AMCU will be Obliged to Apply Methods for Calculation of Fines for Competition Violations

Arzinger law firm, 
Kyiv, Ukraine, Fri, April 24, 2015

Inlate March, the Parliament of Ukraine registered the Draft Law "OnAmendments to Legislation on Protection of Economic Competition regarding theCalculation of Fines for Competition Violation by Bodies of the AntimonopolyCommittee of Ukraine" under Ref. No. 2431(hereinafter, the Draft Law).

TheDraft Law has been prepared by antitrust and competition lawyers of Arzingerunder the supervision of Lana Sinichkina and Sergiy Shklyar. 

Thekey provisions of the Draft Law stipulate that fines for competition violationsshall be calculated based on the Methods for AMCU’s Bodies to Calculate theAmounts of Fines (hereinafter, the Methods). Such Methods should be approved byresolution of the Cabinet of Ministers of Ukraine. 

Lawyersof Arzinger have drafted the relevant Methods as well. 

The necessity of drafting the Methods isdetermined in particular by a numerous violations by the AMCU  of the principles of proportionality and non-discrimination at fines’determination. Fines applied by the AMCU in “furniture cartel" case can bea striking example of mentioned approach (see  http://www.unn.com.ua/uk/news/1455490-proti-v-tsushka-vidkrito-kriminalne-provadzhennya) 

TheMethods embody the best European approaches, while taking into account thenational specifics of antitrust regulation, and are one of the most importantsteps in the fulfilment of obligations by Ukraine in the field of competitionprotection in accordance with the Association Agreement. 

Also,the Draft Law invites Ukraine to perform its other obligation– to guaranteecompanies the opportunity to challenge the amounts of fines or obligationsapplied by the AMCU in an independent court. Earlier, that right was notavailable to the companies, while judicial practice registered only a few casesof sanctions lifted per se. Thus the AMCU remained entitled to re-apply anysanction (including in any other amount) upon review of its own relevantdecision.

Anotherno less important proposal under the Draft Law is to ensure that companiesconsidered to have committed violations of the law retain the right to appealthe AMCU’s decisions to the court, with the whole scope of procedural rightsreserved for them in the relevant proceedings.

TheDraft Law is being actively discussed by lawyers, representatives of publicorganizations, including professional ones, and is also being considered atmeetings of the Public Council under the AMCU. 

Ifthe Draft Law is approved, it will allow businesses and professional communityto have a clear understanding of the AMCU’s approaches in determining theamounts of fines and thus to correctly assess the relevant antitrust risks andensure compliance with the principle of equality and proportionality in the sanctions applied.