On 4 October 2012, the Ukrainian Leniency Procedure was finally adopted by the Antimonopoly Committee of Ukraine (AMC), coming into immediate effect. Unlike in some other jurisdictions, in Ukraine leniency remains available after the AMC initiates an investigation, but not after the so called “preliminary conclusion” is issued (such preliminary conclusions are issued at a very late stage of the investigation process, informing the cartel members of the authority’s formal position).
The new Leniency Procedure introduces the marker system, making the procedure significantly more transparent, thereby giving businesses something of a covenant if they indeed were the first to ‘blow the whistle’. As an illustration, the marker issued by the designated AMC’s State Commissioners to the applying undertaking’s representative would warrant priority to the first to “blow the whistle”. What is more, applicants can be awarded with the marker and continue their cartel activity with a view of obtaining more evidence that would enable them to prove the violation.
For an applicant to be successful, it must:
? disclose the cartel to the AMC;
? before the other cartel participants;
? providing the authority with enough information to prove the existence of the cartel.
Similarly to the position in the EU, the ‘first in’ to inform the AMC of the ongoing cartel will not qualify for leniency, if:
? having informed the AMC thereof, the undertaking did not take efficient measures to terminate it (unless it was motivated by collecting more evidence);
? it initiated or managed the cartel; or
? it did not provide the AMC with all evidence or data in its possession.
However, the Leniency Procedure fails to envisage the possibility for a reduction in the fines that would otherwise have been imposed on a cartel member in exchange for disclosure of information on the cartel and cooperation with the AMC during its investigation. The fact that a de jure procedure for reducing the level of fines has been omitted remains a significant drawback that will undoubtedly deter many potential whistleblowers.
Although a leniency program did not exist in Ukraine until now, there are some sporadic examples of where undertakings that closely collaborated with the AMC during its cartel investigations were rewarded with significant fine reductions. For example, in August this year, in a distortion of tender case in the construction industry, two out of three cartel participants received relatively hefty fines, amounting to EUR 38,000 and 30,000 respectively, while the whistle blower was fined with a symbolic EUR 15. Also in 2012, in the so-called furniture cartel, which involved the members of the Furniture Association “Mebeldrevprom”, fines amounting to approximately EUR 40 million were imposed (with the highest imposed on a single undertaking amounting to approximately EUR 16 million), while three undertakings that collaborated with the AMC escaped with a meager fine of EUR 3,000.
Needless to say, the adoption of the Leniency Procedure is expected to increase the popularity of leniency, thereby assisting the AMC in collecting proper evidence to fight cartels.