FAS Revises its Draft Amendments to Natural Monopoly Laws


Bryan Cave Leighton Paisner (Russia) LLP, formerly Goltsblat BLP in Russia, advises that a draft federal law put forward by the Federal Antimonopoly Service of Russia (FAS) has been published on the federal regulatory website1. The Draft Law dated 27 February 2019 amends the Competition Law and also invalidates the Natural Monopoly Law and some other legislative acts or their provisions.

Key revisions proposed to the Draft Law are to update the below definitions:

  • “natural monopolist means a business entity providing services using power network assets or power sector real-time operations control services in the natural monopoly spheres specified by this Federal Law”;

  • “network asset means the public railway infrastructure, power grid facilities, trunk oil and oil product pipelines, trunk gas pipelines and gas distribution pipelines, communications facilities and networks, heat distribution facilities, a centralised water supply system and a centralised water disposal system.”

The revised Draft Law also defines a natural monopoly sphere as a tradable service area classified under this Federal Law as a natural monopoly where a consumer may obtain services from natural monopolists.

Under the revised Draft Law, the following areas are subject to regulation:

  • oil and oil product trunk pipeline transportation;

  • gas pipeline transportation;

  • infrastructure provision for railway transport;

  • public telecommunications services;

  • power transmission services;

  • power sector real-time operations control services;

  • thermal energy transmission services;

  • water supply and water disposal using centralised and communal infrastructure systems.

Under the Draft Law, a decision to change or terminate regulation of certain natural monopoly businesses is taken by the federal antitrust body following a specific product market competition review made under its internal procedure.

The Draft Law also clarifies cases when a natural monopolist must maintain separate accounting records of its costs and revenues by type of regulated operation, namely if such a business entity is subject to state price (tariff) regulation.

One interesting new concept in the Draft Law is that losses incurred by a natural monopolist or any other business entity as a result of unlawful decisions or actions (omissions) by the natural monopoly regulator are subject to compensation.

Public debate starts on 28 February 2019 and ends on 14 March 2019.

We will continue monitoring FAS legislative initiatives and keep you up-to-date on important regulatory developments affecting natural monopoly services.

1 http://regulation.gov.ru/projects#npa=81192

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