One of the steps announced in ‘The Nation’s Plan – 100 specific steps to implement five institutional reforms’ is to change the concept of operation of the antimonopoly service, bringing it into conformity with the standards of the Organization for Economic Co-operation and Development (OECD).
Under Step 53 of the Nations Plan, the modified antimonopoly service should focus on the promotion of free competition. A 2-stage approach has been developed to change the concept of operation of the antimonopoly body and antimonopoly legislation, bringing them into conformity with the OECD's standards.
According to the report of the Chairman of the RK Committee for Regulation of Natural Monopolies and Protection of Competition made at the 43rd Meeting of the Interstate Council for Antimonopoly Policy, held as part of the international event 'Competition Week in Russia' (21-24 September 2015), proposals to amend the laws of the Republic of Kazakhstan and the draft Entrepreneurial Code was intended to be developed at stage one.
The Entrepreneurial Code and proposals for amendments to the accompanying RK Law On Amendments to Certain Legislative Acts of the Republic of Kazakhstan Regarding Entrepreneurship were adopted by the Senate of the RK Parliament on 8 October 2015.
We would like to draw your attention to the following fundamental amendments:
- As from 1 January 2016, the Register of Dominants will only be kept in respect of regulated market entities. Small businesses will most likely be excluded from the above Register. At the same time, it is expected that the Register will be fully withdrawn;
- The prohibitions regarding anticompetitive agreements extend to verbal agreements. The previous version of the Competition Law was equivocal;
- The dominant position of a market participant will now be established if set thresholds are exceeded, concurrently having regard to any circumstances that would evidence the dominant influence on the market;
- A conciliation commission is being instituted within the antimonopoly body to deal with cases of violations in the sphere of competition (i.e., prior to a final decision being issued by the antimonopoly body);
- It is expected that, as from 1 January 2017, price control will be fully cancelled and substituted by the instruments of antimonopoly regulation;
- As we can see, the provision on the effect on consumer rights has been excluded from the qualifying elements of violations of the antimonopoly law. There were continuous discussions in practice as to that the infringement of individual interests of natural persons not connected with the restriction of competition and entrepreneurial activity should not be qualified as elements of violation of the antimonopoly legislation.
Please be informed that the RK Law On Competition will become invalid when the Entrepreneurial Code comes into force.
It is contemplated that further amendments to the antimonopoly law will be made at stage two. Such amendments will be prepared on the basis of the overview of the Kazakhstan antimonopoly laws and policy, currently being conducted by the OECD since April of this year. The overview, to be completed by the end of 2015, will provide recommendations on bringing Kazakhstan’s antimonopoly legislation into line with international practice and the OECD's standards.
In general, it is expected that the amendments will be aimed at the rules for the protection of competition, upgrading penalties for cartel agreements, and decriminalization of some violations of the antimonopoly legislation. Also, the approaches to the prohibition of economic concentration will most likely be changed.