Long anticipated changes in the merger clearance filing procedure in Ukraine finally became effective on 19 August 2016. Why are such changes so important and why the Ukrainian merger control system required the developments so badly? 

Those who have come across the Ukrainian merger control at least once have probably noticed two major features it is notorious for: pitifully low thresholds on the one hand and enormous volume of data to be disclosed on the other. The first issue was sorted out to some extent this spring, when the thresholds were raised and some changes to the procedure were introduced at the legislative level.

Now, the Antimonopoly Committee of Ukraine (the “Antimonopoly Committee”), having passed many bureaucratic procedures, has finally managed to adopt new Concentration Regulations No.14-рп as of 21 June 2016 (the “Concentration Regulations”) accorded with the law and introducing a substantial cut in the information to be disclosed. The most noticeable amendments are as follows.

1. Full Procedure

A full list of companies belonging to the group, a full list of such companies’ top officers, a full group chart in the form of a table, detailed data on all legal entities operation – those were the most burdensome parts of filing. Representatives always applied to the Antimonopoly Committee to reduce these lists and the Antimonopoly Committee mostly agreed with some cuts, but sometimes not. Anyway, there always existed formal grounds for the regulator to require the whole information, which, for example, in case of a large international investment fund, is close to impossible.

Now, only immediate parties to the transaction, their beneficiaries and companies operating in Ukraine shall be disclosed. Officers and family members shall be disclosed only in case they cause control relations between companies to be disclosed.

The only point the new Concentration Regulations added are documents to prove the financial sources of the merger. This is to show that no third party stays behind the merger and would subsequently gain control, e.g. through exercising its creditor rights.

2. Economic Feasibility

Economic substantiation of the concentration, unlike the other parts of filing, has been substantially extended. Now, there is a strict 25-point questionnaire which includes data on markets involved in the contemplated concentration, companies operating in those markets, concentration parties’ development plans, assessment of manufacturing capacities in those markets, demand structure, etc. This is a great contrast to sometimes filed one-to-two page economic substantiations describing ‘synergies of the merger’ and ‘absence of harm to competition because of absence of monopoly in the market’.

Thus, such new standard of economic substantiation requires even the most qualified antitrust attorneys experienced in competition economics to involve market research companies and clients in collecting information for preparation of economic substantiation.

3. Fast Track Procedure

The fast track procedure was not an official option under the previous rules. Now, as the law prescribes a 25-day fast track, the new Concentration Regulations also provide for a much reduced list of data to be disclosed. Thus, neither the disclosure of all companies operating in Ukraine, nor the economic substantiation are needed. However, some information on involved relevant markets is still to be disclosed.

Those are the main new requirements for filings submitted under the new Concentration Regulations. They are much more user-friendly than the previous ones. Of course, some may say that these Concentration Regulations could have been better in one way or the other, however, there are other fields of antitrust regulation still to be improved. Consequently, the current version of law and new Concentration Regulations would govern merger control in Ukraine at least for some years to come.