Comment to Article 163. Anticompetitive actions (inaction) of state and local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities, unfair competition of the Code of the Republic of Kazakhstan on Administrative Offenses  

     1. Anticompetitive actions (inaction) of state and local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities, -

     they impose a fine on officials in the amount of three hundred monthly calculation indices.

     2. Unfair competition -

     entails a fine for small businesses in the amount of two hundred, for medium-sized businesses - in the amount of three hundred, for large businesses - in the amount of one thousand five hundred monthly calculation indices.

     3. The action provided for in the second part of this Article, committed repeatedly within a year after the imposition of an administrative penalty, -

     entails a fine for small businesses in the amount of three hundred, for medium-sized businesses in the amount of four hundred, for large businesses in the amount of two thousand monthly calculation indices.

     The commented article establishes administrative responsibility for anticompetitive actions (inaction) of state and local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities, and for unfair competition.

     The generic object of offenses provided for in Article 163 of the Administrative Code is the procedure established in the legislation of the Republic of Kazakhstan and protected by the state for conducting business in the Republic of Kazakhstan.  

     The direct object of the offenses provided for in Article 163 of the Administrative Code is the procedure established by the legislation of the Republic of Kazakhstan for conducting business in compliance with the principle of fair competition and the prohibition of unfair competition.

     The subjective side of illegal acts provided for in Article 163 of the Administrative Code for offenders – individuals and officials is characterized by guilt in the form of intent. The guilt of a person is revealed by his mental attitude towards the illegal acts committed by him and their harmful consequences.  

     The subjective side of offenses, the subjects of which are legal entities, is not subject to determination due to the existence of a legal requirement to establish guilt as a condition for bringing to administrative responsibility, only in relation to individuals. According to the legislation of the Republic of Kazakhstan on administrative responsibility, legal entities are administratively liable for the mere fact that they have committed an illegal act or omission, for which administrative liability is provided for in the Administrative Code, without taking into account the guilt of the officials of the legal entity who committed this act.

     The structures of administrative offenses provided for in the commented article are formal. To bring to administrative responsibility for their commission, it is not necessary to establish the fact that the offender caused material damage.  

     Part 1 of the commented article establishes administrative responsibility for anticompetitive actions (inaction) of officials of state and local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities.

     The subjects of the offense provided for in Part 1 of Article 163 of the Administrative Code are officials of state and local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities.  

     The objective side of the offense provided for in Part 1 of the commented article is characterized by the commission by officials of state and local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities, anticompetitive actions (inaction), expressed in the adoption of illegal acts or decisions and (or) in other illegal actions (inaction) that have led or may lead to to limit or eliminate competition.

     The concept and types of anticompetitive actions (inaction) are defined in the PC RK. Anticompetitive actions (inaction) of state and local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities, are recognized, among other things:

     1) the introduction of restrictions on the creation of a market entity in any field of activity;

     2) unjustified obstruction of the market entity's activities;

     3) the establishment of prohibitions or restrictions on the free movement of goods, other restrictions on the rights of a market entity to sell goods;

     4) instructions to the market entity on the priority supply of goods for a certain category of buyers or the priority purchase of goods from certain sellers (suppliers) or the conclusion of priority contracts;

     5) the establishment of restrictions for purchasers of goods on the choice of market entities that provide such goods;

     6) actions aimed at raising, lowering or maintaining prices;

     7) actions aimed at dividing the commodity market according to the territorial principle, the volume of sale or purchase of goods, the range of goods sold, or the composition of sellers (suppliers) or buyers;

     8) restriction of access to the commodity market, withdrawal from the commodity market, or removal of market entities from it;

     9) providing certain market entities with benefits or other advantages that put them in a privileged position relative to competitors, or creating unfavorable or discriminatory business conditions in comparison with competitors;

     10) direct or indirect coercion of market entities to conclude contracts as a matter of priority, to supply goods to a certain circle of consumers as a matter of priority, or to purchase goods from certain sellers (suppliers) as a matter of priority.

     By virtue of the imperative requirement of the norm, paragraph 1 of art. 194 PC RK prohibits and invalidates, in whole or in part, in accordance with the procedure established by the legislation of the Republic of Kazakhstan, anticompetitive actions (inaction) of state, local executive bodies, organizations endowed by the state with the functions of regulating the activities of market entities, expressed in actions (inaction), adoption of acts or decisions that have led or may lead to restriction or elimination competition, except in cases stipulated by the laws of the Republic of Kazakhstan in order to protect the constitutional order, protect public order, human rights and freedoms, public health and morals.

     For committing an offense under Part 1 of Article 163 of the Administrative Code, the offender is punished with a fine.

     The amount of the fine for committing an offense under Part 1 of Article 163 of the Administrative Code is 300 MCI, is fixed and is not subject to change by the body imposing them.  

     An administrative penalty under Part 1 of the commented article is imposed on the offender by the antimonopoly authority or the court, in case the case is considered in court.

