Current antitrust laws prohibit the restriction, prevention or elimination of competition. Many legal provisions, however, establish responsibility not for a specific action, but for its consequences. In this regard, it can be quite difficult to assess the degree of danger of some operations on the market, since it is impossible to predict their results in advance.

Things are somewhat simpler with cartels. The law expressly prohibits concluding cartel agreements. Accordingly, it is enough for the controlling structures to prove, and for unscrupulous participants to realize the very fact of such collusion. Let us consider further in detail what a cartel is and what responsibility is provided for its creation.

General information

A cartel agreement is an agreement prohibited by law between competitors to:

• market section;
• prices;
• creating a shortage of products;
• participation in tenders;
• boycott of certain categories of buyers.

The antimonopoly authority must prove the very fact of the existence of a cartel. Dangerous consequences for the economy are implied. This means that the supervisory authority is not required to prove their occurrence, including probable occurrence, in order to bring a person to administrative responsibility. The situation with criminal punishment is somewhat different.

The currently valid Art. 178 of the Criminal Code of the Russian Federation provides for various sanctions for violators of antimonopoly legislation. However, to impute them it is necessary to collect evidence.

Qualification Features

To determine the signs of a cartel conspiracy, it is necessary:

Features of proof

To bring individuals to justice under the Criminal Code, FAS Russia uses two types of evidence: indirect and direct. The latter include documents (protocols, agreements, statements, etc.), as well as testimony of witnesses that directly indicate the presence of violations. To obtain such evidence, the FAS Russia conducts surprise inspections. As practice shows, often during such events, clearly anti-competitive documents signed by market participants are discovered.

Direct evidence has become increasingly difficult to find over recent years. In many cases, regulatory authorities find documents indicating the existence of a cartel agreement, in which participants use pseudonyms. In this regard, the collection of indirect evidence indicating collateral, additional facts related to a particular violation is of great importance in investigations. To obtain them, regulatory authorities analyze the behavior of business entities, the structure of the market, perform mathematical calculations and examinations. The results of all these activities act as indirect evidence.

Nuances

As the employees of the regulatory authorities themselves explain, the antimonopoly service has a kind of “red line” for cases where there is no direct evidence of a cartel conspiracy. A decision to punish the perpetrators is made if the results of an economic examination show that the situation in the market is unacceptable, and if there is one or two additional evidence of a violation of the law. It is worth saying, however, that the controlling structures do not directly name the circumstances to which they can react. This is done to prevent unscrupulous competitors from being able to prepare for inspections.

Subject of proof

When analyzing the market and the behavior of economic entities, the antimonopoly authority, when investigating cartel agreements, seeks to find confirmation that:

• competitors act uniformly and synchronously without any objective reasons for this;
• the activities of the subjects contradict their interests;
• business transactions could not be carried out under any circumstances except in the presence of conspiracy.

Problems of judicial practice

Many countries have developed and successfully used practical guidelines for proving and investigating cases of cartel agreements. They are, as a rule, not enshrined in regulations, but are recorded in reviews of judicial practice.

Domestic antimonopoly legislation came into force relatively recently. Accordingly, judicial practice in cases concerning forms of restriction of competition is still quite contradictory.

In addition, complex cases are considered by the same judges who make decisions to challenge non-normative acts of government structures. Due to the lack of specialization, which allows authorized persons to see not only the legal, but also the economic side of cartel cases, the materials provided by entities suspected of conspiracies are deprived of evidentiary value. As a result, judges trust the conclusions drawn from checks of complaints about cartel collusion by the FAS.

In this regard, practical guidelines developed by regulatory authorities are becoming increasingly relevant. One of them is FAS Order No. 220 of 2010. It provides explanations on the procedure for determining the product and geographical boundaries of the product market. Work is currently underway to develop similar practical guidance on damage assessment and vertical agreements.

Stages of proof

To be held accountable for a cartel conspiracy under the Criminal Code of the Russian Federation, it is necessary:

1. Identify inconsistent, illogical behavior of an economic entity in the market.
2. Detect a “failure” in the actions of an entrepreneur. For example, he sold a product for 10 rubles per piece, but suddenly increased the price 5 times.
3. Identify differences in the behavior of entrepreneurs suspected of collusion from the actions of other market participants.
4. Prove the probable existence of an agreement to eliminate competitors.

According to experts, the first and second stages may merge into one. However, regulatory authorities usually use different methods in the proof process. The FAS implements both stages, opening cases of conspiracy, reacting to certain events in the market. One telling example is the sudden increase in buckwheat prices.

Features of the application of economic models

The methods of proof chosen by the regulatory authority are usually not fixed in practice. Economic models are constantly being transformed under the influence of market conditions. Every year new techniques emerge that refute or replace the old ones.

Often, in cases between the regulatory authority and cartel participants, a dispute arises about the validity of a particular model.

Identifying differences in subject behavior

To prove the presence of certain deviations in the actions of market participants, a set of economic measures based on the collection of information has been developed. The methods used in the third stage are more detailed.

