Russia modifies fines for anticompetitive agreements

Antitrust Alert

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New amendments to article 14.32 of the Russian Code on Administrative Offences (Amendments) entered into force on 28 April 2017 and establish new penalties for concluding anticompetitive agreements, implementing concerted practices and coordinating economic activities.

Following the Amendments, penalties for anticompetitive agreements and concerted practices vary depending on the degree of "public risk". Prior to the Amendments, there was generally a single form of liability for any type of anticompetitive agreement or concerted practice - up to 15% of the amount of the annual proceeds from the sale of goods on the market, or of the annual expenses for acquiring goods on the market (except for agreements restricting competition in tenders). Now the fine will depend on the type of infringement.

Important

The Amendments increasing liability for cartels will not apply to offences committed prior to the Amendments entering into force. However, the new provisions which decrease the potential liability can be applied retroactively.

It should be noted that the antimonopoly regulator is authorised to issue an order to transfer to the federal budget the profits received due to violation of competition legislation. Based on the established practice, in some cases, when the size of the turnover fine is substantially less than the profits received as a result of the violation, the antimonopoly regulator may recover such profits instead of imposing a turnover fine.

These changes demonstrate that competition legislation is being improved as the law enforcement practice develops.