideration of the case.

45. The decision on the case consists of the intro-ductory part, the descriptive part, the statement of reasons and the operative part.

The introductory part of the decision on the case contains the date and the place the decision on the case has been made, the composition of the com-mission on proceedings, the names of the bod-ies participating in the consideration of the case (with the indication of the location for legal en-tity, the place of registration for individual).

The descriptive part of the decision on the case contains the indication to the statement of the ap-plicant on possible violation of the rules of the competition, the arguments of the defendant and the explanations of other bodies participating in the consideration of the case.

The statement of reasons contains the circum-stances of the case determined during the investi-gation, evidence based on which the conclusions of the commission on proceedings were made, the regulations the commission on proceedings relied upon. The fact of the recognition by the defen-dant of the violation of the rules of the competi-tion is reflected in the statement of reasons.

The operative part of the decision on the case contains the conclusions as to the availability or lack of grounds for the termination of the case consideration, the conclusions as to the availabil-ity or lack of violations of the rules of the compe-

tition in actions (inaction) of the defendant in the case, the amount of the penalty provided for by the Agreement for the violation of the rules of the competition calculated according to the Calcula-tion procedure and the order of imposing penal-ties provided for by the Agreement, the measures on the suppression and (or) elimination of the consequences of violation of the rules of the com-petition, on ensuring competition, with the indi-cation of terms of their implementation.

46. The Commission College makes the decision on the termination of the case consideration in the case of:

1) absence of violation of the rules of the compe-tition in actions (inaction) of the defendant (de-fendants);

2) liquidation of the legal entity, the only defen-dant on the case;

3) death of the individual, the only defendant on the case.

47. In case the person is relieved of liability on the basis of part 8 of article 14 of the Agreement, this fact is reflected in the operative part of the deci-sion on the case.

48. The copies of the decision on the case made by the Commission College are forwarded to the bodies participating in the consideration of the case.

The above copies of the decision on the case are forwarded to the bodies participating in the con-sideration of the case in any way available to them allowing to establish the fact of receipt of such copies by them.

The commission exercises control over the execu-tion of the decisions made on the case.

IX. Procedure for filling an appeal against the de-cisions of the Commission College

49. The decisions of the Commission Colleague are challenged in accordance with the established procedure.


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1. The present Rules have been developed in ac-

cordance with Subitem 2 Item1 Article 29 of the

Agreement on Common Principles and Rules of

Competition as of December 9, 2010 (herein-

after referred to as the Agreement) and are ap-

plied by the Eurasian Economic Commission in

accordance with its competence in monitoring

the compliance with common rules of competi-

tion by economic entities (market subjects) hav-

ing dominant position on cross-border markets

of goods.

2. These Rules use the terms defined in Article 2

of the Agreement, as well as the terms with the

following meaning:

‘global market conditions’ – the terms of sale on

global goods markets, the level of demand and

supply, the level of prices on these markets, the

tendencies of their change;

‘adjacent markets’, ‘wholesale markets’, ‘retail

markets’ – used in the meanings defined in the

State of Competition Assessment Rules approved

in accordance with Subitem 1 Item 1 Article 29 of

the Agreement (hereinafter referred to as State of

Competition Assessment Rules).

3. Monopolistically high price is understood as

the price fixed by the economic entity having

dominant position (market entity), provided the

following conditions are met in their totality:

a) if it is higher than the sum necessary for the

production and sales of these goods (the cost of

the goods’ production and distribution deter-

mined in accordance with the legislation of the

Member States of the Customs Union and The

Common Economic Space) and the profit;

b) if it is higher than the price which has been

formed in the competitive environment on the

goods market comparable in terms of the com-

position of buyers and sellers, the conditions of

goods circulation, the goods market entry condi-

tions, government regulation, including taxation

and customs tax and tariff regulation (hereinafter

referred to as comparable good market), if such

market is available in the territory of the common

customs territory of the Customs Union and the

Common Economic Space or beyond its borders,

or the price fixed on the same goods market ear-

lier, if this price has been formed in competitive

environment.

4. The price shall not be recognized as monopo-

listically high, if it is fixed by natural monopoly

within the tariff rates for a commodity defined in

accordance with the legislation of the Member

States of the Customs Union and the Common

Economic Space.

5. Monopolistically low price is understood as

the price fixed by economic entity with dominant

position, provided the following conditions are

met in their totality:

а) if price is lower than the sum necessary for the

production and sales of these goods ( the cost of

the goods’ production and sales determined in

accordance with the legislation of the Member

States of the Customs Union and the Common

Economic Space) and the profit;

b) if it is lower than the price which has been

formed in competitive environment on compa-

rable goods market, if such market is available in

the territory of the common customs territory of

the Customs Union and the Common Economic

Space or beyond its borders.

Rules for Determination of Monopolistically High

and Monopolistically Low Prices

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6. The price shall not be recognized as monop-

olistically high, if its fixation by the seller of the

goods has not resulted or could not have resulted

in the restriction of competition due to reduction

in number of the economic entities (market enti-

ties) not being the members of the same group of

persons as the buyers or sellers of the goods on

the relevant goods market.

II. Determination of monopolistically high and

monopolistically low prices

7. The price shall be recognized as monopolis-

tically high, if it corresponds to the conditions

stated in Item 3 of the present Rules and has been

fixed by economic entity (market entity) with

dominant position in the following ways:

а) by raising the earlier fixed price of the goods,

provided the following conditions are met in their

totality:

– the expenses necessary for the production and

sales of the good have remained unchanged, or

their change does not correspond to the price

change of the goods;

– the composition of the buyers or the sellers

of the goods have remained unchanged, or the

change of its composition has been insignificant;

– the conditions of goods circulation on the

goods market, which include those caused by the

measures of government regulation, including

taxation and tariff regulation, have remained un-

changed, or their change does not correspond to

the price change of the goods;

– the demand for and (or) supply of the goods

have remained unchanged, or their change does

not correspond to the price change of the goods;

– the influence of global market conditions has

remained unchanged, or its change does not cor-

respond to the price change of the goods;

– the influence of adjacent markets has remained

unchanged, or its change does not correspond to


b) by maintaining or not decreasing the earlier

fixed price of the goods, provided the following

conditions are met in their totality:


sales of the good have significantly decreased;

– the composition of the buyers or sellers of the

goods brings about the possibility to lower the

price of the goods;

– the conditions of goods circulation on the goods

market, which include those caused by the mea-

sures of government regulation, including taxa-

tion and tariff regulation, bring about the possi-

bility to lower the price of the goods.

– the change of demand for and (or) supply of

the goods brings about the possibility to lower the

price of the goods;

– the influence of global market conditions brings

about the possibility to lower the price of the

goods;

– the influence of adjacent markets brings about

the possibility to lower the price of the goods.

