Press Release

Agency Held Plenary Collegial Board Session Attended by Prime Minister of Republic of Kazakhstan K. Masimov

January 21, 2010, the Agency of the Republic of Kazakhstan for Competition Protection (Antimonopoly Agency) (the “Agency”) held plenary Collegial Board session dedicated to the 2009 Agency performance and future tasks for the year 2010. The Prime Minister of the Republic of Kazakhstan, K. Masimov, attended the session.     

The 2009 Agency’s activity was focused on implementation of the Government’s anti-crisis program by effectively abolishing anticompetitive actions taken by antimonopoly legislation violators, efficient responding and forecasting situation in commodity markets, measures for decreasing administrative barriers to small and medium size businesses, etc. All these means were crucial to control inflation and to provide further economic growth.      

The Agency’s 2009 anti-crisis measures could become efficient due to a consistent legislative and institutional work. The new RK “On Competition” Law regulations showed that this Law is mostly an anti-crisis one which ensures civilized competitive relations.

One of the antimonopoly authority’s major functions is commodity markets monitoring. In order to prevent unfair competition and concerted actions which restrict competition 60 commodity groups were analyzed. Thus, the relevant suggestions on competition development in these markets were submitted to the Government and public authorities.     

The Agency and its territorial divisions conducted 74 investigations in petroleum products market. The materials regarding 34 entities were submitted to judicial and law enforcement authorities. The fine estimated 1.88 billion tenge.   

The anticompetitive concerted actions between cement plants were detected as well. The Agency fined them an administrative penalty 1.64 billion tenge. The materials are being considered by judicial authorities.    

Besides, the Agency was monitoring food market in 2009. Additionally, the Head of the State stated during the “Direct Line” on November 13, 2009, that the food pricing should be regulated immediately. The Government created a working group which takes consistent and complex measures. The Agency took measures regarding 14 major supermarkets where unfair competition was detected.      

In 2009, the Agency was involved in 179 lawsuit cases, where 66 of them were concluded and 62 cases confirmed antimonopoly authority’s opinions. The courts approved fines imposed by the Agency which estimated totally 24.6 billion tenge.     

The facts of unfair competition by commercial banks were also detected in financial markets. The banks unreasonably refused to grant credits and provide preferential credit terms to affiliated entities.   

The participation of public enterprises in competitive markets was discussed during the session. The past year showed the number of public enterprises had not decreased and the quality of their services had been low. These facts impact negatively competition. Currently, more than 5000 public enterprises operate in various sectors.   

The new “On Procurement” Law’s regulations, allowing procurement from one products (services) source from lower enterprises, generated “hidden” monopoly. It becomes usual when a public authority establishes its lower public enterprises with separate budget programs. The cases of public enterprises activities duplication were detected as well. Though, many enterprises established under akimats are inefficient and unprofitable.                    

In order to cope with this situation a special commission is suggested to be formed where members will be from the Agency, the Ministry of Economy and Budget Planning, and the Ministry of Finance with power to submit suggestions to the Government regarding reorganization of public enterprises which have public functions in public authorities, also delegation of minor occupations and properties of public enterprises to competition, budget economy due to delegation of public enterprises’ some functions to competition.          

In order to prevent terms delays of granting public aid to small and medium size business entities it was offered to include employees of the Agency’s territorial divisions in the commission which will grant this aid.  

The Head of the antimonopoly authority indicated major goals to be implemented in 2010 according to the Agency’s Strategic Plan. The goals are immediate responding and situation forecasting in commodity markets, decreasing government participation in competitive markets, ensuring antimonopoly legislation regulations compliance.  

Concluding the session, the Prime Minister of the RK supported Agency’s initiatives and gave assignments for the year 2010.