The description of a particular economic model usually begins with the conditions under which it can be applied. The antimonopoly authority needs to compare it with the actual state of affairs. This check is carried out for each economic model until the most suitable one is selected.

The FAS actively uses the method of comparing the behavior of entities suspected of collusion with the actions of competitors. It is worth noting, however, that in foreign practice such analysis acts as a mandatory stage of proof, and not as a tool that can be used in one case and not used in another.

Transition to direct proof of conspiracy

Based on the results of the first three stages, the regulatory authority and cartel participants accumulate a large amount of information. Information comes from consumers, statistical authorities, and other sources.

The supervisory authority, using this information at the final stage, must formulate a reasonable conclusion about the existence or absence of collusion. For this purpose, as a rule, one mathematical model is selected. The task of the antimonopoly authority ultimately comes down to proving why it chose this particular method. Participants in the alleged cartel, in turn, justify the reasons for the impossibility of applying this model.

Specifics of legal proceedings

Economic evidence in cartel cases are those documents and materials that contain substantiated conclusions about:

• product and geographical boundaries of the market within which the violation was committed;
• the time period within which the study was conducted;
• composition of subjects.

These include, in particular:

• FAS analytical report;
• expert opinion;
• written and oral explanations from economists and other specialists, as well as witnesses involved in legal proceedings.

Criminal liability

A fairly strict punishment for participation in a cartel is provided for in Art. 178 of the Criminal Code of the Russian Federation.

Criminal sanctions are applied to economic entities if their actions:

• caused major damage to organizations, individuals or the state;
• resulted in the receipt of income on a large scale.

The punishment will be increased if the restriction of competition through participation in a cartel is committed:

• subject using his official status;
• with damage/destruction of property belonging to other persons, or with the threat of committing such actions (if there are no signs of extortion);
• with causing especially large harm or extracting income on an especially large scale;
• with the use of violence or the threat of their use.

The perpetrators may be subject to one of the following penalties:

Testing Assumptions

Economic analysis can use different mathematical models that characterize the actions of market participants under normal conditions and in the presence of a cartel. However, all these schemes are based on the same principle. Cartel agreement allows participants to set the price of products several times higher than the price of competitors, and thereby make excess profits.

However, the models in any case are a conditional description of the real situation. Therefore, all assumptions on which they are based require verification.

If there is a dispute about the existence of a cartel, it is necessary to find answers to 2 main questions:

1. Did the cartel cause increased profits due to inflated product costs?
2. Is the market being analyzed sufficiently transparent?

The first question, unfortunately, is often forgotten in practice. Here we need to remember the reason for banning the cartel. The legal ban is established because collusion between competitors always leads to higher prices, and this, in turn, causes harm to consumers. This assumption is what economists should test. The fact is that it may turn out that profit margins actually decreased during the period when, according to the regulatory authority, the cartel was created.

To form a cartel, economic actors must be able to understand what competitors are doing. If one of the participants increases the cost of products, then he will lose customers because they will switch to goods from other manufacturers. If there are doubts about market transparency, the likelihood of a cartel existing is minimal.

08/30/2013 15:08, Kurgan region, website:

Bidding is a traditional institution of civil law, reflecting a special procedural aspect of concluding a contract. However, it should be noted that the institution of bidding these days has acquired an intersectoral character: with certain features it is used not only in civil law, but also beyond it.

Bidding as an intersectoral phenomenon has two constitutive features that are also characteristic of bidding as a civil legal institution: equality of bidders and their competitiveness with each other. At the same time, all relations arising in the process of organizing and conducting auctions remain in the field of civil law regulation, regardless of in what area of ​​public relations, as well as for what purposes the auctions are organized and held.

Competitiveness is a constitutive feature of any bidding, objectively determining its essence; in the absence of competitiveness, bidding loses all meaning. At the same time, competitiveness in itself may be inherent not only in bidding, but also in other methods of concluding a contract. Such methods are proposed to be called “competitive procedures for concluding a contract,” the meaning of which boils down to the existence of several alternative counterparties who compete (compete) with each other for the right to become a party (counterparty) to the same contract.

The sign of competition is that the winner of the auction will be the participant who offers the most favorable price for purchasing the property or the best conditions, therefore each participant strives for his offer to be the most profitable.

Competitiveness as a constitutive feature of bidding finds direct expression in individual elements of the legal regime established for bidding. First of all, it is necessary to indicate the quantitative composition of participants. Bidding with one participant cannot be considered valid (there must be at least two participants). It should also be noted that genuine competition has as a necessary prerequisite the equality of conditions under which competition occurs. Competitiveness, as applied to bidding, presupposes competition on equal terms.

Bidding should be positioned as a special case of competition when concluding a contract; its peculiarity is the tightening of procedural requirements, such as: notification of the bidding, advance determination of the conditions for participation in them, including the possibility of securing bids, and the strictly mandatory conclusion of an agreement based on the results of the bidding with the winner.

