GLOBAL COMPETITION REVIEW
Merger Control The international regulation of mergers and joint ventures in 75 jurisdictions worldwide
Consulting editor: John Davies Published by Getting the Deal Through in association with:
Allens Anastasios Antoniou LLC Bae, Kim & Lee, LLC Bowman Gilfillan CˇAKMAKOVA Advocates Carey Castañeda y Asociados C&C Partners (Chitale & Chitale) Corpus Legal Practitioners Davis Polk & Wardwell LLP D’Empaire Reyna Abogados Djingov, Gouginski, Kyutchukov & Velichkov Drew & Napier LLC Dr Kamal Hossain and Associates ELIG, Attorneys-at-Law Elvinger, Hoss & Prussen Epstein, Chomsky, Osnat & Co & Gilat Knoller & Co Freshfields Bruckhaus Deringer GRATA Law Firm GTG Advocates Guevara & Gutierrez SC – Servicios Legales Kinstellar Koep & Partners Konnov & Sozanovsky Kromann Reumert Lenz & Staehelin LEX Mannheimer Swartling Marques Mendes & Associados Mason Hayes & Curran Mboya Wangong’u & Waiyaki Advocates McMillan LLP M & M Bomchil Oppenheim Posse Herrera Ruiz Raidla Lejins & Norcous Revera Consulting Group Rizkiyana & Iswanto, Antitrust and Corporate Lawyers Robinson Bertram Roschier, Attorneys Ltd Rubin Meyer Doru & Trandafir LPC Russell McVeagh Sanguinetti Foderé Abogados Sele Frommelt & Partners Attorneys at Law Ltd SimmonsCooper Partners TozziniFreire Advogados UGGC Avocats Vainanidis Economou & Associates Webber Wentzel Weerawong, Chinnavat & Peangpanor Ltd Wikborg Rein WKB Wiercin´ski Kwiecin´ski Baehr Wolf Theiss YangMing Partners Zulficar & Partners
Merger Control 2014 Consulting editor John Davies Freshfields Bruckhaus Deringer Publisher Gideon Roberton Business development managers Alan Lee George Ingledew Dan White Account managers Zosia Demkowicz Megan Friedman Trainee account managers Cady Atkinson Joseph Rush Dominique Destrée Media coordinator Parween Bains Administrative coordinator Sophie Hickey Trainee research coordinator Robin Synnot Marketing manager (subscriptions) Rachel Nurse
Overview Bruce McCulloch, Takeshi Nakao and Gian Luca Zampa Freshfields Bruckhaus Deringer iv Timelines Michael Bo Jaspers and Joanna Goyder Freshfields Bruckhaus Deringer ix Acknowledgements xxv Albania Günter Bauer, Denis Selimi and Paul Hesse Wolf Theiss 1 Argentina Marcelo den Toom M & M Bomchil 6 Australia Fiona Crosbie and Carolyn Oddie Allens 13 Austria Axel Reidlinger and Maria Dreher Freshfields Bruckhaus Deringer 22 Bangladesh Sharif Bhuiyan and Maherin Islam Khan Dr Kamal Hossain and Associates 29 Belarus Ekaterina Pedo and Dmitry Arkhipenko Revera Consulting Group 34 Belgium Laurent Garzaniti, Thomas Janssens, Tone Oeyen and Alexia Burckett St Laurent Freshfields Bruckhaus Deringer 39 Bolivia Jorge Luis Inchauste Comboni Guevara & Gutierrez SC – Servicios Legales 45 Bosnia & Herzegovina Günter Bauer, Sead Miljkovic´ and Dina Durakovic´ Morankic´ Wolf Theiss 49 Brazil José Regazzini, Marcelo Calliari, Daniel Andreoli and Joana Cianfarani TozziniFreire Advogados 54 Bulgaria Nikolai Gouginski and Lyuboslav Lyubenov Djingov, Gouginski, Kyutchukov & Velichkov 59 Canada Neil Campbell, James Musgrove, Mark Opashinov and Devin Anderson McMillan LLP 66 Chile Claudio Lizana, Lorena Pavic and Juan E Coeymans Carey 74 China Michael Han and Nicholas French Freshfields Bruckhaus Deringer 81
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Head of editorial production Adam Myers
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European Union John Davies, Rafique Bachour and Angeline Woods Freshfields Bruckhaus Deringer 128
Managing director Richard Davey Merger Control 2014 Published by Law Business Research Ltd 87 Lancaster Road London, W11 1QQ, UK Tel: +44 20 7908 1188 Fax: +44 20 7229 6910 © Law Business Research Ltd 2013 No photocopying: copyright licences do not apply. First published 1996 Eighteenth edition ISSN 1365-7976 The information provided in this publication is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer–client relationship. The publishers and authors accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of August 2013, be advised that this is a developing area.
