Starting from January 10, 2016, amendments to the Competition Law, providing for contesting under a simplified procedure the acts and actions of the authorities and organizations in the areas of construction, tenders and procurement entered into force. Pursuant to the amendments, the Russian Federal Antitrust Service has powers to consider such claims under a simplified procedure. 

The amendments establish the following timeframes for contesting: 

• 3 months for contesting acts and actions of authorized bodies and organizations in the area of residential construction and operation of networks;
• 10 work days for contesting acts and actions of tender organizers;
• 3 months for contesting acts and actions of tender organizers if an agreement is not concluded or if bidding is deemed to not have taken place. 

The antitrust authority must consider such claims within 7 work days, with the opportunity of a one-time extension of the term if additional information is required. In the event a violation is confirmed, the antitrust authority issues an order to cure it. At the same time, the consideration of claims by the antitrust authority does not rule out court protection.¹ 

Furthermore, officials can also bear administrative liability for violations in the area of construction.² For instance, for violation of the procedure on issue of construction and commissioning permits, the penalty will constitute 3,000-5,000 rubles. In the event of a repeat violation, the penalty increases up to 30,000-50,000 rubles or disqualification for up to 2 years. 

The penalties for organizations performing connection to networks will constitute 10,000-40,000 rubles for officials and 100,000-500,000 rubles for organizations. The penalty increases for a repeat violation up to 40,000-50,000 rubles or disqualification for up to 3 years for officials and up to 600,000-1,000,000 rubles for organizations.³  

We should note that the simplified procedure for contesting will allow to decrease the number of violations and, at the same time, to not delay the construction of residential facilities. In the event of violations at any level – from the allocation of land plots to registering them in cadaster – business entities can contest the unlawful actions under the simplified 7-day procedure. 

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^[1] Clause 3 Article 18.1 of Federal Law No.135-FZ “On protection of competition” dated 26.07.2006

^[2] Article 14.9.1 of the Code of Administrative Offences

^[3] Clauses 1 and 2 Article 9.21 of the Russian Code of Administrative Offences

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.