4. Are schools allowed to have commercial activities, and if affirmative, under what conditions?

The RF Law “On Education” determines that the educational institution is a legal entity. And according to the norms of civil law, it may be a party of economic transactions, i.e., to run business within the limits prescribed by the Civil Code of Russian Federation and other Federal Laws.

These limits are listed in Article 47 of the Law “On Education”:

Educational institutions may engage in business activities only stated in the Law. There are only a few activities from the entire spectrum of civil transactions: the transfer of property rights (lease), commercial representation (commission, agency), purchase and sale (in the form of retail sale), participating in particular partnership. However, here should be added other profitable secondary operations not associated directly with the production and selling of goods, works and services that are mentioned in the statute. This significantly extends the range of possible types of business activity.

Educational institution may only engage in the type of business activity specifically stated in its charter. By this fact educational institutions significantly differ from other legal entities that have the right to carry out any activity not prohibited by the Federal Laws, unless it contradicts the object and purpose of the activities, stated in the Charter of legal entity.

Educational institution is eligible to participate in the establishment of any commercial and non-profit organizations as a founder, shareholder, partner or co-investor (sharer).

Along with the general (educational) activities, state or municipal educational institution may also provide additional paid services:

* Supplementary education programs;

* Special courses and cycles of disciplines;

* Tutoring;

* Advanced study;

* Other services not stated in appropriate educational programs and state educational standards.

These services can not replace the general educational activities funded from the respective budgets. Otherwise, the money earned through such activities, shall be withdrawn by the founder (by state and / or municipal authorities) to its budget.

In addition, the founder or local government has a right to suspend business activity of educational institutions up to the court decision on this matter, as a lever that could restrain educational institutions managers’ enterprise, if it causes damage to the educational activities determined by the statute.

As a general rule, income from any activity of state or municipal educational institution shall be used by it in accordance with the statutory objectives, i.e. for organization and provision of educational process.

5. Is there any case-law on the applicability of competition law to activities of HEIs?

Strictly speaking, there is. Although it probably should be a matter of the activity of education and HEI related authorities, not of the activity of HEIs themselves.

Private HEIs, which are licensed by the Ministry of Education or – later – by Ministry of Education and Science, have the same rights as state-operated ones. Ministry occasionally issues acts that limit competition in higher education that impair the rights of private HEIs, in comparison, for example with Moscow State University. In such cases private institutions send the requirements to check such acts to Federal Antimonopoly Service (FAS). For example, in practice, as a result of the adoption of certain regulations which are issued by former Ministry of Education or the Ministry of Education and Science, it turns out that private educational institutions may participate in the competition for government grants and funds, but even if they win, they can not get budget money, because the Law “On Education” and the Budget Code contain certain amendments that do not allow to provide private institutions with such grants and funds. FAS responds to such appeals, explaining the contents of Article. 15 of the Law “On Protection of Competition”. This article prohibits to limiting competition in governmental, ministerial and departmental decisions.

Such decisions are contained in the Protocol №4 of the Expert Council of the Federal Antimonopoly Service of Russian Federation on the development of competition in education and science dated 4 June 2007, Protocol №6 of the Expert Council of the Federal Antimonopoly Service of Russian Federation on the development of competition in education and science dated 29 April 2008. Amendments to the RF Law “On education” and the Federal Law “On Higher and Postgraduate Professional Education” based on these decisions were drafted and referred to the Ministry of Education and Science and the Ministry of Economic Development of Russian Federation for further joint elaboration and introduction to the Government of Russian Federation.

In particular, with the help of FAS, they succeeded in liberalization of participation of private universities in the competition for state support of innovative universities in the framework of national project “Education”.

6. Is competition law applicable on the competition for students?

No, it is not. The RF Law “On Competition Protection” applies to relationships that concern the protection of competition, including the prevention and suppression of monopolistic activity and unfair competition, if Russia’s legal entities and foreign legal entities, federal bodies of executive power, bodies of state power of Subjects of Russian Federation, local authorities, other bodies exercising functions of those agencies or organizations, as well as state budget funds, the Central Bank of Russia, individuals, including individual entrepreneurs are involved in such relationships. However, individuals are subjected to this law, only when they do activities as business entities, to which students do not belong.