OREANDA-NEWS. January 13, 2014. A joint Commission of the Federal Antimonopoly Service (FAS Russia) and the Federal Defence Procurement service (Rosoboronzakaz) found that “Khimprom” OJSC (Novocheboksarsk) abused its market dominance in the part of fixing monopolistically high prices for the goods for further product manufacturing under state defence procurement (in breach of Part 1 Article 10 of the Federal Law “On Protection of Competition”).

The case was initiated upon the findings of an inspection carried out jointly with Rosoboronzakaz to enforce Article 14 of the Federal Law “On State Defence Procurement” (antimonopoly requirements in state defence procurement), and to execute the instructions of the Government of the Russian Federation issued due to a critical situation with state defence procurement in 2013.

“Khimprom” OJSC violated the law by fixing prices for the main raw materials used to manufacture special products for the needs of the Ministry of Defence, Roscosmos and Rosatom. The Commission established that in some cases the actual company profitability for the products in question exceeded 60% with the average profitability across the industry at 20-25%.

“Khimprom” OJSC is the only producer on the analyzed market and has the dominant position in the Russian Federation. Products manufactured by “Khimprom” OJSC constitute some of the most important components for the products produced under state defence procurement.

“This is the first case in FAS practice investigated in a new format jointly with our colleagues from Rosoboronzakaz. Such cooperation enabled the Commission to promptly understand the situation and make a decision. The work carried out in the course of the case investigation formed the grounds for issuing several instructions by the Government of the Russian Federation, aimed at resolving problematic issues in the system of placing and executing state defence procurement”, said Stats-secretary, Deputy Head of FAS Andrey Tsarikovskiy.