Chambers Merger Control 2019. Ukraine
Author: Igor Svechkar, Alexey Pustovit, Tetiana Vovk
Source: Chambers Merger Control 2019

1. Legislation and Enforcing Authorities

1.1 Merger Control Legislation

The relevant merger control legislation in Ukraine includes the following:

  • the Law on Protection of Economic Competition 2001 (the Competition Law);
  • the Law on the Antimonopoly Committee of Ukraine 1993 (the AMC Law);
  • the Regulation on the Procedure for Filing Applications with the Antimonopoly Committee of Ukraine for Obtaining its Prior Approval of the Concentration of Undertakings 2002 (the Concentrations Regulation);
  • the Methodology for Assessment of the Monopoly (Dominant) Position of Undertakings on the Market 2002;
  • the Methodology for Assessment of Control Relations 2002;
  • the Guidelines on Calculation of Fines for Violation of Ukrainian Competition Law 2016 (the Guidelines on Fines);
  • the Guidelines on the Assessment of Horizontal Mergers 2016; and
  • the Guidelines on the Assessment of Non-Horizontal Mergers 2018.

1.2 Legislation Relating to Particular Sectors

In December 2017, the Amendment to the Competition Law dealing with notifications by sanctioned (Russia-related) parties became effective. According to the Amendment, the Antimonopoly Committee of Ukraine (AMC) must reject notifications (or drop their review, if they are already in Phase I or II) if the notified concentrations are prohibited by the Law on Sanctions. According to the AMC, the new rules will apply to situations where any of the parties to the concentration (or any entity/individual connected to them through control relationships) is on the Ukrainian sanctions list, and where a particular type of sanctions applies to a given individual or entity (eg, assets freeze, etc).

Also, special rules apply to the review of notifications that concern the capitalisation and reorganisation of banks – the AMC will review them and grant clearances within ten days of receiving the complete set of documents.

1.3 Enforcement Authorities

The AMC is the primary state authority that enforces merger control rules in Ukraine. It has powers to review transactions and grant or refuse clearance, and to investigate and penalise violations of the merger control regime, etc. The Cabinet of Ministers of Ukraine (CMU) may overrule AMC decisions prohibiting a concentration on public interest considerations.

2. Jurisdiction

2.1 Notification

Notification is compulsory if the thresholds triggering merger clearance are met, unless the transaction qualifies for one of the following exemptions (such transactions are not considered concentrations):

  • the establishment of a new undertaking that aims at or results in the co-ordination of competitive behaviour of either its parents or the new undertaking on the one hand, and its parents on the other (such establishment is generally regarded as concerted practice, which may require a separate – antitrust – clearance);
  • the acquisition of shares qualifying as a financial buyer transaction – ie, the shares are acquired by a financial institution for the purposes of further resale within one year (extendable), provided that the acquirer does not exercise voting rights;
  • intra-group transactions, unless control links within the group were established in violation of the Ukrainian merger control rules; or
  • the acquisition of control over an undertaking or a part thereof by a receiver or a representative of a state authority.

2.2 Failure to Notify

Failure to notify can lead to a fine of up to 5% of the consolidated turnover in the year immediately preceding the year when the fine is imposed. Such fine can be imposed on the entire corporate group of an immediate infringer that allows the AMC to fine any local subsidiaries of the parties and improves the AMC's chances to successfully collect fines.

As a matter of practice, the fines for failing to notify are considerably lower. Under the Guidelines on Fines (which have a recommendatory nature, although the AMC has publicly committed to following them), the 'base' fines for failing to notify are as follows:

  • 10% of the turnover on the relevant (and adjacent) Ukrainian markets for failure to notify a concentration that results in monopolisation or substantial restriction of competition;
  • between UAH510,000 (approx. EUR16,600) and 5% of the turnover on the relevant (and adjacent) Ukrainian markets if a transaction does not pose serious competition concerns; or
  • between UAH170,000 (approx. EUR5,600) and UAH510,000 (approx. EUR16,600) for failure to notify a transaction if the parties are active on non-overlapping and non-adjacent markets in Ukraine.

The above 'base' amounts may be further adjusted depending on the effect of the violation on competition, the social importance of the market involved, the profitability of the economic activity connected with the violation, and any aggravating or mitigating circumstances, which may increase or decrease the fine. Based on recent AMC practice, the fines usually range from EUR5,000-16,000.

