No. 57. Important developments in the antimonopoly legislation (on audits by antimonopoly authorities and granting of state or municipal preferences)

03.08.2009

Goltsblat BLP advises that Federal Law No. 164-FZ of 17 July 2009 “On Amendments to the Federal Law “On Protection of Competition” and Certain Legislative Acts of the Russian Federation” will come into effect on 23 August 2009.

The many amendments to the Federal Law “On Protection of Competition” include, especially, broader authority of the antimonopoly bodies to perform audits and request documents (information), and more detailed rules governing the exercise of such authority.

Antimonopoly bodies are entitled to check compliance with the antimonopoly legislation of the Russian Federation by state authorities, local governments and organisations. Audits are performed by decision of the head of an antimonopoly body and auditors are entitled to request any documents, explanations and information they might need, including correspondence in electronic format.

The law provides for two types of audit: scheduled and unscheduled, all performed in the field, not more than once every three years for scheduled audits and, for unscheduled audits, upon receipt of information regarding violation of the antimonopoly legislation or with a view to checking fulfilment of a previously issued order. Audited entities should be notified 3 working days before a scheduled audit and 24 hours before an unscheduled one. Checks for compliance with the prohibition on agreements and concerted actions between business entities restricting competition may be performed without notice. The audit period may not exceed 1 month from the starting date indicated in the relevant order (with the possibility of extension another 2 months).

For the first time, the law recognises the right of antimonopoly officials to examine territories, premises, documents and possessions of an audited entity (in the presence of at least two witnesses). The results of the examination are recorded in a protocol. A period 3 working days from receipt of a relevant request has been established for providing documents and information. Subject to timely notice from the audited entity, the antimonopoly authorities may set a new deadline for submitting documents and information or refuse to do so. Documents should be provided in the form of certified copies but antimonopoly officials retain the right to review the originals.

The important amendments to the Federal Law “On Protection of Competition” also touch upon government or municipal aid. The term itself has been replaced by a new one: granting of state or municipal preferences. The list of eligible spheres has been extended to include development of education and science, physical culture and sports, occupational safety, national defence capability and security.

A preference is granted subject to prior written approval by an antimonopoly body. There are, however, some exceptions to the general rule for approval (mainly with respect to preferences envisaged by budget law acts). The period for considering an application for a preference to be granted has been reduced from two to one month.

For additional information, please contact:

Eugenia Borzilo, Head of Group,
Corporate/M&A,
Goltsblat BLP;
T: +7 495 287 44 44
E: info@gblplaw.com

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