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Estonia Raino Paron and Tanel Kalaus Raidla Lejins & Norcous 122 Faroe Islands Morten Kofmann, Jens Munk Plum and Erik Bertelsen Kromann Reumert 137 Finland Christian Wik, Niko Hukkinen and Sari Rasinkangas Roschier, Attorneys Ltd 141 France Jérôme Philippe and Jean-Nicolas Maillard Freshfields Bruckhaus Deringer 147 Germany Helmut Bergmann, Frank Röhling & Bertrand Guerin Freshfields Bruckhaus Deringer 155 Greece Aida Economou Vainanidis Economou & Associates 165 Greenland Morten Kofmann, Jens Munk Plum and Erik Bertelsen Kromann Reumert 171 Hong Kong Michael Han and Nicholas French Freshfields Bruckhaus Deringer 174 Hungary Gábor Fejes and Zoltán Marosi Oppenheim 183 Iceland Hulda Árnadóttir and Heimir Örn Herbertsson LEX 190 India Suchitra Chitale C&C Partners (Chitale & Chitale) 196 Indonesia H MBC Rikrik Rizkiyana, Albert Boy Situmorang and Anastasia P R Daniyati Rizkiyana & Iswanto, Antitrust and Corporate Lawyers 200 Ireland Niall Collins and Tony Burke Mason Hayes & Curran 206 Israel Eytan Epstein, Tamar Dolev-Green and Shiran Shabtai Epstein, Chomsky, Osnat & Co & Gilat Knoller & Co 212 Italy Gian Luca Zampa Freshfields Bruckhaus Deringer 219 Japan Akinori Uesugi and Kaori Yamada Freshfields Bruckhaus Deringer 228 Kenya Godwin Wangong’u and CG Mbugua Mboya Wangong’u & Waiyaki Advocates 235 Korea Seong-Un Yun and Sanghoon Shin Bae, Kim & Lee, LLC 241 Liechtenstein Heinz Frommelt Sele Frommelt & Partners Attorneys at Law Ltd 246 Luxembourg Léon Gloden and Céline Marchand Elvinger, Hoss & Prussen 251 ˇAKMAKOVA Advocates 254 Macedonia Vesna Gavriloska, Maja Jakimovska and Margareta Taseva C Continued overleaf
Malta Ian Gauci and Karl Sammut GTG Advocates 261 Mexico Gabriel Castañeda Castañeda y Asociados 268 Morocco Corinne Khayat and Maïja Brossard UGGC Avocats 274 Namibia Peter Frank Koep and Hugo Meyer van den Berg Koep & Partners 280 Netherlands Winfred Knibbeler & Peter Schepens Freshfields Bruckhaus Deringer 284 New Zealand Sarah Keene and Troy Pilkington Russell McVeagh 290 Nigeria Babatunde Irukera and Ikem Isiekwena SimmonsCooper Partners 299 Norway Jonn Ola Sørensen, Simen Klevstrand and Øyvind Andersen Wikborg Rein 304 Poland Aleksander Stawicki and Bartosz Turno WKB Wiercin´ski Kwiecin´ski Baehr 310 Portugal Mário Marques Mendes and Pedro Vilarinho Pires Marques Mendes & Associados 316 Romania Anca Iulia Cîmpeanu (Ioachimescu) Rubin Meyer Doru & Trandafir LPC 324 Russia Alexander Viktorov Freshfields Bruckhaus Deringer 331 Saudi Arabia Fares Al-Hejailan, Rafique Bachour and Hani Nassef Freshfields Bruckhaus Deringer 337 Serbia Günter Bauer and Maja Stankovi´c Wolf Theiss 342 Singapore Lim Chong Kin and Ng Ee-Kia Drew & Napier LLC 349 Slovakia Günter Bauer, Zuzana Sláviková and Paul Hesse Wolf Theiss 360 Slovenia Günter Bauer, Klemen Radosavljevic ˇ and Paul Hesse Wolf Theiss 366 South Africa Robert Legh and Tamara Dini Bowman Gilfillan 372 Spain Francisco Cantos, Álvaro Iza and Enrique Carrera Freshfields Bruckhaus Deringer 384 Swaziland Kenneth J Motsa and Gabsile A Maseko Robinson Bertram 390 Sweden Tommy Pettersson, Johan Carle and Stefan Perván Lindeborg Mannheimer Swartling 394 Switzerland Marcel Meinhardt, Benoît Merkt and Astrid Waser Lenz & Staehelin 399 Taiwan Mark Ohlson and Charles Hwang YangMing Partners 405 Thailand Chinnavat Chinsangaram and Kallaya Laohaganniyom Weerawong, Chinnavat & Peangpanor Ltd 413 Turkey Gönenç Gürkaynak ELIG, Attorneys-at-Law 418 Ukraine Alexey Ivanov and Leonid Gorshenin Konnov & Sozanovsky 426 United Kingdom Alex Potter, Alison Jones and Martin McElwee Freshfields Bruckhaus Deringer 431 United States Ronan P Harty Davis Polk & Wardwell LLP 438 Uruguay Alberto Foderé Sanguinetti Foderé Abogados 448 Uzbekistan Bobur Karimov and Bakhodir Jabborov GRATA Law Firm 453 Venezuela José Humberto Frías D’Empaire Reyna Abogados 458 Zambia Sydney Chisenga and Alick Gondwe Corpus Legal Practitioners 462 ICN Introduction