In progress there are no contractual ties for organizing and conducting tenders, the construction of an “implied contract for tendering”, accepted by modern legal science, is untenable. Notice of an upcoming auction is not a public offer, but a unilateral transaction by the organizer, the consequence of which is an invitation to make offers, which are the applications of applicants for participation in the auction. The notice exists on its own and does not require any acceptance.

Contractual relations can arise between well-defined, specific persons, but at the time of filing applications for participation in the auction, these persons are not defined in any way: applicants (applicants) will have to go through the procedure for admission to participation in the auction, only as a result of which a circle of bidders will be formed.

There is a complete absence of mutual rights and obligations at the auction. The organizer can change the terms of the auction or cancel them altogether (the consequences of such behavior are different, but bidders have no right to resist it), bidders can change or withdraw their bids at any time, as well as take a completely formal, passive participation in the auction (for example without making bids in a step-by-step auction). In addition, if we consider the notice of auction to be a public offer, and the application to participate in it as acceptance, then the latter should be devoid of independent legal content, which, in turn, is concentrated exclusively in the notice. It is obvious that the bidding mechanism actually functions differently: bidders’ applications must have independent and specific content, i.e. act as offers in relation to the contract, in order to identify the conditions and conclusion of which tenders are held.

Under the current legislation, there is no place at auctions for agreements allowed in international practice between participants in upcoming auctions (on the creation of consortia and similar contractual associations). The reason for this is not only the requirements of paragraph 4 of Art. 447 of the Civil Code of the Russian Federation stating that the person who wins the auction is an individual or legal entity, as well as the Russian Federation, constituent entities of the Russian Federation and municipalities. Bidding is a civil legal relationship, the participants of which are citizens and legal entities (Clause 1, Article 2 of the Civil Code of the Russian Federation), but not contractual associations.

Due to the increasing detail of procurement and antitrust legislation, unscrupulous customers and bidders are inventing increasingly veiled ways to manipulate the bidding procedure, the detection of which becomes even more difficult for both other participants and regulatory government agencies.

Trading manipulation schemes

Schemes for manipulating bids during tenders often include mechanisms for the proportional division and distribution among participants in the conspiracy of additional profits received by increasing the final price of the contract. For example, competitors who agree not to submit bids or submit a known losing bid may become subcontractors or suppliers by entering into agreements with the successful bidder to share the benefits of the illegally obtained high contract price. However, long-term bid manipulation agreements may involve much more sophisticated methods of distributing contract wins, monitoring, and distributing the benefits of bid fraud over months or years. Manipulation of entries in competitions may also include cash payments by the winning bidder to one or more colluders. This so-called offset payment is also sometimes associated with firms submitting "cover" bids (with higher prices).

Individuals and legal entities implement various schemes for manipulating applications during competitions in a variety of ways; as a rule, they use one or more common strategies. These techniques are not mutually exclusive. For example, cover submissions can be used in conjunction with a competition winner rotation scheme. These strategies, in turn, may manifest as patterns that procurement officials can recognize, and familiarity with them may help expose bid manipulation schemes.

Submitting cover applications. Cover bids (also referred to as additional, auxiliary, formal or symbolic) are the most common way to implement bid manipulation schemes in competitions. It is implemented as follows: individuals or legal entities agree to submit bids subject to at least one of the following conditions: (1) a competitor agrees to submit a bid at a price higher than the bid price of the bidder who is to be the winning bidder, (2) the competitor submits a bid with a price that is already known to be too high to be accepted, or (3) a competitor submits a bid containing special conditions that are known in advance to be unacceptable to the buyer. Cover bids are intended to create the appearance of real competition.

- Withdrawal of applications. Withdrawal schemes involve agreements between competitors in which one or more companies agree to withhold bids or withdraw a previously submitted bid to ensure acceptance of the winning firm's bid. In essence, withdrawal of applications means that the company's application does not participate in the final consideration by the competition organizers.

- Rotation of applications. In bid rotation schemes, colluding firms continue to submit bids, but they agree to take turns winning the competition (i.e., taking turns to become the qualified lowest bidder). Methods for implementing bid rotation agreements may vary. For example, participants in a conspiracy may decide to distribute the sums of money from a certain group of contracts among all firms approximately equally or in accordance with the size of each company.

- Market division. Competitors share the market and agree not to compete for certain customers or in certain geographic areas. For example, competing firms may allocate specific customers or define groups of customers among different firms so that competitors do not bid (or only submit cover bids) for contracts offered by a particular type of potential customer assigned to a particular firm. The competitor, in turn, will not apply for a competition organized by a group of clients assigned to other firms participating in the agreement.

The possibility of implementing an agreement based on collusion is influenced by industry and product characteristics of the market. Such characteristics may tend to support firms' efforts to manipulate bids. The indicators of competition fraud discussed below may become more apparent in the presence of certain enabling factors. A variety of industry or product characteristics that contribute to collusion; companies do not necessarily need all of these factors to be present in order to successfully manipulate bids.