Information about the imposed fine and the identity of the parties, and the non-confidential version of the fining decision are published by the AMC on its website.

Apart from the fine and possible reputational issues associated with the publication of the fining decision, parties may face the following negative implications: 

  • a ban on the companies’ cross-border activities with Ukraine, which can be imposed by the Ministry of Economy of Ukraine at the AMC’s request if the parties refuse to pay the imposed fine. However, this risk is hypothetical, as no such ban appears to have been imposed to date;
  • third-party damages claims (double the amount of actual damages sustained);
  • invalidation of the transaction; or
  • possible complications with the Ukrainian clearance of future transactions, as the AMC may scrutinise their review.

2.3 Types of Transactions

The following types of transactions are caught by the merger control rules:

  • the merger of two or more previously independent undertakings, or the takeover of one undertaking by another;
  • the acquisition of direct or indirect control over an undertaking, including through (but not limited to):
  1. the acquisition or lease of a significant part of the assets of an undertaking (including under liquidation); or
  2. appointments to certain positions (eg, CEO, Deputy CEO, Chairman, Deputy Chairman or more than half of the members of decision-making or supervisory corporate bodies), if the same person(s) already holds similar positions in other undertakings (cross-directorship);
  • the establishment by two or more undertakings of a new undertaking that will independently pursue business activity on a lasting basis, while its establishment does not result in the co-ordination of competitive behaviour either of its parents or the new undertaking on the one hand, and its parents on the other; and
  • the direct or indirect acquisition (including receiving rights to use) of participation interests (shares, equity), whether controlling or non-controlling, whereby certain thresholds (25% or 50% of the votes in the highest governing body of the undertaking concerned) are reached or exceeded.

Intra-group transactions such as internal restructurings or reorganisations are not caught (see also 2.1 Notification).

Operations not involving a transfer of shares or assets (eg, shareholders’ agreements, changes to articles of association, etc) are caught if they lead to the acquisition of control (including joint or negative) over an undertaking or a change in the nature of control (eg, joint control to sole control).

2.4 Definition of 'Control'

Control is broadly defined as the ability to exercise decisive influence on the strategic decisions related to the business activity of an undertaking, including via veto/blocking rights. More specifically, control is deemed to exist if an undertaking:

  • directly or indirectly holds/manages more than 50% of shares or votes in another undertaking;
  • is entitled to receive at least 50% of the profit in another undertaking;
  • is authorised to appoint the CEO, Deputy CEO, Chairman, Deputy Chairman or more than half of the members of decision-making or supervisory corporate bodies (or if the same persons hold similar positions in several undertakings); or
  • otherwise controls another undertaking (through management, joint activity, shareholders' arrangements, lease of assets, etc).

Acquisitions of minority or other interests less than control are caught, beginning from the level of 25% of voting rights in an undertaking (see also 2.2 Failure to Notify).

2.5 Jurisdictional Thresholds

A transaction is notifiable in Ukraine if either of the following thresholds is met:

  • the combined parties' worldwide value of assets or turnover exceeds EUR30 million and the value of assets in Ukraine or the Ukrainian turnover of each of at least two parties exceeds EUR4 million; or 
  • the value of assets in Ukraine or the Ukrainian turnover of the target (including its controlling shareholder/seller group) or of at least one of the founders of a new entity exceeds EUR8 million and the worldwide turnover of at least one other party exceeds EUR150 million.

All figures are calculated for the financial year immediately preceding the year of the concentration.

Special rules apply to the calculation of thresholds for banking and insurance companies, as follows:

  • for banking companies: one tenth of the bank's assets should be considered for the purposes of turnover/asset threshold;
  • for insurance companies: the net assets of an insurance company should be considered for the purposes of the asset threshold, and the revenues from insurance activities should be considered for the purposes of the turnover threshold.

2.6 Calculations of Jurisdictional Thresholds

The turnover-based threshold is calculated based on the net revenue (ie, without VAT, excise duties and other turnover-based taxes and contributions) according to the financial statements of the parties, excluding intra-group sales. The law does not provide any reliable guidelines regarding the geographical allocation of turnover for the purposes of assessing whether the local threshold is met. In practice, the domicile of a customer is the most decisive element for the AMC's determination regarding the geographical allocation of turnover. The asset-based threshold is based on book value.

