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Antitrust Dispute Resolution in Kazakhstan

Antitrust Dispute Resolution in Kazakhstan. Rustam Ilzhanov, Senior Partner Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers London, October 26, 2011. Law of the Republic of Kazakhstan On Competition. Exterritorial effect: actions affect assets,

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Antitrust Dispute Resolution in Kazakhstan

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  1. Antitrust Dispute Resolution in Kazakhstan Rustam Ilzhanov, Senior Partner Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers London, October 26, 2011

  2. Law of the Republic of Kazakhstan On Competition • Exterritorial effect: • actions affect • assets, • shares/participatory interests, • rights with respect to legal entities • located within Kazakhstan; • actions restrict competition in Kazakhstan. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers www.szp.kz

  3. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Government Control • The government authority overseeing competition in Kazakhstan is • the Agency for Protection of Competition • (the Antimonopoly Agency). • Primary activities of the Agency : • combating monopolistic practices; and • supervision of economic concentration. www.szp.kz

  4. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Combating Monopolistic Practices • Monopolistic activities: • anticompetitive agreements between market entities; • anticompetitive concerted practice of market entities; and • abuse of a dominant or monopolistic position. www.szp.kz

  5. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Anticompetitive Agreements • AnticompetitiveRestriction of • Agreements Competition • Anticompetitive agreements include: • setting up agreed prices; • division of goods markets based on criteria; • restriction of production or sale of goods . www.szp.kz

  6. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers ConcertedPractices • ConcertedRestriction of • PracticesCompetition • Concerted practices include: • setting up prices; • restriction of production or sale of goods; • refusal to enter into contracts with certain vendors or buyers; • use of discriminating conditions in equivalent agreements. www.szp.kz

  7. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Abuse of Dominant/Monopolistic Position Dominant position - share in a goods market ≥35%. Monopolistic position - share in a goods market = 100%. www.szp.kz

  8. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Investigations in the good markets : • Oil products; • Electricity supply; • Cement wholesale; • Communication services (Roaming, Internet, etc.); • Agriculture. www.szp.kz

  9. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Practice of Sayat Zholshy & Partners: • abuse of dominant position by a leading Kazakhstan fuel and lubricants distributor (fine threatened against the client – EUR ≈58 mln.); • abuse of dominant position by a mobile operator (fine threatened against the client ≈ EUR 57 mln.); • abuse of dominant position by a tea supplier (fine threatened against the client – n/a); • anticompetitive concerted actions of a dairy producer (fine threatened against the client – n/a); • anticompetitive concerted actions by a vegetable oil producer (fine threatened against the client – n/a). www.szp.kz

  10. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Obtaining consent for economic concentration:Stage 1:verification of completeness of submitted documents – 10 calendar days;Stage 2:consideration of the application – not more than 50 calendar days. www.szp.kz

  11. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Applications for Economic Concentration

  12. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Key Points while Filing Application • Submission of large volume of information : • production and sales volumes and exports and imports volumes to and from Kazakhstan for the previous 2 years + forecasts for the following 3 years for each market entity which is a part of the applicant's group of persons. • inclusion of great number of market entities to the definition of group of persons (apart from parent companies, subsidiaries and sister companies) =>information related to their ultimate individual beneficiaries, etc. www.szp.kz

  13. Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Consequences of a Failure to Obtain Consent for Economic Concentration • Pursuant to the legislation : • imposition of a fine (≈EUR14,000); • holding of the transaction invalid. • Practice: • "impaired relations" with the Agency (additional future investigations by the Agency); • problems and obstacles for future transactions (e.g., rejection of future applications, etc.). www.szp.kz

  14. Nurly Tau Business Center Block 2A, 3rd Floor 5, Al-Farabi Ave. 050059, Republic of Kazakhstan,Tel.: +7 727 311 00 20Fax: +7 727 311 00 22e-mail: info@szp.kz www.szp.kz

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