The main indicators that help reduce the likelihood of concluding an agreement on bid manipulation are:

Large number of bidders. Manipulation of bids in competitive bidding is more likely in cases where a small number of companies are suppliers of a product or service. The smaller the number of sellers, the easier it is for them to reach an agreement on how they will manipulate bids.

Low barriers to entry into the product market. If few firms have appeared or have a chance to appear in a market over a certain short-term period, because entering this market is expensive, difficult or time-consuming, firms operating in this market are protected from competitive pressure from potential newcomers. This security barrier facilitates bid manipulation efforts.

Low demand growth rates. Significant changes in supply or demand conditions will typically destabilize existing bid manipulation agreements. Constant, predictable demand tends to increase the risk of collusion.

Cyclical fluctuations in demand. The absence of collusion in the wave of a cyclical upturn (in a state of anticipation of a downturn) entails for the participant an increase in one-time profits compared to losses in the near future (under the influence of possible profits declining during a downturn).

Differences in costs between market participants (traders). Lower costs in the production of goods/provision of services lead to higher profits outside the agreement and do not entail the participant’s interest in concluding an agreement (there is no interest in support).

Lack of structural connections. Low levels of cross-ownership and participation reduce the likelihood of collusion.

Availability of many substitute goods/services. In the event of a shortage or unavailability of good alternative goods or services that can replace the product or service being purchased, individuals or entities wishing to resort to bid manipulation feel safer knowing that buyers have few good alternatives if they eat at all, and thus their efforts to raise prices have a greater chance of success

The existence of cartels leads to an artificial rise in prices and a lack of new, better goods. Such agreements lead to the fact that participating enterprises lose incentives to introduce innovations, and companies participating in the cartel, as a rule, try to prevent new players from entering the market by raising barriers to entry into the market.

For cartel conspiracy (the most dangerous economic crime), administrative liability is provided with punishment in the form of a turnover fine in the amount of up to 15% of the company’s annual turnover, and criminal liability, with punishment under Article 178 of the Criminal Code of the Russian Federation in the form of a fine from 300 thousand to 1 million rubles , and for especially dangerous cartels the prison term is from 3 to 7 years in prison.

In order to identify competitive fraudsters, you need to know certain signs of unfairly conducted auctions: a small number of participants, only a symbolic reduction in the offer price, incomplete attendance at the auction, etc.

These main features can be established by free access to the all-Russian official website for placing orders for the supply of goods, performance of work, provision of services for state and municipal needs www.zakupki.gov.ru, where all the actions of the companies participating in the placement of the order according to the so-called “cutting” » are visible in the public domain. In bid rigging, competitors agree on the terms of a bid to maximize their profits and eliminate competition.

Apply in case of detection of signs of violation of antimonopoly legislation in the form of collusion at auctions, you can contact the Kurgan OFAS Russia at the address: Kurgan, st. M. Gorky, 40, room 215, tel. 45-39-55, f. 46-39-85, e-mail: [email protected]

The requirements for filling out an application are established by parts 1 and 2 of Article 44 of the Law on Protection of Competition.

If you do not have sufficient information necessary to write an application to the antimonopoly authority, you have the right to send the available materials, which will be considered by the Kurgan OFAS Russia on your own initiative, since by virtue of Part 1 of Article 39 of the Law on Protection of Competition, the basis for initiating a case a violation of the antimonopoly law is not only a statement by a legal entity or individual indicating signs of a violation of the antimonopoly law, but also the direct detection by the antimonopoly authority of signs of a violation of the antimonopoly law.

Kiryanova Victoria Sergeevna / Kiryanova Viktoriya Sergeevna - Department of Finance and Credit,
School of Economics and Management, student;
Vakulenko Kseniya Eduardovna / Vakulenko Kseniya Eduardovna - Department of Finance and Credit,
School of Economics and Management, student
Far Eastern Federal University, Vladivostok

Annotation: The article discusses collusion schemes at auctions, provides specific examples of these collusions, and proposes a solution to this problem. Articles of regulatory legal acts that control competition and agreements between market participants are provided.

Abstract: the article considers with the scheme of collusion in the auction, provides specific examples of these collusions, and offers a solution to this problem. This article provides an article of legal acts, regulatory competition and agreements between market participants.

Keywords: auction, collusion of auctioneers, agreements of economic entities, concerted actions, competition, electronic auction.

Keywords: auction, conspiracy of auctioneers, agreements of economic entities, concerted action competition, electronic auction.

During an auction, participants compete with each other for the right to purchase a certain product, type of service, or production of work. But recently, cases of collusion have become more frequent, taking various forms. As a result of such agreements, the main purpose of holding auctions is violated - saving money for budgetary institutions and making a profit for private auctioneers.

Collusion at an auction is a preliminary, prior to the auction, secret agreement of several participants to act in a certain way in their own interests and to the detriment of the interests of other persons and economic entities.

Auction collusion restricts competition and violates human rights and is therefore prohibited by law.