Quick Reference Tables
Belarus Revera Consulting Group
Belarus Ekaterina Pedo and Dmitry Arkhipenko Revera Consulting Group
Legislation and jurisdiction 1
What is the relevant legislation and who enforces it?
Currently, the legislation of the Republic of Belarus in the sphere of merger control is in the process of reform. Despite this fact in the Republic of Belarus there is a system of normative legal acts regulating relations in this sphere, which consists of the following legal acts: • the Constitution of the Republic of Belarus; • the Civil Code of the Republic of Belarus; • Law of the Republic of Belarus of 10 January 2006 No. 100-Z ‘On Business Companies’; • Law of the Republic of Belarus of 10 December 1992 No. 2034XII ‘On Counteraction to Monopolistic Activity and Competition Development’ (the Law on Antimonopoly Activity); • Law of the Republic of Belarus of 16 December 2002 No. 162-Z ‘On Natural Monopolies’ (the Law on Natural Monopolies); • the Edict of the President of the Republic of Belarus of 28 December 2009 No. 660 ‘On Certain Issues of Creating and Operating Holding Companies in the Republic of Belarus’; • Edict of the President of the Republic of Belarus of 27 February 2012 No. 114 ‘On Certain Issues to Strengthen State Antimonopoly Regulation and Control’ (the Edict of Strengthening of the Antimonopoly Policy); • Resolution of the Council of Ministers of the Republic of Belarus of 17 February 2012 No. 156 ‘On approval of a single list of administrative procedures by government agencies and other organisations in relation to legal persons and individual entrepreneurs, Amending the Decision of the Council of Ministers on February 14, 2009 N 193 and Repeal of certain provisions of the Council of Ministers of the Republic of Belarus’; and • Resolution of the Ministry of the Economy of Republic of Belarus of 30 November 2009 No. 188 ‘On Approving the Instruction on the Rules of Performing Administrative Procedure ‘Issuing Document on Consent for Performing a Transaction with Stocks, Pays, Shares in Statutory Funds on Legal Entities’ and Changing and Amending Certain Resolutions on the Issues of Antimonopoly Regulation’ (the Instruction of Receiving Antimonopoly Approval). The Constitution and Civil Code establish general principles of antimonopoly regulation. The Law on Antimonopoly Activity defines the institutional and legal framework for the prevention, control and suppression of monopolistic activity and unfair competition in order to ensure the necessary conditions for the establishment and effective functioning of commodity markets, the promotion and development of fair competition and to protect the rights and legitimate interests of consumers. Other normative legal acts concretise positions of legislative policy, set subjects’ rights and duties and coordinate governmental actions in the sphere of merger control. Today the legislature is actively working on a new edition of the Law ‘On Counteraction
to Monopolistic Activity and Competition Development’, which will eliminate the shortcomings of current legislation. In Belarus the system of merger control legislation is provided by legislative and executive bodies. Special agencies that enforce the merger control legislation are presented at two levels: main control functions are enforced by Ministry of the Economy substantially through the Department of Pricing Policy of Ministry of the Economy. At the local level the functions of control are performed by the departments of pricing policy under the committees of the economy of local executive committees. The new edition of the Law ‘On Counteraction to Monopolistic Activity and Competition Development’ provides for the establishment of a specialised antimonopoly body outside of departmental subordination. The Belarusian legislator has also provided the opportunity of social control by specialised social organisations, unions of consumers and other public associations to take measures against creating company monopolies. 2
