Competition Agency

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On approval of the rule and procedures of investigation

Unofficial translation

Order of the Chairman of Competition Agency of Georgia

№ 30/09-5

30 September 2014 Tbilisi

On approval of the rule and procedures of investigation

Pursuant to Articles 171 (4), 23 (7), 25 (13) and 34 (61) of the Law of Georgia on Competition, I

Order:

Article 1

The administrative proceedings of application and complaint and the rule and procedures of investigation be approved in the form enclosed.

Article 2

This Order shall take after October 1, 2014.

Chairman of the Agency…................................................................................ Giorgi Barabadze

The rule and procedures of investigation

Chapter I. General Provisions

Article 1. Introductory Provisions

  1. The rule and procedures of investigation (hereinafter referred to as “Rule”) is elaborated in accordance with the Law of Georgia on Competition (hereinafter referred to as “Law”).
  2. The present Rule determines the rule and procedure for carrying out investigation by the legal entity of public law Competition Agency (hereinafter referred to as “Agency”) in relation to infringements of provisions foreseen in the Law, as well as the rights and obligations of the parties involved in course of investigation.
  3. Relevant provisions of the Law, of the Law of Georgia on Control of Entrepreneurial Activity, the present Rule and other normative acts shall apply with respect to the investigation set forth in point 2 of present Article.

Article 2. Grounds for commencement of investigation

  1. The Agency shall be authorized to start investigation on the basis of application or complaint or by its own initiative.
  2. The basis for commencement of investigation shall be reasonable assumption that relevant articles of the Law have been infringed.

Article 3. Rights and obligations of parties involved in investigation

  1. Applicant and parties shall be obliged to provide the Agency with important information about the case.
  2. Persons involved in investigation shall be entitled to have representative in the course of investigation.
  3. Applicant and parties shall have the right to get acquainted with the materials of the case pursuant to rule set forth in article 99, of General Administrative Code of Georgia.

Article 4. Grounds of recusal

  1. A person, whose case is examined, shall have the right to recuse an employee of the Agency, who is interested in the pending case.
  2. The grounds for the recusal are the existence of the interest of conflict set forth in Article 21 of the Law.
  3. Chairman of the Agency reviews and shall make a decision on recusal.
  4. In the case of Article 21 (2) of the Law, if there are relations, provided for in Article 19 of the Tax Code of Georgia between authorized person of the Agency and economic agent, against whom the investigation is carried out by the agency, a relevant employee of the agency must recuse himself/herself.

Article 5. Public and confidential information

  1. Decisions taken by the Agency, as well as research, during the course of investigation shall be public, except of confidential information provided for in Article 20 of the Law.
  2. Disclosure of confidential information shall be executed pursuant to Legislation of Georgia.

Chapter II. Investigation

Article 6. Decision on commencement of investigation or on the refusal to commence investigation

  1. According to the Article 23 of the Law, after studying the admissibility of the application/complaint the Agency shall make decision on commencement of investigation or on refusal of commencement of investigation.
  2. The Agency may, based on the application and/or complaint, refuse commencement of investigation, if:

a) The complaint has not been submitted by the authorized person;

b) There is no legal ground provided by the Law;

c) Requested information and/or evidence by the Agency has not been submitted by the applicant and/or complainant within the stipulated time frame provided in Article 23 (6) of the Law;

d) Insolvency proceedings have been instituted with respect to the respondent economic agent;

  1. Decision on refusal of commencement of investigation may be appealed to the Tbilisi City Court pursuant to Article 28, point 2 of the Law and chapter XIII of the General Administrative Code of Georgia.

Article 7. Decision on commencement of investigation on own initiative

  1. The Agency, on its own initiative, may commence investigation, with respect to which it makes a reasoned decision.
  2. In the course of investigation the Agency determines relevant economic agent(s) and informs on commencement of investigation.
  3. In the course of investigation the Agency have the right to request information from the relevant economic agent related to investigation.

Article 8. Duration of investigation

  1. The Agency, after adoption of decision on commencement of case investigation, shall commence investigation of the case and shall make final decision no later than 3 months.
  2. Case investigation, in view of its importance and complexity, may be extended for the time frame determined by the Agency, but for no more than 10 months.
  3. The Agency shall, in no less than 10 working days prior to expiration of the time frame for investigation of the case, inform the applicant and/or complainant continuation of case investigation.

Article 9. Temporary suspension of activity of the economic agent

  1. The Agency shall be entitled to apply to the court with a motion to temporarily suspend certain activity of the economic agent, until final decision has been made by the Agency, if provided obvious evidence exists, that such activity significantly restricts competition pursuant to Article 6 and 7 of the Law.