According to Article 34 of the Constitution of the Russian Federation, everyone has the right to engage in entrepreneurial and other economic activities not prohibited by law, but they should not be aimed at monopolization and unfair competition.

In accordance with Article 11 of the Federal Law “On the Protection of Competition” (hereinafter referred to as the Federal Law “On the Protection of Competition”), concerted actions of business entities and agreements between them on the product market are prohibited if they lead or may lead to an increase, decrease or maintenance of prices at auction .

According to Article 14.32 of the Code of Administrative Offenses of the Russian Federation (hereinafter referred to as the Code of Administrative Offenses of the Russian Federation), the conclusion by an economic entity of an agreement, participation in it or the implementation of concerted actions, as well as coordination of economic activities, are considered an administrative offense and entail administrative liability.

In accordance with Article 178 of the Criminal Code of the Russian Federation, preventing, restricting or eliminating competition by concluding agreements between business entities-competitors, if they caused large damage to citizens, organizations or the state or resulted in the extraction of income on a large scale, are considered criminal offenses.

During bidding, actions that lead or may lead to the prevention, restriction or elimination of competition are prohibited, including:

1.coordination by auction organizers or customers of the activities of its participants;

2.creation of preferential conditions for a bidder or several bidders;

3.violation of the procedure for determining the winner of the auction;

4.participation of auction organizers or customers in the auction.

Among collusions at an auction, the most common agreements are between auctioneers. Although there are other collusion schemes. Let's look at some of them.

Scheme No. 1. Conspiracy of participants.

1. Since the list of auctioneers is posted in an open source, they can agree among themselves in advance by dividing the lots. And then the behavior pattern will be as follows: the auctioneer announces the lot and the starting price. Only one card is raised. The next lot is another card and so on.

A similar type of conspiracy was uncovered by the Federal Antimonopoly Service (hereinafter referred to as FAS) of the Rostov region in 2009. During the auction for the right to conclude a municipal contract for the production of a project for the gasification of social facilities in the Semikarakorsky district, Rostoblzhilproekt LLC and Monolit LLC coordinated their actions and did not reduce the contract price for individual lots in favor of each other. By their actions, they violated Article 11 of the Federal Law “On Protection of Competition” and were forced to pay a fine: Rostoblzhilproekt LLC - in the amount of 147 thousand rubles, and Monolit LLC - more than a million rubles.

2. Auctioneers gather in advance and hold their own auction, during which they determine their prices for the lots and offer each other “compensation”. Whoever offers the largest amount of “compensation” wins. During the auction, they raise the card once and lower the price as much as possible.

An example of this type of collusion can be the coordinated actions between participants during the FGU Uprdor "Caspian" holding an auction for the provision of maintenance services for sections of the federal road Syzran-Saratov-Volgograd in 2013. Volgogradavtodor and DSP PK-Stroy entered into an agreement with Avtotechpark to transfer 10 million rubles to him for his refusal to participate in the fight, and with Volgogradavtomost they entered into subcontract agreements to carry out work on the won lots. The auctions for lots No. 11 and No. 12 were declared invalid as a result of the refusal of participation in them by DSP PK-Stroy and OGUP Volgogradavtodor, respectively. And government contracts were concluded at starting prices with one participant: with OGUP Volgogradavtodor for lot No. 11, for lot No. 12 with DSP PK-Stroy LLC. With such an agreement, the auction participants violated Article 11 of the Federal Law “On Protection of Competition”, creating conditions under which budget funds were spent inefficiently. Those found guilty face fines ranging from 10 to 63 million rubles.

3. Auctioneers do not come to the auction, with the exception of one offering the maximum price.

In 2009, the Sverdlovsk OFAS Russia established that 5 participants were allowed to participate in the auction for the repair of metal roofs of educational buildings, including Construction Enterprise SMU-30 LLC, MonolitStroy LLC and Agroremstroy LLC. However, only a representative of Agroremstroy LLC attended the auction procedure. As a result, the auction did not take place, and the state contract was concluded with the only participant in the auction - Agroremstroy LLC. In this case, Article 14.32 of the Code of Administrative Offenses of the Russian Federation was violated, according to which a fine ranging from 1 hundredth to 15 hundredths of the offender’s proceeds from the sale of goods on the market is provided for the implementation of concerted actions that limit competition.

4. Auctioneers do not place bids until the auctioneer reduces the starting price of the item, and then begin to submit bids that reduce the price of the lot by the minimum auction step (0.5–1%).

In 2010, the Federal Antimonopoly Service of Russia discovered a conspiracy between Trading House GIGIYA LLC, Dmitrovskie Vegetables LLC, Frutovit LLC, TK Ditrade LLC and Atlantis LLC during an open auction for the right to conclude government contracts for the supply of purified potatoes and vegetables from the 2009 harvest to feed students of educational institutions in Moscow. The participants were found to be in a contractual relationship. This is confirmed by the minimal percentage reduction in the initial price, which is not typical for government procurement. As a result, the decrease was 0.5-1% instead of the required 10-15%. For violation of Article 11 of the Federal Law “On Protection of Competition,” auction participants were brought to administrative liability.