What kinds of mergers are caught?
According to the Civil Code, there are five kinds of legal entity reorganisation, from which two kinds of reorganisation are caught under merger control, namely: a merger of two legal entities with creation of a new entity, and acquisition of two legal entities with transfer of rights and duties to one of them. Due to the fact that mergers and acquisitions can be real instruments to the foundation of unfair monopolies, the Belarusian legislator establishes in the Law on Antimonopoly Activity the following measures for market protection: • creating, reorganisation of holdings, unions and associations, whose members are legal entities and individual entrepreneurs must be approved by the antimonopoly body; • merger control regulation embraces the following transactions: • transactions where the company and the target (a business entity or an individual entrepreneur) occupy the same commodity market, when the acquirer’s activity covers more than 30 per cent of a certain commodity market; • transactions with shares (at least 25 per cent) of the target holding a dominant position if the acquirer is a legal entity, an individual entrepreneur, a foreign state, an international organisation or their bodies; • acquisition of right to influence the decisions of the target (means possession over at least 20 per cent of the shares or stock in the statutory fund of the legal entity) holding dominant position if the acquirer is a legal entity, an individual entrepreneur, a foreign state, an international organisation or their bodies; and • acquisition of control over the target, when the intended transaction feasibly allows the acquirer to determine the conditions of carrying out business activity of the target or to perform functions of the managing body (means possession over at least 20
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per cent of the shares or stock in the statutory fund of the legal entity) and the acquirer is a legal entity or a legal entity, an individual entrepreneur, a foreign state, an international organisation or their bodies. In accordance with these requirements of the Law under the necessity of obtaining the consent of the antimonopoly authority come a great number of business entities. There is an Edict of the President of the Republic of Belarus 13 October 2009 No. 499, which details the specific provisions of the Law concerning getting the consent of antimonopoly authority. In particular consent is required if the transaction that provides control over the target is based on one of the following agreements: a contract of sale, a contract of trust management, a joint activity agreement or a commission agreement and the book value of the target’s assets for the latest reporting date exceeds 100 basic units (1 basic unit is equal to 100,000 Belarusian rubles, or the proceeds from sales for the previous financial year exceeds 200 basic units. The new edition of the Law on Antimonopoly Activity eliminates this defect. Consent from the antimonopoly authority must be obtained before the legal entity proceeds with the transaction, otherwise the transaction may be found invalid. The term of the consent is 30 days from the date of submission of all required documents.
