While the unprecedented consequences of the coronavirus (COVID-19) outbreak have already become commonplace, many aspects of its influence on various business activities remain to be understood. In this LawFlash, we examine how the COVID-19 pandemic may affect certain regulatory deadlines and routine filings, including filings under the Russian competition law.
In sum, there is no indication that the Federal Antimonopoly Service (FAS), Russia’s antitrust regulator, as well as other federal regulatory authorities, will suspend their work. However, they will adjust their functionality to address the rapidly changing environment. At present, there is no law or emergency response situation that allows the regulatory authorities to extend the statutory timelines. However, there are regulations that require changes to the methods of working. It remains to be seen how the regulatory authorities adapt. Note that FAS already has broad authority to extend the antitrust filing review period.
There are several key laws governing emergency situations, such as Federal Constitutional Law No. 3-FKZ on State of Emergency (Emergency Law), Federal Law No. 68-FZ on Protection of People and Territories from the Emergency Situations (Civil Protection Law), and Federal Law No. 52-FZ on Sanitary and Epidemic Safety (Sanitary Law).
In general, the Emergency Law allows the Russian president to declare, by issuing a presidential decree, a state of emergency in the whole country or in any of its territories to limit certain civil freedoms such as freedom to choose a place to live or travel by, for example, restricting free movement of people, suspending the work of regional and local (although not federal) government authorities, or restricting movements of goods and certain financial operations. The declaration of the state of emergency must be confirmed by the Council of Federation, an upper chamber of the Russian parliament.
No state of emergency in connection with COVID-19 has been declared to date. Even if declared, the Emergency Law does not require that federal governmental authorities suspend their functioning, nor does it contain rules extending the regulatory deadlines in a state of emergency situation.
Civil Protection Law
When introducing various COVID-19-related measures, governmental authorities refer to the so-called "state of enhanced alert” under the Civil Protection Law. The Civil Protection Law allows the regional and local governments to set up their emergency response plans adequate to the perceived emergency threat and obligatory for organizations in the concerned territories.
For example, the Mayor of Moscow, Russia’s capital and largest city, introduced measures mandatory for all employers in Moscow. These measures are in addition to the measures introduced by Russia’s Chief Sanitary Inspector. Most of the federal authorities are located in Moscow, and these measures would also affect them. Read our LawFlash on mandatory measures for Russian employers.
The Civil Protection Law requires all organizations (both state and private) in the concerned territory to plan and implement various protective measures in case of an emergency situation or state of enhanced alert.
Laws governing specific authorities’ functions do not address emergency situations. Among such laws is the Federal Law on Protection of Competition (Competition Law).
Labor Ministry Recommendations
The Russian Ministry of Labor and Social Development (Labor Ministry) issued its recommendations for how Russian government and municipal authorities and state-owned organizations must adjust their work to take measures to help limit the spread of COVID-19. Read the recommendations in Russian. In sum, the Labor Ministry prescribed, among other things, measures to ensure social distancing. These measures include the following:
- Avoid all in-person meetings except in urgent and emergency cases; otherwise meetings must be held by video.
- Temporarily suspend receiving visitors, and encourage people to send inquires by post or apply using electronic means of communication.
- Arrange for the flexible working schedule of employees so there is no concurrence of people in the office at any given time.
- Conduct regulatory functions using distant methods of communication and prepare documentation in electronic form.
Emergency Response by FAS
FAS must review antitrust merger control applications within 30 days, with a possible extension of up to two months. The measures taken to deal with the spread of COVID-19 could delay this review.
On 18 March, Russia’s Supreme Court ruled to cancel most of the court hearings throughout the country, except for certain urgent cases. This Supreme Court ruling recommended that courts use videoconference technology wherever possible. Read our LawFlash on Russian court limitations.
FAS has not yet issued a similar ruling. Of course, the routine antitrust filings normally do not require meetings in person. The Competition Law allows filings to be made electronically. In practice, this option was not used often in the past due to possible errors in electronic protocols. Perhaps now practitioners should reconsider this approach.
It is not clear whether the electronic filing could in fact expedite application review, as this would depend on various technical and organizational issues on the regulator's side. Normally, FAS employees review filings in-office. At present, the FAS website provides no indication of the change in FAS routines of operation. (FAS is actively involved on a COVID-19 response program to oppose and prevent opportunistic anticompetitive behavior of vendors of essential goods such as protective gear.) But the protective measures prescribed by the Chief Sanitary Inspector, Labor Ministry, and Mayor of Moscow may cause such change in the near future. This equally applies to the work of other regulatory authorities.