GILS Antitrust law: Belarus

BELARUS

1. Is the mandatory merger control regime in force in Belarus?

Yes. One of the principles of the state policy in the sphere of counteracting monopolistic activity and development of competition is the principle of ensuring effective control over compliance with antimonopoly legislation, including transactions and other actions recognized as economic concentration, to the extent necessary for the protection and development of competition (the principle of ensuring effective merger control).

2. Which authority is responsible for the merger control regime in Belarus?

The Ministry of Antimonopoly Regulation and Trade of the Republic of Belarus (hereinafter referred to as the “MART”) is the state body responsible for the merger control.

3. What is the definition of concentration?

The term “economic concentration” means actions, the commission of which affect or may affect the state of competition. In particular, these are, for example:

• reorganisation in the form of merger and acquisition;
• transactions with stocks (shares in the share capital);
• transactions with property that is fixed assets (including transactions on the transfer of property on the basis of a transfer act or separation balance sheet);
• transactions on the acquisition of rights to participate in the management of business entities;
• establishment of an association, holding company or partnership;
• creation of joint ventures by competitors.

4. Is pre-merger filing or post-merger filing required?

The consent of the MART for economic concentration (hereinafter referred to as the “merger clearance”) must be obtained prior to the economic concentration activities. That is, for example, before the conclusion of the share purchase agreement.

5. Examples of key concentration types caught by merger control rules in Belarus.

 The following types of economic concentration fall under the MART control:

- reorganisation of legal entities in the form of merger or acquisition;

- establishment of holdings, associations, unions, state associations, inclusion of a legal entity in the holding company;

- establishment of a commercial organisation if the contribution to its share capital is stocks (shares) of another commercial organisation and (or) property that is fixed assets and (or) intangible assets of another commercial organisation;

- acquisition in the aggregate of 25 or more percent of stocks (shares in the share capital) of a business entity operating in the same commodity market;

- obtaining into ownership, use or possession of property that is fixed assets and (or) intangible assets of a commercial organisation, if the book value of such property exceeds 20% of the book value of fixed assets and (or) intangible assets of the commercial organisation whose property is alienated;

- acquisition of the right of participation of the same business entity in the management bodies of two or more business entities operating in the market of interchangeable (similar) goods, provided that such business entity is able to determine the terms and conditions of business activities of these business entities;

- conclusion of a simple partnership agreement (joint business agreement) between competing business entities on the territory of the Republic of Belarus;

- entering into other transactions that affect or may affect the state of competition.

6. What are the notification thresholds, which a concentration must trigger for a merger control filing to be required?

The general conditions triggering the need to file for merger clearance are:

- the book value of assets, determined on the basis of accounting statements as of the last reporting date preceding the date of submission of the application, exceeds 400 000 basic units (approximately EUR 4,7 million); OR

- the revenue volume from the sale of goods at the end of the reporting year preceding the year of the transaction exceeds 800 000 basic units (approximately EUR 9,4 million); OR

- one of the business entities involved in the transaction is included in the State Register of Business Entities Holding a Dominant Position on Commodity Markets or the State Register of Natural Monopolies.

7. Does the authority have any discretion to review transactions that do not meet the notification thresholds?

Such a discretion is not expressly provided for. However, if the transaction, in the opinion of the MART, would affect the state of competition in a commodity market, the MART may initiate an inspection.

8. Do the merger control rules apply to foreign-to-foreign transactions taking place outside Belarus?

Applicable if the transaction is made in respect of shares (stocks) or property of a Belarusian business entity.

9. Are there specific merger control rules relating to the notification thresholds (e.g., specific merger control notification thresholds for specific sectors; different rules to calculate turnover for specific industry sectors such as banks and insurances or retail, specific rules relating to foreign subsidies, companies, etc.)?

No. The general rules of merger control apply to all business entities.

10. Whether Belarus requires the payment of filing fees and if yes, when?

The merger clearance is free.

11. Whether there is a filing deadline in Belarus requiring a notification to be filed within a certain period of time following a particular transactional event (e.g., signing a share and purchase agreement)?

