Russia has amended its criminal code on cartels, signaling a
major change in antitrust law enforcement. On March 8, 2015,
President Vladimir Putin signed a Federal Law "introducing
changes to Article 178 of the Criminal Code of the Russian
Federation." Article 178 creates criminal liability for
cartel activities that prevent, restrict, or eliminate
competition. The recent amendments introduce notable changes,
including changing the title of the Article from "Preventing,
restricting or eliminating competition" to simply
The amendment abolishes criminal liability for repeatedly
abusing market dominance. This is a significant shift from
the law's previous incarnation, which included "repeated
abuse" – determined by successful prosecutions for at
least three offenses within three consecutive years – in the
law's definition of restriction of competition that exposes a
firm to criminal liability. Under the amendment, there is no
longer criminal liability for a firm's unreasonable refusal to
conclude an agreement with a competitor, or for refusal to remove a
barrier to entry to a market. The far narrower law defines
this crime as restriction of competition by competing businesses
which enter into an agreement that restricts competition, provided
that conduct involves high profits or causes major damage to
individuals, companies, or the state.
The thresholds for the level of income and damage that will
trigger criminal liability have increased dramatically, and are now
ten times higher. The amount considered sufficiently
"high profits" has changed from 5 million to 50 million
rubles ($824,266), and the phrase "particularly high
profits" now refers to 250 million rubles ($4.12 million),
increased from 25 million. The amount considered "major
damage" caused by anticompetitive conduct has increased from 1
million rubles to 10 million ($164,853), and the amount of
"particularly high" damage is now 30 million rubles
($494,560) rather than three million. This change is intended
to exclude small businesses from criminal prosecution for antitrust
In addition, a business entity or individual that participated
in a cartel will be relieved from criminal liability if it was the
first cartel participant to voluntarily report the activity,
actively facilitated exposure of the cartel, paid restitution for
losses caused by the cartel, or otherwise took action to make up
losses caused by the cartel. Previously, Article 178 only
provided for relief from administrative liability, and
companies or individuals would be unlikely to report cartel
agreements where the threat of criminal prosecution remained.
Consequently, the change is meant to encourage reporting to
antitrust authorities about cartel behavior.
The amendments to Article 178 are meant to relieve small- and
medium-sized businesses from criminal liability for cartel
activity, liberalizing and narrowing the reach of Russia's
competition laws, and to improve the rate of cartel
detection. The changes should have a considerable impact on
the way in which cartels are reported and the types of
anti-competitive conduct that are prosecuted criminally.
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