OREANDA-NEWS. November 26, 2014. A conference on antimonopoly regulation of the banking business was held in Moscow. The conference was arranged by Sviaz-Bank (Vnesheconombank Group), the International Analytics Unlimited Bank Club, and the Line of Law Firm of Attorneys.

The conference was attended by bank lawyers, representatives of bank associations, firms of attorneys, law companies, and public and nongovernmental organizations, and instructors of higher education institutions.

The conference was moderated by Alexei Kostovarov, senior lawyer of the Line of Law Firm of Attorneys, and Victoria Tsygankova, chief editor of the Konkurentsiya i pravo (Competition and Law) journal covering antimonopoly (antitrust) subjects.

It is first time that lawyers came together to discuss and overview the performance of the Federal Antimonopoly Services (FAS) in banking. It is long time that the antimonopoly policy in the Russian Federation was reformed. Alexei Ulyanov, Development Director, National Association of Trading Institution, told the audience that 100 antimonopoly regulators around the world file fewer lawsuits than the FAS does in this country. One plausible explanation for this difference is the legacy of Soviet monopolism.

The more lawsuits the FAS brings, the speaker said, the worse the situation shapes up for competition. Curiously, the FAS has not initiated a single legal action against a partly foreign-owned company (be it a beer brewer, or maker of tobacco products or medications), and that cartels are hard to take to court. Ulyanov spoke in much detail about the “Fourth Antimonopoly Package,” and focused specifically on protection of small and medium enterprises from FAS pressure. In the U.S., by contrast, a corporation turning over around 30 billion rubles (conversion from dollars to rubles makes comparisons more striking) has been the smallest respondent in an antitrust lawsuit in recent years as compared to thousands of companies making sales less than a million rubles that are hauled to court every year in Russia.

The speaker also said that the Russian Ministry of Economic Development (MED) has submitted a report to the Federal Government requesting persecution of SME businesses to be stopped. Among the highlights of the MED’s report was its proposal that an amendment be made to Law 135-FZ that no company may be charged with market domination if it turns over any amount smaller than 400 million rubles, and that any surprise inspections of small businesses be made with a public prosecutor’s authorization only.

Andrei Laikov, Manager of Sviaz-Bank’s BLIZKO Payment System recognized as a payment system nationally significant for the country, focused on the need for money transfers to be covered by insurance to avoid bankruptcy of some money transfer systems and loss of funds of Russian and other CIS countries’ citizens. Laikov also said that dumping practices of some players in the money transfer markets must be discontinued and that the FAS must step in to fulfill its role.

Alexander Dondokov, of the Line of Law Firm of Attorneys, reviewed foreign practices in imposing optimal penalties on a monopolist. Dmitry Rogozin, Director, Federal Research Methodologies Center, Institute of Social Analysis and Forecasting at the Russian Presidential Academy of National Economy and Public Administration, surveyed the FAS polling practices by citing concrete examples and drew the conclusion that an overwhelming majority of lawsuits brought by the FAS based on polls had errors of representation and measurement.

Svetlana Avdasheva, head of the Applied Economics Department, Economy Division, Deputy Director, Enterprises and Markets Analysis Institute, National Research University of the Higher School of Economics, advanced her arguments for the need to have economists involved in antimonopoly litigations.

Tatiana Machkova, head of the Legislative Risks Office, Sberbank of Russia, spoke to the conference participants about the lawsuit brought by the Rostov FAS Office (on annuity payments) on the complaint made by one Smagin against Sberbank. The litigation dragged on for 20 months, making two rounds after an appeal and involvement of the Central Bank’s Office in Rostov Region, and ultimately the court ruled in Sberbank’s favor. The speaker said that the National Research University, Higher School of Economics, did an economic analysis and the Levada Center conducted a sociological poll, and, finally, after so much groundwork, the final ruling was that there was nothing wrong with making annuity payments.

Vadim Novikov, senior research associate of the Russian Presidential Academy of National Economy and Public Administration, member of the Council of Experts under the Russian Government, and a renowned antimonopoly economist, made a strong point that the Federal Antimonopoly Service is a treadmill of lawsuits brought in and verdicts handed down. The U.S. Federal Trade Commission hears 15 lawsuits a year, while the FAS investigated 2,635 cases in 2013, the speaker quoted from the Global Competition Review. Russian Prime Minister Dmitry Medvedev has instructed his ministers to develop measures making small business immune from antimonopoly lawsuits.

The conference offered its participants an opportunity to exchange views on cooperation between business and the FAS.