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Process and timing
Is the notification process voluntary or mandatory?
What timing requirements apply when filing a notification?
There are no deadlines for filing notifications in Ukraine. The only requirement is that Anti-monopoly Committee of Ukraine (AMC) clearance be obtained before the implementation of the concentration. It is even possible to file notification of a transaction in the early stages, when no definitive agreement has been reached.
What form should the notification take? What content is required?
The Concentrations Regulation sets short and full-form notifications for simplified and standard review procedures, respectively. The parties must also submit electronic versions of the notification and all documents attached to it on CD.
Short form notifications must include:
- a description of the transaction structure, indicating transaction stages and the timeline for their implementation, as well as a draft or copy of the transactional documents;
- information if the clearance is sought or granted in other jurisdictions;
- a description of the source of financing, indicating terms and conditions, as well as documents to confirm the availability of funds (eg, a balance sheet or an excerpt from a bank account) or to evidence that a financial institution lending funds will not acquire control over the borrower as a result of the financing arrangement (eg, a loan agreement);
- the parties’ asset and turnover data, globally and in Ukraine, for the previous financial year;
- information on the parties’ ultimate beneficiary owners (if any);
- a general outline of the parties’ activities in all markets, globally and in Ukraine, indicating Ukrainian subsidiaries and companies active in Ukraine; and
- value and volume-based sales and market share data for the relevant markets, indicating competitors and their estimated market shares in overlapping markets.
In addition to the documents and information required under the short-form notification, full-form notifications must include:
- a detailed economic analysis of the transaction’s effect on the Ukrainian market (similar to Form CO under the EU Merger Regulation); and
- the parties’ excerpts from the trade register or similar (in notarised and apostilled or legalised hardcopies).
Is there a pre-notification process before formal notification, and if so, what does this involve?
There is no pre-notification process. However, AMC officials are usually available for brief unofficial discussions regarding the notifiability of a proposed transaction or technical issues relating to a future notification.
Can a merger be implemented before clearance is obtained?
The parties are subject to a stand-still obligation. Closing without or before clearance constitutes a violation of merger control law.
Guidance from authorities
What guidance is available from the authorities?
The parties to a transaction may refer to the AMC for formal guidance (ie, a non-binding preliminary opinion) on whether the concentration is notifiable and whether clearance is likely to be granted or refused. Obtaining a preliminary opinion does not release the parties from having to apply to the AMC for merger clearance (if required).
Once the merger control notification is filed, the parties may initiate consultations with the AMC during an initial 15-day review period with respect to documents and information required for review of the application, including the possibility of a simplified procedure and the elimination of minor faults in the application. However, the law does not envisage the possibility of preliminary consultations taking place before notification (such consultations are available only to applicants and thus only after notification). Informal discussions with AMC officers are usually possible at any stage; in complex cases, it is customary to have meetings with the AMC and seek advice on remedies. Individual derogations are not possible.
What fees are payable to the authority for filing a notification?
The obligatory filing fee is UAH20,400 (approximately €630) per notification. There may be multiple notifications depending on the transaction structure; in this case, multiple filing fees must be paid.
Publicity and confidentiality
What provisions apply regarding publicity and confidentiality?
Automatic confidentiality does not apply to information submitted by the parties and may be available on their request. When applying for confidentiality, the parties should provide a grounded justification, as well as a non-confidential version of the information. If the confidentiality request is not satisfactorily justified, it will be rejected by the AMC.
Following changes to the Competition Law that came into effect in March 2016, the AMC is obliged to publish non-confidential versions of clearances within 10 working days of the decision being made. For merger clearances, the scope of disclosure normally covers:
- the essence of the transaction;
- the identity of the parties; and
- a brief description of their activities at group level in Ukraine and worldwide.
The scope of disclosure can be pre-negotiated by the parties. They can claim for extra confidentiality by submitting a reasoned motion to refrain from disclosing sensitive data.
Are there any penalties for failing to notify a merger?
The statutory maximum fine for implementing a notifiable transaction before or without obtaining AMC clearance is up to 5% of the group's consolidated worldwide turnover for the year immediately preceding that in which the fine is imposed.
In practice, fines in merger cases are considerably lower and are calculated based on the Guidelines on the Calculation of Fines amended and revised by the AMC in August 2016. Although the guidelines are non-binding, the AMC has publicly committed to follow them strictly and does so in practice. The document sets the basic amounts of fines for the violation of competition law, including in merger cases, and clarifies that the maximum theoretical fine (5% of the group's consolidated worldwide turnover) can now be imposed in exceptional circumstances to ensure deterrence. Other cases can be split into the following groups:
- 10% of the turnover in the relevant (and adjacent) market for failure to notify a concentration, which results in the monopolisation or substantial restriction of competition;
- between UAH510,000 (approximately €15,900) and 5% of the turnover in the relevant (and adjacent) market for failure to notify a concentration, which does not lead to the monopolisation or significant restriction of competition, nor has an effect on Ukrainian product markets; and
- between UAH170,000 (approximately €5,300) and UAH510,000 (approximately €15,900) for failure to notify a concentration where the parties are active in non-overlapping and non-adjacent markets in Ukraine.
Fines imposed under the first two groups may be multiplied for aggravating or mitigating coefficients (ie, depending on the effect of the violation on competition, the profitability of economic activity connected with the violation and the nature of goods produced in the relevant market).
In addition, in each case, the fines may be doubled for repeat offences and further increased by up to 50% for aggravating factors (eg, refusal to cooperate and obstructing a case investigation) or reduced by up to 50% for mitigating factors (eg, cooperation with the AMC during the case investigation, voluntarily filing a corrective merger application and pleading guilty). The Guidelines on the Calculation of Fines do not clarify how much of a decrease each of these circumstances provides, but the AMC applies them in practice.
The statute of limitations for imposing a fine for an unauthorised merger is five years. The lapse of the limitation period exempts offenders from fines, but the legal status of the transaction remains questionable. This creates uncertainty for intra-group deals involving so-called ‘uncleared’ companies (including routine restructurings), as the intra-group exemption is conditional on compliance with the merger control requirements at the moment of the incorporation or acquisition of the respective companies.
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