5. The auctioneer submits an application to participate in the auction, which contains false information about it, or other information presented to create the appearance of formal participation of an economic entity in the auction.

In 2013, the prosecutor's office of the Budzyakovsky district of the Republic of Belarus conducted an investigation into fraud on an especially large scale. The director of the Budziak company, participating in the auction for the privatization of securities, ensured the formal participation of another person in the sale, who was offered funds to reimburse the costs of the lease agreement.

Scheme No. 2. Collusion between the participant and the customer.

The customer draws up auction documentation for a specific supplier or manufacturer, indicating strict requirements that apply only to a specific trademark of a particular product, which accordingly limits the number of participants in placing an order.

Scheme 3. The customer and the participant are one person.

If an official of any institution knows that budget funds have been allocated for the purchase of goods, then he creates a company that participates in the auction and wins it by rejecting applications from other participants.

The solution to the problem of auction collusion is to conduct auctions electronically. Since participation in such auctions is anonymous, the likelihood of collusion is reduced, and “paper” procedures are simplified. In addition, the electronic form attracts more participants.

Electronic auction is an auction in which price proposals are submitted via the Internet. Suppliers apply to participate if they agree to the terms of delivery and compete only on price. All proposals of participants are reflected on the website, and each of them can see them and submit their own. If the offer has been on the site for an hour, and no one has submitted another offer after it, the auction is declared over. If identical price offers are received, the winner is the one whose offer was the first. By law, the end of an auction must be reported immediately.

Electronic auctions have a number of advantages over other types of transactions. They have openness and objectivity. This results in a reduction in purchasing prices. An important property is the unlimited geographical coverage of suppliers combined with a reduction in transaction time. This method of conducting auctions has proven itself well in Europe. Foreign experts believe that an electronic auction is an effective anti-corruption mechanism aimed against possible collusion of its participants.

Literature

1. Code of the Russian Federation on Administrative Offenses (Administrative Offenses Code of the Russian Federation) N 195-FZ dated December 30, 2001 / (Date of access: June 21, 2014).
2. Constitution of the Russian Federation of December 12, 1993 /
3. Criminal Code of the Russian Federation (Criminal Code of the Russian Federation) N 63-ФЗ dated 06/13/1996 / (Date of access: 06/21/2014).
4. Federal Law “On the Protection of Competition” N135-FZ of July 8, 2006 / (Date of access: June 21, 2014).
5. Features of proving collusion between business entities at auctions / Y. Kulik, A. Grishina / Legal Insight; No. 7 (13), 2012, p. 8-13.
6. Coordinated actions of participants in placing government orders / E.S. Shabanova / Bulletin of Omsk University. Series "Law"; No. 3 (24), 2010, p. 138–141
7. Electronic auctions: from a laser pointer to ... / A. Emelyanov / Megacity management; No. 4-5, 2008, p. 87-91.
8. The authorities of local mayor's offices dispose of state property as their own / (Date of access: 06/21/2014).
9. For collusion in the bidding of road workers, the FAS threatens a fine of half the contract price - up to 113 million rubles. / (Date of access: 06/21/2014).
10. Problems of government procurement / (Date of access: 06/21/2014).

06 June 2017

The head of the Pskov OFAS Olga Milonaets spoke about the scandalous road contracts between the companies of the Kukha brothers and the Pskov administration for almost half a billion rubles on the air of the Besedka program on local radio, reported "Pskov news feed". We provide a transcript of this conversation on the pages of the veteran media in full.

Good afternoon, our guest is Olga Milonaets, head of the regional department of the Federal Antimonopoly Service. Olga Viktorovna, good afternoon.

Good afternoon.

Today we will talk about the resonant scandal that is flaring up around city road contracts. Let me remind you that next week the FAS department will consider a case initiated on the grounds of a cartel conspiracy. The focus is on the agreement between the Pskov administration and the companies Technodor and UDS Pskov, the founders of which were entrepreneurs associated with the Pskov authorities. I know that the Pskov OFAS has complaints about this contract. What is the essence of the claims, Olga Viktorovna, please explain to us.

I can’t say that this is a scandal for us. This is our ordinary work by virtue of our powers. We actually opened a case of conspiracy between the government and participants in the so-called “road auctions.” Now information is emerging that these are not exactly road auctions. Our UGH believes that this is an ordinary contract for 400 million rubles for washing curbs, for painting various fences and a little, it seems, for hundreds of millions for sealing cracks. Therefore, the customer says: “It is strange that this attracted the attention of the townspeople, and that our control over these auctions has increased.” He tries to present these auctions as something ordinary. But, nevertheless, we have a deputy’s appeal on this issue, and there is a lot of material in the press.