The legislator provides the special term ‘natural monopolies’. It means that only governmental legal entities can be engaged in the following spheres of activity: • transportation of gas, petroleum and petroleum products through pipelines and distribution pipelines; • transmission and distribution of electricity and thermal energy; • centralised water supply and sanitation; • telecommunications and postal services of general use; • services provided by the railway communications that ensure the movement of public transport, traffic control, railway transportation; • services of transport terminals and airports; and • maintenance and operation of the airways, air traffic control. Activity in the sphere of natural monopolies is strongly controlled by the antimonopoly governmental body. 6
Filing is mandatory without any exceptions; if the transaction meets the requirements outlined in question 2. 7
What types of joint ventures are caught?
Like other commercial legal entities, joint ventures are subject to merger control under the Law on Antimonopoly Activity. The legislator does not make a clear distinction between antimonopoly regulation of joint ventures and other business companies, therefore for joint ventures general rules should be applied. 4
Is there a definition of ‘control’ and are minority and other interests less than control caught?
The Law on Antimonopoly Activity establishes the definition of control and sets two types of control: direct and indirect control. Control is essentially a possibility for one party (legal entity or individual) to make or determine decisions that are binding upon another party (legal entity or individual) of certain actions such as: • exercising the functions of its executive body; and • disposal of more than 50 per cent of the total number of votes attributable to shares in the authorised fund of a legal entity. Applicable legislation appeals to the Edict No. 499, which sets that the possibility of control occurs when an entity holds 20 per cent or more of the shares or stock of another legal entity. Although as a general rule minority and other interests less than control are not caught by merger control regulations, the acquirer in particular transactions (eg, if there is a possibility for the buyer to determine the conditions in which the target carries out business or to perform functions of the managing body) will be obligated to pass through merger clearance procedures. 5
What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?
Thresholds are expressed in the legislatively established limits (see question 2), exceeding which a legal entity must obtain a special permit from the antimonopoly authority. In addition, the legislation establishes a protection of universal principles (such as fair competition, protection of the rights and legitimate interests of consumers). Any actions that infringe on these guidelines are qualified as illegal and will entail offensive legal liability.
Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?
Do foreign-to-foreign mergers have to be notified and is there a local effects test?
There is no ‘local effects test’ in Belarus. Antimonopoly authorities of Belarus administer transactions settlement in the territory of Belarus if they may influence the competition among business entities on the goods market of Belarus. There is a rule according to which if the transaction may lead to the restriction of competition in Belarus or to other negative consequences and moreover, a foreign legal entity takes part in the settlement of such a transaction then a foreign legal entity shall receive consent from antimonopoly authorities. In other cases Belarusian legislation generally does not regulate foreign jurisdictions. 8
Are there also rules on foreign investment, special sectors or other relevant approvals?
There are no specific rules of regulation addressing certain types of activities according to Belarusian legislation. Notification and clearance timetable 9
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
No clearly defined deadlines have been set; however following logically from the legislation, it can be said that the filing is to be made before entering into the transaction. If a transaction without merger clearance results in the emergence or strengthening of a dominant position on the relative commodity market or restriction of competition, the transaction may be found invalid by a court decision upon a claim filed by the antimonopoly authority or other interested third parties. In practice, there are often cases of subsequent approval by the antimonopoly authority transactions for which it was necessary to obtain the consent of the antimonopoly authority. In addition to the effects that the transaction may be recognised as invalid, Belarusian legislation establishes administrative liability in certain cases. For example, in accordance with article 1.3 of the Edict on the Strengthening of the Antimonopoly Policy officials are responsible for the evasion of regulations and other legal requirements of the antimonopoly bodies, failure to provide to the antimonopoly bodies of information (documents, explanations), necessary for the exercise of their functions. The fine for these acts ranges from 20 to 50 basic units. The draft of the Law on Antimonopoly Activity
Belarus Revera Consulting Group provides for another kind of responsibility connected with the fact that the court may make a decision on forced division of legal entity or a decision on the allocation of its enforcement of one or more business entities. In Belarus there are some cases of prosecution the legal entities to the administrative responsibility. 10 Who is responsible for filing and are filing fees required?
