15 July 2009
Grigory Chernyshov comments for The Moscow Times Russian PM's initiative to adopt a bill that would ensure criminal penalties for unfair competition

The Moscow Times

Putin Orders Action on Antitrust Bill

Anatoly Medetsky

Prime Minister Vladimir Putin vented his frustration Tuesday to a group of top senators over delays in the parliament on passing a bill that would ensure criminal penalties for unfair competition.

The government is hoping that harsher anti-monopoly regulation, which now operates through a system of fines, will help it pull the economy out of a slump. The Federal Anti-Monopoly Service has been unable to apply criminal punishments so far, saying that part of the law is too vague.

A bill that would offer greater clarity about what constitutes unfair competition has been stuck in the State Duma since Feb. 27, when the Cabinet submitted the legislation. Duma deputies gave the bill preliminary approval only at the end of May.

Putin demanded that the parliament adopt the bill before the end of this month, saying consultations on the Cabinet-sponsored project had taken far too long.

“This begins to look like deliberate procrastination,” he said in a meeting with five senior Federation Council members, including Speaker Sergei Mironov.

The Duma is scheduled to consider the bill in the key second reading Wednesday.

The demand to speed up the work comes a day after Federal Anti-Monopoly Service director Yury Artemyev said he asked the prime minister for help on the matter.

“We asked Vladimir Vladimirovich to help us ask the parliament to adopt [an amended] Article 178,” Artemyev said Monday, referring to the article in the Criminal Code that sets penalties for unfair competition.

The new article would stipulate prison terms of up to three years for violations of anti-monopoly law, Artemyev said.

In addition to dropping its vague language, the amended law would cover cartel collusion, which it currently does not, said Grigory Chernyshov, a partner at law firm Egorov Puginsky Afanasiev & Partners.

“It’s weird because this is the most serious violation,” said Chernyshov, who is also a member of the nonprofit Partnership for the Promotion of Competition, which was established in 2007 to advocate for better anti-monopoly regulation.

Another member of the partnership, Artur Rokhlin, a partner at the law firm Yust, said the law would make the economy less monopolized, but warned against any excesses. “The danger of arbitrary use of these provisions is not being removed,” he said.

Putin spoke a day after the Presidium, a scaled down Cabinet, discussed the state of competition in the country as described by the Federal Anti-Monopoly Service. In a state-of-affairs report that the service published on its web site Tuesday, it pointed out that state agencies accounted for almost half of the 6,540 violations that it uncovered last year.

It also said state-run corporations and a selective use of federal funds to bail out crisis-hit companies were a major hurdles for competition.

It was unclear Tuesday whether the amendments for criminal penalties would help combat the government-related competition problems. A call to the Federal Anti-Monopoly Service press office went unanswered Tuesday afternoon.