The much awaited Comesa Competition Commission ('the
Commission"), with its seat in Lilongwe, Malawi, moved a step
closer to the commencement of official operations when it hosted a
seminar on the "Implementation of a Regional Competition
Regulatory Framework in the Common Market for Eastern and Southern
Africa (COMESA)" recently. The seminar, which was held in
Lusaka Zambia, was addressed by, amongst others, the Director and
CEO of the Commission, Dr George Lipimile and the new Chairman of
the Commission, Mr Alexander Kububa, who is also the head of the
Zimbabwe Competition Commission.
In his address, Dr Lipimile indicated that the Commission was poised to commence its official operations in the course of February 2012, or so soon thereafter. If the Commission's intention to start operating in earnest from this month is realised, many market participants in the Comesa region are likely to be caught by complete surprise, especially in relation to merger notifications for the reasons referred to below.
The Commission will be responsible for the enforcement of the Comesa Competition Rules, which came into force in December 2004, but which have never been implemented owing to the absence of the institutional framework necessary for their enforcement. The practical effects of the enforcement of the Comesa Competition Rules will be most keenly felt in the area of merger notifications. The Rules make transactions in the Comesa region with a regional dimension notifiable to the Commission. This gives rise to a number of interesting issues.
Nkonzo Hlatshwayo, a partner at Webber Wentzel's Competition Practice Group who attended the seminar, observed that one of the key issues facing the new Commission is the allocation of investigative responsibilities in respect of mergers between National Authorities and the Commission. "For many of these National Authorities, merger notification fees provide much needed revenue to fund their operations as many Governments in the region lack the interest or funds to pour money into a novel area of the law. Consequently, the Commission will have to contend with National Authorities' insistence on being involved in regional merger notifications in part to ensure that revenue streams never dry up" Hlatshwayo said.
Given its unique provisions, which require merging parties to notify a merger within 30 days from the date of agreement, the Commission is likely to see a flurry of activity in its first few days, if practitioners in the region will be sensitive to the legal implications of the Comesa Regulations. How these provisions, which could create undue pressure on parties to prepare a merger notification in a hurry in order to comply, will be implemented in practice remains unclear. However, there were suggestions from Comesa that the date of agreement may have to be interpreted in a manner that does not create these unintended consequences.
Even if its operations are delayed, it appears this will be for a short while. The delay could arise from the fact that Comesa's premises in Lusaka Zambia went down in flames a few days before the seminar in December last year. If operations commence immediately, that 30 day period may force those less prepared to put together a merger notification in haste.
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