On 26 January 2016 the Ukrainian Parliament approved in the second reading Draft Law 2168-a “On Amendments to the Law of Ukraine “On Protection of Economic Competition” Increasing the Efficiency over Merger Control” (the “Law”) .
The Law increases financial thresholds that trigger merger control notification requirements, as well as introduces certain novelties aimed at simplification of merger control review process. In particular, the most important changes include the following:
- the filing requirement is now triggered if:
- the parties' aggregate worldwide assets/turnover exceeds EUR 30 million and at the same time Ukrainian assets/turnover of each of the 2 parties exceeds EUR 4 million;
- Ukrainian assets/turnover of the target in which shares/assets or control are acquired, or of at least 1 of the founders of the new entity to be established exceeds EUR 8 million, while at the same time worldwide turnover of the other party (on a group level) exceeds EUR 150 million;
(the assets/turnover are to be calculated on a group level);
- elimination of the 35% market share driven filing requirement;
- introduction of pre-consultation mechanism with Ukrainian competition authority and simplified fast-track (25-days) review procedure for qualifying parties; and
- introduction of remedy offering mechanism for concentration/concerted actions participants for cases where the authority establishes grounds for banning a transaction.
In addition, official filing fees for review of concentration and concerted actions filings have been increased to UAH 20,400 (approx. EUR 740 as of today) and UAH 10,200 (approx. EUR 370 as of today), respectively.
The Law is expected to come into force in April this year.
The business community and legal experts have been lobbying and working closely to support these changes that are part of a broader effort to make Ukraine a friendlier place to do business. We expect merger control process in Ukraine to become more targeted, smoother and predictable
Amnesty for merger control violations can be used until September 2016
In September 2015, the Antimonopoly Committee of Ukraine (the “AMC”) approved recommendations related to procedure of calculation of fines for violation of legislation on protection of economic competition and protection against unfair competition (the “Recommendations”), which made the process of calculation of fines by the authority more predictable and transparent.
The Recommendations also introduced a quasi-amnesty for failure to receive merger control clearance (the “Amnesty Rule”), pursuant to which companies, which apply to the AMC for approvals of transactions, which they failed to clear with the AMC in the past, would receive lower fines, as compared to the amounts of fines, which are fixed in the Recommendations.
Fines for filings under the Amnesty Rule made within the first 6 months after publication of Recommendations (until 15 March 2016) will be UAH 20,400 (approx. EUR 740 as of today), while fines for filings made within subsequent 6 months will be UAH 102,000 (approx. EUR 3,720 as of today).
Amnesty Rule can be utilized until 15 September 2016 for clearance of transactions that closed prior to 15 September 2015.