Sales or assets booked in foreign currency should be converted into EUR using the FX rate established by the National Bank of Ukraine as of the last day of the respective financial year.

Special rules regarding the calculation of thresholds apply in the banking and insurance sectors (see also 2.5 Jurisdictional Thresholds).

2.7 Relevant Businesses/Corporate Entities for the Purpose of Calculation

All businesses and corporate entities belonging to the respective group should be taken into account. The relevant group is defined as ultimate controlling parent(s) and all entities directly/indirectly controlled by it (them), including due to shareholding and/or directorship, family ties and otherwise. Importantly, the figures of a controlling seller (or other parent) also count towards those of the target/assets. Formal interpretation of the law allows for the allocation of turnover/assets of all controlling parents to the JV, and of the JV's turnover in full to each of the controlling parents.

If there are changes in the group composition, the relevant figures should be adjusted accordingly to reflect the actual pre-transaction group composition.

2.8 Foreign-to-Foreign Transactions

The merger control law does not differentiate between domestic and foreign-to-foreign transactions. The latter are also subject to merger control if the relevant thresholds are met, irrespective of the overall effect of the transaction in Ukraine. This means that a filing can be required even if only the controlling seller meets the local turnover or assets threshold, while the target has no sales and/or assets in Ukraine.

However, based on general provisions of the Competition Law, there may be an argument that the application of the turnover/asset thresholds should be qualified by the effects doctrine, and clearance should not be required if a transaction lacks reasonable local nexus and cannot have any anti-competitive effects in Ukraine. Still, this argument is rather vague in legal terms and is not currently supported by the AMC.

2.9 Market Share Jurisdictional Threshold

There is no market share jurisdictional threshold in Ukraine.

2.10 Joint Ventures

The establishment of a joint venture through the formation of a new company may qualify as a concentration or concerted practice.

In particular, a joint venture is considered a concentration if such new company is established by two or more independent undertakings, if it will independently pursue business activity on a lasting basis, and if its establishment does not result in co-ordination of competitive behaviour either of its parents or the joint venture on the one hand, and its parents on the other. Otherwise, the establishment of a joint venture is considered a concerted practice that may require antitrust clearance (as opposed to merger clearance).

If the establishment of a joint venture qualifies as a concentration, the general rules on jurisdictional thresholds apply.

2.11 Power of Authorities to Investigate a Transaction

The AMC does not have power to investigate a transaction that does not meet the jurisdictional thresholds, although the parties may still voluntarily file such transaction.

The statute of limitations for transactions that meet the relevant thresholds is five years from closing.

2.12 Requirement for Clearance Before Closing

The implementation of a transaction must be suspended until clearance.

2.13 Penalties for Implementation of a Transaction Before Clearance

The penalties and risks associated with the implementation of the transaction before clearance are the same as for not filing at all (see 2.2 Failure to Notify for more details), although, in practice, pre-clearance closing may receive more favourable treatment from the authority and involve less severe sanctions – in particular, a lower fine (compared to not filing at all and being caught). Fines have been imposed for pre-clearance closing in a number of cases, including foreign-to-foreign transactions; these were mainly below EUR10,000.

Information regarding such penalties (the amount of the imposed fine, the identity of the parties, and the non-confidential version of the decision) is published by the AMC on its website.

2.14 Exceptions to the Suspensive Effect

The requirement to suspend a notifiable transaction applies globally. There is no possibility to seek a waiver or derogation from this rule.

The only exception applies in case of a tender/bid process where a notifiable concentration should be filed within 30 days of the winner of a tender/bid being announced. This exception was originally designed for local privatisation procedures and may not be adaptable to public bids abroad.

2.15 Circumstances Where Closing Before Clearance Is Permitted

The AMC cannot permit closing before clearance. Hold-separate/carve-out arrangements also do not remove the risks of fines; however, in practice, they may mitigate the liability, as they would clearly show the parties’ intention to comply with the Ukrainian merger control rules.

3. Procedure: Notification to Clearance

3.1 Deadlines for Notification

There is no deadline for notification. The only relevant rule is that the parties should apply for and obtain clearance before closing of the transaction.

Also please see 2.2 Failure to Notify and 2.13 Penalties for Implementation of a Transaction Before Clearance regarding penalties applied in practice, and Question 2.14 Exceptions to the Suspensive Effect regarding exemption for the tender/bid process.

