| As an immediate result of the financial crisis triggered by the devaluation of the rouble in August 1998, the State Anti-Monopoly Committee was upgraded to full Ministry status by Presidential Order 1142 of September 22 1998.
In addition to the jurisdiction inherited from the former State Anti-Monopoly Committee, the remit of the Ministry for Anti-Monopoly Policy and for the Support of Business Activities includes industrial policy and the support of small and medium-sized enterprises. The competencies of the Federal Service for the Regulation of the Natural Monopolies in the Field of Telecommunications and of the Committee for Transport (including in particular responsibility for price regulation in these areas) were also transferred to the Ministry. In the meantime, the 79 regional anti-monopoly committees have become branches of the Ministry. The various departments of the Ministry (see page facing) are run by two First Deputy Ministers and six Deputy Ministers.
As a consequence of President Yeltsin's 'rotating' personnel policy, the first Minister for Antimonopoly Policy, Gennadiy Khodyriev, was replaced in untimely fashion by Mr Yushanov. However, stability of a kind has been ensured in the person of Ms I M Fonarova, the former head of the State Anti-Monopoly Committee, who has served as a First Deputy Minister since the Ministry was first established.
In 1999 there were no significant changes in Russian anti-monopoly law. However, since the cornerstone of Russian anti-monopoly legislation, the Law on Competition and the Limitation of Monopolistic Activities on the Commodity Markets of March 22 1991 ('the Anti-Monopoly Law'), was more or less adapted to Western standards in 1995, changes in the substantive law are of lesser importance in terms of competition policy than enforcing the existing law. In the attempt to protect the market, the current legislation has unfortunately produced a supervisory regime so strict that it constitutes an obstacle to (particularly foreign) investment. Even minor investments or share acquisitions are subject to antitrust control. New business ventures must also be notified if the aggregate value of the founders' assets exceeds 100,000 times the minimum monthly wage (at present just US$320). Repeated requests by foreign business associations for the threshold to be raised have been ignored. Notification is for purely statistical purposes and is laborious and time-consuming. The problem is aggravated by the formal approach taken by the authorities.
Deregulation of prices was the focus of antimonopoly policy in 1999. Before 1995, the prices set by all businesses with a market share of more than 35 per cent were subject to supervision. Since 1995 only those set by 'natural' monopolies and utilities have been controlled. In 1999 efforts were made to get pricing in the telecoms and transport sectors deregulated; however, this is still a sensitive area. The announcement in July by First Deputy Minister Fonarova that public transport fares would be liberalised provoked a national outcry.
The forthcoming official report of the Antimonopoly Ministry on its activities in 1997 and 1998 may offer a clue to future developments. According to one unofficially circulating summary, the number of proceedings initiated fell from 3,766 in 1997 to 3,020 in 1998. In 1998, 31 per cent of such proceedings were initiated in connection with abuse of dominance, mostly in the energy sector. However, the summary makes no specific reference to any concrete projects in hand.
Andreas Gravenhorst |
