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COMMON COMPETITION POLICY – a necessary condition for the effective functioning on the Single Economic Space Nurlan Aldabergenov Member of the College – Minister for competition and antitrust regulation of the Eurasian Economic Commission Vienna , 2012. Single economic space ( SES ).
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COMMONCOMPETITION POLICY– a necessary condition for the effective functioning on theSingle Economic SpaceNurlanAldabergenovMember of the College – Minister for competition and antitrust regulation of the Eurasian Economic CommissionVienna, 2012
Single economic space (SES) Integration and macroeconomic policy Economics and financial policy Industry and agricultural sector Trade Technical regulation Customs cooperation Energy and infrastructure Competition and antirust regulation From 1 January 2012
40 Trade turnover of the Republic of Belarus, Republic of Kazakhstan and the Russian Federation 29 (41%)
Russia’s trade turnover with Belarus and Kazakhstan 30,7 (33%) Billion of USD 2011 2010
Belarus's trade turnover with Russia and Kazakhstan (46%) Billion of USD 2011 2010
Kazakhstan’ trade turnover with Belarus and Russia 7,5 5,9 Billion of USD (24%) 2010 2011
Main ways of the single competition policy development within the SES Public (municipal) procurement Antitrust regulation Price regulation, including control over introduction and prolongation of the governmental price regulation
9 Harmonization of competition laws in Belarus, Kazakhstan and Russia Kazakhstan, Belarus and Russia bring the legislation into accordance with principles and rules of competition established by sections II and III of the Agreement The current status of the draft laws on making amendments and additions to: The law on counteraction to monopolistic activity and competition development is in Parliament of the Republic of Belarus The law on competition of the Republic of Kazakhstan is in Mazhilis of the Republic of Kazakhstan’s Parliament Federal Law on protection of competition of the Russian Federation is at the federal level
Difference in administrative penalties for violation of competition rules • Fines for undertakings
Difference in antitrust legislation of the three Member States
Use of best international practices • WARNING • NOTICE • DISQUALIFICATION Introduction of preventive measures and adequate penalties for antitrust law violations:
Elimination of barriers in mutual trade • The Republic of Belarus • Legal services • Retail sale of tobacco products • The Republic of Kazakhstan • Purchase of electric energy for power supply • Activities in the field or architecture, constriction and urban development • The Russian Federations • Private detective activity • The activities of join stock investment funds 1. The analysis of licensing system and legislation of member-states of the Customs union and SES on establishment of unreasonable barriers in mutual trade and development of offers on their harmonization. For example: differences in licensing 2. Direction of proposals on changes into the legislation in the field of competition policy in terms of harmonization of the legislation of each of the States in accordance with the Agreement on common principles and rules of competition to the Eurasian economic commission and the Government.
Regulatory acts on execution of control over the common rules of competition: Criteria of assigning markets to cross-border ones Methodology on competition assessment Methodology on evaluation of excessively high (low) prices Methodology on calculation of fines and procedure of penalizing Procedures of consideration of applications (claims) on violation of competition rules Procedures on carrying investigations of competition rules violations Procedures on consideration of competition rules violations Rules on cooperation between the EEC and relevant authorized bodies of the Member-States
Result of convergence of methods of setting tariffs for natural monopolies 1. Decrease of tariffs level for natural monopolists’ services 2. Transparency of natural monopolists' activities 3. Ensuring equal possibilities in procurement for all potential suppliers
Model Law on Competition (signing term – July 2013) Prohibition of anticompetitive agreements and concerted actions Prohibition of abuse of dominance Main terms Prohibition of unfair competition Prohibition of anticompetitive acts and activities of governmental authorities Competition in public (municipal) procurement Control over economic concentration Control over provision of state (municipal) aid State monopoly Functions and powers of competition authorities Governmental price regulation Penalties for violation of competition legislation