3.2 Type of Agreement Required

On the basis of draft transactional documentation, the parties may file a letter of intent, a memorandum of understanding or similar written document. No binding agreement is required prior to notification.

Under the general rule, filing cannot be made if there is nothing in writing, although this may be possible in some cases. For example, in a hostile takeover, the acquirer can file without any written documentation endorsed by the target or its shareholders. In this situation, the AMC can independently request certain information from the target that is necessary for merger review.

3.3 Filing Fees

There is a filing fee of UAH20,400 (approx. EUR670) per notifiable event (ie, each action/step of the transaction that qualifies as a concentration), which should be paid prior to filing a notification.

3.4 Parties Responsible for Filing

The obligation to file is joint, and all parties to the transaction (ie, the buyer and target/seller, merging parties, JV partners or their direct/indirect parents) are responsible for filing. It is important to note, however, that 'failure to file' does not in itself amount to a competition offence; rather, 'closing without clearance' is the violation. Thus, although, for example, both the seller and the purchaser may fail to comply with the (joint) filing obligation, only the purchaser will eventually be held liable, because it is the 'acquisition of control/interest' (and not a 'divestiture' on the part of the seller) that qualifies as 'closing without clearance' under the law.

3.5 Information Required in a Filing

If the transaction qualifies for the simplified fast-track procedure, the filing should include the following information and documents (in summary):

  • information regarding the transaction, the sources of its financing, and supporting documentation (transaction documents or at least their drafts, and documents regarding financing of the transaction and the availability of funds);
  • information regarding the parties' assets and turnover (group-wide) on a worldwide level and in Ukraine;
  • information regarding the notifying parties and their beneficiary owners;
  • general information on parties’ activities globally and in Ukraine (for all markets); and
  • detailed information on the relevant markets, including information on sales, market shares and competitors.

If the transaction is subject to the standard procedure as opposed to the simplified fast-track procedure, the filing should also include the following information and documents (in summary):

  • detailed economic analysis of the transaction’s impact on the Ukrainian market(s);
  • information regarding membership in associations; and
  • the parties’ excerpts from the trade/commercial/banking/court register or similar.

Furthermore, together with the hard copy of the notification, the parties are also required to attach electronic versions (PDF/Word, etc) of the notification and all documents filed along with it.

The filing should be made in Ukrainian, and all documents to be filed alongside it should be translated into Ukrainian. Additionally, powers of attorney (if the parties authorise external counsels) and registry excerpts for foreign entities should be notarised and apostilled/legalised, depending on the jurisdiction. Confidential information should be properly marked in the filing so that the AMC treats it accordingly.

3.6 Penalties/Consequences if Notification Is Deemed Incomplete

If the notification is deemed incomplete, it is rejected and will have to be resubmitted although, during the 15-day 'preview' period, the AMC holds consultations with the notifying parties regarding the completeness of the filing and usually allows the parties to submit any missing information during the preview period (or sometimes even the review period) without a formal rejection.

3.7 Penalties/Consequences if Notifying Party Supplies Inaccurate or Misleading Information

The submission of inaccurate or misleading information in the filing may result in a fine of up to 1% of the respective party’s turnover in the year immediately preceding the year when the fine is imposed. However, in practice and pursuant to the Guidelines on Fines, the fine for such violation is capped at UAH136,000 (approx. EUR4,400) subject to possible adjustment for aggravating or attenuating circumstances.

Also, the authority may reconsider its decision if it was based on inaccurate or misleading information.

3.8 Phases of the Review Process

The standard merger review procedure involves the following phases:

  • Preview period. The AMC has 15 calendar days to decide whether the notification is complete and can be accepted for the substantive review (Phase I). If the notification does not meet the formal requirements, the AMC may consider it incomplete and reject it, so the parties would need to refile, restarting the process.
  • Phase I. During Phase I, the AMC will either issue the clearance or initiate Phase II. Phase I lasts up to 30 calendar days and involves a substantive review and assessment by the AMC of whether the transaction can be approved or whether there are potential grounds to prohibit the transaction, in which case Phase II is initiated.
  • Phase II. Phase II review (if initiated) involves a close analysis of the transaction and the associated competition concerns, and an examination of expert opinions and other additional information. In practice, the Phase II review period is limited to 135 calendar days, starting from the day Phase II notice is sent to the parties. During this period, the AMC will either issue the clearance (conditional or unconditional) or adopt a decision prohibiting the concentration.

