A new Cyprus merger control legislation came into effect on 20/6/2014. This is the Control of Concentrations Between Undertakings Law of 2014 (83(I)/2014) (hereinafter “the Law”), which replaces the 1999 merger control legislation that was previously in effect.
Some of the main changes effected by the Law are the following:
- Jurisdictional thresholds: Not only has there been a minor quantitative increase in the relevant thresholds (from €3.417.200 to €3,500,000) it is now a jurisdictional requirement for at least two of the participating undertakings to generate turnover in the Republic of Cyprus. Under the previous regime, it was enough if only one such undertaking generated turnover in Cyprus. The scope of the Law was therefore restricted, presumably to exclude transactions with no real overlap as far as the Cyprus market is concerned.
- Timing: The requirement of the previous legislation to notify within one week from the date of conclusion of the relevant agreement has been replaced with a requirement to notify at any point after conclusion but prior to completion. Furthermore, a notification may now be made even before the conclusion of the relevant agreement where the undertakings concerned demonstrate a good faith intention to conclude an agreement. In light of this new provision, the notifying parties now enjoy greater flexibility in connection with the timing of the notification.
- Assessment: A wider test has been introduced for the purposes of assessing a concentration. The previous test of whether the concentration in question creates or strengths a dominant position in the relevant market(s) has been replaced with the wider question of whether the concentration may significantly affect competition in the said market(s).
- Fees: While the previous legislation did not provide for a submission fee, a €1000 fee has been introduced. A further fee of €6000 is also applicable in the event of a full investigation of the transaction.
The changes effected by the Law are expected to help in modernising the Cyprus merger control regime, which was up to now largely based on the 1989 merger control regulation (Council Regulation (EEC) No 4064/89), and in bringing it more in line with the current European framework (Council Regulation (EC) No 139/2004 and relevant jurisprudence). Indeed they address a number of problems that the parties and their lawyers faced under the previous regime.