19.08.2016 — FAS Unraveled Widespread Pharmaceutical Cartel

The Federal Antimonopoly Service (FAS) detected elements of an anti-competitive agreement between several pharmaceutical companies. Participants of this arrangement maintained prices at the auctions on delivery of drugs and medical supplies for the state and municipal needs. Some of these pharmaceutical companies had already been held liable for similar offenses in the past.

Elements of the anti-competitive agreement were revealed in more than 700 auctions almost all over Russia. The FAS noted that uncovering antimonopoly violations in the area of health care is particularly important as such violations negatively affect not only the budget but also the ordinary people, being able to cause increased prices for medications and medical services.

At the same time, medical institutions that bought their medical supplies at these auctions have never reported the violation. “This fact confirms once again that health care is one of the most anti-competitive areas”, noted the FAS representatives.

18.08.2016 — New Eurasian Economic Union Customs Code to Be Ratified in Fall

The Eurasian Economic Commission (EEC) is developing a new Customs Code, which will establish unified methods for customs valuation of imported goods, simplify and accelerate some customs procedures, and provide new privileges to economic operators. Preliminarily the draft Code will be complete and presented for ratification in October, 2016.

Major novelties are focused on the development of electronic document flow and simplification of the customs procedures. In particular, the Code permits submission of customs declaration without filing the supporting documents and provides for release of goods within 4 hours from the moment when the respective declaration was submitted.

Besides, it is planned to introduce a unified method for customs valuation of imported goods and to provide new privileges to authorized economic operators, i.e. suppliers eligible to use the simplified procedures. The new Code establishes three categories of operators with different amount of privileges depending on their experience in the sphere of foreign economic activity and the history of customs duties payments in good faith.

Unlike the existing Customs Code of the Customs Union dated 2009, which seeks to decentralize regulations and to delegate many issues to the national legislation, the new Customs Code of the EEU intends to unify the customs regulation and to create uniform customs rules within the EEU.

17.08.2016 — Government to Increase Expenses of Foreign Internet-Business

In order to support the Russian market and to ensure that Russian and foreign retailers are in the equal position, the Federal Tax Service (FTS) has proposed to oblige foreign internet shopping services to register legal entities within Russia for the purposes of VAT accrual in respect of the supplied goods.

The FTS has proposed to establish automatic VAT accrual for goods imported by foreign internet shopping services. The mechanism is to be implemented with the help of other authorities, such as the Ministry of Economic Development, Ministry of Industry and Trade and the Federal Customs Service.

The FTS’s proposal is aimed at supporting the Russian internal market, which is disadvantaged due to lower prices of foreign internet services. Apart from that, the FTS’s proposal is based on international practices. In particular, similar rules are in place in the European Union. The European customs authorities open up parcel for customs valuation and accrue the respective levies and taxes.

16.08.2016 — Unscheduled Inspections to Be Approved by Prosecutor's Office

The Russian President has instructed the responsible authorities to develop a list of measures that will decrease administrative load on the business community. One of such measures is the establishment of mandatory prosecutor’s office approvals for all unscheduled inspections.

As a result of the Government meeting, it was decided to amend the Russian legislation to the effect that the prosecutor's office should approve not only planned but also unscheduled inspections initiated in connection with violation of consumer rights and launched under special state control (supervision) procedures.

This novelty is to be implemented by the General Prosecutor's Office, which has to develop the above-mentioned amendments by November 1, 2016.

15.08.2016 — Russian-Language Internet (Runet) to Fall under State Control

The Ministry of Communications and Mass Media of the Russian Federation (Mincomsvyaz) has developed amendments intended to transfer control over national domains .РФ and .RU to state-controlled organizations. Amendments are aimed at expansion of the state control over the infrastructure of the Russian-language Internet and at redistribution of cash flows from rendering services in the Russian domain zones.

The amendments provide for transfer of control over the critical infrastructure of the Internet (including national domain zone, its infrastructure and the Internet exchange points) to an organization established by Mincomsvyaz. At the moment, these matters are managed by a non-profit organization, the Coordination center for TLD RU.

Another proposal is to implement licensing of the Internet exchange points, which are to be owned exclusively by Russian legal entities. This will effectively equip Mincomsvyaz with almost unlimited authority over the Russian-language Internet.

Experts note that enhanced monitoring over the Runet is not the only reason for such proposals. The aspiration to redistribute cash flows coming from services rendered in the Russian domain zones, which amounted to 0.5 billion rubles in 2015, could be one of the possible hidden reasons for the proposed bill.