If the transaction qualifies for fast-track review, a 25-day period applies (see 3.11 Accelerated Procedure).

3.9 Parties Engaging in Pre-Notification Discussions with the Authorities

The Competition Law does not provide for formal pre-notification discussions. Usually, the parties can only request formal consultations with the AMC during the 15-day preview period although, in practice, informal pre-filing discussions are also possible.

3.10 Requests for Information During the Review Process

Requests from the authority during the review process are very common and, depending on various factors (such as the complexity of the transaction mechanics and potential competition concerns), may be quite burdensome. Requests during the preview period do not stop the clock but can lead to the filing being rejected as being incomplete if the parties fail to respond promptly. Requests during Phase I also do not stop the clock. Requests at Phase II may suspend or even restart the review, but its overall duration still should not exceed 135 days.

3.11 Accelerated Procedure

The 25-day simplified fast-track review procedure is available for transactions where only one party is active in Ukraine (for this purpose, the seller's group should also be taken into account), or where the parties’ combined shares do not exceed 15% on the overlapping markets or 20% on vertically related markets. The AMC tends to interpret the 15%/20% threshold quite restrictively, often in the manner that more than 15%/20% with one of the parties and 0% with the other (ie, no increment at all) does not meet the test, and the filing should undergo a standard review.

As a practical matter, the parties may also try to negotiate a more expedited review with the AMC under the standard review procedure.

4. Substance of the Review

4.1 Substantive Test

A transaction can be cleared by the AMC if it does not result in monopolisation (ie, creating or strengthening of the monopolistic (dominant) position) or a substantial restriction of competition on the Ukrainian market or a significant part of it.

Under the Competition Law, the relevant benchmarks to establish a monopolistic (dominant) position are as follows:

  • more than 35% market share if held individually;
  • more than 50% if held collectively by not more than the three largest undertakings; and
  • more than 70% if held collectively by not more than the five largest undertakings.

The CMU may still approve a transaction that was prohibited by the AMC if the positive effects of such transaction on the public interest outweigh the negative impact of the restriction of competition, provided that such restriction is necessary for achieving the purpose of the concentration and does not jeopardise the market economy system.

4.2 Markets Affected by a Transaction

The Concentrations Regulation defines the markets affected by the transaction as those where a target, the merging parties or a joint venture is (would be) active, as well as vertically related (adjacent) markets. In practice, the authority is unlikely to see competition concerns if the parties’ combined market shares do not exceed 15% on the overlapping markets or 20% on vertically related markets.

4.3 Reliance on Case Law

The AMC usually relies on case law (precedents) of the European Commission and the competition authorities of EU countries and the USA, mainly with respect to the approach to market definition.

4.4 Competition Concerns

Under the Guidelines on the Assessment of Horizontal Mergers and the Guidelines on the Assessment of Non-Horizontal Mergers, the authority shall investigate the following main competition concerns:

  • unilateral or non-co-ordinated effects:
  1. the elimination of important competitive constraints on one or more firms, which consequently would have increased market power (in case of horizontal mergers);
  2. upstream or downstream foreclosure (in case of vertical mergers); and
  • foreclosure in related markets (in case of conglomerate mergers)
  • co-ordinated effects: change the nature of competition in such a way that undertakings that did not previously co-ordinate their behaviour would be significantly more likely to co-ordinate (including by tacit co-ordination) and raise prices or otherwise harm effective competition (in the case of horizontal and vertical mergers).

Also, while reviewing the concentrations, the AMC should take into account countervailing factors such as countervailing buyer power, the likelihood that entry would maintain effective competition on the relevant markets, and the 'failing firm' defence.

4.5 Economic Efficiencies

The AMC may take into account efficiency arguments and any positive effect on the public interest (such as the modernisation and rationalisation of production, purchase or sales, technical and product standards, the promotion of technical, technological or economic development, etc). These factors are not likely to be decisive but may still be relevant for the CMU analysis, which can authorise a transaction prohibited by the AMC even though there are no public records of any recent transactions cleared in such a way.

4.6 Non-competition Issues

The AMC should predominantly consider competition issues, while non-competition issues may be used as supporting (but not decisive) arguments. Still, the non-competition issues may serve as grounds for the CMU when overruling the AMC prohibition decision (see 4.5 Economic Efficiencies).

