State Standard for antimonopoly compliance

The set of documents which help businesses devise an efficient compliance system and understand the process of its implementation will be upd ated with a new national standard. It will come into effect starting from 2023 and is aimed at creating unified rules and procedures when companies implement tools for preventing antimonopoly risks. Elena Sokolovskaya, partner at Pepeliaev Group, will review, what does the standard offer, and what questions arise owing to it being adopted.

The swift development of a market economy bears risks for competition. Therefore, it is becoming increasingly vital to devise efficient prevention tools allowing their user to preclude any violations of legislation.
Since 2014, the implementation of the institution of antimonopoly compliance has been actively under discussion in Russia. In the spring of 2020, amendments were adopted which updated the Competition Protection Law with the new article 9.1. This article regulates the requirements which a company should comply with when implementing a system that ensures compliance with antimonopoly legislation. The next step was made in July 2021, when the Russian Federal Antimonopoly Service published its clarifications on the procedure for implementing compliance systems. The Service pointed out that it is the right of business entities to file with the authority its internal compliance regulation or a draft of such regulation, so that whether it complies with the law could be established.

At the same time, at the initiative of the Association of Compliance Managers, the national standard for risk prevention tools was being prepared. On 25 October 2022, State Standard (GOST) R 70433-2022 “The internal system for ensuring compliance with antimonopoly legislation (antimonopoly compliance system) in an entity” (the “Standard”) was approved by Order No. 1181-st of the Federal Agency for Technical Regulation and Metrology (known under the Russian acronym “Rosstandart”), with its effective date being 1 January 2023.

For information
The Association of Compliance Managers was founded in 2018. Its goals are to summarise the best practices of setting up and perfecting risk prevention systems and to implement a se t of measures to prevent antimonopoly violations.

The Standard is non-binding and aimed at forming unified rules and procedures of antimonopoly compliance and encouraging business entities to devise and implement risk prevention systems as part of their activities.

The developers of this document have taken into account both the rules of the Competition Protection Law as well as individual provisions and conclusions from yearly annual reports, clarifications of the Federal Antimonopoly Service, and academic writings of leading Russian and foreign experts (including those authored by the antimonopoly authority’s staff).

The Standard’s provisions are recommended to be used by any business entities falling within antimonopoly regulation and control irrespective of their legal status, organisational structure, type and industry specifics.

It sets out the general approaches and requirements, the rules and procedures for developing and adopting internal corporate documents concerning a risk prevention mechanism.

For convenience, the Standard can be divided into a general and a special part.

The general part outlines the purposes, goals and principles as well as the main subjects and objects of compliance, high-priority domains to be regulated, the principal types of unlawful conduct, and typical violations identified by the regulatory body.

The special part features antimonopoly risks and describes the system for managing such risks, specifies the powers of the main subjects of the compliance system and the specifics of how their collaboration is organised for the sake of preventing antimonopoly risks at an early stage, avoiding reputational damage and mitigating negative consequences, as well as to increase efficiency and enhance the activities of controlled parties in the long term as well as to ensure that they are competitive.

According to the Standard, business entities may file a draft compliance regulation both with an antimonopoly authority and an independent expert or expert organisation for them to draft an opinion on whether the document is in line with legal requirements.

It still remains unclear what experts or expert organisations will issue such opinions. It also remains open what legal significance such an opinion will have if the internal compliance regulation is subsequently forwarded to the Federal Antimonopoly Service.

We continue monitoring how practice is progressing.

Source: Competition and Law