Protection of competition: changes in control over economic concentration.

23.01.2012

Legal Update No. 318

Goltsblat BLP advises that Federal Law of 6 December 2011 No. 401-FZ “On Amendment to the Federal Law ‘On Protection of Competition’ and certain legislative acts of the Russian Federation”, envisaging, in particular, a change in control over transactions and other actions affecting the state of competition, came into effect on 6 January 2012.

The main changes in control over economic concentration are as follows:

  • a raised threshold for obtaining agreement to M&A by organisations from 3 to 7 bn RUB in total assets and from 6 to 10 bn RUB in total revenues;
  • new cases when agreement is required: merger of a financial institution into a non-financial commercial entity and vice versa;
  • state control to be exercised by the anti-monopoly authority of the Russian Federation over transactions and other actions relating to shares (interests) of foreign persons and (or) organisations, if:

    • the transaction involves a person (group of persons) acquiring more than 50% of the shares (interests) in a foreign legal entity or other rights allowing it either to determine the conditions for this entity to do business or to fulfil the functions of its executive body;
    • a foreign person or organisation has delivered over 1 bn RUB worth of goods to the Russian Federation during the year preceding the transaction or other action;
  • a changed procedure for calculating total assets in share (interest) acquisition transactions, entailing the possibility of the assets of the seller (or the group of entities to which it belongs) not being taken into account if, as a result of the transaction, the seller loses the rights to determine the conditions for the sold entity to do business;
  • changed requirements on information disclosure for obtaining agreement to transactions:
    • the information to be provided about a group of entities comes down to disclosure of controlled or controlling entities or persons operating on one and the same market with the applicant and (or) acquired entity (though, in a number of cases, more detailed disclosure about the group might be required);
    • the need to disclose information about persons holding more than 5% of the shares (interests) in the authorised capital of the acquired entity and persons in which the acquired entity holds over 5% of the shares (interests) in the authorised capital.

For additional information, please contact:

to Nikolay Voznesenskiy
Head of Anti-monopoly Practice
Goltsblat BLP
T: +7 (495) 287 44 44,
E: info@gblplaw.com
 

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