OREANDA-NEWS. September 13, 2011. Andrey Tsarikovsky: “We formed a cartel investigation mechanism that has begun to work efficiently”. Stats-Secretary Andrey Tsarikovsky, Deputy Head of FAS Russia, made this statement giving a presentation at a cartel-investigation workshop on Competition Day in Rostov-on-Don, reported the press-centre of FAS Russia.

An anticompetitive agreement (a cartel) is a form of monopolistic association and agreement. It is the most dangerous economic violation in the field of antimonopoly regulation that harms consumers as well as national economy in general.

“Until 2008, there were just a few cartel cases in Russia. When we analysed our cartel investigation practice it became obvious that the level of cartelization of the economy in Russia is very high, but any attempts to combat cartel with bare enthusiasm were to no avail and it was necessary to move to systemic efforts on exposing anticompetitive agreements”, explained Andrey Tsarikovsky.

FAS Russia adopted a number of measures that radically changed cartel investigations.

The first step was dramatic changing of the legal framework. Russia made amendments to Article 178 of the Criminal Code of the Russian Federation that provide for tough sanctions for entering in a cartel agreement, including criminal punishment. Russia also introduced leniency programmes when the first cartel participant who reported the cartel to the Antimonopoly Service is relieved from liability.

Another step towards improving cartel investigation was devising inspection techniques. “Today “dawn raids” have become a usual practice”, said Andrey Tsarikovsky. “Dawn raid are sudden inspections employing search procedures, copying electronic media, obtaining written statements. Under the current law, to inspect economic entities the authorities must observe a great number of procedures and reach many approvals, but “dawn raids” are an exception – FAS undertakes it suddenly, without warning anybody.” Deputy Head of FAS Russia discussed an interesting case when a sudden inspection allowed exposing a written cartel agreement on price-fixing and dividing a market.

Andrey Tsarikovsky reminded that FAS does not have the powers to conduct operational investigations. Therefore, it is impossible to investigate anticompetitive agreements without the law enforcement bodies being involved. Today the work with the Ministry of Interior and the Prosecutor’s Offices is well-organised both at the level of the Central FAS Office and its regional offices. In 2011 FAS has already forwarded dozens of case files to the law enforcement bodies to consider initiating criminal cases under Article 178 and other Articles of the Criminal Code of the Russian Federation.

As a result of these efforts, FAS initiated more cases under Articles 11 and 16 of the Federal Law “On Protection of Competition”. If in 2007 only 232 cases were opened for violating Article of the Federal Law “On Protection of Competition” (agreements or concerted actions of economic entities), in 2010 FAS initiated 607 cases. In 2010 FAS initiated 639 cases under Article 16 of the Federal Law “On Protection of Competition” (agreements or concerted actions involving the authorities) against 148 cases in 2007.

“We have traveled a long way from sporadic, isolated cartel investigations to clear and coherent efforts to combat cartels”, pointed out Andrey Tsarikovsky. “Today it is possible to state: we have formed a mechanism for cartel investigation and this mechanism has begun to work efficiently”.

Reference:
Cartel is a powerful restriction of market competition between economic entities. By entering in such agreements, independent companies act like monopolists refecting independent market conduct and rivalry with their competitors.