8. The price shall be recognized as monopolisti-

cally low, if it corresponds to the conditions stated

in Item 5 of the present Rules and has been fixed

by economic entity (market entity) with domi-

nant position in the following ways:

а) by lowering the earlier fixed price of the goods,

provided the following conditions are met in their

totality:


sales have remained unchanged, or their change

does not correspond to the price change of the

goods;



79

goods has remained unchanged, or the change of

the composition is insignificant;

– the conditions of goods circulation on the

goods market, which include those caused by the

measures of government regulation, including

taxation and tariff regulation, have remained un-

changed, does not correspond to the price change

of the goods;

– the demand for and (or) supply of the good

have remained unchanged, or their change does

not correspond to the price change of the goods;

– the influence of global market conditions has

remained unchanged, or its change does not cor-

respond to the price change of the goods;

– the influence of adjacent markets has remained

unchanged, or its change does not correspond to


b) maintaining or not raising the earlier fixed

price of the goods, provided the following condi-

tions are met in their totality:


sales have significantly increased;


goods brings about the possibility to raise the

price of the goods;

– the conditions of goods circulation on the goods

market, which include those caused by the mea-

sures of government regulation, including taxa-

tion and tariff regulation, bring about the possi-

bility to raise the price of the goods;

– the change of demand for and (or) supply of the

good brings about the possibility to raise the price

of the goods;

– the influence of global market conditions brings

about the possibility to raise the price of the goods;

– the influence of adjacent markets brings about

the possibility to raise the price of the goods.

9. In order to define the characteristics of set-

ting monopolistically high (monopolistically low)

price, in accordance with Items 7 and 8 of the

present Rules, by economic entity (market entity)

with dominant position, the analysis of the fol-

lowing factors is applied:

а) the dynamics of various prices types (weighted

average prices, for different buyers’ types etc.);

b) the production costs of the goods and commer-

cial expenses’ structure for their sales (including

the validity of all types of costs), as well as the

dynamics of production costs (including the com-

parison of rates of the production costs’ growth

(individual cost elements));

c) the dynamics of investments into non-financial

assets;

d) the dynamics of various gross profit types and

its distribution lines (including the payment of

dividends and investment activity);

e) the profitability of production, sales, assets;

f) the dynamics of the commodity’s production

volume (sales).

10. In order to make the analysis described in

Item 9 of the present Rules, the following sources

of initial information are used:

а) official statistical data;

b) the information obtained from tax, customs

and other government bodies, central (national)

banks of the Member States of the Customs Union

and the Common Economic Space;

c) the information obtained from natural per-

sons and legal entities (including the data pro-

vided by the buyers of one particular commod-

ity), including their selective surveys, as well as

the data provided by the sellers of one particular

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commodity, the data of marketing and sociologi-

cal studies;

d) the results of economic expert analysis and

other evaluations, the conclusions of specialized

organizations, as well as those of specialists and

experts;

e) the publications of executive authorities and

independent information centers and services;

f) information of consumers’ and producers’ as-

sociations;

g) media reports;

h) the materials of the Eurasian Economic Com-

mission and the data of antimonopoly bodies of

non-member states of the Eurasian Economic

Commission and the Common Economic space;

i) government standards, technical conditions

and other standards;

j) the requests of natural persons and legal enti-

ties sent to the Eurasian Economic Commission.

11. In order to determine the comparability of

goods markets, the check is made as to whether

the following conditions are met in their totality:

а) the compared goods markets belong to one

market type depending on the specifics of eco-

nomic activity of the sellers and buyers (whole-

sale, retail);

b) no significant differences in the buyers’ and

(or) sellers’ composition (the comparable con-

centration level and goods market volume defined

in accordance with the State of Competition As-

sessment Rules);

c) no significant differences in general conditions

of goods circulation on the market (the compa-

rable economic and geographic, natural and cli-

matic conditions);

d) no significant differences in terms of access to

goods markets (for example, the comparable level

of initial investments for realization of activity,

comparable duration of financial cycle, compa-

rable minimum production level, lack of prefer-

ences to individual manufacturers, comparable

administrative barriers etc.);

e) no significant differences in the degree of gov-

ernment regulation measures influence on the

commodity price level, including taxation and

customs and tariff regulations.

12. The assessment of the state of competition

on comparable goods market is conducted on

completion of the competition state analysis, held

in accordance with State of Competition Assess-

ment Rules.

13. Determining the presence of comparable

goods markets is not required, if the price fixed by

economic entity (market entity) with dominant

position is compared with the price formed in

competitive environment in the same goods mar-

ket within the period preceding the violation of

common rules of competition, with due account

for the inflation level, when analyzing the level of

competition on goods market where monopolis-

tically high price has been set, the following cir-

cumstances will be revealed (in their totality):

а) within the period preceding the violation of

common rules of competition, the price was be-

ing formed in competitive environment;

b) the conditions of economic activity have not

changed on this goods market.


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1. The present Rules and procedure have been de-

veloped in accordance with Item 3 Part 1 Article

29 of the Agreement on Common Principles and

Rules of Competition (hereinafter referred to as

the Agreement) and determine the procedure of

calculation of fines for legal entities at the rate

specified in Article 14 of the Agreement for the

Violation of Common Rules of Competition under

Section III of the Agreement (hereinafter referred

to as Violation of Rules of Competition) and for

failure to provide to the Eurasian Economic Com-

mission (hereinafter referred to as the Commis-

sion) data (information), or providing knowingly

false data (information), under Point 5 Article 14

of the Agreement (hereinafter referred to as fail-

ure to provide information).

2. For the purposes of application of the pres-

ent Rules and procedure, the following terms are

used:

‘proceeds’ – all earnings expressed in monetary

terms and related to the calculations for the com-

modity sold on the market where competition

rules have been violated, in monetary and (or)

natural forms, for the calendar year either preced-

ing the year when it was decreed to initiate and

conduct the proceeding about the violation of

competition rules, or for the part of the calendar

year prior to the date of the decision about ini-

tiation and conduct of the proceeding about the

violation of competition rules, if the offender was

not involved in the sales of the goods within the

preceding calendar year;

‘violations’ – violations of competition rules by

the legal entity, his failure to provide information,

unless stated otherwise;

‘offender’ – legal entity recognized by the Com-

mission the one who violated competition rules,

in accordance with the procedure of dealing with

the cases of violation of competition rules un-

der Section III of the Agreement, as well as legal

entity that has not provided information to the

Commission;

‘aggregate sum of proceeds’ – all earnings ex-

pressed in monetary terms and related to the cal-

culations for all the goods sold on the markets

where the offender is involved in economic activity

in monetary and (or) natural forms for the calen-

dar year either preceding the year when it was de-

creed to initiate and conduct the proceeding about

the violation of competition rules, or for the part of

the calendar year prior to the date of the decision

about initiating and conducting the proceeding

about the violation of competition rules, if the of-

fender did not carry out any activity as to the sales

of goods in the preceding calendar year.

3. In the present Rules and procedure, the terms

specified in Article 2 of the Agreement are used.

II. Calculation of the fine amount

4. The fine amount for violation of competition

rules is determined by the amount of basic fine,

with due account for the circumstances mitigating

and aggravating the responsibility, in accordance

with Annex No. 1.

The amount of fine for failure to provide infor-

mation is determined by the amount of basic fine,

Rules of Calculation and Procedure of Imposition

of Fines Provided for by the Agreement on Common

Principles and Rules of Competition

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with due account for the circumstances mitigating

and aggravating the responsibility, in accordance

with Annex No. 2.