     Part 2 of the commented article establishes administrative liability for unfair competition.

     The subjects of the offense provided for in Part 2 of the commented article are business entities that have violated the prohibition of unfair competition established by law in paragraphs 1 of Article 8 and paragraph 1 of Article 177 of the Criminal Code.  

     The objective side of the administrative offense provided for in Part 2 of the commented article is characterized by the commission of illegal (and if the offense was committed by an individual entrepreneur, then guilty) actions resulting in unfair competition.  

     The concept of unfair competition and its types are defined in Article 177 of the PC RK. Unfair competition is any action in competition aimed at achieving or providing undue advantages. Unfair competition includes the following actions::

     1) illegal use of means of individualization of goods, works, services, as well as objects of copyright;

     2) misuse of a product from another manufacturer;

     3) copying the appearance of the product;

     4) discrediting the market entity;

     5) deliberately false, unfair and unreliable advertising;

     6) sale (purchase) of goods with a compulsory assortment;

     7) calling for a boycott of a competitor's seller (supplier);

     8) calling for discrimination against the buyer (supplier);

     9) the call of the market entity to terminate the contract with a competitor;

     10) bribery of an employee of the seller (supplier);

     11) bribing a customer's employee;

     12) misuse of information constituting a trade secret;

     13) the sale of goods with the provision of false information to the consumer regarding the nature, method and place of production, consumer properties, quality and quantity of the goods and (or) its manufacturers;

     14) incorrect comparison by a market entity of goods produced and (or) sold by it with goods produced and (or) sold by other market entities.

     For committing an offense under Part 2 of Article 163 of the Administrative Code, the offender is punished with a fine.

The amount of the fine for committing an offense provided for in Part 2 of Article 163 of the Administrative Code is differentiated depending on which category of business entities the offender belongs to. In this regard, the body bringing the offender to administrative responsibility must first establish the legal status of this person and the category of entrepreneurship to which he belongs before bringing a person to justice.  

     Depending on the business category to which the offender belongs, the amount of the fine is:  

     - for small businesses – 200 MCI,  

     - for medium–sized businesses - 300 MCI,  

     - for large business entities – 1,500 MCI.

     The amounts of fines are fixed and are not subject to change by the body imposing them.  

     An administrative penalty under Part 2 of the commented article is imposed on the offender by the antimonopoly authority or the court, in case the case is considered in court.

     Part 3 of the commented article establishes a more severe penalty for repeated commission of the act provided for in Part 2 of the commented article within a year after the imposition of an administrative penalty.  

     At the same time, the object, the subjective side and the subjects of the offense provided for in Part 3 of the commented article coincide in their characteristics with the object, the subjective side and the subjects of the offense provided for in Part 2 of Article 163 of the Administrative Code.  

     In the description of the objective side of the offense provided for in Part 3 of Article 163 of the Administrative Code, a sign of repetition is added to the act provided for in Part 2 of the commented article.  

     An offense is considered to have been committed repeatedly if the person has previously committed the act provided for in Part 2 of Article 163 of the Administrative Code, has been subjected to administrative punishment for it, and the one-year period during which the person is considered to have been subjected to administrative punishment has not expired yet.

     The repetition of an offense is an independent qualifying feature, entailing the qualification of an unlawful act as an independent element of an offense under Part 3 of Article 163 of the Administrative Code.  

     Repetition as a qualifying feature is established not only in fact by identifying the number and nature of the unlawful acts committed by the violator during the year, but also legally by establishing the fact of bringing this person to administrative responsibility for committing an offense under Part 2 of Article 163 of the Administrative Code, the existence of an effective and unturned court order imposing an administrative penalty under Part 2 tbsp . 163 of the Administrative Code, the fact of its announcement, delivery or referral to the offender and the expiration of a one-year period from the date of imposition of the penalty.

     If a person has committed an unlawful act repeatedly or continues to commit it after the start of the commission and until it is revealed, but until that moment he has not previously been brought to administrative responsibility under Part 2 of Article 163 of the Administrative Code, then bringing him to responsibility under Part 3 of Article 163 of the Administrative Code is impossible, since there is no qualifying sign of repetition. In this case, the person must be brought to administrative responsibility and punished under Part 2 of art. 163 of the Administrative Code, even if there are signs of repeated violations during the year and the uniformity of violations committed.  

     For repeated commission of an offense under Part 2 of Article 163 of the Administrative Code within a year after the imposition of the penalty, the offender is punished with a fine.

     The amount of the fine for committing an offense under Part 3 of Article 163 of the Administrative Code is differentiated depending on the legal status of the offender, and if the offender is a business entity, it also depends on which category of business entities he belongs to. In this regard, the body bringing the offender to administrative responsibility must first establish the legal status of this person and the category of entrepreneurship to which he belongs before bringing a person to justice.  