4.7 Special Consideration for Joint Ventures

There are no special substantive tests/considerations for joint ventures. However, in practice, the authority also tends to consider potential vertical effects in such types of transactions.

If the establishment of the joint venture results in the co-ordination of competitive behaviour either of its parents or the joint venture, on one hand, and its parents, on the other, then such transaction will be treated as a concerted practice (rather than a concentration), requiring individual antitrust clearance by the AMC (subject to certain conditions).

5. Decision: Prohibitions and Remedies

5.1 Authorities' Ability to Prohibit or Interfere with a Transaction

The AMC may prohibit a transaction if it leads or may lead to monopolisation (ie, the creating or strengthening of a monopolistic (dominant) position) or to a substantial restriction of competition on the Ukrainian market or a significant part thereof. In practice, the AMC rarely imposes a blanket ban and completely refuses to authorise a transaction; rather, it may require that the parties propose remedies (accept certain obligations) in order to ensure a sufficient level of competition in the market.

5.2 Parties' Ability to Negotiate Remedies

According to the Competition Law, if the AMC identifies any grounds for a transaction to be prohibited during the Phase II review, it shall inform the parties of these grounds and the parties, in turn, can propose remedies ( structural or behavioural) to be further negotiated with the AMC. 

5.3 Legal Standard

The Competition Law provides for structural remedies (eg, divesting overlaps) or behavioural remedies (eg, restrictions on the use or management of certain assets, or price increases), although there are no comprehensive rules regarding scope, specific conditions, or the various technicalities of the remedies. The only relevant requirements are that remedies should alleviate competition concerns and be proportionate, and that supervision of their implementation should be reasonable. Therefore, in practice, the remedies are usually negotiated on a case-by-case basis. 

5.4 Typical Remedies

In practice, remedies are most often behavioural (and often accompanied by reporting obligations that allow the authority to monitor compliance). There are no public records of non-competition issues being addressed in remedies.

5.5 Negotiating Remedies with the Authorities

Under the merger control rules, discussions on remedies start at Phase II when the authority identifies the grounds to prohibit the transaction. Procedurally, the authority should notify the parties of such grounds, and in turn the parties can propose the remedies to the AMC within a 30-day period (extendable upon the parties’ request). The AMC does not formally propose remedies on its own motion, but is required to carry out consultations with the parties in order to agree the terms and conditions of the remedies, where it can outline the scope of remedies in order for them to be acceptable. 

5.6 Conditions and Timing for Divestitures

There is no standard approach, as the remedies are usually negotiated with the AMC on a case-by-case basis. All relevant conditions and timing (including the possibility to complete the transaction before remedies are complied with) should be set out in the AMC clearance decision. Non-compliance with remedies may result in a fine of up to 5% of the parties' worldwide turnover in the year immediately preceding the year when the fine is imposed. In practice and according to the Guidelines on Fines, the fine for this violation is limited to 10% of the turnover on the relevant (and/or adjacent) Ukrainian market (if it resulted in monopolisation or a significant restriction of competition).

5.7 The Decision

Upon review of a filing, the AMC issues a formal decision permitting or prohibiting the transaction, and publishes the non-confidential version of the decision on its website.

5.8 Prohibitions and Remedies for Foreign-to-Foreign Transactions

The AMC imposed behavioural commitments on the parties in a number of recent foreign-to-foreign transactions, including the Bayer/Monsanto deal (2017), the GSK/Novartis deal (2015) and the Whirlpool/Indesit deal (2015). There are no recent decisions prohibiting foreign-to-foreign transactions.

6. Ancillary Restraints and Related Transactions

6.1 Clearance Decisions and Separate Notifications

A merger clearance decision does not cover ancillary restraints (such as non-compete, non-solicitation), which may formally require separate (antitrust) clearance.

7. Third Party Rights, Confidentiality and Cross-border Cooperation

7.1 Third Party Rights

Third parties (eg, customers, competitors, complainants) can be involved during the Phase II investigation if the AMC believes that the notified transaction may significantly affect their rights and interests. Such third parties have the right to be heard, and to have limited access to the case materials.

7.2 Contacting Third Parties

The AMC contacts third parties in Phase II, typically publishing a statement regarding the instigation of Phase II and inviting all interested parties to provide their comments or objections concerning the effect of a concentration on the market; it may also send written requests for information.

