Legislation and jurisdiction

Relevant legislation and regulators

What is the relevant legislation and who enforces it?

In Bosnia and Herzegovina, merger control, as well as other aspects of competition law, is substantially governed by the Competition Act of Bosnia and Herzegovina (the Act). The Act became effective as of 27 July 2005. It was enacted at the state level and applies throughout the entire territory of Bosnia and Herzegovina, that is, in both entities (the Federation of Bosnia and Herzegovina and the Republic of Srpska) and in the Brčko District. The Act was amended twice so far, in 2007 and 2009.

In addition to the Act, numerous regulations were adopted by the Bosnia and Herzegovina Competition Council (the Council), the authority responsible for enforcement of the Act and for monitoring competition in the market. These regulations set out the procedural framework and define the standards for application of the Act. The most relevant regulations for merger control are the Regulation on the Notification of Concentrations and the Criteria for the Assessment of Concentrations, and the Regulation on the Definition of Relevant Markets.

The competition legislation of Bosnia and Herzegovina is generally in line with the rules and principles of the EU competition law regime. Moreover, in practice, the Council often uses the EU competition law standards as a guide to deciding the cases brought before it.

The Council is an independent authority established by the Act. It has exclusive competence to decide on the existence of activities prohibited by competition law in the market of Bosnia and Herzegovina. The Council has six members. Three members are appointed by the Council of Ministers of Bosnia and Herzegovina, with one representative from each of the constituent nations. Two members are appointed by the government of the Federation of Bosnia and Herzegovina, and one member is appointed by the government of the Republic of Srpska. The mandate of all members of the Council lasts for six years with an option to be extended for an additional six years. A new president of the Council is appointed every year. The Council submits its annual reports to the Council of Ministers of Bosnia and Herzegovina.

More information about the Council and its activities can be found at www.bihkonk.gov.ba.

Scope of legislation

What kinds of mergers are caught?

The Act defines a concentration as:

  • a merger by absorption or a merger by the formation of a new entity;
  • the acquisition of control or a controlling interest by one or more undertakings over another undertaking or a part thereof, or a group of undertakings or a part thereof through the acquisition of a majority shareholding, or the acquisition of a majority of voting rights, or in any other way under the company laws of Bosnia and Herzegovina; or
  • the creation of a full-function joint venture.


Intra-group acquisitions and restructurings are not caught by the merger control rules.

What types of joint ventures are caught?

Joint ventures performing on a lasting basis all the functions of an autonomous economic entity (full-function joint ventures) are caught by the Act.

Joint ventures that aim to coordinate the market behaviour of two or more undertakings, whereby each of them maintains its legal and economic autonomy, are not subject to the merger control regime, but may be covered by the provisions on restrictive agreements.

Is there a definition of ‘control’ and are minority and other interests less than control caught?

The Act provides a rather general and broad definition of ‘control’ without specifying any details that may lead to the existence of control within the meaning of the Act.

Following the wording of the Act, ‘control’ exists when one or more undertakings jointly have a dominant influence over another undertaking or group of undertakings, based on the law, an agreement or any other means, and considering all legal circumstances and facts. ‘Control’ is deemed to exist when one or more undertakings jointly:

  • have a majority shareholding in an undertaking;
  • have a majority of the voting rights; or
  • have the right to appoint more than half of the management board members, the supervisory board members, or the appropriate body that manages or controls operations, or otherwise has the right to manage the operations of the undertaking.


Given this broad definition of ‘control’, the acquisition of a minority interest that enables the holder to exercise a dominant influence over an undertaking or group of undertakings is subject to the merger control regime.

Thresholds, triggers and approvals

What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?

According to the Act, the Council has to be notified of an intended concentration if, in the preceding business year:

  1. the combined worldwide turnover of the undertakings concerned exceeds 100 million Bosnia and Herzegovina convertible marks; and
  2. (a) the individual turnover of each of at least two undertakings concerned in Bosnia and Herzegovina amounts to at least 8 million Bosnia and Herzegovina convertible marks; or (b) the undertakings concerned together have a market share of more than 40 per cent on the relevant market in Bosnia and Herzegovina (according to the interpretation applied by the Council, this threshold can be met by one undertaking alone).