Chapter III. Request for Information

Article 10. Agency’s right to request information

  1. The Agency, in accordance with the Law, shall be authorized to request information of the relevant economic agent, information available to other interested parties, which will contribute to determination of important circumstances of the case.
  2. In the Agency’s application on request of information shall be stated legal basis for the request of information, the subject-matter, purpose and time-limit within which the information shall be provided, as well as possible effects of non-delivery of information and the possibility and time frame for its appeal shall be noted.
  3. The time-limit set forth in point 2 of this Article may not be less than 5 days. The Agency shall be authorized to extend the time frame for delivery of document or other information on the basis of a reasoned application, but only once and for no more than 15 days, which is the basis for stopping the flow defined in Article 8 of the present Rule.
  4. The presentation of information and/or evidence by economic agent within the period specified by the Agency is the basis for renewal the term pursuant to Article 8 of the present Rule.

Article 11. Delivery of Information

Information shall be considered to be delivered if it is fully submitted to the Agency’s official address or to the official electronic address within the time frame set forth in Article 10 (3) of the present Rule.

Article 12. Non-delivery of information

  1. Following shall be considered as non-delivery of information:

a) Intentional delivery of incorrect information;

b) Incomplete delivery of requested information.

  1. A reasoned response on the non-availability of the requested information submitted within the time frame stipulated in Article 16 shall not be considered as non-delivery of information.

Article 13. Results of non-delivery of information

  1. In case of non-delivery of information the Agency shall have a right to:

a) Impose an administrative fine on economic agent in accordance with sub point “f” of the first point of Article 18 and Article 32 of the Law, as well as Articles 38, 15911 and point 65 of Article 239 of the Law on Administrative Offences.

b) Apply to the court with a motion to demand information;

c) Apply to the court with a reasoned motion for the purposes of on-the-spot inspection in accordance with the Articles 25 (7) (8) of the Law.

  1. The Chairman of the Agency decides the imposition of the fine on the basis of investigation team’s proposal in case of non-providing the information.
  2. The fine does not relieve the corresponding person/party from obligation to provide information.

Chapter IV. Investigation proceedings

Article 14. General procedure of investigation

  1. If the chairman of the Agency decides to open an investigation, he/she creates an investigational group with the participation of at least 2 persons, in which with the stuff member of agency may be as well as invited expert. With the decision of the Chairman the head of the group will be appointed the relevant employee of the Agency.
  2. Investigational group shall be entitled to proceed to any legally allowed investigational activity on its own initiative in accordance with the Law and the present Rule. It makes its decisions on majority vote, in case there is no majority, the voice of the head of the group is prevailing.
  3. The Chairman of the Agency shall be authorized, in relevant circumstances, on the basis of proposal of the investigational group, to apply to the court for provisional halt of the activities of the economic agent.

Article 15. Investigation of the circumstances

  1. The Agency during the administrative proceedings shall be obliged to investigate all the important circumstances of the cases and make a decision on the basis of evaluation and reconcilement of these circumstances.
  2. In accordance with the circumstances of the cases, the Agency is obliged:

a) To collect information regarding the case;

b) To get the explanation for determination of circumstances of the case;

c) To invite the expert;

d) To apply to other measures provided by the law for the purposes of collecting the information, investigation and assessment.

Article 16. Circle of people from whom explanation may be obtained

  1. For the purposes of determining important circumstances of the case the Agency shall be entitled on its own initiative or on the basis of a motion of a party, invite the following persons to give explanations:

a) Parties;

b) Interested party.

  1. Persons invited by the Competition Agency for explanation shall be obliged to give explanations on the relevant case and appear at the hearing in order to give explanations.
  2. The Agency is entitled to invite the expert during the investigation process.

Article 17. Notification on the time and place of the hearing

  1. Notification shall be handed over to the addressee, to his/her representative, or to administration of the working place. The notice may be handed over by post and/or other technical means (telephone, fax, electronic mail). Delivery by the technical means, indicated in the present point shall be considered successful if the addressee confirms the receipt or if the notification was given to the contact requisites indicated by the addressee.
  2. The notice on the time and place of the hearing shall be given to the parties and persons related to the case no later than 5 days.

Article 18. Hearing

  1. The Agency shall hold a hearing for the purposes of obtaining explanations. In exceptional cases in view of interests of investigation, the explanations from the persons may be obtained separately, the contents of which shall be notified to the relevant economic agent within 5 days, so long as the provision of information shall not hinder the course of investigation.
  2. Explanation may be obtained without hearing procedure. In this case, explanation protocol shall be drawn up. Explanation protocol shall be signed by the employee of competition agency, who receives explanation and by the person who gives explanation, content of which shall be notified to the relevant economic agent within 5 days, if the provide information does not hinder the course of investigation.

