Just recently, the Antimonopoly Committee of Ukraine (the "AMC") released its guidance on increase of efficiency of control over economic concentrations for undertakings subject to sanctions (the "Guidance").
In its Guidance the AMC explained how it would apply the amendments introduced by the Law of Ukraine "On Amending Certain Laws on Protection of Economic Competition Concerning the Increase of Efficiency of Control over Economic Concentrations" (the "Law"), which entered into force on December 17, 2017. For more details, please see our recent alert.
According to the Law, the AMC will not approve a concentration if the actions constituting a concentration are included in the list of actions that are subject to sanctions as provided in part one of Article 4 of the Law of Ukraine "On Sanctions". In particular, this may include the following sanctions:
- assets freeze - a temporary limitation of owner's right to use and dispose of his property;
- ban on participation in privatization or lease of state property for residents of foreign states or persons under the direct or indirect control of foreign states residents;
- complete or partial ban on transactions with securities, issuer of which is a person/entity subject to sanctions in accordance with the Law of Ukraine "On Sanctions".
At the same time, the AMC indicates that concentration may also be prohibited in case other types of sanctions listed in Article 4 of the Law of Ukraine "On Sanctions" are imposed on the parties to the concentration, depending on the circumstances in each particular case.
It is clear from the Guidance that:
- the AMC will not approve the concentration completion of which involves actions subject to sanction;
- the restriction applies not only to direct parties to the concentration subject to sanctions, but also to all persons/entities connected to them by control relations which constitute an undertaking within the meaning of applicable competition law. Still, the AMC will analyse the presence or absence of impact of the sanctioned company on the concentration based on its own discretion; it may follow that in the absence of any impact, the application for concentration may be accepted for review by the AMC;
- the AMC will reconsider and revoke decisions approving concentrations in case the AMC becomes aware that parties to the concentration were or became subject to respective sanctions. Such decisions can be reconsidered by the AMC within 5 years from the date of their adoption.
Despite the fact that the AMC declared that it will analyze the impact of restrictive measures on the notified concentration, it remains unclear whether the AMC will consider concentrations, that can be carried out without violating the sanctions, but implementation of which can hypothetically violate the sanctions imposed or facilitate such violation. In this case, a possible solution would be for the AMC to adopt a decision subject to conditions and commitments aimed at preventing violations of restrictive measures.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.