The Regulation on the Notification of Concentrations and the Criteria for the Assessment of Concentrations (Regulation) adopted by the Council, effective as of 5 May 2010, stipulates that if the undertakings concerned have registered corporate seats in Bosnia and Herzegovina, the concentration shall be notified to the Council if the local threshold (2)(a) or (b) is satisfied, regardless of whether the worldwide threshold (1) is also met. The Council intended to clarify the wording of the Act with this provision. However, its interpretation has led to confusion. In particular, it was unclear whether the Council is at all competent to interpret the Act in such way in a legally binding manner and whether this provision may also have an impact on foreign-to-foreign mergers. Therefore, we filed a request for clarification to the Council. In its rather broad reply, the Council stated that if some of the undertakings concerned have their registered corporate seat outside Bosnia and Herzegovina or some undertakings concerned have their registered corporate seat abroad, but have subsidiaries in Bosnia and Herzegovina, both the local threshold (2)(a) or (b) and the worldwide threshold (1) have to be met to trigger a filing obligation. Therefore, one may conclude that the ‘clarification’ provided by the Council in the Regulation (ie, notification required if only the local threshold (2)(a) or (b) is satisfied) applies only to cases where all undertakings concerned are purely domestic undertakings (ie, undertakings that have local shareholders and are not subsidiaries of foreign legal entities).

The aggregate turnover of the undertakings concerned is to be calculated on a worldwide consolidated basis. Turnover generated by sales between the undertakings concerned is not taken into account.

In the case of an acquisition of one or more parts of an undertaking or of a group of undertakings, irrespective of whether such parts constitute independent legal entities, only the turnover pertaining to the parts subject to the concentration is taken into account. Should there be more than one concentration of the undertakings concerned within a two-year period, they will be considered as one single transaction and it shall be deemed that the transaction occurred on the date of the occurrence of the last transaction.

If the undertaking concerned is a bank or financial institution, the turnover shall consist of the following: income from interest and similar income sources; income from securities; commissions; net profit from financial operations; and other operating income.

For insurance and reinsurance companies, the turnover shall consist of gross premiums, which include all received and expected premiums, as well as reinsurance premiums, but after the deduction of taxes and fees charged by reference to the amounts of the individual premiums or the aggregate amount of premiums.

Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?

As a general rule, the Council shall be notified of all concentrations that exceed the thresholds set forth in the Act.

An exemption from the filing obligation exists in cases in which banks, financial institutions or insurance companies acquire shares in the ordinary course of business with the intention of reselling them within the following 12 months, provided that in the meantime the shares are not used to influence the market behaviour of the undertaking concerned. Furthermore, the acquisition of control by a bankruptcy administrator or liquidation administrator in the course of bankruptcy or liquidation proceedings does not require that the Council be notified.

Do foreign-to-foreign mergers have to be notified and is there a local effects or nexus test?

Foreign-to-foreign concentrations are covered by the Act if the turnover thresholds are exceeded.

We are not aware of any cases or discussions in which the Council would have indicated that an effects-based exemption from the filing obligation (where the turnover thresholds were met) would be accepted. To date, the Council appeared to be unwilling to consider arguments in that respect.

Are there also rules on foreign investment, special sectors or other relevant approvals?

There are no special rules related to foreign investments, special sectors or other relevant approvals in the competition law of Bosnia and Herzegovina. However, in certain business sectors, such as banking, telecommunications, energy and pharmaceuticals, additional regulatory provisions exist that need to be observed. For example, certain changes in the shareholding structure of a telecommunication provider require a notification to or approval by the competent telecommunications agency. This notification or approval from the telecommunications agency is required in addition to the merger approval by the competition authority, if any.

Law stated date

Correct on

Give the date on which the information above is accurate.

1 May 2020