Legal Update “Russia ratifies Agreement on unified principles and rules of competition”
The globalization in the modern world, supranational and international financial and political formations and integration of world economies into single regional and cross-border markets have made it necessary to establish a single legal framework that would unify the regulatory control of combined markets and free movement of capital. One of the main areas in the development of combined markets regulation is antitrust regulation.
A striking example of the dynamic development of supranational antitrust regulation is the system of antitrust regulation organization in the European Union, the backbone element of which is the European Commission. The latter is the main regulator of economic competition ensuring compliance with the provisions of the Lisbon Treaty, which define the rules of competition in the single internal EU market.
However, today we have a unique opportunity to observe the formation of supranational antitrust regulation not only in the Eurozone, but also in Ukraine’s neighbor states Belarus, Kazakhstan and Russia. In July 2011, the Parliament of the Russian Federation ratified the Treaty on Common Principles and Rules of Competition concluded by the said states in December 2010. The Treaty is aimed at establishing a common competition policy to ensure the free movement of goods, services and capital, the freedom of economic activity, and the effective operation of commodity markets in the new geopolitical and economic formation, the Customs Union, as well as to avoid adverse effects on trade between the Parties to the Treaty.
The Treaty establishes the Common Principles and Rules of Competition in the territory of the Parties and for their businesses in cross-border markets in the territory of two or more Parties. The criteria for referring a market to cross-border markets to determine the competence of the Commission of the Customs Union will be set by decision of the Interstate Council of the EurAsEC (the High Authority of the Customs Union) within 6 months after entry into force of the Treaty. The Common Principles and Rules of Competition, provide, in particular, for the following:
• inadmissibility of authorities’ anticompetitive actions
• prohibition of competition restricting agreements
• prohibition of concerted actions of economic entities
• prohibition of economic entities’ abuse of dominant position
• prohibition of unfair competition
• possibility of government price control on goods markets that are not in the state of a natural monopoly.
The body authorized to monitor the compliance with the Common Principles and Rules of Competition in the single economic space is the Customs Union. The Customs Union Commission may decide to impose a fine for breach of competition rules on cross-border markets in the territory of two or more Parties. Such a decision shall be an executive document and shall be enforceable by national acts enforcement authorities of the Party, in the territory of which the wrongdoing entity is registered. Acts, actions (inaction) of the Customs Union Commission in competition shall be challenged in the EurAsEC Court in the manner prescribed by the EurAsEC Court Charter and the Agreement on Resort to the EurAsEC Court regarding disputes within the Customs Union.
Thus, the structure of the new supra-national competition authorities (the Customs Union Commission and the EurAsEC Court), their competence and authority, shows us that the prototype of the antitrust regulation system of the Customs Union is the antitrust regulation system of the European Union. It can be assumed that by virtue of Ukraine’s significant integration in the markets of the Customs Union Member States, as compared with other geopolitical entities, the Common Principles and Rules of Competition and the successful practice of their application can be an important trigger to accelerate the institutional, legislative and enforcement development of antitrust regulation in Ukraine.