As regards a “market test” of remedies offered by the parties, the Concentrations Regulation provides for consultations between the AMC and the parties, but is silent on the possibility of approaching third parties. There are no public records of any consultations on remedies with third parties.

7.3 Confidentiality

The fact of the notification and a description of the transaction is made public upon either the adoption of the clearance decision or the initiation of Phase II, as the AMC is required to publish the non-confidential version of its decisions, as well as brief notes regarding its resolutions on the initiation of Phase II review within ten working days.

The parties may request that commercial information, including business secrets, is kept confidential, if it can provide a grounded justification for doing so.

7.4 Cooperation with Other Jurisdictions

The AMC may co-operate with the competition authorities in other jurisdictions, based in particular on the respective bilateral or multilateral treaties (such treaties are entered into with certain CIS countries, Bulgaria, Hungary, Latvia, Lithuania and Slovakia, for example), as well as international organisations such as the Organisation for Economic Cooperation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD) and the International Competition Network (ICN). Such co-operation is usually limited to general policy matters and experience sharing, but may also involve thesharing of information (including confidential information).

8. Appeals and Judicial Review

8.1 Access to Appeal and Judicial Review

According to the Competition Law, the parties may appeal the AMC decision in whole or in part to the commercial court.

8.2 Typical Timeline for an Appeal

The AMC decision may be appealed within two months of its receipt by the respective party. There have been no instances of successful appeals in merger cases, although it should be noted that not all court decisions are in the public domain.

8.3 Third Parties Appealing a Clearance Decision

Formally, third parties can appeal a clearance decision to the commercial court, although there is no public record of any such appeal being successful.

9. Recent Developments

9.1 Recent Changes or Impending Legislation

Changes to the law in the past year include:

  • the adoption of the Guidelines on the Assessment of Non-Horizontal Mergers in early 2018, which are similar to the relevant guidelines existing in the EU; and
  • amendments to the Competition Law concerning transactions involving sanctioned (Russia-related) parties (see 1.2 Legislation Relating to Particular Sectors above for more details).

Current proposals to change the Competition Law concern the following:

  • applying the 25-day simplified procedure to transactions where:
  1. none of the parties to the concentration is engaged in business activities in the same product and geographic market, or in a product market which is upstream or downstream from a product market in which the other party to the concentration engages;
  2. a party is to acquire sole control of an undertaking over which it already has joint control, provided that such joint control was acquired in compliance with the competition law in the past; or
  • parties submit voluntary filings (ie, where the concentration does not require clearance); and
  • increasing the filing fee for submission of a notification that does not qualify for review under the simplified procedure from UAH20,400 (approx. EUR670) to UAH40,800 (approx. EUR1,340).

In addition, the AMC is currently working on the draft Methodology on the Market Definition to improve its rules on defining the relevant market, which is expected to be finalised in 2018.

Furthermore, a draft law on the calculation of fines is pending approval by the Parliament. It aims to make the Guidelines on Fines binding upon the AMC and empower courts to annul the AMC’s decisions on fines or obligations imposed on the parties, and to order the AMC to reconsider cases in this regard.

9.2 Recent Enforcement Record

Fining decisions have been publicly available since mid-July 2015. Since then, the AMC has imposed fines for failure to notify/closing without clearance in more than 100 instances. In almost all of these cases, the amount of the fine was between EUR5,000 and EUR16,000, and the fines were imposed for implementing non-problematic transactions (some of them were foreign-to-foreign deals).

As far as is known, there have been no cases where the AMC prohibited a foreign-to-foreign transaction.

In a number of recent foreign-to-foreign transactions potentially raising concerns, the AMC imposed only behavioural commitments. As far as is known, there have been no structural remedies in foreign-to-foreign transactions (although please note that there is no public register of AMC decisions issued before mid-July 2015). 

9.3 Current Competition Concerns

The AMC is currently focusing predominantly on analysing parties' market shares prior to and after implementation of the transaction. If combined shares exceed 30%, the AMC is likely to initiate Phase II to analyse thoroughly the transaction and possible competition concerns.

The AMC is also starting to apply its Guidelines on the Assessment of Horizontal Mergers, and recently adopted the Guidelines on the Assessment of Non-Horizontal Mergers to analyse the possible unilateral and/or co-ordinated effects of the transaction, as well as countervailing factors (such as buyer power, market entry, and the 'failing firm' defence).

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