20.11.08

Russia’s Ministry of Economic Development and its Federal Antimonopoly Service (FAS) coordinated a block of amendments to the Law on Competition, initiated under instructions from Prime Minister Vladimir Putin. According to Igor Artemyev, head of the FAS, the draft will be presented to the prime minister at the next Council on Competitiveness. The council meeting is tentatively scheduled for next week, according to Putin’s press secretary.

Ministry of Economic Development has suggested requiring FAS permission only in cases when a "monopolistic enterprise" increases its share on the market. If it only purchases non-core assets, a notification sent to FAS would be sufficient.

The amendments double the amount of assets and the sales volume for defining "monopolistic." Asset size is increased from three billion to seven billion rubles, and sales volume – from 200 million to 400 million rubles. Threshold values remain the same: approval is required for obtaining 25%, 50% and 75% of stocks, and 1/3, ½ and 2/3 of shares in joint-stock company. Amendments apply only to non-financial corporations; asset size for banks and insurance companies is to be specially determined by government.

These measures will lighten the administrative burden on medium-sized business, the majority of which will leave FAS control, explained head of the FAS department Sergey Pyzirevsky.

Businessmen widely agree that it is a proper measure, but it will not have a serious effect, since sale volume of majority of medium-sized businesses does not exceed six billion rubles.

According to Alexander Pirozhenko, head of the department of the Ministry of Economic Development, his ministry approves of this change, but also has its own alternative suggestion.

Another approved amendment authored by FAS would dismiss civil servants for up to three years or impose a 30 000 ruble fine on them if they are found guilty by a court of “actions limiting competition." FAS officials explain that this wording allows punishing violations of direct bans, for example, of providing government assistance to businesses, as well as for actions preventing a company’s entrance into a market.  Currently punishment measures may not be applied to guilty officials immediately; first an order for eliminating the violation has to be issued, and only if the official ignores it, will he be fined.

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Source: “Vedomosti”