OREANDA-NEWS. January 28, 2010. No.381-FZ Federal Law "On the Basis of Government Regulation of Trading Activities in the Russian Federation" (the Law on Commerce) of 28th December 2009 comes into effect on 1st February 2010. The Law is designed to harmonize at the federal level relations associated with commercial activities in the Russian Federation, reported the press-centre of FAS Russia.

The Law is aimed at creating transparent and predictable procedures of trading activities that do not depend on arbitrary requirements of local authorities, as well at eliminating excessive administrative barriers in trade and supporting small and medium business involved in trade and food production.

The Law on Commerce contains several provisions designed to improve the antimonopoly regulation and development of competition on the market of retail services.

In particular, Part 6 Article 9 of the Law prohibits participants of trade activities to include remuneration for execution of contract conditions by the trade chain, or other types of remuneration, in the contract price for supply of food products to the retail chain.

A contract for supply of food products also cannot include provisions that a supplier must exercise certain actions or provide services aimed at product promotion (product advertising, or marketing services, etc.); suppliers also cannot be forced to enter into such contracts for the purposes of concluding supply contracts. These norms are aimed at constraining one of the most widespread methods, imposed by retail chains upon counteragents and creating discriminatory conditions for entry of supplies of food products to the market.

Requirements are set for economic entities involved in trading activities and economic entities supplying food products to trade chains to place (provide) information about conditions for selecting counteragents for entering into a food products supply contract and about substantial conditions of such contracts.

Part 1 Article 13 of the Law specifies antimonopoly rules and a list of actions that are forbidden to undertake by economic entities involved in trading activities and economic entities supplying food products to trade chains, as such actions can restrict competition in retail trade and infringe the rights of other economic entities. Contracts for supply of food products, which were concluded prior to the Law on Commerce coming into effect, must be adjusted accordingly within 180 days after the date when the Law comes into effect.

Also the Law on Commerce (Article 14) sets restrictions for acquiring additional shopping space for the purposes of trade activities. These restrictions will be applicable to trade networks, whose share exceeds 25% within the boundaries of a constituent territory of the Russian Federation, including the boundaries of the cities with federal status - Moscow or St Petersburg, and the boundaries of a municipal or a city district. "Such restrictions will create opportunities for improving market conditions and horizontal development of trade networks. Enforcing this norm will facilitate equal access of economic entities to the retail market and help creating competitive environment on this market", noted Timofei Nizhegorodtsev, the Head of the FAS Russia's Department for Social Sphere and Commerce.

In order to enforce this norm, FAS Russia has devised and already sent to the Russian Ministry of Economic Development for approval the draft Method for calculating shares of economic entities involved in food retailing through organizing a retail chain on the relevant market.

Also, to prevent setting unjustified obstacles to activities of economic entities, and restricting the choice of economic entities providing such products by the buyers, Article 15 of the Law forbids certain actions of the authorities and local self-government bodies.

"Currently FAS Russia is investigating a number of cases initiated upon similar facts. Article 15 of the Law on Commerce creates additional possibilities to protect the rights of economic entities from unjustified pressure from the authorities and local self-government bodies ", emphasized Timofei Nizhegorodtsev.

FAS Russia has devised proposals on introducing amendments to the Code on Administrative Violations, which are aimed at enforcement of the provisions of the Law on Commerce and specify sanctions for violating these requirements. The approval procedures are completed, FAS Russia will forward the draft Law about introducing amendments to the Code on Administrative Violations to the Government of the Russian Federation.

Overall, FAS Russia believes that adopting and enforcing the Law on Commerce will enable competitive conditions for market participants, price reduction and help increase the quality of services in retail sales and production of food products.