1. Legislation and Enforcing Authorities
1.1 Merger Control Legislation
The main enactments covering merger control are the following:
- Law No 21/1996 on competition (the Competition Law), as further republished and amended;
- the Regulation on economic concentrations (the Merger Regulation), approved by Order No 431/2017 of the President of the Romanian Competition Council (RCC);
- the Instructions on the concepts of concentration, concerned undertaking, full-functioning joint ventures and calculation of turnover, approved by Order No 386/2010 of the President of the RCC;
- the Instructions on the definition of the relevant market approved by Order No 388/2010 of the President of the RCC;
- the Instructions on ancillary restraints approved by Order No 387/2010 of the President of the RCC;
- the Instructions on remedies in the merger sector, approved by Order No 688/2010 of the President of the RCC; and
- the Instructions on the calculation of the authorisation tax for economic concentrations, approved by Order No 439/2016 of the President of the RCC.
1.2 Legislation Relating to Particular Sectors
There are no specific merger control rules applicable for particular sectors.
However, when an economic concentration may affect national security, an approval from the Supreme Council for National Defence (SCND) is required.
The procedure concerning the SCND approval is governed by the Merger Regulation and Decision No 73 of 27 September 2012 of the SCND. Sectors potentially concerned by SCND approvals, as provided by said decision of the SCND, include the following:
- citizens' and communities' security;
- border security;
- energy security;
- transport security;
- supply systems of vital resources security;
- critical infrastructure security;
- security of informational and communication systems;
- security of the financial, tax, banking and insurance activities;
- security of the production and circulation of weapons, munition, explosives and toxic substances;
- industrial security;
- protection against disasters;
- protection of the agriculture and the environment; and
- protection of the privatisation of companies with State capital or of the management thereof.
1.3 Enforcement Authorities
The main authority entrusted with the enforcement of the merger control regulation is the RCC.
However, the SCND is also involved in the review process when a concentration may pose risks for national security, as mentioned above.
The notification of a concentration is mandatory if the thresholds described in 2.5 Jurisdictional Thresholds are met. If there are any doubts as to whether the thresholds are met, the concentration is to be notified.
2.2 Failure to Notify
The failure to notify an economic concentration that meets the requisite thresholds before its implementation (gun jumping) is an administrative offence sanctioned with a fine ranging from 0.5% to 10% of the turnover obtained by the notifying party in the year preceding the sanctioning.
It is noteworthy that special rules apply to the calculation for non-residents, in whose case the turnover will include:
- the turnover obtained in Romania by each of the Romanian-registered companies controlled by the infringing party;
- the revenues obtained from Romania by each of the Romanian-registered companies controlled by the infringing party; and
- the revenues obtained from Romania by the infringing party that are registered in its financial statements.
The RCC does enforce gun-jumping legislation in practice. Gun-jumping cases are made public upon the commencement and end of the investigation (via press releases), and by having the relevant decision published.
In 2018 the RCC inflicted a gun-jumping fine amounting to RON413,092.55 on one party, whereas in 2017 two parties were fined RON4,502,262.25 and RON387,840.04 respectively (in the 2017 cases, the fines were reduced significantly following a settlement).
2.3 Types of Transactions
A transaction is caught by the merger control rules where there is a change of control on a lasting basis resulting from:
- the merger of previously independent companies or parts of such companies;
- the acquisition of direct or indirect control over an undertaking or parts thereof by acquisition of assets, stocks or by contractual provisions, by natural persons or legal entities that already control an undertaking or by one or more companies; and
- the creation of a full-function joint venture (which is an undertaking established in order to function autonomously for the long term).
2.4 Definition of 'Control'
As per the Competition Law, 'control' may derive from rights, contracts or any other elements that individually or collectively enable one to have a determining influence over an undertaking through (i) ownership or usage rights over the entirety or parts of an undertaking's assets, or (ii) rights or contracts that confer a determining influence over the structure of said undertaking, the voting process or the decisions of the management bodies of such company.
Should acquisitions of minority shareholdings grant the minority shareholder a determining influence over the target (for instance, in the context of veto or other voting rights) then such operation is deemed as an acquisition of control.
Control, whether legal or factual, may also be acquired in common when two or more natural or legal persons would exert a decisive influence over an undertaking.
However, only transactions that bring a lasting 'change of control' to the undertakings concerned and in the structure of the market are covered by the merger control rules. Thus, transactions resulting only in a temporary change of control are not covered.
2.5 Jurisdictional Thresholds
The following thresholds for the notification of a concentration are to be met with regard to the preceding financial year: (i) the cumulated global turnover of the undertakings involved exceeds the Romanian leu equivalent of EUR10,000,000 and (ii) each of at least two undertakings concerned has obtained in Romania an individual turnover exceeding the Romanian leu equivalent of EUR4,000,000.
2.6 Calculations of Jurisdictional Thresholds
The thresholds are calculated based on the undertaking's net turnover, to be computed as per its audited financial statements.
Under Romanian law, the net turnover is the total income obtained by the sale of products and/or the provision of services during the last financial year, out of which turnover related fiscal obligations, exports (including deliveries within the EU) and intra-group revenues are deducted.
Conversions of foreign currency amounts are made at the official exchange rate of the Romanian central bank on the last day of the relevant year.
After the date of the most recent audited accounts, adjustments of the turnover should be made in order to reflect the realities of the undertakings concerned. Hence, turnover resulted from operations such as acquisitions, assignments or cessation of activities is to be excluded from the calculation of the thresholds.
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