Transcript of the beginning of the meeting:

Vladimir Putin: Mr Artemyev, as you know, as part of our joint efforts to bring order to pricing policy and the fight against unjustified price increases in various sectors of the economy, you and I have attached great importance to strengthening the legal liability for the crime of collusion, including collusion in pricing. We discussed the need to stiffen penalties for the crime of collusion. We worked for a long time on an appropriate law and amendments to it, including the need to increase the legal liability, up to and including criminal liability. Now these decisions have been adopted.

Please tell me what you think, will this regulation be implemented in practice and what you hope to accomplish in the near future?

Igor Artemyev: Mr Putin, thank you for the opportunity to report today. I would like to report that last Friday, the last of the amendments approved by the Russian Parliament and signed by the Russian President came into force - amendments from the so-called second anti-monopoly package.

I am referring to the amendments to Article 178 of the Criminal Code. Indeed, pricing collusion is now, since October 30, punishable under criminal law. But at the same time, Mr Putin, we do not intend for the Federal Antimonopoly Service and law enforcement agencies to open scores of criminal cases now, and then arrest entrepreneurs and lock them up somewhere. Refining the regulations we have been working on for several years will be a matter of painstaking and serious work, which will involve cooperation between the Federal Antimonopoly Service and law enforcement agencies.

We are working on the assumption that in order for law enforcement agencies to launch criminal cases, first of all they will need for the anti-monopoly agency to establish corpus delicti. A cartel agreement or abuse of a dominant position must be grounds for corpus delicti. In other words, law enforcement agencies cannot immediately start working on cases without us. 

Secondly, the court must check all of these facts of crime. In other words, the procedure will be as follows: first the FAS will issue a resolution, which any party may contest in court. Except that this resolution may already be suspended when any citizen takes legal recourse. And only then will the court determine if there was in fact a crime in any particular instance. And after such a fact has been determined, we will deliver an appropriate request to the law enforcement agencies.

This means that of course there will be neither abuse nor the tens or thousands of cases predicted by those who were against this amendment to the Criminal Code. 

Vladimir Putin: For example, how many instances of the crime of collusion did you identify last year?

Igor Artemyev: More than 200. A total 226, if I'm not mistaken. This is straight price collusion, market division and associated collusion on transactions. 

But in general, if we take the practices of the EU and US into account, then many economists and law enforcement officials consider the formation of cartels to be the most dangerous economic crime.

Vladimir Putin: Which countries have already adopted a criminal law and criminal liability for cartel agreements and price collusion? 

Igor Artemyev: All countries that have developed modern market economies have noticed that price collusion is extremely dangerous for an open market economy, because by reducing competition to zero and taking advantage of consumers, these offenders violate the basic laws of a market economy. Therefore, criminal liability for such a crime was instituted in the US around 50 years ago and 30 years ago in the EU.

And today there are scores of cases in practice where the most dangerous offenders are imprisoned - for rather lengthy terms at that.

Vladimir Putin: What criminal penalties does this law stipulate?

Igor Artemyev: Part One proposes a suspended sentence or two year imprisonment for first-time offenders. In addition, the court may levy appropriate fines. If the violation is due to prior collusion of a group of persons, then the penalty increases to six year imprisonment. And if it is combined with actions of a violent nature, then the sentence increases to seven year imprisonment.