OREANDA-NEWS. On July 31, 2007 a seminar on "control of state and municipal aid" took place in Arkhangelsk, reported the press-centre of FAS Russia.

Representatives of the Central Office of the Federal Antimonopoly Service (FAS Russia) and its territorial offices (St Petersburg, Vologda, Kaliningrad, Karelia, the Komi Republic, Murmansk, Novogorod, Pskov, Yaroslavl, Rostov, the Bashkortostan Republic and Arkhangelsk) met there to discuss the enforcement practice of Chapter 5 of the Federal Law "On Protection of Competition".

Led by Alexander Kinyov, the Head of the Department of Public Service and State Aid Control, of FAS Russia, the seminar participants analyzed the main issues of enforcing the norms of Chapter 5 of the Federal Law "On Protection of Competition"; they also formulated recommendations for the antimonopoly authorities on enforcement of the existing legislation which regulates state and municipal aid.

The concept of forbidden state aid has been introduced by the Federal Law "On Protection of Competition" that entered into force on 26th October 2006. The Law defined state and municipal aid as offering individual benefits and (or) preferences to one or several economic entities by the federal executive bodies, executive bodies of the subjects of the Russian Federation, local self-government bodies as well as authorized organizations.

The Law introduces a ban on state aid with certain exceptions. For example, offering state or municipal funds (resources, property, benefits) on the basis of tenders, for the purposes of liquidating the consequences of natural calamities, accidents, catastrophes, and emergency situations, as well as some other methods of offering budget funds to economic entities are not classified as state aid.

State aid offered under the federal law, the law on the budget of a subject of the Russian Federation and the act on the budget of a local self-government body is allowed without prior permission of the antimonopoly authority.

In certain cases, state aid can be granted upon permission of the antimonopoly authority (if it does not lead to elimination or preventing of competition). For instance, the antimonopoly authority can allow the aid required for habitation support of the northern territories or area assumed as equivalent to them, protection of the environment, supporting cultural trends or fundamental research, etc.

According to Mr Kinyov, state aid control is one of the main prospective areas of the FAS Russia's activity. Statistics, collected by the antimonopoly authority, shows that officials committed over 50% of the violations of the competition legislation in Russia in the last ten years. "Today one of the main objectives of the antimonopoly service is to stop anticompetitive actions of the authorities - said Mr Kinyov, - while state aid is the most dangerous of such actions because of its impact on the level of competition and on economics in general". The main goal, which faces FAS Russia and its territorial offices, is to develop a unified approach to public policy in this rather new but absolutely important sphere, added Alexander Kinyov.