On 9 August 2016 the Anti-Monopoly Committee of Ukraine (the “AMC”) issued a new recommendatory guidance note introducing changes to the current approach to the application of fines for breach of Ukrainian competition laws (the “Guidance Note”).

For a general overview of the guidance, aside from the new changes discussed below, please see our Law Now.

The changes to the guiding principles used by the AMC when imposing fines are as follows:

  • there is a new approach to the calculation of the basic amount of fine; and
  • the calculation of illegally obtained benefits and/or incurred losses by the perpetrators.

A.    New approach to calculation of basic amount of fine

In determining the fine amount, the AMC calculates the basic amount of the fine for each perpetrator and then adjusts this for mitigating or aggravating circumstances. The newly-adopted Guidance Note significantly develops the approach to be used by the AMC when determining the amount of the recommended basic fines.

The recommended basic fines are now calculated according to the following formula:

BF (basic fine) = PT (perpetrator’s turnover) * IF(%) (initial fine) * (C (coefficient) 1+ C2 + C3) / 3,

where the modifying coefficients are:

  • the impact or possible impact of the violation on competition in related markets (C1) - from 0.05 to 2;
  • social significance of goods related to the violation (C2) - from 0.05 to 2; and
  • the cost effectiveness of the activity associated to the violation (C3) - from 0.05 to 2.

The amount of the recommended initial fines depends on the seriousness of the violation and can be calculated as a % of the perpetrator’s turnover or, for certain moderate and medium violations, set as a fixed amount.

The table below shows a recommended range of the initial fines for most common violations.

Click here to view table.

B.    A reasonable calculation of illegally obtained benefits and/or incurred losses

As an alternative to the calculation provided in section A above, the perpetrators are now able to provide their own reasonable calculation of the inappropriately received financial benefit and/or losses incurred as a result of the competition law infringement.

In such cases, the basic amount of the fine is calculated as double the amount of the inappropriately received benefit and/or incurred losses.

These new changes are aimed at making the fining policy of the Ukraine more consistent and, at the same time, more individually targeted to each and every case.

Regulation: Decree of the Anti-Monopoly Committee of Ukraine No 39-рр dated 09 August 2016 on approval of the Recommendations on approaches for calculation of fines for competition law infringements.