Friday, December 25, 2015

Ukrainian Antimonopoly Committee accuses Gazprom of violating contract with Naftogaz

The Ukrainian Antimonopoly Committee has determined preliminarily, following an antitrust investigation, that Russia's Gazprom occupies a monopolistic position on the Ukrainian gas transportation services market and regularly violated the terms and conditions of its contract with Naftogaz Ukrainy in 2009-2015.

The Antimonopoly Committee concluded in a preliminary report made public in Kyiv on Thursday that Gazprom had ignored any demands that it economically substantiate the terms and conditions of its cooperation with Naftogaz, particularly those concerning the volume of gas transportation across Ukraine and its cost.

"We expect Gazprom representatives to attend the next hearing concerning the possible abuse of monopolistic position," Ukrainian Antimonopoly Committee chief Yuriy Terentyev said.


He pointed out that these were preliminary conclusions of the antitrust investigation, and the hearing is scheduled for January 14.

The Ukrainian Antimonopoly Committee had forwarded the preliminary conclusions to Naftogaz and Gazprom at the end of November, Terentyev said. Naftogaz said in response that it agreed with the findings, while Gazprom has not offered any answer, he said.

"Approximately, the consideration of the case [starting January 14] may take from several weeks to two or three months," Terentyev said, explaining that the term will depend on Gazprom's cooperation with the Antimonopoly Committee.

"The possible consequences are: the obligation to bring the operations into line with the requirement that significant competition should exist on the market, and there is also the possibility of a fine," he said.

Ukrainian law provides for the possibility of a fine that can amount to 30% of the turnover involving violations, he added.

The Ukrainian Cabinet of ministers issued a directive on April 22, 2015 on filing a case with the Antimonopoly Committee regarding Gazprom's possible violation of the law on the protection of economic competition.


Prime Minister Arseniy Yatseniuk said Kyiv was determined to propose to the EU that the two jointly investigate Gazprom's monopoly both on the EU and Ukrainian markets. He said the fine could reach 10% of Gazprom's earnings in Ukrainian territory.

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