5. The amount of fine (F) is calculated according

to the following formula:

F = BF + (∑AR – ∑MR),

where:

BF –basic amount of fine;

∑AR – the sum of numeric indices characterizing

the circumstances aggravating the responsibility;

∑MR – the sum of numeric indices characteriz-

ing the circumstances mitigating the responsibil-

ity.

6. The basic amount of fine is calculated by the

following formula:

BF = (MaxF + MinF) / 2,

where:

MaxF – the amount of maximum fine;

MinP – the amount of minimum fine.

7. The amount of maximum fine is:

а) for the violations specified in Item 1 Article 14

of the Agreement – 500,000 Russian roubles;

b) for the violations specified in Item 2 Article 14

of the Agreement – 15 per cent of the proceeds

from the sales of goods, if the benefit sum of the

goods sales makes 75 per cent or less of the total

amount of the proceeds. If the sum of the pro-

ceeds for the goods sales makes more than 75 per

cent of the aggregate sum of the proceeds, the

maximum fine amounts to 0.03 of the proceeds

from the goods sales;

c) for the violations specified in Item 3 Article 14

of the Agreement –15 per cent of the proceeds

from the sales of goods, if the amount of the pro-

ceeds from the sales of goods is 7 per cent or less

of the total amount of the proceeds. If the amount

of the proceeds from the sales of goods is more

than 7 per cent of the aggregate sum of the pro-

ceeds, the maximum fine amounts to 0.03 of the

proceeds from the sales of goods;

d) for the violations specified in Item 4 Article 14

of the Agreement – 15 per cent of the proceeds

from the sales of goods, if the amount of the pro-

ceeds from the sales of goods is 75 per cent or less

of the total amount of the proceeds, but no more

than one fifty of the total amount of the revenue.

If the amount of the proceeds from the sales of

goods is more than 75 per cent of the aggregate

sum of the proceeds, the maximum fine is 0.03 of

the proceeds from the sales of goods, but no more

than one fiftieth of the total amount of revenue;

e) for violations specified in Item 5 Article 14 of

the Agreement – 500,000 Russian roubles.

8. The amount of the minimum fine is:

а) for the violations specified in Item 5 Article 14

of the Agreement – 100,000 Russian roubles;

b) for the violations specified in Item 2 Article

14 of the Agreement – 1 per cent of the proceeds

from the sales of goods, if the amount aggregate

sum of the proceeds from the goods sales makes

75 per cent or less of the aggregate sum of the

proceeds, but no less than 100,000 Russian ru-

bles. If the amount of the proceeds from the sales

of goods makes more than 75 per cent of the ag-

gregate sum of the proceeds, the minimum fine

makes (0.003) three thousandths of the proceeds

from the sales of goods, but no less than 100,000

Russian roubles;

c) for violations specified in Point 3 Article 14 of

the Agreement –1 percent of proceeds from the

sale of the goods, if the amount of proceeds from

the sale of goods is 7 percent or less of the aggre-


83

gate sum of proceeds, but not less than 100 000

Russian rubles. If the amount of proceeds from

the sale of goods is more than 7 percent of the ag-

gregate sum of proceeds, the minimum fine makes

0.003 (three thousandths) of proceeds from the

sale of goods, but not less than 100 000 Russian

rubles;

d) for the violations specified in Item 4, Article

14 of the Agreement – 1 per cent of the proceeds

from the sales of the goods, if the amount of the

proceeds from the sales of goods is 75 percent or

less of the aggregate sum of the proceeds, but no

less than 100, 000 Russian roubles. If the amount

of the proceeds from the sales of goods is more

than 75 per cent of the aggregate sum of the pro-

ceeds, the minimum fine is 0.003 (three thou-

sandths) of the proceeds from the sales of goods,

but no less than 100,000 Russian roubles;

e) for the violations specified in Item 5, Article 14

of the Agreement – 300,000 Russian roubles.

9. When calculating fines, mitigating circum-

stances (MC) and aggravating circumstances

(AC) that can be characterized by numerical val-

ues are taken into account.

The numerical value is calculated for each miti-

gating or aggravating circumstance according to

the following formula:

AC (MC) = (MaxF – MinF) / 12) x k,

where k – is the coefficient of mitigating or ag-

gravating circumstance.

10. If the fine resulting from the calculation is

lower than the minimum fine, the minimum fine

shall be applied.

If the fine resulting from the calculation is higher

than the maximum fine, the maximum fine shall

be applied.

III. Procedure of application of fine sanctions

11. When applying fine sanctions for violations,

the following general rules are to be followed:

a) Fine sanctions are applied within the limits

specified by Article 14 of the Agreement;

b) the application of fine sanctions does not free

the offender from discharge of the duty, for the

failure to fulfil whereof the sanctions have been

applied;

c) the offender cannot be held liable for the same

offence twice;

d) when the offender is responsible for two or

more violations, fine is imposed for each offence

committed;

e) when the offender is responsible for one action

(inaction) making up violations, the responsibil-

ity for which is specified in two or more Items of

Article 14 of the Agreement, fine is applied within

the higher fine limit prescribed for such action

(inaction).

12. A decree on a case of violation of rules of com-

petition may not be pronounced after expiry of 3

years from the date of the violation.

The decision on the case of failure to provide in-

formation may not be rendered after the expiry

of 1 year from the date of the violation.

13. If the violation is continued, the period speci-

fied by Item 12 of the present Rules and proce-

dure, is calculated from the date of the detection

of the violation.

Continued violation is the violation (action or in-

action) which is expressed in long continuing fail-

ure to follow the rules of competition or failure to

provide information.

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14. A legal entity is considered to be subject to li-

ability for the violation within one year from the

date of the completion of judgement execution.

15. In case of the reorganization of the legal entity

recognized as offender, the following rules of im-

posing fines for violation are to be followed:

a) if several legal entities have merged, the newly

appeared legal entity is to be held liable;

b) if one legal entity has joined other legal entity,

the affiliating legal entity is to be held liable;

c) if the legal entity has been divided, or one or

more legal entities have been singled out, the le-

gal entity that has obtained rights and obligations

for the deals closed and the property in connec-

tion with which the violation has been committed,

is to be held liable;

d) if the legal entity has been reorganized into the

legal entity of other type, the newly-appeared le-

gal entity is to be held liable;

e) fines imposed on the offender in accordance

with Article 14 of the Agreement before the com-

pletion of the reorganization of legal entity shall

apply, with due account for the provisions of

Subitems ‘a’ to ‘d’ of the present Item;

f) In cases referred to in Subitems ‘a’ to ‘d’ of

the current paragraph, the liability is incurred,

regardless of whether the legal entity has been

aware of the fact of violation before the comple-

tion of reorganization.

16. The decision to impose fine for failure to pro-

vide information in connection with the inquiry

of the commission reviewing the case on violation

of the rules of competition is taken in the order

specified by Item 17 of the present Rules and pro-

cedure.

