Amendments to Article 178 of the Criminal Code entered into force on October 30, 2009. Before being amended, this article was rarely used due to its clumsy wording. We will not address the issues related to the new wording of Article 178 here but rather will focus on issues related to its application following the enactment of the amendments.
At the end of 2009, FAS prepared internal instructions on applying Article 178. According to these instructions, FAS’s legal department is obliged to gather information from all the Russian regions and use it to maintain a database of company officials upon whom administrative liability has been imposed for the abuse of a dominant position. Any case in the database that FAS opened to impose administrative liability for abusing a dominant position on officials on whom such liability had already been imposed twice within the preceding three years, is to be closed and FAS is to transfer the file to the Economic Security Department of the Ministry of Internal Affairs in order for the Ministry to open a criminal case under Article 178 of the Criminal Code.
Should FAS decide, after closing an antimonopoly case, that an anticompetitive agreement was concluded or that concerted actions were taken, the file for that case will be transferred to the Economic Security Department of the Ministry of Internal Affairs to open a criminal case if (i) the decision in the FAS antimonopoly case is not challenged within three months of being issued; or (ii) a court decision upholding FAS’s decision in the case has entered into force.
Should the Economic Security Department of the Ministry of Internal Affairs refuse to open a criminal case, FAS must open a case in relation to the applicable administrative offense. In order to facilitate interaction between FAS and the Ministry of Internal Affairs, FAS regional departments must develop joint orders with the regional internal affairs authorities to regulate the procedures for interaction.
Despite the interaction procedures developed by FAS and set out above, the internal affairs authorities remain formally independent when opening criminal cases. As a result, the internal affairs authorities can open criminal cases and conduct investigations before FAS issues a decision establishing a violation of antimonopoly legislation. There are precedents for this: for example, in a recent case opened by FAS against the coal producers SUEK, Russky Ugol, and Stroiservice, FAS’s finding that there was collusion between these companies was based on conversations between representatives of the companies recorded and provided to FAS by the internal affairs authorities (see, for example, http://www.fas.gov.ru/solutions/ solutions_31954.html). Another example is the case opened by FAS’s Chelyabinsk office regarding collusion at auction. The antimonopoly authorities proved collusion on the basis of recorded conversations between auction participants, obtained by the internal affairs authorities as part of an ongoing criminal case (see http://chel.fas.gov.ru/news.php?id=675).