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Cartel leniency in Ukraine: overview
REGULATION
1. What laws provide for a leniency programme and which regulatory authority administers it? Is there any published guidance?
Applicable laws and guidance
A leniency programme is provided for in article 6 of the Law of Ukraine On Protection of Economic Competition (Competition Law) and is further detailed in Regulation of the Antimonopoly Committee of Ukraine (AMC) on the Procedure for Release of Liability No. 399-p of 2012 (Leniency Regulation).
The Leniency Regulation is available on the AMC's website (in Ukrainian only):
www.amc.gov.ua/amku/control/main/uk/pubUsh/article/89137.
Regulatory authority
The AMC administers leniency programme (see box, The regulatory authority).
SCOPE OF APPLICATION
2. What infringements of competition law does the leniency programme cover?
The leniency programme covers any anti-competitive concerted practices (that is, its scope is potentially broader than secret cartels). The programme provides for immunity from the administrative fines, which the Antimonopoly Committee may impose on an undertaking. There are no criminal sanctions for cartels and other anti-competitive practices, or administrative penalties such as orders disqualifying a person from management positions in Ukraine. The leniency programme does not cover non-punitive orders.
RECENT CASES
3. What notable recent cases have applied the leniency programme?
Although the possibility to apply for leniency has been in place since the enactment of the Competition Law in 2002, absence of procedural guidance and satisfactory guarantees for applicants prevented the relevant provision from being tested in practice. The Leniency Programme came into force in October 2012 and relevant practice is very limited. To the authors' knowledge, the Antimonopoly Committee has already received notifications under the leniency programme. However, there is currently no publicly available information on adoption of any leniency decisions.
AVAILABILITY OF LENIENCY
Administrative liability
4. Is full immunity from administrative fines available? What conditions must be met for immunity to be granted?
Full immunity from administrative fines is available, subject to the following conditions (to be met cumulatively):
• The applicant is the first to notify the Antimonopoly Committee (AMC) about the anti-competitive concerted practice.
• The notification is voluntary and is filed before the AMC issues a statement of objection in the relevant investigation case.
• The information provided is material for revealing the concerted practice, essentially meaning that it is sufficient for the AMC to find an infringement.
• The applicant provided all available evidence and/or information concerning the violation.
• The applicant took effective measures to cease its participation in the anti-competitive practices.
No immunity can be granted if the applicant:
Failed to end its involvement in the alleged infringing activities immediately following its application, except for the purpose of further collection of evidence as agreed with the AMC.
• Was an initiator or a co-ordinator of the infringement.
• Failed to provide all relevant information and evidence related to the alleged infringement that came into its possession or was available to it.
The applicant is considered to have provided all relevant information and evidence if it:
• Provided the AMC with all information and evidence relating to the alleged infringement that is available to it within the period established by the AMC.
• Did not destroy, falsify or conceal relevant information or evidence.
• Co-operated with the AMC throughout the investigation.
5. Is there a sliding scale of available leniency from administrative fines?
Both the Competition Law and the Leniency Regulation provide only for full immunity (see Question 4), while reductions in fines are not addressed. However, given that there are no legislative fining guidelines and the amount of fine to be imposed on the violator is always left to the Antimonopoly Committee's (AMC) discretion, the AMC can reduce the fine where it deems appropriate. Previously, the AMC has made public statements that it will adequately reward subsequent applicants (without specifying or limiting their number) and this has already been tested in a case involving a bid suppression cartel (no leniency was formally applied in that particular case).
6. Is immunity or leniency for administrative fines available to individuals? If so, what conditions apply?
There is no liability for individuals, unless they act as undertakings, for example, private entrepreneurs (as opposed to acting in the capacity of managers or employees of an undertaking). Therefore, there is no need for a leniency programme for individuals.
However, if managers or employees do not co-operate with the Antimonopoly Committee in the investigation, the relevant corporate leniency applicant may not be granted immunity.
Criminal liability
7. Is immunity or leniency available for companies and/or its employees in relation to criminal prosecution? What are the implications for employees when an undertaking has been granted immunity or leniency?
Circumstances
There is no criminal liability for anti-competitive concerted practices for companies or their employees.
Proceedings against employees
Not applicable (see above, Circumstances).
Employees' interests
Not applicable (see above, Circumstances).
APPLICATION PROCEEDINGS
8. When should an application for leniency be made?
An application should be made prior to Antimonopoly Committee (AMC) issuing a statement of objection in the relevant investigation case. Therefore, applications are welcome even after the AMC opened the investigation and may have already collected evidence.
9. What are the procedural rules for leniency applications?
Relevant authority
An application should be submitted to the Antimonopoly Committee's (AMC) central office and addressed to the relevant officer of the AMC responsible for accepting leniency applications. The contact information is available at the AMC's website:
www.amc.gov.ua/amku/control/main/uk/publish/article/89137.
Applicant
The application should be filed by an authorised officer or authorised representative of the undertaking.
Informal guidance
There is no possibility or procedure for obtaining an informal guidance.
Form of application
The application should be in writing and contain the information required for the grant of immunity (see Question 4) or securing a marker (see below, Markers).
