When market participants operate on the cross-border market of the Eurasian Economic Union (EAEU) (i.e. on the market of two or more member states), there is a risk of violating not only national legislation of one of the EAEU member states, but also the EAEU law on competition protection.  In such cases, it is necessary to understand which law will be applicable and which authority will be authorized to investigate violations.

The EAEU court developed certain legal positions that must be followed when considering (investigating) cases related to situations where the same action (or inaction) of a market participant violates both national law and the Union law, and it negatively impacts competition on the cross-border market.

The main legal positions set out in the Advisory Opinion of the Supreme Chamber of the EAEU Court include the following:

1) negative impact on the cross-border market and on the national market of a member state at the same time should be considered as a single violation on the cross-border market;

2) geographical characteristics of the market represent the decisive criteria to determine which body shall have the competence (to investigate a case), the Eurasian Economic Commission (EEC) or an authorized body of a member state. The authorized bodies of the EAEU member states operate within the territories of respective member states (i.e. national markets);

3) simultaneous exercise of the competence by the EEC and the authorized body of the EAEU member state in relation to the same violation is impossible.

If committing a single action violates the national law of the EAEU member state and the EAEU law, and it also negatively impacts or may impact competition on the cross-border market, such violation falls under the competence of the EEC and excludes liability under the national law;

When market participants holding dominant position are involved, a case of violation on the cross-border market falls under the competence of the EEC.  This is conditioned by satisfaction of certain quantitative and qualitative criteria as defined by the Ruling of the Supreme Eurasian Economic Council;

4) from a procedural point of view, the EAEU law envisages transfer of applications and materials, from one authorized body to another, depending on the jurisdiction. The EEC decision to conduct investigation construes the basis for termination of consideration of the application by the national authorized body.  This also excludes simultaneous exercise of the competence by these bodies;

5) if, despite the foregoing, a market participant is held liable and subject to sanctions simultaneously by decisions of the authorized body of the member state and the EEC, the decision that violates the competence shall be cancelled.

Akylbek Kussainov, Partner, akylbek.kussainov@zanhub.com

Ilmira Yuldasheva, Counsel, ilmira.yuldasheva@zanhub.com