Answer ... In November 2017 the Parliament of Ukraine amended the Competition Law to address notifications by parties subject to sanctions (Russia related), in force from December 2017. Pursuant to the amended law, the AMCU will reject notifications or cease its review (if such notifications have already progressed to Phase I or II) if the transaction is prohibited by the Law on Sanctions. The AMCU also published guidelines on the issue, confirming that the new rules will apply if any of the participants (or any individuals or entities connected to them by controlling relations) is on the Ukrainian sanctions list; or if a particular type of sanction applies to a given individual or entity (eg, prohibition on disposal of assets or equity). An adverse interpretation of the new rules would suggest that they may apply on a group-wide basis (unlike many of the sanctions themselves) - that is, where a party is not on the list itself, but belongs to a group that is controlled by or that controls sanctioned individuals or entities.
The thresholds and procedures established in the early 21st century are now outdated and no longer adequate to ensure an effective balance between the need for merger control on the one hand and the financial and administrative burden that the merger control regime imposes on businesses on the other.
The need to modernise the approach to merger control was also recognised under the Ukraine-EU Association Agreement.
In 2017 the Anti-monopoly Committee of Ukraine (AMCU) launched a public consultation on the draft Non-horizontal Merger Guidelines, which were subsequently adopted in early 2018. They are largely modelled on the EU Non-horizontal Merger Guidelines and will complement the existing Guidelines on Horizontal Mergers.
One anticipated amendment to the merger control legislation is the suggested definition of ‘state aid’ as a criterion for the impact of trade between Ukraine and the European Union, especially in relation to the establishment of state enterprises in the energy sector. This will align the definition of ‘state aid’ with that in the Ukraine-EU Association Agreement, defining examples of state aid measures whose influence is limited to the local level and which thus do not require notification to the AMCU.
Another proposal is to introduce a new concept of a ‘business entity’ which will depend on the specific activities conducted. In the European Union, unlike in Ukraine, business entities are categorised depending on whether their activities are economic or non-economic. Thus, business entities are entities that carry out economic activities, consisting of the sale of goods or services on the market. Accordingly, state support for non-economic activities will not fall under the rules on state aid, since the law applies exclusively to state aid for economic entities.