On June 18, 2012 the Antimonopoly Committee of Ukraine (AMC) announced that starting from July 1, 2012 it will be imposing the maximum statutory fines for unauthorized mergers. Thus, companies closing transactions without the Ukrainian clearance may be hit with a fine of 5% of their global group-wide annual turnover. This announcement followed after the largest fine in AMC's history (approx. EUR 41.5M) was imposed last week on the manufacturers of wood-based panels, members of a bid rotation cartel.
In view of the very low notifiability thresholds and limited acceptability of the effects-doctrine arguments, a significant number of clearly non-problematic foreign-to-foreign transactions have been technically reportable in Ukraine. The AMC statement is silent on whether the maximum fines will also apply to such transactions. However, given that most of the recent fines have been imposed in the deals raising no competition concerns, including foreign-to-foreign ones, this is quite likely. Although there is no public registry of AMC decisions, we have been witnessing gradual increase in the amounts of fines over the last year, from EUR 10,000-15,000 to EUR 20,000-60,000, including in foreign-to-foreign deals with reasonably insufficient local nexus. Thus, the latest statement builds upon the existing trend and increases the risk of AMC's enforcement action for failure to get clearance in Ukraine prior to closing.
For further information please contact Igor Svechkar or Volodymyr Solohub.