Ukraine's competition laws, particularly those relating to
merger control, have been eagerly anticipated to undergo
significant revisions. Despite repeated attempts, these changes
remained blocked in the Ukrainian Parliament for a long time.
The Ukrainian President and his team have reaffirmed their staunch commitment to the International Monetary Fund to unblock the reforms in the competition law area. They have pledged to revamp and fortify the Antimonopoly Committee of Ukraine (the AMC) by the end of September. Their plan includes bolstering the AMC's legal framework to foster a more robust competitive landscape. In line with this promise, a new draft law addressing these issues has been presented to the Ukrainian Parliament. This bill is expected to undergo an expedited review process to adhere to the President's set deadline.
Proposed amendments seek to modernize and enhance several aspects to align with EU regulations, including the EU Merger Regulation. The changes include:
- Refining important terms like "undertaking" and "control".
- Revamping the merger control process, including modest tweaks to financial thresholds and abolishing the obligation for the seller to verify these thresholds.
- Bolstering the leniency process.
- Setting up procedures for inspections and raids.
- Establishing a settlement procedure.
Moreover, the draft law lays out a comprehensive procedure and the criteria for prohibiting mergers that risk leading to monopolization or significantly limiting competition in the market. It also imposes joint or "parental" liability on involved parties, making them collectively accountable for any fines imposed by the AMC. While the proposed draft law requires a lot of improvement, it represents a significant step forward and is likely to move quickly through the parliamentary review process.
Alongside legislative measures aimed at enhancing the AMC's institutional capacity and authority, the enforcement of competition laws in Ukraine is also becoming more robust. A notable example of this can be seen in the AMC's recent actions: today, they imposed a fine of roughly EUR 49,000 for a violation of merger control laws. This fine, which is 3% of the acquirer's turnover, is a significant increase from the previous fines for similar infringements, which typically ranged between EUR 6,000 and EUR 20,000. This decision follows a previous enforcement action last week where fines of EUR 34,000 and EUR 70,000 were imposed for a comparable violation. These instances highlight the AMC's steadfast resolve to apply more substantial fines for neglecting to report concentrations in Ukraine.
Stay tuned for further developments on this encouraging reform and AMC's steps towards enforcing compliance and strengthening the regulatory landscape. As soon as the draft law clears the first reading and a definitive timeline for its adoption is established, we'll be sure to provide a detailed rundown of what to expect.
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.