Markers
An applicant can secure a marker, which must be perfected within a period to be specified by the AMC, up to a maximum of 30 days.
To secure a marker the applicant should provide the following information:
• Information about its participation in an alleged cartel.
• Duration of its participation in the alleged cartel.
• Information about all the other parties to the alleged cartel known to the applicant, including the individuals that have been involved in it.
Information/evidence
The applicant should provide information and evidence that is material for proving the concerted anti-competitive practices. In addition to the information indicated above (see above, Markers), the following should be provided, for example:
• A detailed description of the alleged cartel arrangement.
• Contents of agreements, notes and correspondence.
• Minutes of meetings.
Submission of the application with a detailed description of the alleged cartel arrangement is regarded as sufficient admission of the infringement.
Oral statements
Oral statements are not accepted.
Short-form applications
Not applicable.
10. What are the applicable procedures and timetable?
After submitting the leniency application the applicant will immediately receive a copy of the minutes confirming the date and time of the application, which serves as acknowledgement receipt. If requested, the Antimonopoly Committee (AMC) will also inform the applicant within one day. If an applicant secures a marker first, that marker must be perfected within a period specified by the AMC, up to a maximum of 30 days (see Question 9, Markers).
The AMC is not required to make any indication as to whether the conditions are met by the applicant and immunity is likely to be granted until rendering the final decision in the case.
There are no fixed deadlines for the AMC to finish the investigation. In practice, the vast majority of investigations last between six months and one year.
WITHDRAWAL OF LENIENCY
11. In what circumstances and at what stage of the proceedings can leniency be withdrawn? What implications does the withdrawal of leniency from one company have for other applicants?
The immunity may be withdrawn if the Antimonopoly Committee (AMC) discovers that the applicant:
• Failed to end its involvement in the alleged infringing activities immediately following its application, except for the purposes of further collection of evidence as agreed with the AMC.
• Was an initiator or a co-ordinator of the infringement.
• Failed to provide all relevant information and evidence related to the alleged infringement that came into its possession or was available to it.
Such withdrawal does not have any implications for other applicants as their applications cannot be considered by the AMC due to a failure to satisfy the immunity condition of being the first in (see Question 4).
Leniency can be withdrawn when the final decision is issued or within five years from its issuance (through reconsideration of the final decision by the AMC).
SCOPE OF PROTECTION
12. What is the scope of leniency protection after it has been granted?
Immunity is available only with respect to the infringing activities disclosed in the application.
13. Does the competition authority offer any further reduction in fines for an undertaking's activities in one market if it is the first to disclose restrictive agreements and practices in another market (leniency plus)?
The law does not provide for such reductions in fines.
14. Does the grant of leniency affect a third party's ability to bring a follow-on damages action against a leniency applicant?
The grant of leniency does not protect the applicant from a third party's follow-on damages action. The amount of damage is twice the amount of the actual damage sustained.
CONFIDENTIALITY AND DISCLOSURE
15. What are the rules relating to confidentiality during a Leniency application?
Identity disclosure
If requested by the applicant, the Antimonopoly Committee (AMC) must ensure confidentiality of the applicant's identity during the investigation. A final decision may disclose the applicant's identity.
Information disclosure
Until the AMC issues a statement of objection other undertakings under investigation can familiarise themselves with the information provided by a leniency applicant, except confidential information and information whose disclosure may create obstacles for further investigation.
Confidentiality requests
The applicant may request confidentiality of information provided. In this case it should prepare a non-confidential version of the application and documents to be shared with other undertakings under investigation.
See Question 76, Domestic submissions and domestic discovery and Question 17.
16. What are the rules concerning disclosure of statements made in support of a leniency application?
Domestic submissions and domestic discovery
No special rules are envisaged as to whether the information submitted by the applicant can be made subject to discovery orders in Ukrainian courts. Under the general rule, any confidential information received by the Antimonopoly Committee is not subject to disclosure, except on request of the state investigatory authorities (in the context of criminal proceedings) or courts.
Domestic submissions and foreign discovery
There are no limitations with respect to discovery of domestic submissions in foreign courts. It appears that such discovery may be possible, for example under the European Convention on Mutual Assistance in Criminal Matters 1959.
Foreign submissions and domestic discovery
There is nothing in Ukrainian law that prevents information submitted in foreign jurisdictions from being made subject to discovery orders in Ukrainian courts.
INTER-AGENCY CO-OPERATION
17. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities from other jurisdictions in relation to leniency? If so, what is the legal basis for and extent of co-operation?
The Antimonopoly Committee may co-operate with regulatory authorities from other jurisdictions, including by transferring the information to foreign competition authorities where the relevant international treaty exists. Confidential information may be provided to a foreign competition authority only if that authority:
• Will use the information exclusively for carrying out its duty.
• Can ensure that no disclosure for other purposes occurs.
PROPOSALS FOR REFORM
18. Are there any proposals for reform?
In 2013, the Antimonopoly Committee (AMC) proposed a draft law providing for fine reduction or partial immunity for the second and subsequent applicants (with the detailed procedure to be further established by the AMC). However, the prospects of its adoption are unclear and the draft law has not yet been submitted to the Ukrainian Parliament.