Article 19. The course of the hearing

  1. The hearing shall be directed by the person designated by the Chairman of the Agency.
  2. In cases of investigation based on a complaint, the complainant or his/her representative is authorized to report on the circumstances and evidence on which his/her complaint is based on.
  3. In cases of investigation on an own initiative or investigation based on application, the report shall be given by the representative of the Agency.
  4. Following the report set forth in points 2 and 3 of the present Article, the respondent or his/her representative may present their own position and the evidences submitted by the complainant and/or the Agency.
  5. Representative of the Agency and the parties shall be entitled to ask questions during the hearing. The parties shall be entitled to ask questions to the persons noted in the first point of Article 16 with the consent of the chairman of the hearing. Representative of the Agency shall be entitled to ask questions which are directly related to the circumstances of the case, as well as questions which are not directly connected to the case, but which may contribute to determination of important circumstances of the case.
  6. The hearing may be conducted by means of videoconference.
  7. Non-appearance of an invited person at the hearing shall not be the ground for adjournment of the hearing. If none of the invited persons appear at the hearing and/or there are justified reasons for non-appearance, the chairman of the hearing may adjourn the hearing.
  8. The chairman of the hearing shall be entitled to dismiss the disturber from the hearing.
  9. After the completion of the hearing is drawn up the protocol, which is signed by the chairman of the hearing and secretary.

Article 20. Motion for on-the-spot inspection

  1. For the purposes of on-the-spot inspection of the economic agent the Agency shall file a reasoned motion to the court.
  2. With court’s permission the Agency shall be entitled to perform on-the-spot inspection of economic agent with respect to whom the complaint and/or application is in place, provided circumstances envisaged in point 8 of Article 25 of the Law exist.
  3. On-the-spot inspection shall be carried out in accordance with point 10 of Article 25 of the Law.

Article 21. On-the-spot inspection of the economic agent and rights and obligations of participants

  1. Inspection shall be conducted during working hours, in consideration of the interests of the economic agent and the complexity of the case.
  2. In case of emergency if there is a possibility of destruction of evidence or other risk of losing it, by the decision of the chairman the inspection can be carried out even during non-working hours.
  3. Person authorized by the Agency to conduct on-the-spot inspection shall be obliged to present to the economic agent in relation to whom on-the-spot inspection is being conducted before commencement of inspection, the following:

a) Judge’s order;

b) Order of the chairman of Agency for the determination of the persons participating in on-the-spot inspection;

c) Personal identification document;

d) Certificate of work.

  1. The person(s) authorized by the Agency to conduct on-the-spot inspection shall be obliged to familiarize the economic agent about the rights and obligations of people engaged in the inspection.
  2. Authorized person and/or employees of the economic agent towards whom on-the-spot inspection is being carried out, shall be obliged to let the authorized person(s) of the Agency into the premises of inspection and not to hinder performance of obligations of the authorized representative of the Agency.
  3. Economic agent shall be entitled to invite entrusted person(s) during the inspection.
  4. Immediately upon completion of on-the-spot inspection the authorized representative(s) of the Agency shall draw up protocol which shall be signed by him/her and authorized person of the economic agent. If authorized person of the economic agent refuses to sign, relevant note shall be made in the protocol.

Article 22. Final hearing

  1. In accordance with this chapter after the collection of the of circumstances of the case of investigation and evidence by the Agency is prescribed a final hearing with the participation of the Investigation Team defined in the Article 16 (1).
  2. Appointment of the hearing and the invitation of participating persons shall be held in accordance with Article 17 and Article 18 of the present Rule.
  3. With the invitation for the final hearing should be sent to the parties the evidences and other documents of the case, which have been obtained by the Agency during the investigation, in accordance with the law on protection of confidentiality requirements.
  4. The final hearing shall be directed by the Chairman of the Agency or by the person designated by him/her.
  5. The Chairman opens the final session with introductory speech, where expresses the essence of the case and evaluates the legal status created by the evidence.
  6. After the Chairman’s speech the parties alternately are given the basic word. The Basic word for the first time in case of the investigation, which is based on the complaint is given to the complainant, afterwards to the defendant, while on the basis of application or Agency's initiative of investigation the word for the first time is given to the head of the investigating team, afterwards to the defendant economic agent.
  7. After the basic speech participants are allowed to ask each other questions on the basis of the verbal consent of the Chairman.
  8. As soon as parties declare about the expiration of the questions, to each side, as well as to the applicant and other participants of the hearing are given the possibility to make a small remark by the chairman.
  9. After the completion of the hearing is drawn up the protocol, which is signed by the chairman of the hearing and secretary.

Chapter V. Decision of the Agency

Article 23. Final decision of the Agency and Appealing Procedure

  1. Upon completion of investigation the investigational group shall prepare a draft of the decision and shall present it to the Chairman of the Agency for approval.
  2. Chairman of the Agency is entitled in decision adoption process in limits of the legislation to adopt, to change or to return it back to the investigational group for further investigation and/or clarification.
  3. The decision of the Chairman of the Agency after its approval has to be sent to the parties/applicant and shall be published on Agency’s web-site within the 10 working days, within the period prescribed in the Georgian Legislation.
  4. Decision of the Agency may be appealed in Tbilisi City Court in accordance with the Law and General Administrative Code of Georgia.