1.1 Underlying issues of competition regulations

Part 1 of article 8 of the RF Constitution guarantees shared economic space, the free transfer of goods, services and financial resources, competition support and freedom of economic activity. Part 2 of article 34 of the RF Constitution prohibits economic activities aimed at monopolization and bad faith competition.

The main regulation governing and ensuring competition is Federal Law No. 135-FZ, dated July 26, 2006, "On the Protection of Competition". In addition, a number of laws governing certain areas of commercial activity contain provisions aimed at protecting competition:

• Federal Law No.35-FZ, dated March 26, 2003, "On Introducing the Specifics of Antitrust Regulation in the Power Industry", which introduces the concept of dominance and exclusivity of competitors in the power market and establishes an indicative list of activities that may prevent, restrict or eliminate competition or damage the interest of third parties;
• Federal Law No.36-FZ, dated March 26, 2003, "On the Peculiarities of Power Industry Operations in the Transition Period", which prohibits a group from combining activities related to the transfer of power and operational and dispatch management with activities relating to power generation and sale/purchase;
• Federal Law No.160-FZ, dated July 9, 1999, "On Foreign Investment in the Russian Federation", which prohibits foreign investors from engaging in bad faith competition and restrictive practices, including creating a shortage of goods within Russia by means of liquidating their own entities/branches in Russia, entering into wrongful arrangements concerning pricing, division of distribution markets or participation in tenders;
• Federal Law No.381-FZ, dated December 28, 2009, "On the Framework for State Regulation of Trade Activities in the Russian Federation", which establishes the specifics of antitrust regulation in trade.

The scope of the Federal Antimonopoly Service's is further detailed in Federal Law No. 57-FZ, dated April 29, 2008, "On the Procedure for Making Foreign Investment in Business Entities Having Strategic Importance for State Defense and Security".

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1.2. Organizational Structure of the Russian antitrust agency (the FAS).

The Federal Antimonopoly Service (FAS of Russia) and its local agencies serve as the antitrust authority in Russia. The head of the FAS of Russia is its chief, who is appointed and dismissed by the Government of the Russian Federation. The organizational structure of FAS includes a central office consisting of departments that cover the main areas of the agency's operations. Local offices of the FAS of Russia operate in the constituent entities of the RF. The heads of the local offices of the FAS are appointed by the chief of the FAS of Russia.

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1.3. General areas of FAS concern:

The FAS of Russia is responsible for legally regulating and controlling

• compliance with antitrust law;
• compliance with the regulations applicable to the operations of natural monopolies;
• compliance with advertising regulations;
• procurement orders for the federal government, including sale of goods, provision of labour or services, etc; and
• foreign investment in companies having strategic importance for national defense and security of the RF.

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1.4. Extraterritoriality

The provisions of Russian antitrust law apply to agreements made outside of the Russian Federation between Russian and/or foreign entities or organizations, as well as to the actions they take, if such agreements are made and the actions taken affect any tangible and/or intangible assets located in Russia or any shares (equity interests) in any companies and any titles to for-profit companies operating in Russia or if they have any other impact on competition in Russia.

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