Legal Alliance appealed to the AMCU in the interest of participants of the pharmaceutical market
The order of the State Customs Service of Ukraine as of 23.12.11 No. 1079 "On Amendments to Certain Orders of the State Customs Service of Ukraine" shall enter into force on February 1 this year.
Order provides for a number of innovations that affect the rights and legitimate interests of participants of the pharmaceutical market in the area of customs control and registration of pharmaceutical products.
Therefore, in accordance with Order No. 1079:
- all the items in group 30 (pharmaceutical products) are included into the scope of application;
- customs control and customs registration of all pharmaceutical products should be carried out in Kiev and Kiev region as of the date of its effectiveness. Exemption is provided for the goods, customs clearance of which under customs regimes "import" and "transit" is carried out in an international crossing point for air communication "Borispol".
Today we can predict that the additional expenses associated with the new procedure will be charged to the final consumer. And these expenses will concern, at least two items:
- the customs clearance of imported and not yet cleared pharmaceutical products will require additional transportation of the goods to the customs post "Kyiv-East", after which the medicinal products are returned to the warehouses of distributors;
- delays in customs clearance of goods will result in additional expenses for customs storage of pharmaceutical products on a customs warehouse "Biocon".
Besides the provision of the powers of authority to "Biocon", being a participant of the pharmaceutical market, may result in privileged, and even monopolistic position on the market.
Therefore, in our opinion, the adoption by the State Customs Service of Ukraine of Order No. 1079 may have infringement elements of the Law “On the Protection of Economic Competition” in the form of anticompetitive actions of the executive branch.
The mentioned corresponds with the provisions of Paragraph 7 of Part 2 of Article 15 of the Law of Ukraine "On Protection of Economic Competition", which refers to the provision of privileges or other benefits for separate business entities or groups of business entities, that put them into a privileged position in comparison with competitors, which may result in prevention, elimination, restriction or distortion of competition. Article 16 thereof prohibits authorities and local authorities to delegate certain powers to associations, enterprises and other business entities if it leads or may lead the prevention, elimination, restriction or distortion of competition.
Taking into consideration all the above, the Legal Alliance Company, as a special legal adviser to the pharmaceutical market of Ukraine, has filed the application for violation of the Law of Ukraine "On Protection of Economic Competition" in the process of adoption of the Order № 1079 with the Antimonopoly Committee of Ukraine.
In view of some procedural issues on submission of such applications (the rights of our Company are not directly violated) we have no assurance in the fact that the document will be accepted for consideration by the Committee. But we could not ignore the situation in which our clients - participants of the pharmaceutical market, may be affected.
According to the information we have, the AMCU has not received any application from market participants, whose rights are directly violated yet. However, if you decide to appeal on your behalf to the Antimonopoly Committee of Ukraine with the similar application, our company is ready to provide you with a legal assistance.
For additional information please contact Oksana Kondratieva, Counsel with the Legal Alliance Company, Head of competition & antitrust practice (kondratieva@l-a.com.ua, +38044 220-15-84)
