Important developments in the anti-monopoly legislation (on the exterritorial nature of activities, definition of a group of persons and control over economic concentration)

23.07.2009

Legal Update No. 52

Goltsblat BLP advises that Federal Law No. 164-FZ of 17 July 2009 “On Amendments to the Federal Law “On Protection of Competition” and Certain Legislative Acts of the Russian Federation” will come into effect on 23 August 2009.

The many amendments include, in the first place, the Federal Law “On Protection of Competition” applying not only to agreements between Russian and (or) foreign persons or organisations concluded outside the Russian Federation but also to their activities influencing the competitive environment in Russia.

New grounds have been introduced for inclusion in a group of persons, formalising the definition previously recognised by the courts, according to which a group of persons may comprise a business entity (partnership) and persons belonging to the same group of persons and controlling more that 50 per cent of the votes in the given entity (partnership).

Another significant development is a raised threshold for requiring prior consent from anti-monopoly authorities for creating a commercial organisation and acquiring stock, shares in or property of such a commercial organisation:

  • aggregate asset value - from over RUB 3 billion to over RUB 7 billion;
  • aggregate commodity sales revenue - from over RUB 6 billion to over RUB 10 billion;
  • aggregate value of the assets belonging to the person whose stock, shares or property are acquired and the assets of the group of persons to which it belongs - from over RUB 150 million to over RUB 250 million.

No prior consent is now required if the transactions involving merger, absorption or acquisition of stock, shares or property are between persons within the same group of persons, provided that over 50 per cent of the votes in a business entity (partnership) included in the same group belong to other persons within the group.

The minimum level requiring notification of transactions and other actions has also been raised from over RUB 200 million to over RUB 400 million for the aggregate asset value or aggregate commodity sales revenues and from over RUB 30 million to over RUB 60 million for the aggregate value of the assets belonging to the person whose stock, shares or property are acquired and the assets of the group of persons to which it belongs. No exemptions have been introduced, however, to notification of transactions and actions within a group of persons falling within the above criteria.

Only persons acquiring stock, shares, property or assets may now apply for prior consent or transaction notification.

If a transaction or other action does require prior consent or subsequent notification for several reasons, it will be subject to approval on the basis of a single application or a single subsequent notification.

The list of information to be provided for transactions and other actions subject to anti-monopoly control to be considered has been extended to include commercial organisations holding over 5 per cent of the applicant’s stock or shares. If there is a nominal holder of the stock or shares in the applicant, information should also be disclosed on the persons in whose interests they are held, including when these persons are registered offshore.

In the absence of any of the requisite documents, the application will be considered as not having been submitted. Furthermore, failure to provide information at the reasonable request of anti-monopoly authorities can result in rejection of the application.


For additional information, please contact:

Eugenia Borzilo, Head of Group,
Corporate/M&A,
Goltsblat BLP;
T: +7 495 287 44 44
E: info@gblplaw.com

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