17. The decision to impose fine on the offender

for failure to provide information is taken in the

following order:

а) The department of the Commission, in whose

jurisdiction are the issues of competition and

anti-monopoly regulation, that has detected the

failure to provide information, shall prepare the

official note addressed to the College member in

charge of this department;

b) The resolution of the College to impose pen-

alty for failure to provide information shall be

drafted by the commission reviewing the case of

failure to provide information that has been cre-

ated and is acting in accordance with the rules set

for the commission reviewing the case of violation

of competition rules, in accordance with the Pro-

cedure for dealing with cases of violation of the

rules of competition;

c) The commission reviewing the case on failure to

provide information calculates the amount of fine.

18. For the purposes of enforcement proceedings,

the certified copy of the case decision taken by the

Commission College shall be sent, in accordance

with the Regulations of the Eurasian Economic

Commission approved by the decision of the Su-

preme Eurasian Economic Council as of Novem-

ber 18, 2011 No. 1, to the Ministry of Foreign Af-

fairs of the Member State of the Customs Union

and the Common Economic Space, in whose ter-

ritory the offender is registered.

19. The relevant national authority responsible

for the enforcement of judicial acts, acts of other

bodies and officials of the Member State of the

Customs Union and The Common Economic

Space, in the territory of which the offender is

registered, shall send the copies of the decision to

initiate enforcement proceedings to the Commis-

sion and to the offender no later than on the day

following the date of issuance of the decision.


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Weighting factor

Note

Mitigating circumstances

1. Voluntary cessation of unlawful conduct by the legal entity having violated the rules of competition

1.25

2. Voluntary reimbursement of the damage caused or voluntary elimination of damage by the legal entity having violated the rules of competition

1

3. The voluntary report by the legal entity having violated the rules of competition on the violation to the Eurasian Economic Commission and (or) the authorized body of the Member State of the Customs Union and The Common Economic Space (hereinafter referred to as Member State) in accordance with the Agreement on Common Principles and Rules of Competition (hereinafter referred to as the Agreement)

1 The legal entity that has voluntarily reported about the agreement not permissible in accordance with Section III of the Agreement, shall be discharged from liability for the offence provided for in Item 2 Article 14 of the Agreement, in the order specified in Item 8 of Article 14 of the Agreement

4. Provision of assistance by the legal entity having violated the rules of competition to the Commission in reviewing the case on the violation of rules of competition

0.5

5. Prevention of harmful consequences of the violation by the legal entity having violated the rules of competition

0,5

LIST

of mitigating and aggravating circumstances taken

into account when calculating the fine amount for

violation of rules of competition provided for by

Article 14 of the Agreement on Common Principles

and Rules of Competition

APPENDIX No. 1

to the Rules of Calculating and Imposing Fines Provided

for by the Agreement on Common Principles and Rules

of Competition

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Weighting factor

Note

6. The legal entity having violated the rules of competition is not the organizer of the agreement restricting competition, or coordinated actions and (or) has received binding instructions to participate in them

0,5 Is applied only for Part 2 Article 14 of the Agreement

7. The legal entity having violated the rules of competition has not begun to execute their agreement restricting competition by the way of voluntarily refusal from unlawful conduct

1,25 Is applied only for Part 2 Article 14 of the Agreement

8. The legal entity having violated the rules of competition has not begun to execute the agreement restricting competition for the reasons beyond its control

0,5 Is applied only to Part 2 Article 14 of the Agreement

Aggravating circumstances

1. Repeated violation of Rules of Competition by a legal entity, if the indicated legal entity has already been fined within a year from the date of completion of judgement execution

2,5

2. Lasting (for 1 year or more) violation of Rules of Competition by a legal entity

1,5

3. Organization of agreements or coordinated actions violating Rules of Competition by a legal entity

2 Is applied only for Part 2 Article 14 of the Agreement


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LIST

of mitigating and aggravating circumstances taken

into account when calculating the fine for failure

to provide data (information) or providing know-

ingly false data (information) provided for by Item

5 Article 14 of the Agreement on Common Principles

and Rules of Competition

APPENDIX No. 2

to the Rules of Calculating and Imposing Fines Provided

for by the Agreement on Common Principles and Rules

of Competition

Weighting factor

Mitigating circumstances

1.Failure to provide data (information) or providing knowingly false data (information) by the legal entity for the first time

2

2. Voluntary cession of unlawful conduct by the legal entity not having provided data (information) or having provided knowingly false data (information)

3

Aggravating circumstances

The repeated failure to provide data (information) or providing knowingly false data (information) by the legal entity, if the legal entity has already been fined for the first offence within one year from the date of judgement enforcement

5

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1. The present Rules have been developed on the basis of Item 1 Part 1 Article 29 of the Agreement on Common Principles and Rules of Competi-tion on December 9, 2010 (hereinafter referred to as the Agreement) in order to assess the state of competition on cross-border goods markets.

These Rules use the terms defined in Article 2 of the Agreement.

2. The present Rules are also applied by the Eur-asian Economic Commission (hereinafter referred to as the Commission):

а) when investigating the violations of Rules of Competition specified in Section III of the Agree-ment (hereinafter referred to as Competition Rules), on cross-border markets;

b) when defining the geographical boundaries of the goods market in order to establish its cor-respondence with the criteria of defining market as cross-border one, approved by the decision of the Supreme Eurasian Economic Council on De-cember 21, 2012 No. 29 (hereinafter referred to as Criteria);

c) when determining dominant position in the goods market of the Customs Union in order to implement Item 16 Article 30 of the Agreement on application of special protective, antidump-ing and compensative measures towards third countries as of January 25, 2008 (hereinafter re-ferred to as Agreement on application of special measures). At that, trade market of the Customs Union is understood as market covering the terri-tory of all Member States of the Customs Union and the Common Economic Space (hereinafter referred to as Member States);

d) when determining the fact of competition re-striction in cases specified by Item 1 Article 18 of the Agreement.

3. Assessment of the state of competition includes the following steps:

a) determination of the time interval for analysis of the goods market;

b) determination of the commodities’ boundaries of the goods market;

c) determination of geographical boundaries of the goods market;

d) determination of the composition of economic entities operating in the goods market;

e) calculation of the goods market volume and of the share of economic entities in the goods mar-ket;

f) determination of the concentration level of the goods market;

g) determination of entry barriers to the goods market;

h) assessment of the state of competition on the goods market;

i) determination of the dominant position of eco-nomic entity on the market;

j) preparation of analytical report.

4. When investigating the violations of the pro-hibitions specified in Article 10 of the Agree-ment, the assessment of state of competition may be carried out with the exclusion of steps specified in Subitems ‘d’ to ‘i’ Item 3 of the pres-ent Rules.

When investigating the violations of the prohibi-tions specified in Article 13 of the Agreement, the assessment of state of competition may be limited to preliminary determination of goods in accor-dance with Item 15 of the present Rules.

5. When assessing the state of competition in the

Rules of Assessment of Competition State

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January 30, 2013 No. 7


89

goods market, the following sources of initial in-formation are to be used:

а) data of official statistics;

b) the information received from tax, customs and other government bodies, central (nation-al) banks, the authorized bodies of the Member States;

c) the information obtained from individuals and legal entities (including the information provided by purchasers of the given good), including by a survey, as well as information provided by sellers of the good, results of marketing, sociological re-search;

d) the results of economic expert analysis and other assessments, the opinions of specialized bodies, as well as those of specialists and experts;

e) the information of the executive authorities and independent information centers and services;

f) the information received from associations of consumers and manufacturers;

g) media reports;

h) the materials of the Commission and the infor-mation received from government bodies of third countries, including anti-monopoly bodies, as well as the data from their previously conducted research;

i) national standards, technical specifications and other regulations;

j) requests of individuals and entities sent to the Commission.

