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Interview by the EEC Minister for Competition and Antitrust Regulation Nurlan Aldabergenov to BNews.kz

Interview by the EEC Minister for Competition and Antitrust Regulation Nurlan Aldabergenov to BNews.kz

12/28/2012
In July 2013, the common Customs Union (CU) law On Competition was issued

​By the middle of the next year, all Customs Union member-states will comply with the Model Law On Competition. The world practice knows no cases when the antitrust agencies of different states apply the same principles. In his interview to BNews.kz, the Member of the Board (Minister) for Competition and Antirust Regulation of the Eurasian Economic Commission (EEC) Nurlan Aldabergenov told about the progress in harmonization of the legislative frameworks of Kazakhstan, Russia and Belarus. 

- Mr. Aldabergenov, what work precedes the development of the Customs Union Antirust Code, and why is its enactment expected not earlier than 2015?

- This year, on the first of January, the Common Economic Space (CES) was launched. Currently, we have no borders, and goods move freely. However, all competition laws existing in the three states remained unchanged, just as before, when the three states were closed. And now, approximation of competition laws to ensure a convenient environment for business is our primary goal.

The first stage of harmonization includes the approximation of competition laws. We are currently working on this issue with the three parliaments and with the three governments. The government of Belarus had considered the draft law On Combating Monopolistic Activity and Promoting Competition, and it was submitted to the Parliament. The draft law of Kazakhstan On Competition is under consideration by the Majilis of the Parliament of Kazakhstan, at the stage of its first reading. We proposed our amendments, reviewed it with the deputies and held round tables discussions. Currently, the deputies are working on it, at the final stage. In Russia, the draft law On Protection of Competition is under consideration at the federal level. Since laws are under consideration, the deputies are entitled to propose amendments.

We should approximate the legislative frameworks of the three states by the next July. We have limited deadlines, which are stipulated by the agreement on the principles and rules of competitions and have been ratified by the parliaments. We strictly follow the schedule, and we should achieve complete harmonization.

Adoption of CES laws and regulations, which are needed for the Eurasian Economic Commission to be able to prevent violations of the competition rules in the cross border markets at the supranational level, will be the next stage.

Besides, a model law on competition shall be drafted, and then the issue of adoption of the CES Competition (Antitrust) Code shall be addressed.


- How far have Kazakhstan, Russia and Belarus moved away from each other in developing appropriate policy over the years of independence?


- The laws of our states are very close. There are no significant differences. We have studied this issue, in what way the competition laws should be modified to align them with the common principles and rules. For example, while Belarus and Kazakhstan comply with the principle of equal application of antitrust laws, in Russia it is not directly reflected in its draft law.

Or let’s take the principle of inadmissibility of anticompetitive actions by public authorities. The draft law of Belarus contains no prohibition against agreements between other public authorities or organizations exercising their functions, or between them and economic agents. We recommended specifying such measures to make steps aimed at preventing, identifying and restraining actions (omission) by public authorities more effective.

The next field includes eliminating administrative barriers hindering access to the markets of Belarus, Kazakhstan and Russia, in the context of free movement of goods in the Customs Union. A mechanism has already been developed in this field.

The existing issues can be addressed through the EEC, but, of course, this work shall be done by the Council of the Commission.

The EEC has 9 ministers, each responsible for a specific area. The Eurasian Commission equally protects all the three markets. We approach them in the same way. However, the Council of the Commission, comprised of the Vice Prime-Ministers, protects the interests of every individual country; i.e. Kazakh Vice Prime-Minister protects the interests of Kazakhstan, and Russian Vice Prime Minister protects the interests of Russia, and Belarusian Vice Prime-Minister protests the interests of Belarus. The Eurasian Economic Commission is the executive body that treats all of them equally.

These are the differences between the Commission and the Council.

Therefore, to this extent, the Council submits its proposals and points out the areas where administrative barriers exist in this or that state. Assume that Russia imposed an administrative barrier in the field of government procurements. Since the goal in this field is to achieve free tender-based procurements in the three states, the Council of the Commission issues instructions to us and we take necessary actions.​


- How important is the development of the common law On Competition for the three CU member-states? The three states have totally different economies. The states differ in terms of both their territory and structure of industries. Will it not result in a situation of total disagreement with every state trying to promote its own interests?


- You asked a good question. I have already been asked it, and it was discussed with our foreign partners. We consulted with the representatives from the world’s leading competition authorities of France, Austria, China, South Korea, and the United Kingdom.

 What is the current situation in Europe? 27 states joined the European Union. Antitrust regulation is among their priorities. They dream of, but are unable to achieve a model law. There, they really have a total disagreement.

When we raised this issue and asked whether such a situation was possible in our case, we analyzed the situation. What do we have at the moment? Firstly, as I have already said, our legislative frameworks differ slightly. And we will eliminate these slight differences at the first stage of harmonization.

Our foreign partners keep saying: “Of course, it’s easier in your case. You have one language, one background and one history. You originate from the previous Union and you have the same concepts.”

As regards our economies, they are rather developed in all the three states. Kazakhstan, Russia and Belarus are rather strong in this regard. Finally, having studied the situation, we concluded that we would be able to adopt that law.

I should say, though, that while Europe sets the same goal, they have different countries. Germany has a history of its own, France has a background of its own, and the United Kingdom also has its unique history, and it’s difficult to unite them. So, in this respect, they are also looking at us, at what we are doing now.

For example, we talked to our peers from one of the strongest competition agencies of the world, the Korean agency. They say: “We understand, and we, as well as all antitrust agencies of the world also would like to approximate. Because we have one language; it’s a language of antitrust regulation. Cartels, arrangements and abuse exist everywhere. Unfair competition and violations occur everywhere, and they all have similar nature, i.e. the legal frameworks in the field of competition are similar in all countries all over the world, and that’s why they say that we have one language, but we are totally different to be able to approximate. In your case, it’s easier.”

So, this model law is a huge breakthrough in the field of competition policy comparing to the communities, in which we are members. Accordingly, we have an excellent foundation, and we will exert every effort to issue the model law On Competition; it is a cornerstone for us.

No similar law On Competition exists in the world. The deadline for its adoption is July 2013. It is expected to be signed by the heads of the three states. It will be voluntary. Since it will signed by the Presidents of the three states, it will constitute an assignment for all public authorities and for the Parliaments to align their laws and regulations with the model law.

This model law shall contain a prohibition against anticompetitive agreements, abuse of a dominant position or unfair competition. It is a crucial instrument. First, it shall reflect the interests of the three states. So, the law is discussed with the general public, scientific communities and entrepreneurs. 

Besides, we have a goal of drafting and issuing the common Antitrust Code within two or three years after the adoption of the model law. It is considered to be the ultimate form of integration of the three states in the field of competition policy. Of course, it is an ambitious goal. The model law itself will have about 47 articles. It will be a large volume, and the Antitrust Code, of course, will be even bigger. Nevertheless, we must advance and try, and we also must understand that the boundaries are open, with goods moving freely. So, establishing common competition rules for our businesses and people is all we need to do.

- Thank you for a comprehensive conversation. We wish you to achieve all your goals in the coning year 2013.

Aizhan BEKTASOVA​
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