FAS and ALROSA Coordinated the Terms of Distribution of Rough Diamonds

The Federal Antimonopoly Service (FAS) of Russia approved the text of regulation on the terms and conditions of natural diamond distribution by OJSC AK ALROSA, PRIME reported citing a statement by the state agency.
The regulation represents the outcome of more than two years of joint work of FAS and ALROSA.
The process of development and negotiation of the regulation text was aimed at creating environment for effective operation of rough diamond market, protection of competition and elimination of exclusive relationship between supplier and buyer of rough diamonds, securing equal conditions and fair access to rough goods as well as non-admission of blocks for newcomers to operate at the market.
The work was destined for drafting fundamental principles of commercial relations of ALROSA being a dominant player of rough diamond market, with existing and potential buyers of natural diamonds, as well as procedure and terms of diamond distribution which would exclude discriminatory approach to rough diamond consumers, FAS said in the statement.
The regulation specifies the basics and forms of distribution of natural diamonds, requirements for potential buyers subject to forms of distribution and final list of criteria defining the requirement, as well as the list of documents and details to be provided by buyers, procedures of filing and processing of applications for purchase of diamonds, certification of buyers for compliance to the specified requirements and making decision and authorization of cooperation.
At the end of May FAS convicted ALROSA and Government of Republic Yakutia of violation of antimonopoly legislation. The reason for this move lied in one of the paragraphs contained in Agreement on social and economic development of Republic Yakutia signed between ALROSA and the government in March 2011. The clause stipulated obligations of the parties to pursue integrated policy through Diamond council at the President of Yakutia to support and develop diamond-cutting industry of the region, effect sustainable supplies of rough diamonds to diamond cutting enterprises in Yakutia and develop diamond complex in general.
ALROSA opposed the resolution of FAS and was going to appeal the decision at court, saying that the agreement with Government of Yakutia did not provide for either the volumes of supplied goods, or prices and exact counterparties to be selected, while Diamond council used to give recommendations in respect of buyers which were not obligatory.