II. Determination of the time interval of the goods market analysis

6. Time interval is determined by the analysis of the goods market depending on the purpose of the assessment of competition, duration of the period of the alleged violation of competition rules, the peculiarities of the goods market and the availability of necessary information (includ-

ing accounting records). A time interval study of the goods market is at least 1 year or it cor-responds to the term of existence of goods market (if the period of existence of this goods market is less than 1 year).

7. If the assessment of the state of competition in the goods market is limited to the study of its characteristics which have developed before its start date, the retrospective assessment of the state of competition is conducted.

8. If buyers do not replace and are not ready to replace the commodity being in consumption and purchased within certain period with the same commodity purchased within other period, the following characteristics of the goods market are taken into account when choosing the time inter-val:

а) seasonality of goods’ supplies throughout the year;

b) the possibility for the sellers (producers) to change the time of sale (production) or shell life of goods;

c) the periods of maximum and minimum demand (including short-term), ratio of the customers’ number in these periods;

d) the possibility for the sellers to set different prices in different time periods;

e) contract terms;

f) the time of appearance of goods on the goods market;

g) the degree of novelty of goods.

9. All characteristics of the goods market are de-termined within the prescribed time period of the study.

10. In determining dominant position on the mar-ket of the Customs Union in order to implement Item 16 of Article 30 of the Agreement on the ap-plication of specific measures, the time interval of

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the analysis of the goods market is 2 years from the date preceding the date of initiation of the in-vestigation.

III. Determination of product boundaries of the goods market

11. Establishment of product boundaries of the goods market – the procedure of defining the product (its consumer’s properties) not having substitute or interchangeable with the goods cir-culating on the same goods market.

12. The procedure of determining boundaries of the goods market includes:

a) preliminary determination of the good;

b) the identification of the good’s properties, de-termining buyer’s choice and the commodities potentially interchangeable with this good;

c) the identification of substitutable goods.

13. The definition of product boundaries of the goods market is based on the opinion of consum-ers about the interchangeability of goods that make up the product group. If the alleged viola-tion of rules of competition is viewed in relation to the buyer (monopsony), the opinion of the seller of these goods is decisive as to the issue of interchangeability of the goods.

The customers’ feedback is determined by sur-vey or analysis of the subject of the agreement under which the sale of goods is implemented. The customers’ feedback may be different, de-pending on how they participate in the turnover of goods (wholesale, individual wholesale or re-tail buyer).

14. The goods can be sold in the same territory on different good markets. In particular, goods may be sold on wholesale markets where consign-ments of goods are sold primarily for the purpose of resale or industrial consumption, and in retail markets where sales of single units are performed primarily for personal use, and that results in par-

ticular circumstances of goods circulation (terms and conditions of supply, geography of delivery, minimum consignment, form of payment, war-ranty and service conditions, pricing etc.) for each good market. The assessment of the state of competition in such markets should be carried out separately, as the composition of the buyers and sellers can vary and the level of competition in such markets may not be the same.

15. The preliminary classification of goods shall be based on:

a) the contract concluded in respect of the goods;

b) permits (licenses) for carrying out certain ac-tivities;

c) standard acts regulating the manufacture and sales of goods;

d) classifiers of economic activities, products, works and services acquired recognized in the ter-ritories of the Member States;

e) dictionaries of goods or commodity expert ref-erence books;

f) the conclusions of specialists and experts with the expertise in the relevant field.

16. For the identification of the goods properties determining buyers’ choice, the following factors are analyzed:

a) functionality (including consumer’ attributes);

b) the purpose of the acquisition (including in-dustrial consumption, resale or private consump-tion);

c) qualitative characteristics;

d) technical characteristics (including perfor-mance indicators, restrictions on transport and storage, assembly conditions, repair, maintenance (including warranty), the specifics of industrial consumption);

e) price;


91

f) conditions of sales (including lot sizes, form and terms of payment for the goods, place of re-ceipt of the goods by the buyer);

g) the specifics of marketing (including the effect of advertising).

17. The identification of the goods which are po-tentially interchangeable is carried out by:

a) the expert appraisement and specialists’ opin-ions;

b) the analysis of goods comparable in relevant properties within the same classification group under the classifier of economic activities, prod-ucts, and services valid in the territory of one of the Member States.

18. For the identification of interchangeable goods, one or several of the following methods are used:

a) the test of ‘hypothetical monopolist’;

b) the analysis of price formation and price dy-namics, changes in the volume of demand by price changes;

c) the calculation of the cross-price elasticity de-mand index in accordance with Item 20 of the present Rules.

19. When conducting the test of ‘hypothetical monopolist’, the long-term (1 year and more) rise of price for the goods A by approximately 5 to 10 per cent (with the effect of inflation excluded) is presumed. It is determined in a survey how buyers of the goods A will respond to this increase.

If, as a result of survey, it is established that buyers will replace the goods A with other goods and the sales volume of the goods A will decrease, what will make rise in prices non-lucrative, then the goods for which the buyer is ready to substitute the goods A should be included with the goods A in the substitutable goods group.

The indicated procedure is carried out until the

group of goods for which the price can be raised without reducing benefits for the ‘hypothetical monopolist’ is discovered. The goods included in the group are recognized as substitutable goods.

When conducting the test of ‘hypothetical mo-nopolist’, the smallest set of goods for which a ‘hy-pothetical monopolist’ can set the specified price rise without concomitant loss of its proceeds shall be regarded as the group of substitutable goods.

20. The measure of interchangeability of goods is the cross-price elasticity of demand index cal-culated as the ratio of the percentage change of demand for one commodity to the percentage change of price for other commodity in a given period.

Stable values of the cross-price elasticity of de-mand index being in excess of one are the signs of the interchangeability of goods.

21. When the retrospective assessment of the state of competition in the goods market is made, it is based on the market prices that prevailed dur-ing the specified time interval of the study of the goods market.

22. When establishing dominant position in the goods market of the Customs Union in order to implement Item 16 of Article 30 of the Agree-ment on the application of special measures, the goods subject to investigation are recognized as product boundaries of the goods market, together with analogous goods or with directly competi-tive goods determined in accordance with Article 2 of the Agreement on application of special mea-sures.

IV. Determination of geographical boundaries of the goods market

23. Within geographical boundaries of the goods market, the buyer purchases goods or has economic, technical or other possibility to purchase goods, or considers it expedient to ac-quire the item, but does not have this oppor-tunity, or considers it inexpedient to acquire

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it outside the geographical boundaries of the goods market.

24. The procedure of determining the geographi-cal boundaries of the goods market includes:

a) the preliminary determination of geographical boundaries of the goods market;

b) the identification of the conditions of com-modity circulation restricting economic, technical possibilities of the goods acquisition by the buyer outside geographic boundaries of the goods mar-ket;

c) the definition of the territories included in geo-graphic boundaries of the goods market.

