Investments in BRICS: Business Perspectives and Legal Frameworks. IBA: Investments in BRICS. February 2013. Session: Trade, Antitrust and Other Regulatory Matters in BRICS. Ilya Nikiforov

1. © Egorov Puginsky Afanasiev & Partners
Trade, Antitrust and Other
Regulatory Matters in BRICS
Ilya Nikiforov
Managing Partner
Investments in BRICS:
Business Perspectives and Legal Frameworks

2. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 2
The World Bank Report 2012
Russian Federation: Doing Business (DB)
Topic Rankings DB Rank
Enforcing Contracts 12
Registering Property 45
Resolving Insolvency 61
Paying Taxes 94
Getting Credit 97
Starting a Business 105
Protecting Investors 114
Trading Across Borders 161
Dealing with Construction Permits 180
Getting Electricity 184
Source: http://www.doingbusiness.org/data/exploreeconomies/russia

3. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 3
How to Safeguard Your Investments in Russia: Traps and Tips
Never underestimate the oligarchs
Russia is only part in Europe. Other part is Asia
Background check on the principals of target companies
Structure the deal (corporate vehicle) contractual documentation in an
established jurisdiction
Structure the deal with a seller
The payment of consideration for the shares is staggered or delayed by a few
years to ensure smooth transition
The senior management is retained for the transition period
Be prepared for thorough due diligence
Negotiations begin after the contract is signed
Form a strong board including your Russian advisers
Deal with a credible local counsel

4. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 4
Federal Antitrust Service of Russia (FAS)
Mergers & Acquisitions (Economic Concentration)
Public and Municipal Procurement
Natural monopolies
Antitrust Regulation in the Electric Power Industry
Advertising
Foreign Investments in Strategic Sectors
Retail Trade
Tenders for Property, Resources, Rights / Licenses
Competence

5. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 5
FAS of Russia
Ranked 17th in the Rating
Enforcement of the Global
Competition Review.
The strategic goal of the
FAS of Russia for the period
until 2018 is to become one
of the worldwide top 10
antitrust authorities.

6. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 6
Development of Quality Management
The FAS of Russia was the first federal executive
body to receive the certificate of conformity with
the requirements of the International Standard for
Quality Management Systems ISO 9001:2008
and implement its principles:
 Process management
 Commitment for results and specific
indicators of effectiveness
 Customer focus
 Special attention to staffing and professional
development

7. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 7
Advocacy of Competition
The FAS of Russia implements
active transparency policy in the
Internet by communicating with the
users of social networks and blogs.*
Through its accounts in social networks and blogs, the FAS of Russia provides
people with the opportunity:
 To receive – in a convenient and clear manner – not only information on
the FAS activity, but also explanations and responses to questions
 To express and discuss suggestions for service improvement
*Overall number of readers / subscribers = about 40 thousands
FAS-book
@rus_fas
fasovka

8. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 8
Cartel Enforcement
Notion of cartel, coordination, concerted actions
Absolute prohibition per se of horizontal agreements
(cartels):
 Price fixing and maintenance
 Tender collusion
 Market allocation
 Refusal to conclude a contract (boycott)

9. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 9
Prohibition per se of horizontal agreements (does not apply to vertical
agreements)
General exclusions
Detailed regulation on leniency program of exemption from liability
Administration for anti-cartel enforcement; broader powers of the
antitrust authority for the inspection of business entities
Fines pegged to revenue
Criminal liability for cartel activity (up to 7 years of imprisonment)
Anti-Cartel Enforcement Is the Priority
Second Antitrust Law Reform 2009
Instruments for Combatting Cartels

10. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 10
Clear identification of prohibited per se agreements and concerted
actions
Establishment of a fixed administrative fine for the abuse of
dominance (this is not related to competition-blocking)
Exclusion of criminal liability for concerted actions
Clarification of the definition of prohibited coordination of economic
activity
Identification of peculiarities of revealing prohibited agreements
during tenders and calculating the appropriate administrative fine
Elaboration of the procedures for leniency program for anti-
competitive agreements
Anti-Cartel Enforcement Is the Priority
Third Antitrust Law Reform 2009

11. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 11
What’s to Come
Development of a federal bill on introducing legal tools of
protecting rights and legitimate interests of groups of persons
in courts (class actions), including the opportunity of
participation in class actions for legal entities
Strengthening the opportunity of ascertaining multiple
damages for the violation of anti-trust legislation,
establishment of a procedure for allocating the recovered
amounts of damages from the anti-trust violators in favor of
aggrieved persons
Source: Decree of the Government of the Russian Federation N 2579-r “On Approval of the Calendar of Activities
(“Roadmap”) on Development and Enhancement of the Anti-Trust Policy” dated December 28, 2012
Bill to be adopted by
October 2014
Bill to be adopted by
November 2013
Prospects

12. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 12
Priorities
Source: http://ria.ru/interview/20111223/524215074.html#ixzz2FxenyZa8
Priorities for 2012 - 2014
Anti-cartel enforcement
Control of socially important markets
Implementation of provisions of the new legislation,
improvement of law enforcement practices

13. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 13
Summary of Court Cases
First 6 months of: 2010 2011 2012
Rulings Issued 3 879 4 179 3 902
Appealed 1 413 2 070 1 822
Vacated 189 206 274
Percentage of vacated rulings
(in the number of appealed rulings)
13,4% 10% 15%
Issued rulings
Appealed rulings including
rulings issued in the
previous period
(percentage in the number
of issued rulings)
Vacated rulings
(percentage in the number
of appealed rulings)
Judicial Review of FAS Rulings

14. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 14
Anti-competitive actions of authorities
Monopolistic activity
Unfair competition
Other violations, failure to submit applications and
notifications as well as requested information
Enforcement by Subject
According to the FAS statistics, many years in a row more than 50% of all violations of the antitrust legislation
have been committed by authorities of different levels. Improvement of legislation allowed to clearly determine
what action or acts of authorities limit competition, create unreasonable preferences for specific companies or
introduce excess administrative barriers for business.
Violation of the antitrust legislation  fines and disqualification (prohibition to hold a post for up to three years).
Prosecution for violations of the antitrust laws (%)
Source: http://ria.ru/interview/20111223/524215074.html#ixzz2FxenyZa8

15. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 15
Expansion of Extraterritorial Law Enforcement
Article 3 of the Federal Law “On Protection of
Competition”
Timely actions of the FAS of Russia towards
foreign companies (violators)
Expansion of cooperation with foreign antitrust
authorities
Conduction of active joint investigations in
transboundary markets

16. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 16
Interstate Council for Antitrust Policy:
 Harmonization of national competition legislation of the CIS
member states
 Elaboration of coordinated approaches in various aspects of
regulation
 Development of cooperation among antitrust authorities of the
CIS member states while investigating transboundary violations
Staff for Joint Investigations:
Investigations in the air traffic, telecommunications, grain, food commodities, pharmaceutics,
electric power, oil and petrochemicals markets.
Law Enforcement in Transboundary Markets
Joint Investigations and Cooperation (CIS)

17. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 17
Ilya Nikiforov is a head of the Dispute Resolution practice that “fully deserves its enviable
reputation”.
The European Legal 500
Ilya Nikiforov “wins plaudits from competitors for the “superb job” he does in litigation and
arbitration”
Chambers Europe 2008
Ilya Nikiforov
Ilya Nikiforov
Managing Partner
St. Petersburg office
Egorov Puginsky
Afanasiev & Partners
T 7 (812) 322 96 81
F 7 (812) 322 96 82
e: Ilya.Nikiforov@epam.ru
Ilya Nikiforov is a Managing Partner at St. Petersburg office of Egorov Puginsky Afanasiev & Partners.
Arbitration Group of the firm headed by Ilya Nikiforov is the only Russian practice listed in Global
Arbitration Review Top 100 survey (2012). Chambers Europe 2011 ranked Ilya Nikiforov as a Tier 1
disputes lawyer in the market.
Ilya Nikiforov is known for a strong expertise in both litigation and arbitration and is listed as an
arbitrator by prominent arbitration institutions, such as WIPO, ICDR. Ilya has special experience in
international business transactions, commercial arbitration, construction and development projects,
and intellectual property law .
Nikiforov represents client interests at domestic forums at all levels, before Moscow arbitration
institution and other prominent commercial arbitration institutions, such as the ICC, LCIA and SCC. He
is often engaged as a Russian law counsel/expert in connection with commercial litigation and
international arbitration proceedings worldwide.
Since 1997 Ilya Nikiforov serves as an adjunct faculty member at the Law School of St. Petersburg
State University. He frequently speaks at professional conventions. Mr. Nikiforov has published a
substantial number of works on Russian business laws. He has co-authored one of the leading
Commentaries to the Civil Code of the Russian Federation (Parts 1, 2 and 4) that was published in
2004, 2005 and 2007.

18. Ilya Nikiforov Trade, Antitrust and Other Regulatory Matters in BRICS | 18
M&A Law Firm of the Year 2006
M&A Law Firm of the Year 2007
M&A Law Firm of the Year 2009
Mergers & Acquisitions magazine, Russia
Award for Contribution to Legal Education in Russia
The Corporate Lawyer, Russia
Thank you!
Ilya Nikiforov
Managing Partner
Egorov Puginsky Afanasiev & Partners
Investments in BRICS