The Chinese merger review regulator, the Ministry of Commerce (MOFCOM), has just announced that it has finished an internal restructuring review and the current Consultation Division will be abolished.

No more formal consultation during PRC merger review: A shortened waiting period expected


The Chinese merger review regulator, the Ministry of Commerce (MOFCOM), has just announced that it has finished an internal restructuring review and the current Consultation Division will be abolished.

A shortened pre-acceptance phase

A shortened pre-acceptance phase

The PRC merger review process has been criticized for the long, unpredictable pre-acceptance phase for which there is no statutory time limit. MOFCOM’s reforms seem aimed at significantly improving the current situation with the following changes: 

  • The Consultation Division will be converted into a case review team, which will work together with the other divisions to take a case from submission through to clearance.
  • The three case teams will allocate notifications among themselves by sectors. Once done, the assigned case team will contact the parties proactively and in a timely manner when they have supplemental requests.
  • There will be time limits for both the case team and the parties in respect of making and responding to supplemental requests. Overall timing of the pre-acceptance phase is anticipated to be reduced to less than one month before the formal Phase 1 review period is initiated whether a transaction is notified under the simple case route or not.

Practical implications of the new procedures

Under the new procedure, the formal Consultation Division will be abolished and released manpower will focus on case review. In the future, MOFCOM will only respond to very few, if any, queries in relation to the preparation of a notification. Consultation on general matters, including jurisdictional issues, will in principle no longer be available. This means MOFCOM will leave many difficult questions such as the determination of control and the calculation of turnover to merging parties and their legal advisers to self-assess on a case by case basis.

We do not consider that closing the consultation door is likely to cause a significant adverse impact on the review process. Experience shows that it has been extremely difficult to obtain a firm and clear view from MOFCOM on complex issues via consultation with the result that many companies feel obliged to notify in any event. The advantage of a significantly shortened pre-acceptance phase is likely to outweigh the loss of the current consultation process, such as it is. The reforms are likely to have an overall positive impact on the duration of the merger review process. There are, however, certain technical issues to bear in mind under the new procedures: 

  • Submission of notifications should all be made in the morning, so that MOFCOM will be able to enter the case into its internal system on the same day. 
  • Date of confirmation on receipt of the materials will be of practical significance under the new process, i.e. to begin the calculation of the review time limits. Therefore, MOFCOM will apply a higher standard to the completeness of submissions than it does now: the notification will need to be technically complete and of credible quality to start the clock running. MOFCOM will not acknowledge receipt of a notification if any mandatory material is missing, or the quality of the notification is too poor (e.g, it demonstrates a lack of reasonable market analysis) for an official to start the review process.
  • The parties need to specify the sector statistical code in the notification, which will facilitate case allocation. 


Abolishing the consultation procedure is the most significant internal organizational change to procedures of the Anti-Monopoly Bureau within MOFCOM since the Chinese Anti-monopoly Law took effect in 2008. This development demonstrates that after reviewing more than 1,100 cases over the past 7 years, MOFCOM has accumulated sufficient experience in merger review to effectively streamline the PRC merger review procedure to advance with the times.

While the reforms remain to be tested, it appears likely they will be an overall positive development for companies which currently have to undergo PRC merger review on their M&A transactions.