Substantial Changes Made to Free Trade and Competition Draft Law - საერთაშორისო გამჭვირვალობა - საქართველო

Substantial Changes Made to Free Trade and Competition Draft Law

17 April, 2012

On April 10, 2012 the Georgian Parliament discussed the draft law “On Free Trade and Competition” in the third hearing. Transparency International Georgia published comments and suggestions concerning the draft earlier. Now we will focus on the substantial amendments that were made to the draft law after the second hearing:

  • According to the amended Articles 25.1 and 25.2, the Agency should finalize its investigation of a complaint within six months of receiving it, with the possibility of extension up to 15 months, depending on the importance and seriousness of the case. In contrast, the original draft established a three-month period for investigation, with the possibility of extension up to a maximum of six months. We believe that timely decisions shall be made in order to ensure the Agency’s effectiveness and fair competition on the market;

  • Article 1.5 of the draft law, as submitted for the second hearing, stated that in cases where issues covered by the law “On Free Trade and Competition” were regulated differently by another law, the latter was to have precedence. Transparency International Georgia emphasized in its comments that the law’s interaction with other legal acts had to be established in clearer and more accurate manner, in order not to jeopardize the implementation of the core principles of competition law. The fact that the aforementioned provision was removed during the third hearing must be welcomed. However, the provision that replaced it states that the law does not concern price formation. This means that if relevant complaints are received by the agency, the latter’s power will essentially be limited while investigating the cases of abuse of dominant position and the artificial price oscillation tendencies, as it will not have the authority to analyze the components of a price set by a dominant company.

  • Transparency International Georgia participated in preparing the draft law “On Amendments to Tax Code” which authorizes the Agency to access the information about companies collected by the Revenue Service. This draft law has already been initiated in Parliament and the relevant power of the Agency is reflected in Article 18.3 of the draft law “On Free Trade and Competition”, which definitely is a positive development;

  • Based on the changes in Article 22, the right to submit a complaint to the Agency is granted to any person, not only to those who suffer damages, as it was stipulated in the previous version of the article.

  • According to the draft law, it is not clear whether the head of the Competition and State Procurement Agency can issue an independent normative act (order) regarding competition or not. If he does not have this power, the independence of the Agency will be reduced further;

These changes had been made to the draft law before the 3rd hearing. However, they were not discussed either at the plenary session of the Parliament, or at the second and third hearings. The fact that the draft law handed out to the MPs at the third hearing did not include a list of approved remarks proves that the changes had not been discussed. Therefore, the procedure of amending and adopting of the draft law is in violation of the Rules of Procedure of the Parliament of Georgia.

Author: Natia Kutivadze