On Feb. 7 the Verkhovna Rada of Ukraine voted for Draft Law 6746 “On amendments to certain legislative acts of Ukraine to ensure the principles of procedural justice and improve the effectiveness of proceedings in the suits on legal violations of the protection of economic competition,” according to which a number of key changes are proposed for the Law of Ukraine “On the Protection of Economic Competition.”
One of the important innovations is setting boundary time limits for the carrying out of investigations by the Antimonopoly Committee of Ukraine.
In particular, the Law stipulates the following terms:
– For cases connected with failure to provide information, the submission of false information, the non-execution of the decisions of the Antimonopoly Committee of Ukraine, and obstructing inspections, etc. – six months from the date of the adoption of decision on beginning consideration of the case;
– For cases on concentration of assets without permission, on the violation of conditions of concentration during the creation of an economic entity for which a permit was granted, and on violations stipulated by the Law of Ukraine “On Protection against Unfair Competition” – one year;
– For cases on concerted anticompetitive actions (cartels) – five years;
– For all other types of violation – two years.
Another important innovation is the provision regarding the new “settlement” institution for Ukraine. Its essence is that the antimonopoly body and the defendant in the case agree on the voluntary recognition by the defendant of all or part of the charges, for which a reduced fine is imposed.
An entity can at any stage of the case, before the Committee draws up preliminary conclusions on the case, submit an application to the Antimonopoly Committee to settle the case. Following the request, consultations are held between the parties, and the terms of the settlement are agreed and, in the event of reaching an agreement, the parties signs the relevant agreement.
It should be mentioned that the agreement is subject to approval by an economic court in accordance with the jurisdiction rules, and should contain a condition for the unconditional recognition of the violations by the defendant in the case, and the amount of the fine, which should be 20 percent less than the amount of fine that would be calculated according to the general rules. This statutory provision is quite interesting, but although it is not completely clear how it will be consistent with procedural legislation.
One more interesting innovation is the prohibition by the Law on appeals by the defendant against decisions of the Antimonopoly Committee of Ukraine taken in accordance with the terms of the settlement procedure.
The conditions of the reached settlement cannot be declared to be information with restricted access, and should be fully described in the relevant decision of the Antimonopoly Committee of Ukraine in the case.
The law also proposes the extension and improvement of the procedure for exempting from liability violations in the form of concerted actions, if persons have appealed to the Antimonopoly Committee of Ukraine to declare that they recognize the violation. Complete exemption from liability for the first person applying is currently provided.
The law, in accordance with modern European practice, also introduces a partial exemption for further persons, namely:
• A reduction of the fine by 50 percent for the second person who applied;
• A reduction of the fine by 30 percent for a third person;
• A reduction of the fine by 20 percent for all others.
A more detailed description of the rights of case participants and defendants are specified by the Law. In particular, there is a clearly defined right to ask the antimonopoly bodies and obtain justified answers, the right to familiarize themselves with the case file (including the right to copy these materials), etc.
The issue of the adoption of preliminary conclusions in the case, and lodge objections to them, are also regulated more clearly.
An important change is the fact that the Law now establishes a minimum period of one month from the date of receipt of preliminary conclusions, during which objections should be filed (currently this period is 10 days), as well as a maximum period for which the term for submission of objections on the person’s application may be extended – up to three months.
Other crucial innovations are the norms concerning the possibility of discharging the officers of the Antimonopoly Committee of Ukraine or experts and interpreters if it is established that there are circumstances that cast doubt upon their impartiality or objectivity, in particular, in connection with the existence of a conflict of interests in accordance with the Law of Ukraine “On the Prevention of Corruption.”
In general, the Law is very important for the further development of antitrust regulation in Ukraine, and therefore we hope for its early signing by the president and for it to be published.