We have taken control of this situation and are now looking into it. It's not an easy matter. Two auctions, one for 264 million, the second for 183 million. The so-called twin firms won in turn. In one auction, the winner was UDS Pskov, which registered 11 days before the auction, and in the second auction, Technodor LLC, which also registered a few days before the auction.

What are we paying attention to now? I think that not only these two companies will be involved in our case. We have now decided to involve all organizations that participated in this auction. We will look at the behavior of each of the organizations, because the auction is quite a tasty morsel. Wash the curbs, paint the fences, somehow repair the cracks in the asphalt. This is the city center, Zavelichye, and Zapskovye

We want to clarify with the companies that also took part why they did not compete, why they did not make business proposals. How did it happen that the companies took one “step” at a time, and victory was with these two organizations. We want to see at another auction why all the companies were removed, we will definitely see why they were removed. We will look at how security for the contract was filed for 13 and 11 million. We are undergoing a major review of the entire process.

Olga Viktorovna, in April the Pskov OFAS announced the initiation of a case against the organizer and participants of auctions for the maintenance of roads in Pskov. The department says there is evidence. I'd like to hear what the evidence is.

I can say that we had enough evidence to initiate a case. We initiate all cases based on signs of violations, signs of conspiracy. There are a couple of points, we have already outlined them, which may, under certain circumstances, indicate collusion between the companies and the customer. Those same stories that, strangely enough, were organized in 11 days precisely for these purposes, not yet knowing that there would be an auction. Why do the Kuhi brothers register two companies when there are other organizations that could take part in the auction? And here two offices are created specifically to participate in the auction, without having any technology, equipment, or staff. These are the first “bells”. The second is the behavior of campaign participants. The third thing is that all [applications] were withdrawn. In addition, we conducted an on-site inspection and inspected computers in the Pskov city administration together with the prosecutor’s office. Everything that we are currently processing is not yet ready to bring to the surface. But, nevertheless, we are working on certain evidence.

Do I understand correctly that you are charging under Article 16 of the Competition Law? What kind of article is this?

This is a very proof-heavy article. Collusion between government authorities and business entities. It is clear that other security organizations may also have claims behind this economic clause. Therefore, we must understand the situation very carefully. Was there a conspiracy, or was it someone’s negligence, or an accidental coincidence, or a leak of information that we will or will not be able to prove. Quite serious complaints.

In your work experience, are there any precedents when such processes end in court decisions? Are the perpetrators punished? How difficult is this to prove?

Of course, there are such cases in the FAS practice. And in our practice, we have had such cases, as a rule, when, for example, land plots are provided without bidding to a certain structure and when certain documents are found confirming that the parties have agreed on their actions - both the organizers and participants in the bidding exist. I can’t say that there are very many of them. As a rule, such cases are very successful when they are initiated by law enforcement agencies, transferring some kind of operational data. My colleagues do not often, but such things happen.

And what threatens the violators if guilt is proven? And who will be responsible - an individual or a company directly?

As a rule, this is an official of the customer. In this case, it could be the UGC or the city administration, if there are still culprits. For business entities this is a legal entity. These are turnover fines. As a rule, very large. Percentage from 1 to 15 of the company’s turnover. We see that the companies were formed 11 days before participating in the auction; they have no turnover. The maximum fine that these companies can receive is 100 thousand rubles each. But, as a rule, we transfer Article 16 to law enforcement agencies. According to Article 178 of the Criminal Code, the conspiracy of the organizer and the conspiracy of the participants is sanctioned, and there the sanction is up to 5 years in prison.

The worst thing is that a criminal sentence cannot be ruled out.

Moreover, the amounts are decent. Our neighbors in the Novgorod region 4 or 5 years ago did road work at a cost of just over 100 million and the damage to the state was calculated based on the cost of the contract. People received real sentences, both from economic entities and from government agencies.

That is, both the customer - someone from the Pskov administration - and the direct executor - the founding company - could face a criminal sentence?

Yes, this is natural if this composition is proven.

Olga Viktorovna, have you had complaints about the company with the same founders before or is this the first time such complaints have been made?

There were certain complaints, but not about these participants. These founders were not found to have colluded. Naturally, we are now checking these facts, how the companies of these owners have participated in auctions for the last 2-3 years. We are now analyzing all this information.

You just cited the example of our neighbors and voiced one of the cases. I remember the statement of the Federal Antimonopoly Service that the road industry is one of the leaders in cartel agreements. Is it so?

Our central office, naturally, analyzes all the information. I think this is due to the fact that the biggest money in this industry and the biggest damage to the state is established in this market.

Hello, Anton!

(same last names)
Anton

The presence of the same surnames between the Customer's representative and the participant may be a banal coincidence, so it is too early to draw any conclusions. If you had, for example, a marriage certificate for these persons or a certificate from the registry office about the marriage between them, or, for example, birth certificates for these persons or a certificate from the registry office about the relationship of these persons.

