Long-awaited Legislative Initiative: AMCU will be Obliged to Apply Methods for Calculation of Fines for Competition Violations

In late March, the Parliament of Ukraine registered the Draft Law "On Amendments to Legislation on Protection of Economic Competition regarding the Calculation of Fines for Competition Violation by Bodies of the Antimonopoly Committee of Ukraine" under Ref. No. 2431(hereinafter, the Draft Law).

The Draft Law has been prepared by antitrust and competition lawyers of Arzinger under the supervision of Lana Sinichkina and Sergiy Shklyar.

The key provisions of the Draft Law stipulate that fines for competition violations shall be calculated based on the Methods for AMCU’s Bodies to Calculate the Amounts of Fines (hereinafter, the Methods). Such Methods should be approved by resolution of the Cabinet of Ministers of Ukraine.

Lawyers of Arzinger have drafted the relevant Methods as well.

The necessity of drafting the Methods is determined 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 be a striking example of mentioned approach (see  http://www.unn.com.ua/uk/news/1455490-proti-v-tsushka-vidkrito-kriminalne-provadzhennya  )

The Methods embody the best European approaches, while taking into account the national specifics of antitrust regulation, and are one of the most important steps in the fulfilment of obligations by Ukraine in the field of competition protection in accordance with the Association Agreement.

Also, the Draft Law invites Ukraine to perform its other obligation– to guarantee companies the opportunity to challenge the amounts of fines or obligations applied by the AMCU in an independent court. Earlier, that right was not available to the companies, while judicial practice registered only a few cases of sanctions lifted per se. Thus the AMCU remained entitled to re-apply any sanction (including in any other amount) upon review of its own relevant decision.

Another no less important proposal under the Draft Law is to ensure that companies considered to have committed violations of the law retain the right to appeal the AMCU’s decisions to the court, with the whole scope of procedural rights reserved for them in the relevant proceedings.

The Draft Law is being actively discussed by lawyers, representatives of public organizations, including professional ones, and is also being considered at meetings of the Public Council under the AMCU.

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

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Should you have any questions regarding the information contained herein, please do not hesitate to contact us.

Kind regards and best wishes,

Timur Bondaryev,

Managing PartnerAttorney-at-lawHead of Antitrust and Competition Practice

Lana Sinichkina,

PartnerHead of Antitrust and Competition Practice