Benefits of competition for low-income groups Andrey Tsyganov, Deputy Head of the FAS Russia FEDERAL ANTIMONOPOLY SERVICE Sofia Competition Forum November 12, 2012, Sofia, Bulgaria

2 The FAS Russia was established in accordance with the Decree of the President of the Russian Federation 314 of March 09, Federal Antimonopoly Service The FAS Russia consists of the Central Office and 82 Regional Offices in each Russian subject. - The FAS Russia is a federal executive body that is under direct administration of the Government of the Russian Federation. - The Articles of Incorporation of the FAS Russia was approved by the Decree of the Russian Government 331 of June 30, 2004.

3 Functions and powers of the FAS Russia are defined by: the Federal Law 135-FZ of On Protection of Competition Federal Antimonopoly Service The FAS Russia is a federal executive body empowered to perform the following functions: - to adopt normative legal acts; - to exercise control over compliance with the antimonopoly legislation, natural monopolies legislation, advertisement legislation; -to exercise control over public procurement for goods, works and services for state and municipal needs, foreign investments in undertakings of strategic significance for defense and security of the state.

During the conducted research the signs of violation of the antimonopoly legislation during the formation of roaming services tariffs were revealed. Within the frameworks of national legislation the antimonopoly bodies of the Russian Federation and the Republic of Kazakhstan held relevant investigations and initiated cases against their dominant operators. Such cases were settled in October The roaming services tariffs for Russian customers on the CIS territory reduced for 150 – 400%. 4 Ensuring of competition environment on the market for international roaming communications

Dependence of tariffs for air tickets from competition environment on the route Analysis of changes in 4000 tariffs for air tickets on increased popular directions shows that appearance on the market (route) additional: 1 (one) airline operator reduces tariffs by 28,5%, 2 (two) new airline operators – by 32%, 3 (three) – by39%. 5

6 Competition development in the healthcare sector FAS Russia activity in the following sectors: The FAS Russia regularly decides on interchangeability of pharmaceuticals that leads to savings of billion rubles on trades. Such savings can be used to purchase more, pharmaceuticals and to increase of their availability to the low-income groups. The FAS Russia conducts investigations and decides on interchangeability of medical products that leads to significant savings on trades and to increase of access to medical services to patients (such as hemodialysis services). PharmaceuticalsMedical products The FAS Russia regularly issued decisions concerning access to the programs on general medical insurance, to non-governmental including official medical organizations, and thus results in creating for peoples from municipalities the possibility to select medical organizations and by increasing the access to quality health care. Medical services

Control over compliance with the antimonopoly legislation in the agriculture complex 100 cases on violation of the antimonopoly regulation (Article 10 – 40 cases; Article 11 – 23 cases; Article15 – 25 cases; Article cases). 190 cases on signs of violation of the Law on Trade. Approximately 300 cases on administrative violations which provides the imposition of fines. 267 decisions on cases on violations of the antimonopoly legislation were taken (among them 232 decisions on recognition of violations, 34 decisions on termination of cases with reference of absence of signs of violations). By the results of 209 considered cases with the established facts of violations, the turnover and other fines within the Code of the Russian Federation on Administrative Violations totaling 68,7 million rubles were imposed. In accordance with sign of violations of the antimonopoly legislation revealed by the Regional Offices of the FAS Russia during 2012 by in the sphere of agro-industrial complex (taking into account cases initiated in the previous years) 591 cases on violations of the antimonopoly and other legislation of the Russian Federation were initiated and now are considered. The most often violations of the antimonopoly legislation have been revealed on the cereal market(16 cases), milk market (12 cases), butter market (8 cases).

The Federal Law of FZ «On the basic principles of state regulation of trading activities in the Russian Federation» (hereinafter Law on Trade) was adopted since Articles 9, 13, 14 and 15 of the Law on Trade are aimed at improvement of the antimonopoly regulation and competition development in the retail trade market. Articles 13, 14, 15 of the Law on Trade establishes the antimonopoly rules and are the part of the competition legislation the responsibility for breach of which is established in the Code of the Russian Federation on Administrative Violations. State regulation executed through the combination of trade and antimonopoly legislation. Price monitoring according to the list of socially important goods aimed at stabilization of retail prices for such goods. 8 Regulation of trade in the Russian Federation

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