MARIAL STATUS IS NOT A REASON NOT TO OBTAIN PERMITS FOR CONCENTRATIONS AND CONCERNED ACTIONS

Yaroslava LAGAN, Senior Associate, Attorney ADER HABER

In the crisis conditions of the war, Ukrainian and foreign businesses (except Russian, which is sent in the direction of a warship) are faced with the need to promptly carry out corporate restructuring, buy or sell assets, conclude agreements on the distribution of goods and services – that is, with the need to take actions that, in accordance with with the legislation on the protection of economic competition are concentration and concerted actions.

At the same time, legislative changes due to the transition of the Ukrainian economy to the rails of martial law have not yet affected the legislation on the protection of economic competition. Consequently, concentrations or concerted actions by businesses in certain cases provided for by law also require obtaining permits from the anti-competitive agency. The performance of concentrations and/or concerted actions without such permission remains a violation, for which more than tangible fines for any business in the amount of up to 5% of income for the previous year can be applied.

But anyone who has had experience preparing and filing applications for concentration/concert permits knows that this is a time-consuming process that requires the development of a large amount of internal company documentation and lengthy work with public registries. All of this is made more difficult by war, when workers often do not have access to their jobs and public registries are not fully operational. How will the process of filing and consideration of applications be organized in such conditions?

The Advisory Clarifications of the Antimonopoly Committee of Ukraine published on April 1, 2022 regarding the submission and consideration of applications for granting permission for concentrations and concerted actions are intended to resolve this issue.

The main provisions of this document can be distinguished as follows:

• Martial law does not cancel the requirements of the law to apply for permission for concentrations and concerted actions in the cases provided for by law;
• An application for a permit must be submitted at least 15 calendar days before the relevant action is taken;
• Given the circumstances that make it difficult to collect the necessary documentation and restrict access to public registers, applicants are allowed to submit a reduced list of information in the application and documents attached to it, as well as a simplified procedure for their submission;
• Consideration of all submitted applications may be suspended by the Committee during martial law and reinstated within three months after the termination or lifting of martial law. All missing information for the submission of a complete application must be submitted by applicants within this period;
• The Committee understands that declared concentrations/concerted activities under such conditions may be carried out before permission is granted. In such cases, the Committee intends to make decisions on the imposition of fines in the amount of up to 3,000 tax-free minimum incomes of citizens (in 2022, this is UAH 51,000). If the application was not filed within the prescribed period and in accordance with the requirements of the Clarifications, the fine will not exceed 20,000 non-taxable minimums, or UAH 340,000.

An exception is cases where the ultimate beneficial owner of the concentration participant is the Russian Federation or its citizens who supported the military aggression against Ukraine, or if the Committee has reasonable suspicions that the purpose of the concentration is to remove assets from international sanctions for military aggression against Ukraine. In such cases, the fine will be determined at a maximum of 5% of the previous year’s income.

Thus, it is advisable for business entities to refrain from carrying out the declared concentrations or concerted actions until martial law is lifted or terminated and the appropriate permission is received, or not to wait for permission to be received and be ready to impose a fine in the amounts outlined by the Antimonopoly Committee of Ukraine, laying such fines into the budget of the operation.

In my opinion, it would be more expedient to regulate the issue of application in individual cases of reduced fines for violating the legislation on the protection of economic competition at the level of the law, rather than a by-law, if only for reasons of constancy of law enforcement practice. After all, the amount of fines established by advisory clarifications may quite legitimately be revised by the antimonopoly agency in the future – and such new approaches can be applied retrospectively.

At the same time, the Antimonopoly Committee of Ukraine showed a flexible approach in difficult wartime conditions and declared the “rules of the game”, being sympathetic to the conditions in which business is now operating, which, of course, is a responsible and timely step for a subject of authority.

You can learn more about the requirements of the antimonopoly legislation of Ukraine in the context of your business situation during the consultation on obtaining AMCU permits for concentrations or concerted actions, which our company will be happy to provide, offering the best solution to the problem, taking into account the needs of business and the latest law enforcement trends in Ukraine and beyond.