2.1 Overview

Monopolistic activity and unfair competition is generally prohibited by the legislation of Turkmenistan. There are no special regulations concerning the concept of market dominance, monopolistic agreements and concerted actions, or unfair competition. No industry is specifically restricted in regards to monopolistic activity.

The grounds for liability in the case of monopolistic activity are laid out in the Criminal Code (2010) as follows (see details in section 2.6):

1. setting up and maintaining monopolistically high or low prices;
2. collusion or concerted coordinated actions aimed at market sharing;
3. restraint of market entry;
4. removing other participants from the market;
5. setting up or maintaining uniform prices.

A range of other laws provide some regulation of monopolistic activities and unfair competition:

Civil Code of Turkmenistan (2000)

Article 80. Invalidity of transaction due to abuse of (dominant) position A transaction may be considered invalid when transaction performance and remuneration are obviously disproportionate and if the transaction was concluded exclusively as a result of the party's abuse of its dominant position, or if one party was obviously exploited as a result of inexperience.

Article 780. Competition clause

1. Without the consent of the entrepreneur it's commercial representative is not competent to act outside the territory or group of customers, or sphere, within which the commercial representative acts for the entrepreneur; or directly or indirectly to act for a competing entrepreneur (competition clause), with the exception of financial participation in other enterprises. Consent for participation in activity with a competing entrepreneur is considered as granted if it was acknowledged in the original contract.
2. In the case of violation of this obligation by the commercial representative, the entrepreneur can require compensation in the form of damages, also, the entrepreneur can require the commercial representative to transfer transactions concluded for the competing entrepreneur, to him, or return profit obtained from these transactions, or waive any profit obtained as a result of unlawful actions.
3. If it is provided for by the agreement that the competition clause shall be effective even after completion of contractual relations, then such clause shall be effective only in the case where the entrepreneur pays compensation for it, and this compensation is calculated according to the provisions of the Article 782 of the present Code. Such agreement can be concluded for a term not exceeding one year.

Law of Turkmenistan On Commerce (2002)

Article 9. State policy in the sphere of commerce State policy in the sphere of commerce is aimed at:

…

The creation of favorable conditions for the development of various types of commerce, the provision of a stable sales promotion system and the prevention of the creation of monopolies in the consumer's market;

Law of Turkmenistan On Foreign Investments (2008)

Article 16. Observance of fair competition by foreign investors and enterprises with foreign investment

Foreign investors and enterprises with foreign investments are not permitted to act so as to encourage unfair competition, including by the creation of an enterprise for the manufacture of any product of higher demand in the territory of Turkmenistan, and then terminating this activity for the purpose of the promotion of similar foreign products in the market, and also by concluding agreement on prices or on the distribution of trading areas, or restricting rights of other economic agents in Turkmenistan.

Law of Turkmenistan On licensing of certain types of activity (2008)

Article 3. Basic principles for implementation of licensing

…

3. Licensing shall not facilitate monopolization or the restriction of freedom of entrepreneurial activity and activity in the rendering of professional services.

Law of Turkmenistan On Tourism (2010)

Article 11. Principles of governmental regulation in the sphere of tourism The main principles of government regulation in the sphere of tourism in Turkmenistan are:

…

- the development of competition and the prohibition of government monopolies in the tourist market in Turkmenistan…

Law of Turkmenistan On Communications (2010)

Article 45. Legal basis for activity of telecommunications operators

2. The legal basis for activity of telecommunications operators is: …

4) The prohibition of discrimination on the part of telecommunications operators, which occupy monopolistic (dominant) positions in relation to other legal and physical bodies in the telecommunications market.

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2.2. Dominance

See section 2.1.

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2.3. Monopolistic agreements and concerted actions

See section 2.1.

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2.4. Unfair competition

See section 2.1.

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2.5. Antitrust investigation

No specified antitrust regulator and no specific administrative or legal procedure exist. Therefore such investigation would be conducted by the general law enforcement body – the prosecutor's office.

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2.6. Implications for infringers

Civil liability

Civil liability may appear in cases where the transaction is considered invalid due to the monopolistic/dominant entity's abuse of its dominant position. The aggrieved person has a right to claim indemnification where the court upholds the point that the transaction was concluded as a result of the abuse of the respondent's dominant position. Civil liability under this point shall apply to the monopolistic/dominant entity that in turn may claim indemnification through legal action against its CEO, directors or managers.

Civil liability also may take place within criminal trial when court may hold the monopolistic/dominant entity or/and its CEO, directors or managers liable for indemnification. If the monopolistic/dominant entity was held liable it may claim indemnification in recourse action against its CEO, directors or managers.

Criminal liability

1. The following monopolistic actions and the restriction of competition can result in criminal liability (Criminal Code of Turkmenistan, Article 245. Monopolistic actions and restriction of competition):
   • setting up and maintaining monopolistically high or low prices;
   • collusion or concerted coordinated actions aimed at the division of a market;
   • restriction of market entry;
   • removing other participants from market;
   • setting up or maintaining uniform prices.

Criminal liability applies only to physical persons so an entity cannot be held liable for a crime, instead in the case of criminal investigation for monopoly activity its CEO, directors or managers are the persons who will be held liable.

The punishment for monopolistic activity is a fine of the amount from twenty up to forty average monthly salaries.

If monopoly activity is performed:

• repeatedly;
• with the application of violence or threat of its application;
• using an official position;
• by the group of persons on previous concert or by organized group,

then punishment will be a fine of the amount of five up to seventy five average monthly salaries or imprisonment for a term of up to three years.

2. Criminal liability of the entity's CEO, directors or managers for monopolistic activity or other similar activity that is considered to have caused damage can also be charged with under the Abuse of Authority (Article 267, Criminal Code of Turkmenistan). Abuse of authority is punishable with a fine in the amount from twenty to forty average monthly salaries or correctional works for a term of up to two years or imprisonment for a term of up to two years; abuse of authority with grave consequences is punished with a fine in the amount of fifty up to one hundred average monthly salaries or imprison for a term of up to four years.

The Criminal Code of Turkmenistan considers persons performing management functions in commercial or other organizations (CEO, directors or managers) to be the persons that constantly, temporarily or by special authority implement organizational management or administrative economic duties in said commercial organizations, irrespective of the form of ownership, and also in non-commercial organizations, not including bodies of the state authority, bodies of local self-government, and government institutions.

No leniency programs exist in Turkmenistan.

Third parties can bring claims within civil or criminal procedure as regulated by Civil Procedure Code and Criminal Procedure Code.

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