If, nevertheless, these persons are related and there is accurate information about this, you need to ask the FAS to check this information and here we will be talking about a conflict of interest.

a representative of our organization was verbally refused to attend the opening, citing the fact that according to 223-FZ, their Procurement Regulations do not provide for public opening of applications.
Anton

This is true, the commission considers applications independently according to

section 4.5. Review and evaluation of applications

You can refer to the following article in your complaint.

According to Article 3 223-FZ 1. When purchasing goods, works, and services, customers are guided by the following principles:
1) information openness of procurement;
2) equality, fairness, absence of discrimination and unjustified restrictions on competition in relation to procurement participants;
3) targeted and cost-effective spending of funds for the purchase of goods, works, services (taking into account, if necessary, the cost of the life cycle of the purchased products) and the implementation of measures aimed at reducing the customer’s costs;
4) no restrictions on access to participation in procurement by establishing non-measurable requirements for procurement participants.
6. It is not allowed to present requirements to procurement participants, to the purchased goods, works, services, as well as to the terms of execution of the contract and to evaluate and compare applications for participation in the procurement according to criteria and in a manner that are not specified in the procurement documentation. The requirements for procurement participants, for the purchased goods, works, services, as well as for the terms of execution of the contract, the criteria and procedure for evaluating and comparing applications for participation in the procurement, established by the customer, apply equally to all procurement participants and the goods they offer , works, services, to the terms of execution of the contract.

Any expert will confirm the film’s compliance with the technical specifications
Anton

How could it be that the film appeared before the auction?

1) How to prove this?
Anton

In principle, you do not have many reasons to cancel the procurement procedure. Again, the fact of kinship is just an assumption, while there are no supporting documents, the executable technical specification is also not in your favor.

The fact that the film appeared before the auction is difficult to confirm; I believe that appropriate examination is needed.

How did you find out about the availability of the film before the auction?

2) You can’t find fault with the text of the technical specification, it is doable. In this case, what articles of the law should you refer to when filing a complaint?
Anton

According to Article 3 223-FZ10. The procurement participant has the right to appeal to the antimonopoly authority in the manner established by the antimonopoly authority, the actions (inaction) of the customer during the procurement of goods, works, services in the following cases:
1) failure to place in the unified information system the procurement regulations, changes made to the said regulations, procurement information subject to placement in the unified information system in accordance with this Federal Law, or violation of the deadlines for such posting;
2) presenting a requirement to procurement participants to submit documents not provided for in the procurement documentation;
3) implementation by customers of the procurement of goods, works, services in the absence of a procurement regulation approved and posted in the unified information system and without applying the provisions of the Federal Law of April 5, 2013 N 44-FZ “On the contract system in the field of procurement of goods, works, services for provision of state and municipal needs";
4) failure to place or place in the unified information system unreliable information about the annual volume of purchases, which customers are obliged to carry out from small and medium-sized businesses.

However, I believe that in your case an appeal under the Federal Law on the Protection of Competition would be more suitable.

According to Article 17 135-FZ 1. When conducting tenders, requesting price quotations for goods (hereinafter referred to as the request for quotations), requesting proposals, actions that lead or may lead to the prevention, restriction or elimination of competition are prohibited, including:

1) coordination by organizers of bidding, request for quotation, request for proposals or customers of the activities of their participants;
2) creating for a trading participant, request for quotation, request for proposals or for several trading participants, request for quotation, request for proposals preferential conditions for participation in the tender, request for quotation, request for proposals, including through access to information, unless otherwise established by federal law;
3) violation of the procedure for determining the winner or winners of the auction, request for quotations, request for proposals;
4) participation of organizers of bidding, request for quotations, request for proposals or customers and (or) employees of organizers or employees of customers in bidding, request for quotations, request for proposals.
2. Along with the prohibitions established by part 1 of this article when conducting bidding, requesting quotations, requesting proposals, if the organizers of bidding, requesting quotations, requesting proposals or customers are federal executive authorities, executive authorities of constituent entities of the Russian Federation, local government bodies, state extra-budgetary funds, as well as during bidding, request for quotations, request for proposals in the case of procurement of goods, works, services to meet state and municipal needs, restriction of access to participation in bidding, request for quotations, request for proposals not provided for by federal laws or other regulatory legal acts is prohibited.
4. Violation of the rules established by this article is grounds for the court to declare the relevant tenders, request for quotations, request for proposals and transactions concluded as a result of such tenders, request for quotations, request for proposals invalid, including at the request of the antimonopoly authority.
5. The provisions of Part 1 of this article apply, inter alia, to all purchases of goods, works, and services carried out in accordance with Federal Law of July 18, 2011 N 223-FZ “On the purchase of goods, works, and services by certain types of legal entities.”

In this case, you have a chance to appeal only on the basis of coordination of the actions of the participant and the customer. However, again, this can be proven either by witness testimony or by audio and video recordings. I don’t see any other options for proof.

I think that there is little chance of appeal, only on the basis of the relationship of these persons, and that basis is quite shaky.

In the complaint, write that you are asking the FAS to invalidate and cancel the procedure, and also to oblige the customer to carry out the procurement procedure again.