25. The preliminary definition of geographical boundaries of the goods market is conducted on the basis of the information:

a) about the territory on which the signs of viola-tion of common rules of competition have been discovered;

b) price formation in the goods market or differ-ences in price levels for goods in the territories of the Member States;

c) the geographical structure of goods supplies.

26. When determining the geographical bound-aries of the goods market in order to establish whether it meets the criteria, the following signs of cross-border goods market are identified:

a) the delivery of goods from the territory of one Member State to the territory of other Member State;

b) the delivery of goods from the territory of third countries to the territory of two or more Member States.

27. When identifying the conditions of goods cir-culation restricting economic, technical possibili-ties of goods acquisition by the buyer, the follow-ing factors are taken into account:

a) the requirements to the conditions of goods transportation (ensuring preservation of the con-sumer properties of the good);

b) organization and transport schemes of the good acquisition;

c) the possibility to move goods to the buyer or to move the buyer to the goods;

d) the availability, accessibility and interoperabil-ity of vehicles for the movement of goods (buyer of goods);

e) the costs associated with the search and acqui-sition of goods, as well as transportation costs;

f) the peculiarities of the territory in the pre-defined geographic boundaries of the market (in-cluding natural and climatic, social and economic characteristics, presence of zones of the controlled or partially regulated price formation);

g) the regional characteristics of demand for goods (including consumer preferences);

h) the terms, conditions and business practices.

28. The determination of geographical boundar-ies of the goods market is carried out by the fol-lowing methods:

a) the test of ‘hypothetical monopolist’ which is conducted in accordance with Item 29 of the pres-ent Rules;

b) the method of establishing actual sale areas (buyer locations), economic entities (sellers) en-gaged in the sales in the goods market (in pre-defined geographic boundaries);

c) the combination of the methods indicated in Subitems ‘a’ and ‘b’ of this paragraph, or other methods that will allow to define goods sellers (based on predefined sellers), to clearly establish the geographical location of actual sales areas (lo-cation of buyers) where sellers compete with each other when performing sales in the goods market to predetermined buyers.


93

29. When conducting the test of ‘hypothetical monopolist’, the long-term (1 year and more) rise of price for the good by approximately 5 to 10 per cent (with the effect of inflation excluded) in predefined geographical boundaries is presumed. In the survey, it is determined how buyers of the good will respond to this increase.

If, as the result of the survey, it is established that buyers will acquire the goods A in other territo-ries from different sellers and the sales volume of the goods will decrease, what will make rise in prices non-lucrative for ‘hypothetical monopo-list’, then the nearest territories where goods will be purchased shall be included into geographical boundaries of the goods market.

The indicated procedure is carried out until the territory where the price can be raised without reducing benefits for ‘hypothetical monopolist’ is discovered. The boundaries of the discovered ter-ritory are recognized as geographical boundaries of the goods market.

When conducting the test of ‘hypothetical mo-nopolist’, the boundaries of the smallest territory where the seller can carry out the indicated price rise without concomitant loss of its proceeds, shall be regarded as geographical boundaries of the goods market.

30. In the area of services of natural monopolies, geographic boundaries of the market are deter-mined by the characteristics of these services, in particular:

a) the availability and location of technological infrastructure (networks);

b) the capacity of buyers to access technologi-cal infrastructure and its use (connecting to net-works).

31. When establishing dominant position in the market of the Customs Union in order to imple-ment Item 16 Article 30 of the Agreement on ap-plication of special measures, the boundaries of the common customs territory of the Customs

Union are recognized as geographic boundaries of the goods market.

V. Defining the composition of economic entities operating in the goods market

32. The structure of economic entities operating in the goods market includes the economic enti-ties that sell goods within its boundaries within certain time interval of the analysis of the goods market.

33. The number of identified economic entities operating in the goods market is sufficient, if at least one of the following conditions is met:

а) all economic entities operating in the goods market are identified;

b) the number of the identified businesses is suffi-cient to prove or disprove the hypothesis of domi-nant position in the market of any of the economic entities, as well as to establish the degree of influ-ence of each of them on the state of competition;

c) the number of the identified economic entities has been defined on the basis of all available infor-mation and cannot be expanded at the expense of information about economic entities that is avail-able to buyers and sellers in the goods market.

34. Based on the information obtained, when de-termining the time interval of the product inves-tigation and geographic boundaries of the goods market, the economic entities operating on the goods market are determined for which the fol-lowing data allowing to identify them is set:

а) full name (indicating the legal form);

b) location;

c) taxpayer identification number (or other unique numbers allowing to clearly identify the economic entity).

35. For the economic entities operating in the goods market, the following data is also set, if necessary:

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a) affiliation to a group of persons;

b) buyers of goods or regions for the sales of goods;

c) availability of the manufacturing capacity to produce goods;

d) the sellers of goods or sellers of the goods nec-essary for the production of the respective com-modity.

36. When determining the economic entities op-erating in the commodity market, as well as the potential sellers, the size and the composition of buyer groups who purchase goods from sellers operating in the goods market can be specified.

In case small number of buyers (fewer than 15) operates in the market, the economic ties of those buyers with the sellers are to be determined.

VI. Calculation of the goods market volume and the share of economic entities in the goods market

37. The main indicator for calculating the volume of the goods market and the share of economic en-tities in the goods market is the sales volume in the goods market. Other indicators are used in cases where the sales volume cannot be established or when, due to the nature of the goods market, they can more accurately characterize the position of the economic entities in the goods market from the point of view of competition. Other indicators include the volumes of:

а) supply (shipments);

b) revenue;

c) transportation;

d) production;

e) production capacity;

f) stocks of resources;

g) goods in accordance with the existing agree-ments.

38. Indicators refered to in Item 37 of the pres-ent Rules can be used in natural and value terms, as well as in standard measure units ensuring the comparability of data on various goods from the group of substitutable goods, the comparability of data as to various sellers and buyers.

The cost parameters are expressed in Russian roubles. The cost parameters expressed in other currencies are converted on the basis of exchange rates fixed by central (national) banks of the Member States on the corresponding date.

39. Depending on the availability of information, the volume of the goods market is defined as:

а) the sum of the sales volume by economic enti-ties operating in the goods market. At that, re-registration of the same product is not allowed;

b) the sum of the goods volume production with-in geographical boundaries of the goods market (with the exclusion of good consumption in the process of its production and stock volume) apart from the export volume (export) of goods from the respective territory, and with the addition of the import volume (imports) of goods to the re-spective territory;

c) the sum of the purchases volume by commodity market buyers operating in the goods market that can be defined as:

– the volume of retail commodity circulation (for wholesale markets) adjusted by the amount of average trading extra charge;

– the production of the substantiated good con-sumption norms per capita and population (for instance, for retail trading markets with large numbers of buyers) adjusted, if necessary, by ac-tually achieved measure of consumption norms.

40. The share of theeconomic entity in the goods market is calculated as percentage ratio of the indicator characterizing the volume of goods by the given economic entity in the market for cer-tain period, to the index characterizing the total


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volume of the goods market over the same period.

