NEW CYPRUS MERGER CONTROL LAW – The Control of Concentrations Between Undertakings Law of 2014 (Law 83(I)/2014)
Cyprus has recently enacted a new merger control law that has brought about many changes to the existing legal framework as regards the notification and examination of concentrations, which are summarized as follows:
(1) The abolition of the strict one week deadline for filing the relevant notification with the Commission for the Protection of Competition (“CPC”);
(2) The substantive test for determining whether a concentration is compatible or not with the competitive market has been amended with the introduction of “substantial lessening of competition” element in the factors to be taken into account when assessing a concentration, thus moving away from the previous test of the “creation or enhancement of a dominant position”;
(3) The minimum turnover requirements / thresholds for rendering a concentration subject to notification and clearance by the CPC have not been increased but were merely rounded upwards to €3.500.000.
(4) Under the new law, a concentration would need to be notified for clearance to the CPC if the following three conditions are cumulatively met:
The aggregate turnover achieved by at least two of the participating undertakings exceeds, in relation to each one of them, €3.500.000; andAt least two of the participating undertakings inCyprushave a turnover inCyprus; andAt least €3.500.000 out of the aggregate turnover of ALL of the participating undertakings relates to turnover being generated inCyprus
Under the previous law, the second limb of the test provided for any one of the participating undertakings to have commercial activities inCyprus. The new second limb of the test appears to have been improved to provide for at least two (instead of one) participating undertakings and for such undertakings to have turnover in Cyprus (instead of commercial activities in Cyprus) perhaps as an attempt to exempt partially foreign-to-foreign concentrations or Cypriot companies which have no trading activities in Cyprus but are simply holding or investment companies. As you can appreciate, we will have to wait and see how the CPC will enforce and interpret these provisions.
(5) One other important change which has been introduced is the payment of a filing fee of €1000 for all concentrations notified to the CPC. An additional fee of €6000 will also need to be paid in the event that a full investigation (Phase II) will need to be carried out by the CPC.
(6) The notification to be filed with the CPC must now also make reference to the HHI index.
For any further information and/or clarifications, please feel free to contact us at limassol@glslaw.com.cy