On 12 April 2017 the Federation Council of the RF Federal Assembly adopted the draft Federal Law No. 52643-7 on Amendments to the Russian Federation Code on Administrative Offenses (the "Draft Law"). The Draft Law is expected to enter into force in the nearest future.

The Draft Law sets differentiated liability for entering into different types of anticompetitive agreements and engaging in concerted practices depending on the nature and degree of danger to the public of each of those types of offenses.

For instance, the Draft Law proposes to adopt a new version of Article 14.32 of the Administrative Code which, inter alia, introduces different rates of "turnover" fine for the following types of offenses:

  1. Cartels (other than cases where an agreement leads or may lead to an increase or decrease in price or price setting at auction): a fine of 3% to 15% of the annual revenue of the offender (of each cartel participant) from the sale of goods on the market for which the offense was committed;
  2. Agreements leading or that may lead to an increase or decrease in price or price setting at auction or anticompetitive agreements between auction organizers and/or customers with participants in those auctions: a fine of 10% to 50% of the starting price of the subject of the auction;
  3. Prohibited "vertical" agreements: a fine of 1% to 5% of the annual revenue of the offender (of each party to the prohibited agreement) from the sale of goods on the market for which the offense was committed;
  4. Other anticompetitive agreements: a fine of 1% to 5% of the annual revenue of the offender (of each party to the prohibited agreement) from the sale of goods on the market for which the offense was committed;
  5. Concerted practices: a fine of 1% to 3% of the offender's annual revenue from the sale of goods on the market for which the offense was committed.

By formalizing this method of determining the amount of fines, legislators have emphasized their understanding of the differentiation of various types of anticompetitive agreements and concerted practices by the degree of their danger to the public. Obviously, cartels are the most dangerous of them.

It is noteworthy that a much wider range of fine amounts is set for cartels than for other types of antimonopoly offenses. We remind the reader that note 4 to Article 14.31 of the Administrative Code, which remained unchanged after the adoption of the Draft Law, contains a rule for calculating the amount of the "turnover" fine, including for cartels, depending on whether or not there are mitigating and/or aggravating circumstances.

The procedure for applying this rule is currently described in more detail in the FAS Russia Guidelines1 for calculating the amount of the administrative fine based on the offender's revenue. These guidelines are an internal act of FAS Russia that is intended to ensure uniform practice of the local FAS Russia departments in setting "turnover" fines. The adoption of the Draft Law will require FAS Russia to further work on bringing the Guidelines into compliance with the new version of the Administrative Code, as the Guidelines do not currently fully reflect the differentiation established by the Draft Law.

The procedure for applying the new version of the Administrative Code to offenses committed before it enters into force is worth focusing on separately. Generally a law mitigating or canceling administrative liability has retroactive force, in other words, it applies to a person who committed an administrative offense before the law entered into force and against whom the administrative penalty order has not yet been enforced.2 Thus, after the Draft Law enters into force, participants in “vertical” and other anticompetitive agreements and concerted practices can count on a lower amount of administrative fines as compared to the amounts in the current version of the Administrative Code regardless of when the offense was committed (provided the conditions of the relevant provisions of the Administrative Code are observed).