On September 10, 2015, Resolution of the Government of the Russian Federation entered into effect to regulate a procedure for the antitrust body for adopting decisions on establishing tariffs and their thresholds for natural monopolies and other regulated organizations.[1] 

Earlier, a Decree of the Russian President transferred functions of the Federal Tariff Service, including as regards establishing tariffs for natural monopolies, to the Federal Antitrust Service. 

Resolutions on establishing tariffs for natural monopolies will be adopted by the new super regulator through a separate collegiate body consisting of 12 members, which is now established for these purposes within the authority. 

The collegiate body includes representatives of the FAS of Russia (deputy head of the service A.N. Golomolzin, as well as heads of relevant directorates of the authority V.G. Korolev, D.A. Rutenberg and V.V. Solovyev), the Ministry of Economic Development (deputy minister N.R. Podguzov and director of relevant department Y.V. Mandron), as well as representatives of relevant ministries (Ministry of Telecom and Mass Communications (Minsvyaz), Ministry of Industry and Trade (Minpromtorg), Ministry of Energy (Minenergo), Ministry of Construction, Housing and Utilities (Minstroy) and Ministry of Transport (Mintransport)). The chairman of the collegiate body is I.Yu. Artemiev, Head of the FAS of Russia. 

Consent of the majority of members will be needed to adopt a decision on establishing a tariff. In the event the representatives of the Ministry of Economic Development, as well as relevant ministry competent in the tariff issue, are against a proposal, the issue will be put on vote again in 30 days after consulting with the members of the collegiate body. If agreement is not reached after that, the chairman will be entitled to adopt the decision independently. 

At the same time, issues related to railway transport, power industry and gas industry will be resolved under a special procedure. The chairman of the collegiate body will be entitled to adopt a decision on these issues without the repeat consultations in the event a majority of votes is absent. 

In general, it appears that the merge of the Federal Antitrust Service and Federal Tariff Service will allow to adopt prompt and effective decisions in tariff regulation and to perform control over their implementation. Previously, disagreements which complicated adopting decisions on important issues were commonplace between the authorities. Experience of the specialists of the former authority for tariffs and the professional approach and infrastructure of the antitrust service should result in containment of unreasonable tariff growth.

Irina Akimova  Of Counsel, Head of Antitrust Practice                                Moscow   iakimova@cls.ru  Tel.: +7 (495) 970 1090

Dmitry Gavrilenko     Associate                Moscow       Tel.: +7 (495) 970 1090

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Irina Akimova or Dmitry Gavrilenko, Moscow Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.