Change

Starting from January 30, 2014 a new Federal Law amending the Russian Competition Law will enter into force (the “Law”). It excludes the requirement to submit post-closing notifications to the competition authorities after completion of transactions (actions), except for some intra-group transactions. Regulation of the pre-closing clearance has not been changed.

Benefits

• The Law will reduce administrative burdens on business by almost complete exclusion of post-closing control incurring substantial costs, as the scope of data to be provided for a post-closing notification is almost the same as for pre-closing clearance.
• Certain intra-group transactions will not be subject to merger control (post-closing notifications or pre-closing clearance). For, example, transactions between parent company and its subsidiaries, in which it directly or indirectly holds more than 50% shares.
• The Law will reduce the quantity of filings to be considered and will allow the Russian competition authorities to focus on major deals having significant impact on competition. This will enhance efficiency of competition regulation in the Russia.

Exclusion of post-closing notifications is in line with the best world practices requiring mainly pre-closing clearance.

Exceptions

The Law doesn’t cover some intra-group transactions, except for mentioned above. Therefore, they are subject to pre-closing clearance with the competition authorities. This can be replaced with a post-closing notification, if a group is disclosed on the official website of the competition authorities according to the procedure set for by the law.

Recommendations

• By planning an intra-group transaction it is necessary to assess, whether the amended Russian Competition Law is applicable to it;
• Seek professional legal assistance for proper assessment of the need to notify the Russian competition authorities on an intra-group transaction, and in case of such necessity – for preparing and further supporting of a post-closing notification during the consideration process.