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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