According to the legislation of the Republic of Belarus the application is submitted by the interested party or a number of interested parties. It can be performed by one of the interested parties in the name of all of the parties to the transaction or by a representative respectively authorised by all of the parties. There are no filing fees. 11 What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
The waiting period for administrative procedures is 30 days after the filing of all required documents. If not all of the required documents have been received after 10 days, the authority may refuse to process the application. The transaction cannot be performed until receiving the approval of the antimonopoly body. 12 What are the possible sanctions involved in closing before clearance and are they applied in practice?
The legislation has not provided any specific sanctions for closing before clearance, except for the possibility of finding a transaction invalid by a court decision upon a claim filed by the antimonopoly authority (see question 8). The Code on Administrative Offences provides administrative liability for the violation of antimonopoly law within the range of 20 to 50 basic units. In the most serious cases the Criminal Code provides criminal liability, according to which the sanctions can involve imprisonment of officials. Nowadays government policy takes the direction of strengthening state antimonopoly regulation and control, which is connected with entry into force of the Edict of the Strengthening of the Antimonopoly Policy. Such measures are mainly expressed in increased responsibility for legal wrongs. 13 Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
Belarusian legislation does not regulate foreign-to-foreign mergers except for cases when transactions made by a foreign legal entity in the territory of the Republic of Belarus may lead to the restriction of competition as well as in cases described above. In this regard there are no special sanctions.
16 What is the level of detail required in the preparation of a filing?
The Belarusian legislator concretises all steps of filing with examples of statements, deadlines of consideration in the Instruction on Receiving Antimonopoly Approval. As a rule the following information is to be indicated on the notification filed to the antimonopoly authority: • economic and financial information aspects of the contemplated transaction; • information regarding types and amounts of goods (produced or sold in Belarus and for export) in numbers and value (if applicable); • the form in which such information is to be provided is set by the Instruction on Receiving Antimonopoly Approval; • information on legal entities controlling property of other legal entities (legal entities that can directly or indirectly determine decisions of other legal entities or affect decision-making process by way of possessing more than 20 per cent share of the statutory fund of a legal entity); the form in which such information is to be provided is set by the Instruction on Receiving Antimonopoly Approval; • information on the interested party and the target company, including name, place of residence, postal address, banking details, amount of statutory fund and balance sheet assets; and • the purpose of the contemplated transaction. 17 What is the timetable for clearance and can it be speeded up?
There is no specific timetable in Belarusian legislation for clearance. The waiting period within which the antimonopoly authority is to issue a response is 30 days upon filing all the documents. De jure there is no opportunity to speed up review process; de facto review process may be shortened to two weeks. 18 What are the typical steps and different phases of the investigation?
According to the Belarusian legislation there are no clearly defined phases of the investigation. The antimonopoly body has wide authority for market protection, for example officials of antimonopoly authorities have access to all documents of state authorities and commercial entities that may be necessary for them to perform their functions according their purposes. For this purpose antimonopoly authorities may address inquiries to the various state agencies. Substantive assessment 19 What is the substantive test for clearance?
The definition and the procedure of the substantive test for clearance are not established in the legislation of the Republic of Belarus. 20 Is there a special substantive test for joint ventures?
14 What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
Subject to a preliminary coordination with the antimonopoly authority (see question 2) it may be possible to structure the transaction so that the Belarusian entity’s shares are not acquired directly. 15 Are there any special merger control rules applicable to public takeover bids?
The antimonopoly authorities of the Republic of Belarus regularly monitor the market prior to the merger so as to be certain that the effects of a potential or actual merger will not restrain the development of free trade, commerce and competition in the relevant market, and that there will be free access to the relevant market after the merger. The antimonopoly authorities also analyse the possibility of creation or strengthening of a monopolistic or market-dominant position of companies and the effects that result from it.
