July 10, 2023

The President signed the law “On Competition” LRU No. 850 in a new edition

On 03.07.2023, the President signed the law “On Competition” LRU No. 850 in a new edition (the “Law”).

Among other innovations, the Law introduced such a concept as “antimonopoly compliance”.

According to Article 9 of the Law, antimonopoly compliance is a system of internal organizational procedures to ensure that activities comply with the requirements of competition law, identify risks of their violation and prevent these risks.

Thus, in accordance with the Law, antimonopoly compliance must necessarily be implemented in:

– state executive authorities and other organizations;

– economic entities that have a dominant position in the commodity or financial market;

– legal entities whose average annual revenue from the sale of goods over the past 3 years exceeds one hundred thousand times the size of the BCV and in whose charter fund 50 percent or more belongs to the state;

– legal entities whose average annual revenue from the sale of goods over the past 3 years exceeds one hundred thousand times the size of the BCV, in the charter fund of which 50 percent or more belongs to a legal entity, the state share in the charter fund of which is 50 percent or more;

– associations of legal entities.

The Law defined new criteria for the “dominant position”. In accordance with them, subjects of natural monopolies were also defined as subjects with a dominant position.

Also, the institution of “superior bargaining power” was introduced, i.e. the possibility of unilateral influence by an economic entity or a group of persons who do not have a dominant position in determining the terms of the transaction, the territory, and the sale price of goods.

In accordance with the Law, state assistance to economic entities may include tax and customs privileges, subsidies, grants, guarantees, preferential loans, exclusive rights, sale and leasing of state property at preferential prices, granting of rights to use land resources and subsoil on preferential terms, and other preferences.

The Law will come into force on 04.10.2023.