     Depending on the legal status of the offender and the business category to which he belongs, the amount of the fine is:  

     - for small businesses – 300 MCI,  

     - for medium–sized businesses - 400 MCI,  

     - for large business entities – 2000 MCI.

     The amounts of fines are fixed and are not subject to change by the body imposing them.  

     An administrative penalty under Part 3 of the commented article is imposed on the offender by the antimonopoly authority or the court, in case the case is considered in court.

Scientific and practical commentary to the Code of the Republic of Kazakhstan on Administrative Offences (article-by-article) from the Author's team:

     Bachurin Sergey Nikolaevich, Candidate of Law, Associate Professor – chapter 48 (co-authored with E.M. Khakimov);

     Gabdualiev Mereke Trekovich, Candidate of Law – Chapters 11, 21, 22, 23;

     Zhusipbekova Ainur Maratovna, M.yu.n. – chapter 13 (co-authored with Karpekin A.V.); chapters 33, 39 (co-authored with Seitzhanov O.T.);  

     Karpekin Alexander Vladimirovich, Candidate of Law, Associate Professor – chapter 13 (in collaboration with Zhusipbekova A.M.);

     Korneychuk Sergey Vasilyevich – chapters 2; chapter 6 (co-authored with O.T. Seitzhanov, E.M. Khakimov); chapter 8; chapter 25 (co-authored with E.M. Khakimov); articles 457-470, 488, 488-1, 491-506; chapters 28, 30, 52;

     Ilya Petrovich Koryakin, Doctor of Law, Professor – Chapter 49;

     Kisykova Gulnara Bauyrzhanovna, Candidate of Law – chapter 20;

     Omarova Botagoz Akimgereevna, Candidate of Law – chapters 17; chapter 18 (co-authored with B.A. Parmankulova); chapters 26, 31; chapter 32 (co-authored with B.A. Parmankulova);

     Parmankulova Bayan Askhanbaevna – chapter 18 (co-authored with Omarova B.A.); chapters 19, 32 (co-authored with Omarova B.A.); chapter 43 (co-authored with Tukiev A.S.);  

     Podoprigora Roman Anatolyevich, Doctor of Law, Professor - Chapter 24, articles 489, 489-1, 490;

     Porokhov Evgeny Viktorovich, Doctor of Law – Chapters 14, 15, 16, 29, articles 471-475;

     Seitzhanov Olzhas Temirzhanovich, Candidate of Law, Associate Professor, – chapter 4; chapter 5 (co-authored with E. M. Khakimov); chapter 6 (co-authored with S.V. Korneychuk, E.M. Khakimov); chapter 9; chapter 10 (co-authored with B.E. Shaimerdenov, V.V. Filin); chapter 33 (co-authored with Zhusipbekova A.M.); chapter 36 (co-authored with Shaimerdenov B.E.); chapter 39 (co-authored with Zhusipbekova A.M.);

     Smyshlyaev Alexander Sergeevich, PhD. – chapters 38, 40, 42, 43-1 (co-authored with A.S. Tukiev); chapter 44;

     Aslan Sultanovich Tukiev - Candidate of Law, Associate Professor – chapters 1, 3, 35; chapters 38, 40, 42, (co-authored with A.S. Smyshlyaev); chapter 43 (co-authored with B.A. Parmankulova); chapter 43-1 (co-authored with A.S. Smyshlyaev); chapter 44-1 (co-authored with Shipp D.A.); chapter 45; 46 (co-authored with Shipp D.A.); chapter 47;  

     Filin Vladimir Vladimirovich, Candidate of Law, Associate Professor – Chapter 10 (in collaboration with O.T. Seitzhanov, B.E. Shaimerdenov);  

     Yerzhan Maratovich Khakimov, M.yu.n. – chapter 5 (co-authored with O.T. Seitzhanov); chapter 6 (co-authored with O.T. Seitzhanov, S.V. Korneychuk); chapter 7; chapter 25 (co-authored with S.V. Korneychuk); chapters 34, 41; chapter 48 (co-authored with S.N. Bachurin); chapter 53;

     Shaimerdenov Bolat Yerkenovich, M.yu.n., – chapter 10 (co-authored with O.T. Seitzhanov, V.V. Filin); chapter 12; articles 476-487, 507-509; chapter 36 (co-authored with O.T. Seitzhanov); chapters 37, 50, 51.  

     Shipp Denis Alekseevich – chapters 44-1, 46 (in collaboration with A.S. Tukiev).

Date of amendment of the act:  01.01.2020 Date of adoption of the act:  01.01.2020 Place of acceptance:  100050000000 Authority that adopted the act: 103001000000 Region of operation:  100000000000 NPA registration number assigned by the regulatory body:  5 Status of the act:  new Sphere of legal relations:  029000000000 / 028000000000 / 029002000000 / 028004000000 / 029001000000 / 026000000000 / 001000000000 / 001008000000 / 030000000000 The form of the act:  COMM / CODE Legal force:  1900 Language of the Act:  rus  

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