There are no special merger control rules applicable to public takeover bids in Belarusian legislation.
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21 What are the ‘theories of harm’ that the authorities will investigate?
Harm, which can be caused to economic relations, is expressed in the abuse of market dominance, limitation of competition, unfair competition and standard contract provisions. The legislator provides protection of basic economic principles: to ensure the necessary conditions for the establishment and effective functioning of commodity markets, to promote fair competition and to protect the rights and legitimate interests of consumers. 22 To what extent are non-competition issues (such as industrial policy or public interest issues) relevant in the review process?
During the procedure of merger clearance the antimonopoly authority may take into consideration any issue relevant to the contemplated transaction under review. According to the Law on Antimonopoly Activity, the antimonopoly authority may disregard threats to competition caused by the activity to be undertaken by a newly formed legal entity in case of, first, such activity is necessary for the purposes of fulfilling legislative acts within the boundaries of such acts and restriction of competition is inevitable, and second, the positive effect will greatly exceed the negative consequences on the relevant commodity market. 23 To what extent does the authority take into account economic efficiencies in the review process?
Economic efficiencies may be taken into account by the antimonopoly body for the purposes of analysing a transaction that interferes with competition on a relevant commodity market, or a court can take into account positive economic effects of the company’s activity if they significantly exceed the negative consequences of such activity. Remedies and ancillary restraints 24 What powers do the authorities have to prohibit or otherwise interfere with a transaction?
Powers and authorities connected with interfering with a transaction of antimonopoly body are clearly defined in Belarusian legislation; they are expressed in the following provisions: • by way of judicial proceedings claiming the invalidity of transactions made without the approval of the antimonopoly authority and resulting in the emergence or strengthening of dominant position or restriction of competition; • prescribing to stop illegal activity and to eliminate harmful repercussions resulting from such activity; and • issuing a decision on the forced reorganisation or liquidation of a legal entity that has a dominant position on a relevant market.
26 What are the basic conditions and timing issues applicable to a divestment or other remedy?
The legislation does not provide a clearly defined procedure of giving divestment undertakings or any other remedy. The conditions and timing are set by the antimonopoly authority. 27 What is the track record of the authority in requiring remedies in foreign-to-foreign mergers?
There is no track record available regarding the antimonopoly authority requiring remedies connected with foreign-to-foreign mergers. 28 In what circumstances will the clearance decision cover related arrangements (ancillary restrictions)?
Belarusian legislation does not address the issue of arrangements relating to a transaction. It is entirely at the discretion of the antimonopoly authority to cover related arrangements. Involvement of other parties or authorities 29 Are customers and competitors involved in the review process and what rights do complainants have?
It is not obligatory for the antimonopoly authority to engage customers and competitors in the review process. There is a right of social control by specialised social organisations, unions of consumers and other public associations to take measures against creating company monopolies. The legislator sets detailed instructions, according to which social control can be carried out (Resolution of the Ministry of Economy of 17 April 2006 No. 60 ‘On Approval of Instruction of Review of Applications about the Violation of the Antimonopoly Legislation in Terms of Unfair Competition’). 30 What publicity is given to the process and how do you protect commercial information, including business secrets, from disclosure?
As noted above, the draft Law on Antimonopoly Activity imposes additional penalties for violations of antimonopoly legislation.
According to the Law of Antimonopoly Activity, the competition authority is obliged to maintain the confidentiality of information, which contains state secrets or other information protected under the law, including commercial or professional secrets. This explains why, in practice, very little publicity is given to the review process. General principles for protection of information are set by the Civil Code, the Law of the Republic of Belarus of 10 November 2008 No. 455-Z ‘On Information, Informatisation and Protection of Information’. Liability for disclosure of commercial secrets or other secrets is set by article 22.13 of the Code on Administrative Offences of the Republic of Belarus as a fine within the range of four to 20 basic units. In most serious cases the Criminal Code provides criminal liability, according to which the sanction can involve imprisonment of officials.
