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23.11.2022 (Обновлено: 30.11.2022 10:07)

EEC reveals no violation of competition between explosives manufacturers from Russia and Kazakhstan in EAEU cross-border markets

This conclusion was reached by the Board of the Eurasian Economic Commission after considering the materials of the case investigation conducted by the Department for Antitrust Regulation of the EEC.

The basis for the investigation was an appeal to the Commission of the Ministry of National Economy of the Republic of Kazakhstan in connection with the refusal of a number of Russian and Kazakh manufacturers of explosives and electrical initiators (detonators) to supply goods to a Kazakhstan economic entity. The materials contained information pointing to possible signs of an anti-competitive agreement in the actions of certain manufacturers, which, according to the applicant, consisted in refusing supplies to the Kazakh company. 

The investigation found that manufacturers of explosives had signed a contract for the release of products in advance by undergoing the approval procedure with the national authorized body in the field of industry. At the same time, the civil circulation of explosives and electronic initiators in the EAEU countries refers to licensed activities, while the procedure for obtaining permission to increase the volume of exports is quite complicated. Therefore, the presence of only one request for a quotation without specifying the guaranteed volume of purchase is insufficient to conclude a new supply contract.

Moreover, the investigation established certain facts of dishonest actions on the part of the applicant, including violation of contractual obligations and lack of timely payments. Therefore, the antitrust body considered the refusal of the manufacturers of explosives to supply the goods in the considered case as the subject of a civil legal dispute.

The totality of all factors studied during the investigation allowed the EEC Board to conclude that there is no anti-competitive agreement signed between the manufacturers of explosives in the EAEU.

However, in order to create equal competitive conditions, the EEC Board instructed the Department for Antitrust Regulation to inform the authorized bodies of the EAEU countries in the field of industry and manufacturers of explosives to consider the possibility of developing rules for the selection of counterparties and determining the price of goods sold to exclude any possibility of establishing a discriminatory approach.

According to the Minister in charge of Competition and Antitrust Regulation Bakhyt Sultanov, the adoption of such rules will ensure transparency and openness in the activities of suppliers of explosives and initiators. 

"In the course of investigation, meetings were held between representatives of the antitrust bloc and EAEU vendors. I would like to note that economic entities approved the idea of developing rules and expressed their readiness to implement them," the Minister said.