The share of group of persons in the goods mar-ket is defined as the sum of shares of economic entities operating in the specified goods market and composing the group of people.

VII. Determining the level of concentration in the goods market

41. In order to determine the level of concentra-tion in the goods market, the following indicators are used:

a) Market concentration ratio (CR3) – the sum of shares (expressed as a percentage) of 3 largest economic entities operating in the goods market (D1, D2, D3 ):

CR3 = D1+D2+D3;

b) Herfindahl – Hirschmann index of market concentration (HHI) – the sum of the shares (ex-pressed as a percentage) in the goods market of all economic entities operating in the goods market:

HHI = SUM D;

where:

Di – the percentage of the i-th economic entity

operating in the goods market;

N – the total number of economic entities operat-ing in the goods market.

42. In accordance with values of the market con-centration and the Herfindahl – Hirschman index of market concentration, the following levels of concentration of the goods market are classifed:

high (70% <= CR3 <= 100% or 2000 <= HHI <= 10000);

moderate (45% <= CR3 <70%, or 1000 <= HHI <2000);

low (CR3 <45% or HHI <1000).

If the coefficient of market concentration and the Herfindal – Hirschmann index of market con-

centration indicate different concentration levels of the goods market, the indicator having higher concentration level is counted.

If the shares of all the economic entities operat-ing in the goods market are not fixed, the level of concentration of the goods market is established in accordance with the value of the market con-centration coefficient.

VIII. Definition of entry barriers to the goods market

43. The procedure of determining circumstances (actions) that impede the beginning of the activity by economic entities in the goods market (here-inafter referred to as entry barriers in the goods market), includes:

a) the identification of the presence (or absence) of entry barriers to the goods market;

b) the identification of the opportunities to over-come the specified barriers in order to enter the goods market.

44. Entry barriers to the goods market are:

a) economic constraints, including:

– the necessity to make large initial capital invest-ments with long payback period;

– the limited availability of financial resources and higher costs to attract funding for potential participants in comparison with the economic en-tities operating in the goods market;

– the costs of market exit, including the invest-ments that cannot be reimbursed after stopping economic activity;

– the costs of gaining access to the necessary re-sources and intellectual property rights, the costs of advertising and of obtaining information;

– transport restrictions;

– lack of access for potential participants of the goods market to the necessary resources the sup-

N 1

i=1 i

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ply of which is limited, that are allocated between the economic entities operating in the goods mar-ket;

– the availability of economically sound minimum volume of production, which causes higher costs per unit of production, until it reaches the given volume of production (effect of the manufacture scale);

– the benefits for the economic entities operat-ing in the goods market compared to potential participants of the goods market, in particular, in costs per unit of production and the demand for goods, in having long-term contracts with the buyers;

b) the administrative constraints imposed by gov-ernment public authorities of the member states, local governments and organizations, including:

– the conditions of licensing of certain activities;

– the assignment of quotas for production or im-port (export) of goods, use of special protective, antidumping and compensating measures;

– the requirements of mandatory satisfaction of certain demand, maintenance of mobilization capacities, preservation of jobs and social infra-structure;

– the provision of benefits to certain economic entities;

– the obstacles in allocation of land, provision of industrial and other premises;

– the conditions for the competitive selection of goods suppliers for state and municipal needs;

– environmental restrictions, including the pro-hibition on the construction of production capac-ities and transport infrastructure;

– technical regulations, standards, other acts pro-viding requirements to the quality of goods and (or) safety of the goods;

c) the strategy of behavior of the economic enti-

ties operating in the goods market aimed at the creation of entry barriers to the goods market, in-cluding:

– the investment in excess production capacities allowing to increase the production of goods for the purpose of limiting potential participants in the goods market;

– the increase in the costs for buyer connected with the change of seller resulting from the pro-vision of discounts to permanent customers or issuance of mutually complementary goods that are not potentially interchangeable in regard to goods of other economic entities;

– conducting intensive advertising campaigns;

d) the presence of the economic entities in the goods market whose activities cover a number of consecutive stages of the production process and (or) goods circulation (hereinafter referred to as vertically integrated economic entities), includ-ing:

– creating benefits for the participants of verti-cally integrated economic entities in comparison with other potential participants of the goods market;

– the need for participation of potential partici-pants of the goods market in vertical integration, which leads to increasing costs of entry to the goods market.

45. The entry barriers to the goods market are analyzed from the point of view of the possibil-ity of potential sellers (including those operating in the adjacent markets, the ones engaged in the production or sales of the products that are simi-lar in their consumer properties to the consumer goods analyzed) to become parties of the goods market. In addition, the possibilities of economic entities operating in the goods market to increase the production and sales volume of the good are explored.

46. The composition of potential sellers can be


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determined using the following methods:

a) the survey method of the potential sellers that produce (sell) goods, including areas adjacent to the geographic boundaries of the market, or having the opportunity to start the manufacture (sales) of goods within the geographical bound-aries of the goods market. The survey of the po-tential sellers is conducted in the manner similar to the test of ‘hypothetical monopolist’, in the course of which the readiness of the potential seller to enter the goods market during long-term (1 year or more) rise of the price is discovered;

b) expert evaluation method (experts’ survey).

47. The possibility of overcoming barriers to enter a goods market is assessed on the basis of timing and the amount of costs for their overcoming that are measured by the survey of actual and potential sellers, trade specialists (experts).

The barriers for the entry to the goods market are considered surmountable, if the cost of the over-coming as to the entry barriers to the commodity market are economically justified by the income (benefits) that the economic entity planning to enter the given goods market will receive (expects to receive).

The frequency of the appearance of new sellers in the goods market is another indirect evidence characterizing the surmountability of the barriers.

IX. Assessment of the state of competition in the goods market

48. To assess the state of competition in the goods market, it is necessary to determine the type of the market to which the goods market belongs, either the market with poor competition, or the market with the developed competition.

The assessment of state of competition in the goods market is used to determine the dominant position of the entity in the goods market, in ac-cordance with Subitems ‘a’ and ‘b’ Point 2 of the present Rules. All other things being equal, it is

believed that the economic entity operating in the goods market with poor competition has better opportunity to have the decisive impact on the general conditions of goods circulation than the entity operating in the goods market with strong competition.

49. The assessment of the state of competition in the goods market is given on the basis of the in-dicators of the level of concentration of the goods market, the availability and the surmountability of entry barriers to the goods market (determined in accordance with Sections VII and VIII of the present Rules).

The high concentration level of the goods market, the presence of formidable entry barriers to the goods market, the existence of the signs of com-petition restriction identified in the analysis of the goods market specified in Item 16 Article 2 of the Agreement are indicative of the possibility of defining a goods market as the market with poor competition.

The low concentration level of the goods market, the lack of entry barriers to the goods market, the absence of the signs of competition restriction in-dicate the possibility of defining a goods market as the market with developed competition.

The assessment of the state of competition in the goods market is made with due account for the length of the period during which it is impossible to exert decisive influence on general conditions of the commodity sales in goods market.