25 Is it possible to remedy competition issues, for example by giving divestment undertakings or behavioural remedies?
31 Do the authorities cooperate with antitrust authorities in other jurisdictions?
It is possible to remedy competition issues but only for the purpose of restoring the balance on the market and exceptionally in accordance with legislation of Belarus. The antimonopoly authority may in exceptional cases decide to reorganise or liquidate the legal entity that has a dominant position and restricts competition and issue suggestions to legal entities regarding the development of commodity markets and competition. But there are no established specific guidelines on giving divestment undertakings or behavioural remedies set by law.
In accordance with the legislation of the Republic of Belarus the antitrust authorities of Belarus cooperate, collaborate and share experience and information with the antitrust authorities of other states. Moreover the antitrust authorities of Belarus are the members of some authoritative international antitrust organisations such as the International Competition Network, the Interstate Council for Antitrust Policy of CIS, and the Organisation for Economic Co-operation and Development. This membership and collaboration gives the antitrust authorities the opportunity to participate in international fora and conferences concerning the antitrust policy in the world, to be well informed about the latest changes and developments in the field
Belarus Revera Consulting Group of the antitrust and competition policy and to inform and share with the international community information about activity in the field of competition and antitrust in Belarus. Judicial review 32 What are the opportunities for appeal or judicial review?
The possibility to apply for judicial protection is provided by the Constitution of Belarus (article 60). Decisions of the antimonopoly authority can be appealed within one year from the date of the decision, at first through a direct complaint to the antimonopoly body (obligatory prejudicial procedure) and subsequently to the commercial court (in accordance with article 31 of the Law of the Republic of Belarus of 28 October 2008, No. 422-Z ‘On the Basics of Administrative Procedures’). Judicial decision of the first instance can also be appealed to the appellate instance and subsequently to the cassation instance. 33 What is the usual time frame for appeal or judicial review?
An appeal can be proffered within one year from the date of decision, the time of investigation is one month, but in practice the deadline can be shorter. The court of first instance has to consider the claim within one month. An appeal against the first instance court decision should be filed with the appellate instance court within 15 days of the date of the decision. The appellate instance has 15 days to decide on the appeal. A cassation appeal is to be filed within one month from the first instance court decision date and will be considered within one month from the date the appeal was received by the cassation instance. Enforcement practice and future developments 34 What is the recent enforcement record of the authorities, particularly for foreign-to-foreign mergers?
During 2012 the antimonopoly authorities’ activities were as follows: • at the national level – issued 24 opinions on consent to the creation of holding companies, business associations; 13 – to reorganise businesses in the form of a merger; four – in the reorganisation of legal entities with dominant position in the
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commodity markets into joint-stock companies; and 12 – to perform transactions involving the acquisition of shares (stakes) in statutory funds of legal entities; and • at the local level – considered 116 projects of creating, restructuring of business entities and their associations. The antimonopoly body considered 109 applications for approval of transactions to acquire shares (stakes) in the statutory funds of economic entities. Belarusian governmental bodies do not publish any statistics relating to foreign-to-foreign mergers. 35 What are the current enforcement concerns of the authorities?
On the whole, none of the authorities have expressed any strong enforcement concerns in merger control matters. Particular attention by the antimonopoly authorities is paid to legal entities with a dominant position in the Belarusian market and subjects of natural monopolies. Such legal entities must provide to the antimonopoly authority a report on key indicators of work twice a year, on the basis of which the antimonopoly authority shall analyse the activity of legal entity and current situation on the market in the merger sphere. The antitrust authority has not officially identified any particular sectors or issues as its current enforcement concerns in the field of concentrations. 36 Are there current proposals to change the legislation?
The legislation of Belarus relating to merger control is in the process of reform. Today the Belarusian parliament is actively working on a new edition of the Law ‘On Counteraction to Monopolistic Activity and Competition Development’, which will eliminate the shortcomings of the current legislation. There are also amendments and changes are prepared to the Law ‘On Natural Monopolies’ of 16 December 2002 No. 162-Z. Nowadays the government takes active measures for tightening liability in the sphere of merger control.
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Merger Control 2014