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Belarus: control of concentrations

Competition authority’s consent required for transactions meeting certain criteria that may affect competition on the markets in Belarus

 

The following actions are considered to be a concentration and generally require consent from the competition authority – the Ministry of Antimonopoly Regulation and Trade of Belarus (MART):

1. Reorganization in the form of merger or acquisition.

2. Company incorporation if:

• contributions to a new company’s statutory fund include stocks (shares) and (or) fixed assets or intangibles of another company, or

• the new company acquires voting stocks (shares) and (or) fixed assets or intangibles of another company according to a transfer and acceptance act or a spin-off balance sheet,
and such actions are subject to merger control as per points 4-6 below.

3. Creating holdings, associations, unions, joining a holding.

4. Acquisition of more than 25% voting stocks (shares) of a company operating on the same market by a company with a dominant position or by its group companies.

5. Acquisition of at least 25% of voting stocks (shares) of a company with a dominant position, as well as other transactions giving the opportunity to influence decision-making by a company with a dominant position.

6. Acquisition of the right to dispose of:

a) more than 25% of voting stocks (shares) of a company, where:
• the purchaser has not held stocks (shares) of this company before, or
• the purchaser has held not more than 25% of voting stocks (shares) of this company before the transaction

b) more than 50% of voting stocks (shares) if the purchaser has held 25% to 50% of voting stocks (shares) before the transaction.

7. Acquisition of the right to give binding instructions to the company/individual entrepreneur or act as the company’s executive body.

8. Concluding a partnership agreement between competitors in Belarus.

9. Acquiring ownership, use or possession rights over fixed assets or intangibles in Belarus if their value exceeds 20% of the book value of the selling company’s fixed assets and intangibles.

10. Acquiring the right to participate in governing bodies of two or more companies operating on the market of interchangeable (similar) goods if purchasers have the possibility to determine ways of doing business by target companies.

The competition authority’s function to control economic concentrations is carried out by issuing consent to an economic concentration or follow-up notification.

MART’s consent for the actions mentioned above is required if the action meets at least one of the criteria set forth by the competition law. For example, for acquisition of stocks (shares) of companies these criteria include:

• the book value of assets of either the purchaser or the target exceeds 200 000 basic values (approx. 1 778 000 EUR) as of the last reporting date;

the total revenue (without VAT) of either the purchaser or the target exceeds 400 000 basic values (approx. 3 557 000 EUR) as of the end of the previous financial year;

• either the purchaser or the target is included in the National list of economic entities with a dominant position;

• either the purchaser or the target is included in the National list of natural monopolists.

Please note that MART’s consent for the abovementioned actions should be obtained prior to the transaction. Failure to do so can lead to the transaction being declared void as well as penalties.

At the same time, a number of transactions are excluded from the list of concentration actions and does not require MART’s approval, among them:

• actions mentioned in points 4-7 above if performed by the founders when incorporating a company;

• acquisition by a company of its own stocks (shares);

• conclusion of an employment agreement with the company’s director – natural person;

• reorganization in the form of transformation with no changes in the list of shareholders and their interests, and others.

Source: National legal internet portal of the Republic of Belarus (NLIP) 02.02.2018, 2/2536

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