50. In case, if the characteristics specified in Item 49 of the present Rules are not sufficient for de-termining the market type to which the goods market refers, the following factors shall be ana-lyzed:

a) the behavior of economic entities in the goods market (in accordance with Item 51of the present Rules);

b) the results of the economic activity (in accor-dance with Item 54 of the present Rules);

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c) the factors contributing to the restriction of competition (in accordance with Item 53 of the present Rules).

51. The analysis of behavior of the economic enti-ties in the goods market is conducted in order to establish additional factors that affect the state of competition, and it includes:

a) the study of innovation activity (in particular, defining the priority of the goods market partici-pants: updating the product range or cost reduc-tion);

b) the study of the marketing strategy of the sell-ers (in particular, defining the ways of market participants to compete for the increase of their shares);

c) discovering cases of the provision of benefits to certain customers (consumer group) by the sell-ers;

d) if there is evidence of violation of competition rules, the consequences of such violation to com-petition shall be evaluated.

52. When analyzing the results of economic activ-ity, the following factors can be considered:

a) the prices dynamics in the goods market;

b) the dynamics of the goods market volume and demand (including the availability of unsecured demand and the opportunities of its expansion);

c) the stability of the shares of economic entities in the goods market;

d) the frequency of appearance of new commodi-ties in the goods market.

53. The factors contributing to restriction of com-petition in the goods market may include:

a) the existence of barriers for disseminating the information about substitutable goods;

b) the presence of the significant share of verti-cally integrated economic entities;

c) the reduction of the shares as to the economic entities that are not vertically integrated within the time period of the study;

d) dominant position of the vertically integrated economic entities operating in the goods mar-ket, in one of the adjacent goods markets where components, raw materials and other necessary resources used in the production of commodities are circulated, or those where goods consistently move from the manufacturer to the consumer.

X. Peculiarities of conducting the assessment of the state of competition in some goods markets

54. The assessment of the state of competition in the goods market where vertically integrated eco-nomic entities are operating whose products can be considered as commodity on the relevant good market, is carried out with due account for the following features:

а) when determining the potential sellers of the commodity, the products (work, service) manu-factured at separate stages of manufacture by ver-tically integrated economic entities that they can put on the goods market, without any significant extra costs (not more than 10 percent of the costs on manufacture of production), are recognized as the goods circulating in the goods market;

b) the vertically integrated economic entity is in-cluded in the number of actual or potential sellers in the goods market, if the products (works, ser-vices) manufactured at separate stages of manu-facture of goods are recognized as the goods cir-culating in the goods market;

c) if the vertically integrated economic entities are included in the number of actual or potential sell-ers in the goods market, and the volume output by vertically integrated economic entities of the cor-responding products (work, services) is included in the calculation of its volume, whereas, when calculating the shares of the economic entities in a goods market and when defining the concentra-tion of the goods market, the data on the produc-


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tion volume by vertically integrated economic en-tities of the indicated products (work, services) is taken into account.

55. When assessing the state of competition in the goods market in case of the supposed opportunity of the good buyer to eliminate, to limit or to pre-vent competition in such goods market, the fol-lowing peculiarities are taken into account:

a) when determining the time interval for the goods market research, the product and the geo-graphic boundaries of the goods market study, the presence of economical and technical capabilities to sell the goods is identified;

b) when determining the composition of the eco-nomic entities operating in the goods market, the volume of the goods market and the share of eco-nomic entities in the goods market, the level of concentration of the goods market, the buyers of the goods are identified for whom the respective indicators are calculated;

c) when determining the barriers for the entry to the goods market and assessing the competition in the goods market, the capabilities of the po-tential buyers to purchase the commodity in the goods market are analysed.

XI. Determination of the dominant position of the entity in the goods market

56. The dominant position of the entity in cross-border goods market is established on the basis of the analysis of the following circumstances:

a) the share of the economic entity and its relation to the shares of competitors and buyers are estab-lished in accordance with Sections VI and VII of the present Rules in cross-border goods market as a whole, after that the share of the volume sales or purchase is set additionally for the given eco-nomic entity separately, by the parts of the cross-border market located in the territories of differ-ent Member States;

b) the length of the period during which it is pos-

sible to exert decisive influence on the general conditions of the goods sales (including prices) on the goods market (established in accordance with Section IX of the present Rules);

c) the presence of economic, technological, ad-ministrative or other restrictions on the access to the goods market (determined in accordance with Section VIII of the present Rules).

57. The position of the economic entity cannot be considered dominant, if its share on cross-border goods market makes less than 35 per cent, with the exception of cases indicated in Item 59 of the present Rules.

58. The dominant position of the economic en-tity with the share on cross-border goods market equal to or exceeding 35 per cent is established with due account for the analysis of the circum-stances specified in Item 56 of the present Rules.

59. The position of each of no more than 3 eco-nomic entities, who own the largest shares on cross-border goods market, can be considered dominant, if their total share in cross-border goods market, as a whole and in each of its parts located in the territories of the Member States, makes no less than 50 per cent.

The position of each of no more than 4 economic entities, who own the largest shares on cross-bor-der goods market, can be recognized as dominant, if their combined share in the goods market, as a whole and in each of its parts located in the ter-ritories of the Member States, makes no less than 70 per cent.

The present provision shall not apply, if the share of at least one of the indicated economic entities makes up less than 15 per cent in each of the parts of cross-border goods market located in the ter-ritories of the Member States.

The dominant position of the economic entities on cross-border goods market is established, with due account for the circumstances specified in Item 56 of the present Rules.

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Finalized for publication by the Eurasian Economic Commissionunder the direction of Member of the College - Minister for competition and antitrust regulation of the Eurasian Economic Commission Aldabergenov N.S.

Eurasian Economic Commission115114, Moscow, Letnikovskaya str., 2, Bldg. 2Tel.: +7 (495) 669–24–14e-mail: [email protected]

60. The determination of the dominant position of the economic entity in order to implement Item 16 Article 30 of the Agreement on the application of special measures is based on the analysis of the following circumstances:

a) the duration of the period in which it is pos-sible to exert decisive influence on the general conditions of the good (including prices) in the goods market (is established in accordance with Section IX of the present Rules);

b) the existence of economic, technological, ad-ministrative or other restrictions on the access to the goods market (determined in accordance with Section VIII of the present Rules).

The position of the economic entity with the share equal to or exceeding 35 per cent in the customs market of the Customs Union is recognized as dominant.

XII. Analytical report

61. According to the results of the assessment of the state of competition in the goods market, the analytical report is drawn up, with due account for the requirements of the provisions of Items 3 and 4 of the present Rules, in which the results of the evaluation are demonstrated.

62. The analytical report is prepared by the struc-tural subdivision of the Commission responsible for the assessment of the state of competition.

63. The analytical report should contain the main conclusions made on each stage of the assessment of the competition.

64. When investigating the violations of the rules of competition, the timing of the assessment of the state of competition shall not exceed the terms prescribed in accordance with the Procedure for investigating the violations of competition rules approved by the Board of the Eurasian Economic Commission as of November 23, 2012 No. 98.

Eurasian Economic Commission

115114, Moscow, Letnikovskaya str., 2, Bldg. 2

Tel.: +7 (495) 669–24–14

e-mail: [email protected]

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