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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”.

 

Particularities of New Antimonopoly Legislation

14.06.2016

Mykola Aleksiuk, attorney at law at Ilyashev & Partners
Source: Novoe Vremya

In January this year Verkhovna Rada of Ukraine (the Parliament) approved important amendments introduced to the Law of Ukraine “On protection of economic competition”.

These amendments, in the first place, are directed at deregulation of sphere of mergers and acquisitions. It is stipulated that such deregulation will be carried out through the increase of the cost indicators (the amount of assets and volumes of sales of goods and services), reaching of which requires application of market participants to the Antimonopoly committee of Ukraine for the permit to enter into the planned agreement (perform concentration).

So long as the market participants are expecting the day when the said amendments come into force, the Antimonopoly Committee is actively developing statutory regulations allowing to fully implement progressive plans of the legislator.

In particular, on its official web-site the Antimonopoly committee of Ukraine has recently published the draft of the new version of the Regulation for submitting and review of applications on preliminary receipt of the AMCU’s permit for concentration of market participants (Provision on concentration).

With the aim of discussing the nuances of the new version of the Regulation on concentration the Antimonopoly committee of Ukraine initiated a “round table” conference for the lawyers practicing in the sphere of antimonopoly law. It needs to be noted that participants of the event treated the document in question with optimism.

A legal drafting methodology and decrease of the list of the requested documents and information are encouraging optimism. But, of course, all participants of the discussion are keenly waiting for the moment when the provision will enter into force refraining from judgmental comments of practical application of new rules and procedures.

So, let’s try to provide overview of the main novelties proposed by the Antimonopoly committee in the sphere of receiving the permits for concentration.

The first and most important novelty actually repeats the provision of the earlier mentioned law – this is the increase of the cost indicators which represent a certain marker for establishment of the necessity to file an application to the Antimonopoly committee.

Pursuant to new antimonopoly law there are two “tests” of such kind. The application for receipt of the concentration permit is filed in the case, when:

– the total value of assets or total volume of sale of goods of concentration participants, with consideration for the relations of control, for the last financial year, including abroad, exceeds the sum equivalent to EUR 30 mln (according to the NBU currency exchange rate) and the cost (total cost) of assets or volume (total volume) of the sale of goods in Ukraine of no less that two concentration participants, with consideration for the relations of control, exceeds the sum equivalent to EUR 4 mln (according to the NBU currency exchange rate);

– the total value of assets or total volume of sale of goods in Ukraine of a company over which control is acquired, or of a market participant assets, participation shares (securities, investment shares) of which are purchased into ownership or are received into management, or of at least of one of the founders of the established company, with consideration for relations of control, for the last financial year, exceeds the sum equivalent to EUR 8 mln (according to the NBU currency exchange rate), and, at the same time, the volume of sale of goods of at least one participant of concentration, with consideration for relations of control, for the last financial year, including abroad, exceeds the sum equivalent to EUR 150 mln (according to the NBU currency exchange rate).

Person earlier facing compliance in the sphere of antimonopoly law may definitely sense a huge chasm between the old and new marginal values. One may confidently state that the mentioned novelty is a sure step towards harmonization of the national legislation with European standards.

No less important novelty is introduction of the simplified procedure of filing applications which stipulates for decreasing the terms of consideration of an application by the committee, as well as substantial limitation of the quantity of documents and information required to be provided to receive a permit.

This procedure will be used in the cases when: a) only one concentration participant performs its activities in Ukraine, or b) total share of the concentration participants at the one and the same product market does not exceed 15 percent, or c) shares or total shares of participants of the concentration do not exceed 20 percent at the product markets at which the products (goods, works, services) are sold without purchase or sale of which activities of any participant of the concentration is impossible.

According to projections made by the management of the Antimonopoly committee, voiced during the “round table”, a lion’s share of applications will meet the requirements stipulating their review in particular under the simplified procedure which cannot but please the market participants also.

Among other things the following points must be highlighted:

– availability of the right pertaining to the market participants (hot being the applicants) to enter as third persons into the process of consideration of applications by the Antimonopoly committee for provision of own objections against the planned concentration;
– an obligation to publish information on commencement of review of each case on concentration, as well as of the decisions made under the results of the review, at the site of the Antimonopoly committee;
– possibility to carry out preliminary consultations between the applicants and employees of the committee, as well as coordination of the final text of the decision;
– considerable decrease of the volume of information about the management of concentration participants and narrowing of the list of persons in relation to whom the applicants must provide information;
– absence of the necessity to repeat information provided through use of specialized software.

At the same time the novelty stipulates for the increase of the requirements advanced towards economic substantiation of the potential concentration which, in the opinion of the committee’s opinion, may be duly prepared only upon engagement of qualified economists and market specialists.

With high level of probability one may state that the planned novelties will considerably promote liberalization of the national business climate: there will be much less obligatory applications to the regulatory authorities, the permits will be issued more effectively, and the work of the Antimonopoly committee will concentrate on really important cases of mergers and acquisitions.

And although it will be possible to objectively evaluate the said novelties only after application of new procedures in practice by getting a feel of new legislation with a view to its focus on innovation and practicability, we can already be grateful to the Antimonopoly committee for its desire to improve and simplify business processes requiring support throughout the lengthy economic crisis.

 
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