At a glance: competition infringement investigations in Ukraine

Investigation

How is an investigation into a suspected breach of competition law started?

Antimonopoly Committee of Ukraine (AMCU) investigations are initiated in one of three ways:

• upon a third party’s complaint of a violation of their rights as a result of competition infringement;
• upon a submission of a public body on violations of the competition law; or
• on the AMCU’s initiative.

Besides, if the complainant submits information on potential negative consequences resulting from the filing made, the investigation shall be initiated by the AMCU.

As a general rule, if the AMCU detects the potential breach of competition law along with its negative consequences, it starts the investigation. However, if the potential infringement does not have a significant impact on the competition, the AMCU may refuse to launch the investigation.

What are the limitation periods for investigation of competition infringements?

As a general rule, the limitation period for investigating an alleged infringement of competition is five years from the date of its occurrence or five years from the date of its termination for a continuing violation.

A shortened limitation period of three years applies to the following types of infringements:

• failure to submit information to the AMCU;
• submission of incomplete information to the AMCU;
• submission of false information to the AMCU; and
• obstruction of the AMCU’s inspections, seizures or arresting of evidence.

A limitation period is suspended during the investigation.

What powers does the competition authority have to gather information?

The AMCU is entitled to gather information during the market study, investigations and dawn raids in a number of ways. In particular, the AMCU has authority to:

• require information from undertakings, public authorities and third parties, including those with restricted access;
• ask for expert opinions;
• enter and search premises and vehicles of the undertakings;
• interview officials and employees of undertakings, and obtain explanations from third parties;
• seize or arrest property, documents, things or other evidence; and
• engage the police, customs and other law enforcement agencies.

Failure to provide information at the AMCU’s request, as well as submission of incomplete or unreliable information, falls within the scope of competition law violations. The negative consequences for the infringer consist of a maximum fine of 1 per cent of the total worldwide turnover of the undertaking in the year preceding the enforcement of the fine. Recently, the AMCU imposed a 1 million fine hryvnia on the State Savings Bank of Ukraine for failing to provide the information it required.

For what types of infringement will the competition authority launch a dawn raid? Are there any specific procedural rules for dawn raids?

A common ground for launching a dawn raid by the AMCU is an alleged competition infringement without any particular details or specifics to justify such a revision. Consequently, any violation of competition law can be a driving force for an unannounced visit by the AMCU. Moreover, a dawn raid may be also initiated in other cases (eg, detection of inaccuracy of data in the documents provided at the AMCU’s request).

Procedural rules for dawn raids are stipulated in AMCU’s self-adopted Regulations on the Procedure for Conducting Inspections of Compliance with the Competition Law Regulation (2001). During 2019, 22 dawn raids were carried out by the AMCU.

During a dawn raid, the AMCU is empowered to inspect premises and vehicles of undertakings. However, a draft law that is currently being finalised, proposes authorising the AMCU to inspect private premises, provided it obtains authorisation by a court.

What are the company’s rights and obligations during a dawn raid?

Company’s rights during a dawn raid can be summarised as follows:

• to require the dawn raid to be carried out within the competence of the AMCU’s officials;
• to request certified copies of evidence being seized by the AMCU in their original forms;
• to receive a report on the dawn raid; and
• to file complaints about the actions of the officials conducting the dawn raid.

At the same time, the company should refrain from obstructing the inspection, seizure or arresting of evidence, and obey legitimate demands of AMCU representatives during a dawn raid.

What are the penalties and other consequences for refusing to cooperate with the authorities during an investigation?

There are several negative consequences for refusal to cooperate with the AMCU during a dawn raid.

The refusal to cooperate with the AMCU by creating obstacles during the inspections, seizure or arrest of evidence may result in a fine of up to 1 per cent of the total worldwide turnover of the undertaking in the year preceding enforcement of the fine and nominal administrative fines for the undertakings’ employees.

When setting the amount of a fine, the AMCU considers aggravating and mitigating circumstances specified in the Guidelines on Fines. Under the Guidelines on Fines, interfering in an investigation or refusing to cooperate with the AMCU will result in the basic fine being increased. Alternatively, cooperating with the AMCU during an investigation is a mitigating circumstance that reduces the amount of the fine.