OREANDA-NEWS. On March 13, 2007 the Federal Antimonopoly Service (FAS Russia) initiated a case against the State Council of the Komi Republic for breaching Part 1 Article 15 of the Federal Law "On Competition Protection" (on restricting competition on the markets of oil extraction and processing), reported the press-centre of  FAS Russia.

Due to a number of complaints received by FAS Russia, it has analyzed the Law of the Komi Republic of 15th November 2006 "On Amendments to the Law of the Komi Republic "On Tax Benefits on the Territory of the Komi Republic and Amendments to Some Legislations Regarding Tax Benefits". Under the new Law, tax benefits in the Komi republic are given to the companies involved in oil extraction and refining provided the following (apart from some other) conditions are met: the annual company's oil output on the territory of the Komi republic should be no less than 7 mln, tons and (or) oil refinery - no less than 3 mln, tons.

According to the Ministry of Industry and Power Generation of the Komi Republic, these conditions are met only by the companies within the Luikoil group of persons, that is: "Lukoil-Komi" Ltd. (oil extraction) and "Lukoil-Ukhtaneftepererabotka" (oil refining).

Accordingly, FAS Russia has concluded that offering benefits on property tax and profits tax can be unjustified and can also infringe the interests of other economic entities outside the "Lukoil" group of persons, which would result in competition restriction. Therefore, actions undertaken by the State Council of the Komi Republic might have breached the antimonopoly legislation.

The case is scheduled for consideration at the end of April 2007.