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EBA General Meeting with the Head of the Antimonopoly Committee of Ukraine

08/ 12/ 2020
  Today, the European Business Association met with Olha Pishchanska, Head of the Antimonopoly Committee of Ukraine, and her team. Business representatives see the AMCU as an independent regulator, whose activities are aimed at ensuring equal rules of the game for business. Therefore, many questions arose regarding the decision-making procedure of the members of the AMCU. We also discussed with the Antimonopoly Committee some issues related to the protection of competition in the field of transport, electronic payments, etc. Regarding the organizational issues, it was explained to us that during the voting by the Interdepartmental Commission, the AMCU representative expresses not his position but the one of the Antimonopoly Committee. Meanwhile, before the meeting of the Commission, the representative must gather the necessary material to prepare a reasoned position on the issue and be guided by the relevant documents from the Ministry of Economy. Positions are evaluated and negotiated with government officials. In the absence of information to make an objectively balanced decision, the representative usually abstains from voting. It was also informed that the Antimonopoly Committee expects to finalize the draft law on competition and antitrust reform, which was developed in line with the leading EU practices in this area. This document provides for an increase in the concentration threshold and proposes a clearer algorithm for the application of antitrust inspections. We also talked about the draft Resolution of the Cabinet of Ministers on state regulation of prices for certain groups of goods. The AMCU experts believe that this approach distorts market pricing, so they are against such measures. The Antimonopoly Committee has also stated that it will not take on the functions of the National Commission on Transport Regulation to regulate natural monopolies. Thus, AMCU is currently actively working on companies requests regarding violations in the transport sector. Based on information from the business representative, the AMCU sent to JSC Ukrzaliznytsia its recommendations on the Single Agreement on the provision of services for the organization of cargo transportation by rail. In turn, Ukrzaliznytsia answered that it is ready to implement the given recommendatory measures gradually. Therefore, there are no grounds to open a large-scale case at the moment, unless the companies provide accurate evidence of the impact of violations by Ukrzaliznytsia on them as carriers. The same applies to the issue of reducing the ships levy in proportion to the amount of unused draft. A letter has been sent to the Ministry of Infrastructure, but it is not binding on them. Thus, business assistance is needed to create an evidence base from market participants so that the AMCU can have grounds for a tougher response. EVA has also always emphasized that the pilotage cost is significantly overestimated. According to business representatives, opening a market for private pilotage services, would reduce the relevant fees, reduce the cost of court calls, and as a result - increase the attractiveness of port terminals. It is also worth noting that healthy competition will improve the quality of pilotage services. The Ministry of Infrastructure did not follow the recommendations of the AMCU on this issue, so, as it was announced during the meeting, the AMCU plans to start the case. Besides, the companies appealed to the AMCU to investigate violations of the legislation on the protection of economic competition in the field of acquiring services. Thus, the size of bank commissions for acquiring has been growing rapidly in Ukraine for recent years and is currently 7-8 times more expensive than the size of these fees in the EU. Therefore, Ms. Pishchanska assured us that the AMCU has started to carry out the analysis of this market and the assessment of the transparency of calculation methods. The results of these studies are expected in early 2021 and will be sent to interested companies. At the same time, the Committee cannot support the legislative restriction on the maximum size of bank commissions for acquiring stipulated in the draft laws № 4178 and № 4179, which are being now considered by the Verkhovna Rada. During the discussion, we also touched upon the problems of the shadow market, competition in the field of medicines, tobacco products, oil products, and more. Unfortunately, the AMCUs investigation in these areas is very often hampered by the actions of the judiciary, which indicates the imperfection of the Ukrainian judicial system. On behalf of the European Business Association, we thank Ms. Pishchanska and her colleagues for this open dialogue and prompt response to business inquiries. In turn, the EBA community expresses its readiness to join the AMCU initiatives that contribute to a more positive investment climate in the country!

Today, the European Business Association met with Olha Pishchanska, Head of the Antimonopoly Committee of Ukraine, and her team. Business representatives see the AMCU as an independent regulator, whose activities are aimed at ensuring equal rules of the game for business. Therefore, many questions arose regarding the decision-making procedure of the members of the AMCU. We also discussed with the Antimonopoly Committee some issues related to the protection of competition in the field of transport, electronic payments, etc.

Regarding the organizational issues, it was explained to us that during the voting by the Interdepartmental Commission, the AMCU representative expresses not his position but the one of the Antimonopoly Committee. Meanwhile, before the meeting of the Commission, the representative must gather the necessary material to prepare a reasoned position on the issue and be guided by the relevant documents from the Ministry of Economy. Positions are evaluated and negotiated with government officials. In the absence of information to make an objectively balanced decision, the representative usually abstains from voting.

It was also informed that the Antimonopoly Committee expects to finalize the draft law on competition and antitrust reform, which was developed in line with the leading EU practices in this area. This document provides for an increase in the concentration threshold and proposes a clearer algorithm for the application of antitrust inspections.

We also talked about the draft Resolution of the Cabinet of Ministers on state regulation of prices for certain groups of goods. The AMCU experts believe that this approach distorts market pricing, so they are against such measures.

The Antimonopoly Committee has also stated that it will not take on the functions of the National Commission on Transport Regulation to regulate natural monopolies. Thus, AMCU is currently actively working on companies’ requests regarding violations in the transport sector.

Based on information from the business representative, the AMCU sent to JSC “Ukrzaliznytsia” its recommendations on the Single Agreement on the provision of services for the organization of cargo transportation by rail. In turn, Ukrzaliznytsia answered that it is ready to implement the given recommendatory measures gradually. Therefore, there are no grounds to open a large-scale case at the moment, unless the companies provide accurate evidence of the impact of violations by Ukrzaliznytsia on them as carriers. The same applies to the issue of reducing the ship’s levy in proportion to the amount of unused draft. A letter has been sent to the Ministry of Infrastructure, but it is not binding on them. Thus, business assistance is needed to create an evidence base from market participants so that the AMCU can have grounds for a tougher response.

EVA has also always emphasized that the pilotage cost is significantly overestimated. According to business representatives, opening a market for private pilotage services, would reduce the relevant fees, reduce the cost of court calls, and as a result – increase the attractiveness of port terminals. It is also worth noting that healthy competition will improve the quality of pilotage services. The Ministry of Infrastructure did not follow the recommendations of the AMCU on this issue, so, as it was announced during the meeting, the AMCU plans to start the case.

Besides, the companies appealed to the AMCU to investigate violations of the legislation on the protection of economic competition in the field of acquiring services. Thus, the size of bank commissions for acquiring has been growing rapidly in Ukraine for recent years and is currently 7-8 times more expensive than the size of these fees in the EU. Therefore, Ms. Pishchanska assured us that the AMCU has started to carry out the analysis of this market and the assessment of the transparency of calculation methods. The results of these studies are expected in early 2021 and will be sent to interested companies. At the same time, the Committee cannot support the legislative restriction on the maximum size of bank commissions for acquiring stipulated in the draft laws № 4178 and № 4179, which are being now considered by the Verkhovna Rada.

During the discussion, we also touched upon the problems of the shadow market, competition in the field of medicines, tobacco products, oil products, and more. Unfortunately, the AMCU’s investigation in these areas is very often hampered by the actions of the judiciary, which indicates the imperfection of the Ukrainian judicial system.

On behalf of the European Business Association, we thank Ms. Pishchanska and her colleagues for this open dialogue and prompt response to business inquiries. In turn, the EBA community expresses its readiness to join the AMCU initiatives that contribute to a more positive investment climate in the country!

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