Revera Consulting Group
Belarus
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
3
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.
www.gettingthedealthrough.com
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
35