On 12 November 2015 a draft law changing the merger control procedure in Ukraine (the “Draft Law”) was passed after its first reading in the Ukrainian Parliament.
The Draft Law is part of ongoing competition law reforms which Ukraine is undertaking in line with the Ukraine-EU Association Agreement.
The Draft Law introduces several important changes to the existing merger control procedure:
A. Filing thresholds significantly increased
|Current filing thresholds
||Thresholds proposed under the Draft Law
1) all parties’ combined aggregate worldwide assets or sales (including related entities), exceed the equivalent of EUR 12 million; and
2) each of at least two parties to a transaction has aggregate worldwide assets or sales (including related entities) exceeding the equivalent of EUR 1 million; and
3) at least one party to a transaction (including related entities) has assets or sales in Ukraine exceeding the equivalent of EUR 1 million.
Two alternative tests apply
Test 1: transactions with both parties active in Ukraine:
1) all parties’ combined aggregate worldwide assets or sales (including related entities) exceeding the equivalent of EUR 30 million; and
2) at least two parties to a transaction (including related entities) have assets or sales in Ukraine exceeding the equivalent of EUR 4 million.
Test 2: big transactions:
1) at least one party to a transaction (including related entities) has sales in Ukraine exceeding the equivalent of EUR 8 million; and
2) at least one other party’s aggregate worldwide sales (including related entities) exceeding the equivalent of EUR 100 million
Market share threshold (if met, triggers filing irrespective of the assets or turnover of the parties to a transaction):
|The market share of any party to a transaction or the combined market share of all parties to a transaction (including related entities exceeds 35% of the market on which the transaction takes place and/or the adjacent markets.
||No market share test
B. Preliminary consultations and expedited review procedures introduced
Applicants are entitled to consult the Anti-Monopoly Committee (the “AMC”) with respect to the following: documents and information necessary for the notification of the intended merger, expedited notification review options, and removal of defects in notification materials already submitted.
The expedited review procedure of 25 days (regular review procedure is 45 days) starting from the submission applies in the following cases:
- only one party to a transaction is active in Ukraine; or
- the aggregate market share of all parties to a transaction in one and the same market does not exceed 15%; or
- the market shares or aggregate market shares of parties to a transaction active in a market that is downstream or upstream to the market in which any other party to a transaction is active, do not exceed 20%.
C. Procedure for proposing remedies and imposing conditional decisions during Phase II review clarified
If, during Phase II, the AMC sees grounds for prohibiting the transaction, it must notify the applicants and give them reasonable time to propose remedy obligations mitigating or removing the negative impact of the transaction on competition.
Such remedy obligations must be proportional to and justified by the anti-competitive threats of the transaction. The AMC’s measures to control the remedy obligations undertaken by the parties to a transaction cannot be excessive.
D. Filing fee increased
Administrative fees for submitting the merger control and concerted action notifications and other submissions to the AMC increased significantly (four times the current fees). Nonetheless, even the increased filing fee will remain relatively low (see some examples below).
|Type of submission
||Fee proposed by the Draft Law
|Merger control filing
||approx. EUR 200
||approx. EUR 800
|Concerted actions filing
||approx. EUR 100
||approx. EUR 400
|Preliminary conclusions on merger control cases
||approx. EUR 150
||approx. EUR 600
|Preliminary conclusions on concerted actions cases
||approx. EUR 50
||approx. EUR 200
The Draft Law is now being prepared for its second reading in Parliament.