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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.

 

The Draft Law on Introduction of Amendments to the Law “On Protection of the Economic Competition” Was Passed in the First Reading on 12-th of November This Year. The Draft Law Regulates Improvement of Effectiveness of the System of Control Related to Economic Concentration

25.11.2015

Oleksandr Fefelov, Attorney at Law, Head of Antitrust and Competition Practice at Ilyashev & Partners Law Firm
Source: Companion

Passing of the corresponding law is also stipulated by the obligations undertaken under the EU Association Agreement. According to the mentioned Agreement Ukraine is obliged to introduce the EU Regulation No. 139/2004 on the control of concentrations within three years from the moment when the Agreement enters into force.

The draft law stipulates considerable increase of the threshold values and two variants of their calculation. Obtaining the AMCU’s consent is required in two instances. The first instance is when the total annual volume of sale of goods or total cost of assets in Ukraine of, at least, two participants of concentration exceeds the equivalent of EUR 4 mln each and their mutual turnover or cost of assets (including foreign) for the previous year exceeded EUR 30 mln. The second instance stipulates the case when the volume of sale of one participant of concentration exceeded the equivalent of EUR 8 mln and excess of an equivalent of EUR 100 mln by at least one participant including foreign assets.

There were years when the AMCU received thousands of applications on obtaining a permit for concentration. This quantity far outweighs the quantity of applications filed in other countries. In more than half instances these were the cases which did not influence the state of competition at Ukrainian commodities markets. The need of their coordination existed only because of formal requirements of the lower threshold which had lost its edge long ago.

After approval of the amendments in the form of the law the quantity applications filed to the AMCU will significantly decrease. Their nature will also change. It will give a possibility for the corresponding department of the Committee to lay the focus onto the cases which are really important from the point of competition protection. New tax figures will significantly decrease the load onto the medium-sized business, as well as will allow saving finances and efforts spent for drafting applications and legal support of the process of permit obtaining. The positive moment here is that the term of consideration of cases has been decreased by two or more months. Also the major part of agreements between foreign companies (not influencing the state of competition in Ukraine) will not be subject to coordination by the AMCU.

Satisfying is the fact that for a number of concentrations a simplified procedure of consideration of cases was stipulated. The said procedure was decreased by 25 days. Stipulated also is the possibility of entering into consultations with the AMCU. Of importance is the proposal to mention in the Law the possibility to initiate concentration or coordinated actions “in case of necessity to carry out a profound investigation or expert review”. The said amendments will increase the AMCU’s level of responsibility and remove objectivism in the process of appraisal of cases filed for coordination. Such absence of coordinations in relations with the Committee because of the serious protraction of the terms of obtaining the permits.

 
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