Antitrust Dispute Resolution in Kazakhstan Rustam Ilzhanov, Senior Partner Current Issues In Kazakh...
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Antitrust Dispute Resolution in Kazakhstan Rustam Ilzhanov, Senior Partner Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers London, October 26, 2011
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Transcript of Antitrust Dispute Resolution in Kazakhstan Rustam Ilzhanov, Senior Partner Current Issues In Kazakh...
Antitrust Dispute Resolution in Kazakhstan
Rustam Ilzhanov, Senior PartnerCurrent Issues In Kazakh Law –
An Update for Foreign Investors and Their Advisers
London, October 26, 2011
Law of the Republic of Kazakhstan
On Competition
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Exterritorial effect:•actions affect
assets, shares/participatory interests,rights with respect to legal entities
located within Kazakhstan; •actions restrict competition in Kazakhstan.
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
The government authority overseeing competition in Kazakhstan is
the Agency for Protection of Competition (the Antimonopoly Agency).
Primary activities of the Agency :• combating monopolistic practices; and • supervision of economic concentration.
Government Control
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Monopolistic activities: •anticompetitive agreements between market entities;
•anticompetitive concerted practice of market entities; and
•abuse of a dominant or monopolistic position.
Combating Monopolistic Practices
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Anticompetitive Restriction of
Agreements Competition
Anticompetitive agreements include: • setting up agreed prices; • division of goods markets based on criteria; • restriction of production or sale of goods .
Anticompetitive Agreements
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Concerted Restriction of
Practices Competition
Concerted practices include: • setting up prices;• restriction of production or sale of goods; • refusal to enter into contracts with certain vendors or
buyers; • use of discriminating conditions in equivalent agreements.
Concerted Practices
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Dominant position - share in a goods market ≥ 35%.
Monopolistic position - share in a goods market = 100%.
Abuse of Dominant/Monopolistic Position
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
• Oil products;• Electricity supply;• Cement wholesale;• Communication services (Roaming, Internet, etc.);• Agriculture.
Investigations in the good markets :
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
• abuse of dominant position by a leading Kazakhstan fuel and lubricants distributor (fine threatened against the client – EUR ≈58 mln.);• abuse of dominant position by a mobile operator (fine threatened against the client ≈ EUR 57 mln.); • abuse of dominant position by a tea supplier (fine threatened against the client – n/a);• anticompetitive concerted actions of a dairy producer (fine threatened against the client – n/a);• anticompetitive concerted actions by a vegetable oil producer (fine threatened against the client – n/a).
Practice of Sayat Zholshy & Partners:
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Obtaining consent for economic concentration:Stage 1: verification of completeness of submitted documents – 10 calendar days;Stage 2: consideration of the application – not more than 50 calendar days.
ECONOMIC CONCENTRATION
Reorganization(merger or accession)
≥25% shares/participation
interests
Assets Membership in legal entity’s
executive bodies
1. ≥ EUR 15mln (value of assets/sales volume of group of persons of the purchaser/reorganized market entities + target);
2. Dominant or monopolistic position (one of the parties of transaction).
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
Applications for Economic
Concentration 2010 January – August 2011
Total 330 205
Consent granted 151 76
Rejected 131 75
Pending n/a 24
No consent required 3 13
Review of application ceased
4 16
Withdrawn 6 0
Consent denied 0 1
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Key Points while Filing Application
Submission of large volume of information :• production and sales volumes and exports and imports
volumes to and from Kazakhstan for the previous 2 years + forecasts for the following 3 years for each market entity which is a part of the applicant's group of persons.
• inclusion of great number of market entities to the definition of group of persons (apart from parent companies, subsidiaries and sister companies) =>
information related to their ultimate individual beneficiaries, etc.
Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers
www.szp.kz
Consequences of a Failure to Obtain Consent for Economic Concentration
Pursuant to the legislation :• imposition of a fine (≈EUR14,000); • holding of the transaction invalid.
Practice:• "impaired relations" with the Agency (additional future investigations by the Agency); • problems and obstacles for future transactions (e.g., rejection of future applications, etc.).
Nurly Tau Business CenterBlock 2A, 3rd Floor5, Al-Farabi Ave.
050059, Republic of Kazakhstan,Tel.: +7 727 311 00 20Fax: +7 727 311 00 22
e-mail: [email protected]