There is no deadline for filing for merger clearance.

The MART’s deadline for making a decision on merger clearance is 30 calendar days.

At the same time, the merger clearance must be done prior to the economic concentration activities.

The consent is valid for 1 year, so the deadline for filing should consider this. It also should be considered that it is unreasonable to apply for merger clearance before agreeing the commercial terms of the transaction, as if they are changed (and, consequently, the transaction documentation is changed) it is necessary to reapply for merger clearance.

12. What information and documents must be disclosed or provided to the authority for the purposes of merger clearance? 

For the purposes of merger clearance interested parties shall submit in particular:

• information on the financial and economic situation of the parties;
• information on the group;
• information on the position of the parties in the commodity market (total revenue volumes, revenue volumes in a particular market, including data by commodity market of Belarus and the region (Minsk city);
• information on planned changes in the Target's activities;
• draft of the document formalising the transaction;
• extract from the trade register of the country of establishment or other equivalent proof of the legal status of the foreign organisation in accordance with the legislation of the country of establishment, etc.

The specific list of documents and (or) information depends on the type of economic concentration.

13. What are the time periods within which the authority must reach a decision on the merger clearance? Is any fast track or simplified procedures available? 

Within 10 business days from the date of filing for merger clearance, the MART makes a decision to accept the application for consideration or to reject it.

If the application is accepted, the MART within 30 calendar days of the receipt of the application makes:

- a decision on merger clearance (at the same time, such a decision may contain conditions for the transaction ensuring competitive behaviour of the business entity in the commodity market);

- a reasoned decision to refuse if:

• the activities of the business entity may lead to the emergence or strengthening of the dominant position of business entities and (or) prevention, restriction or elimination of competition;
• when considering the submitted documents and (or) information, it is established that the information contained therein, which is relevant for decision-making, is unreliable and (or) incomplete.

These deadlines for consideration of applications are general for all business entities. The legislation does not provide for any fast track or simplified procedures.

14. What are the penalties which the authorities may impose for "failure to file" or "late notification"?

Since the Belarusian legislation provides pre-merger filing principle, and there is no deadline for filing, failure to file or late filing would indicate that economic concentration was carried without merger clearance.

Economic concentration without merger clearance is the ground for the court to invalidate the economic concentration activities (related transactions) upon the lawsuit of the MART.

If a violation of the merger clearance requirements has been committed by an entity with a dominant position - i.e. the entity's with the market share over 35%, regardless of the entity's inclusion in the State Register of Business Entities Holding a Dominant Position on Commodity Markets, - and such a violation has resulted in a restriction of competition in the commodity market, the MART has the right to file a lawsuit for forced division of entities.

15. Have there been any recent developments regarding the merger control regime in Belarus?

On 07.07.2024 the amendments to the Law “On Counteracting Monopolistic Activity and Developing Competition” came into force.

Some of the amendments are aimed at improving the approaches to merger control:

1) The list of actions that are NOT recognized as economic concentration has been expanded.

Thus, economic concentration now also does not include:

• establishment of a commercial organisation as a result of a forced split-off or spin-off carried in accordance with the Law;
• reorganisation in the form of merger or acquisition, establishment of a commercial organisation, acquisition of shares in the share capital/stocks, acquisition of management rights, provided they are performed on the basis of a legislative act;
• acquisition of property as part of enforcement proceedings, insolvency or bankruptcy procedures;
• transfer of ownership or other property rights by way of inheritance.

These changes are related to the fact that such actions are mandatory by virtue of legislative requirements or do not have a decisive impact on competition on the commodity markets.

2) The threshold values that trigger merger clearance have been doubled.

Previously, the merger clearance was mandatory if the book value of assets exceeded 200 000 basic units or the revenue volume from the sale of goods exceeded 400 000 basic units. Now these thresholds must exceed 400 000 or 800 000 basic units, respectively.

These amendments will, among other things, reduce the number of entities who are obliged to apply to the MART for administrative procedures on economic concentration, thus reducing the administrative burden on business.

Author: Violetta Liudchyk, Kristina Panchanka