Digital Transformation of the Competition Law Enforcement Procedures of the Anti-Monopoly Committee of Ukraine

Overview
Project Summary Document

TCRS 12860

Status Approved

Location

Ukraine

Business Sector

Notice Type

Public

PSD Disclosed

01 Apr 2020

Project Description

Anti-Monopoly Committee of Ukraine (AMCU), is the authority responsible for the enforcement of the laws On the Protection of Economic Competition and On the Protection against Unfair Competition. The AMCU carries out all the enforcement actions of a designated National Competition Authority (NCA) to apply national and international competition rules applicable in Ukraine. In particular, the AMCU has broad enforcement powers in the areas of collusive practices/cartels, abuses of dominance and control of concentrations, covering all sectors of the Ukrainian economy. It also has consultative powers in identifying and removing regulatory barriers to competition in domestic markets.

However, emerging from a history of economic and political turmoil, the AMCU faces several challenges that have the potential to undermine its effectiveness despite the willingness of its leadership and staff to devote the time, effort and skills necessary to improve their competition enforcement procedures. Despite its highly demanding tasks, many processes applied by the AMCU in the exercise of its duties are based on the use of outdated tools and methodologies. According to the 2016 Organisation for Economic Co-operation and Development (OECD), review of the Ukrainian competition law regime, the AMCU lacks many of the tools considered as essential for effective investigation, prosecution and deterrence, inter alia: (i) limited powers to seize documents and to interview individuals; (ii) no searches of private premises; (iii) no provisions for subsequent applicants in the leniency regime; (iv) no sanctions on individuals for competition law infringements; and (v) no effective fine collection system.

The Review recommends and repeats previous recommendations to create the required legal framework for an effective cartel regime and to enable the AMCU to enforce its decisions directly. Bid rigging (or collusive tendering) occurs when businesses who are market competitors secretly conspire to raise prices or lower the quality of goods or services for purchasers who wish to acquire products or services through a bidding process. Studies show that bid rigging can inflate prices significantly (20% or more), costing billions of dollars every year across the world in taxpayers’ money and damaging the outcomes and integrity of public procurement. Prevention and detection of bid rigging in public procurement markets is crucial to make sure that the public sector has genuine opportunities to achieve value for money. To prevent bid rigging, an assessment of a country’s public procurement laws can determine whether these legislative instruments adequately prevent and/or limit opportunities for bid rigging, and can suggest how they can be improved. In addition, there are new developments in the fight against collusive practices, related to the advances in digital technologies.

The increasing availability of reliable electronic public procurement data and the development of more sophisticated data analysis methods pave the way to pro-actively screen and investigate bid-rigging cartels. Indeed, globally leading competition authorities are developing data-driven methodologies and digital screening tools to identify incriminating errors cartelists make, like suspicious bidding and pricing patterns, and, on this basis, initiate investigations. These tools are designed to quantify the probability of cartels (for example, the rate of successful bids, bid price, number of failed bids, price increases, auctions participation patterns, etc.) and testing indications of collusion empirically. Based on the successful previous cooperation with the EBRD and the OECD, the AMCU requested further assistance to improve regulatory framework, enforcement procedures and enhance its capacity to deal with competition cases.

The Project will include, inter alia, capacity building and awareness raising components. The ultimate objective of the Project is to increase the capacity of the AMCU to deal more effectively with competition cases and in particular bid rigging cases.

• Activity 1 – Review of national procurement laws and relevant guidance
o Assess national legislation and guidelines and provide recommendations to make them pro-competitive.
o Develop Guidance to ensure procurement and competition policies work together.
o Provide examples and recommendations on ways of cooperation between procurers and the Anti-Monopoly Committee, in terms of advocacy, training, exchange of information and reporting.
o Provide examples and recommendations on ways of cooperation between the Anti-Monopoly Committee and anti-corruption authorities to ensure detection and punishment of unlawful conduct that is at the same time corrupt and anti-competitive, as well as allow the exchange of information.
o Deliver training to public procurement officials on collusion red flags, and actions to be taken if collusion is suspected.

• Activity 2 - Identification and guidance on the parameters to be included in a screening tool
o Conduct a detailed review of relevant academic literature in relation to red flags.
o Identify the parameters to be included in a bid rigging cartel-screening tools both for ex ante and ex post detection of collusion based on literature and case law.
o Review of academic literature for identification of the type of information to be included in a database for the purposes of looking for red flags.
o Provision of examples of approaches followed by countries in developing/using cartel screening tools.
o Analysis of relevant case law in jurisdictions using screening tools.
o Identification of a checklist of red flags.

• Activity 3 - Design an appropriate screening tool based on ProZorro data for the ex-ante and ex post detection of bid rigging for the Anti-Monopoly Committee
o Design the screening tool based on ProZorro data for the detection of bid rigging. In order to achieve this, the Project will focus on the parameters to be included in a bid rigging cartel-screening tool both for ex ante and ex post detection of collusive tendering that would make use of ProZorro data.
o Conduct training to the Anti-Monopoly Committee on the use of the screening tool.

• Activity 4 – Establishing a method of prioritising leads and conduct training to the Anti-Monopoly Committee on prioritising leads and turn them to investigations
o Establish a method for prioritising for investigation potential leads identified through screening tools.
o Conduct training of the Anti-Monopoly Committee staff on the prioritisation method of leads generated by the screening tool. v.

• Activity 5 – Assessment and training on the appropriate auction structure
o Conduct an assessment and identification of the appropriate auction structure.
o Deliver training to public procurement officials on appropriate auction structure.

The OECD based on their extensive experience and collaboration with the Administrative Council for Economic Defense (“CADE”) will implement activity 1 of the scope of work. CADE is Brazil's national competition regulator and was identified by the OECD as having implemented the latest best practice for collusion screening and bid rigging.

The client for this project is the Government of Ukraine.

Enquiries

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

TCRS 12860

Status Approved

Location

Ukraine

Business Sector

Notice Type

Public

PSD Disclosed

01 Apr 2020

Project Description

The client for this project is the Government of Ukraine.

Any competitive selections for business opportunities relating to this project will be published on the EBRD's website: Consultancy Procurement Opportunities.

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

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Digital Transformation of the Competition Law Enforcement Procedures of the Anti-Monopoly Committee of Ukraine

Project Description

Enquiries

Business opportunities

General enquiries

Project Description

General enquiries

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)