Activities on discussion of draft of the Model law on competition • International scientific-practical conferences and round tables in Belarus, Kazakhstan and Russia with participation of deputies, power authorities, business community and public organizations. • Belarus – Minsk and Brest • Kazakhstan – Astana and Almaty • Russia – Novosibirsk and Kazan • Inter-parliamentary assembly of the Eurasian economic community (preliminary discussions of issues on harmonization of legislation at meeting of MPA Bureau of EurAsEC on November 22) • Antimonopoly authorities of the states with a rich experience(Japan, Great Britain, Republic of Austria, South Korea etc.) • Examination of issues on adoptions of the Competitive Code of the Single Economic Space
The Court of the EurAsEC Decision of the authorized body of a Member State • Considers cases on compliance of the Customs Union (the CU) bodies’ acts with international treaties, comprising treaty framework of the CU; • Considers cases on challenge of decisions, acts, omissions of the CU bodies; • Interprets international treaties, comprising treaty framework of the CU, acts, adopted by the CU bodies; • Considers disputes between the EEC and the Member States, and between the Member States concerning fulfillment of obligations undertaken within the CU. Court of a Member State Decision of the EEC The Court of the EurAsEC
Cooperation of the EEC with national competition authorities of Belarus, Kazakhstan and Russia on suppression of anticompetitive violations in cross-border markets Complaints from cross-border markets Complaints from cross-border markets ЕEC Ministry for Economics of Belarus carries investigation under laws of Belarus Agency on Protection of Competition of Kazakhstan carries investigation under laws of Kazakhstan Federal Antimonopoly Service of Russia carries investigation under laws of Russia Working groupconsisting of staff of the EEC, Ministry for Economics, Agency on Protection of Competition, Federal Antimonopoly Service – expert assistance to the national bodies and preparation of documents for the Consulting Committee Consulting Committee, consisting of representatives from Belarus, Kazakhstan and Russia – develops proposals for the EEC concerning the received documents Recommendations on suppression of violations or binding for the Member States decisions on amending national legislation 21
Practical realization of goals on establishment of common competition policy Working groups on development of offers: on providing of fair competition conditions in the market of oil products, including excise duties on oil products (for example: excise duties in Russia make about 220 US dollars for AI-92 gasoline per ton, in Kazakhstan about 70 US dollars per ton, and in Belarus about 140 US dollars per ton that creates unequal competition conditions between economic entities of three countries in the market of oil products) on competition development in the air transportation market on competition development at implementation of parallel importing of the goods containing objects of intellectual property
Cost of electricity for the popular in the border regions of Kazakhstan and Russia 1,64 Tyumen region 2,25 Russia 2,54 Omsk region 1,8 Kurgan region 2,25 North - Kazakhstan region 1,77 Novosibirsk region 2,28 2,35 Chelyabinsk region Samara region 1,73 2,38 2,04 1,68 2,85 Altay Pavlodar region Kostanay region Saratov region Akmola region Orenburg region Altai Republic 1,39 2,27 West – Kazakhstan region Volgograd region 1,43 1,81 Kazakhstan East - Kazakhstan region 2,67 Aktobe region 1,09 Astrakhan region Karaganda region Atyrau region
Saint Petersburg Belarus Minsk Belavia Moscow Yekaterinburg Aeroflot Transaero S7 Airlines Utair Russia airways Russia Novosibirsk Competition development in the air transportation market between Belarus, Kazakhstan and Russia Развитие конкуренции на рынке воздушных перевозок между Россией, Беларусью и Казахстаном Аstana Kazakhstan Air Astana Skat Airways Almaty Main directions on the Single Economic Space territory
Parallel importing Producer- trademark holder Supply of goods independently or via official distributor • - medicines; • clothes; • homeware; • consumer electronics; • cars etc. BARRIER: in order to supply to the territories of Kazakstan, Belarus and Russia, the producer’s (trademark holder’s) approval is required Undertaking • Steps to undertake: • To create a working group to develop proposals on elimination of barriers to commodity markets • To amend the Agreement on Common Principles of Regulation in the Sphere of Protection of Intellectual Property Rights 26
Difference between the official price and the price of parallel importers BENEFITS OF PARALLEL IMPORTING:commodities become cheaper Auto spare parts - from 60 to 80% Sport goods - from 30 to 45 % Car seats - up to 50% Perfumes from 20 to 60% Bicycles - up to 40% Photo cameras –up to 20%
Exchange of experience in: • Improvement of the competition policy’s legal framework; • Implementation of practical measures on antitrust regulation and competitive environment development; • Providing procedural assistance in conducting investigations related to violations of legislation in the field of competition policy; • Development of scientific and methodological bases of research in the field of competition policy and legislation. The interaction of the Eurasian Economic Commission with the Austrian Federal Competition Authority in the field of competition policy