A new trend seems to be emerging in Ukrainian merger control, one suggestive of an increasing risk of fines being imposed on the merging parties. The Antimonopoly Committee of Ukraine (the "AMC") issued a press release on Monday, 18 June 2012, in which the authority made its intention clear to resort to imposing maximum statutory fines (up to 5% of gross global group-wide annual turnover) for unauthorised mergers starting from 1 July. This caused a real stir within the legal and business communities and within two days the press release was removed from the AMC's website as a misunderstanding. Nevertheless, the message contained in the press release clearly demonstrates the change of attitude in the minds of the AMC's officials and a shift of the AMC's modus operandi, characterised by a more punitive stance.
The gradual increase in the amount of fines for violating Ukrainian merger control rules could be noticed already in December last year, when a large multinational company, despite voluntarily informing the AMC about the failure to seek its prior approval for a concentration that had minimal nexus to Ukraine, faced a fine that was about three times higher than the historical maximum fine ever imposed for the failure to observe the Ukrainian merger filing requirement (according to our sources, the amount of the fine was about Euro 60,000, although the AMC failed to make this decision public to confirm the fine and its amount). From our informal discussions, we understand that higher fines are becoming the new reality even for non-problematic foreign-to-foreign transactions that are only technically notifiable in Ukraine.
The policy shift is further supported by a precedent last week when the AMC imposed two fines for the submission of misleading information in two separate merger filings. The fines were significantly higher than anybody could have expected based on past practices of the regulator (about Euro 4,000 and Euro 6,000). These developments are further aggravated by the fact that the fines were imposed without an information request being initially sent out by the AMC with a view of confirming the validity of the merger filings' content and verifying the accuracy of the information submitted. This is in stark contrast to former practice, when meager fines were usually imposed for such shortcomings and were only imposed if misleading information was provided as a response to the official information request. Currently, the AMC is likely to impose a fine for the submission of information which does not correspond to that which is already in its possession. It is undoubtedly indicative of a shift in the AMC's enforcement policy, which means that companies must be extremely careful with the statements that they make in the merger filing, including to verify that they match with the information previously provided to the AMC.
Finally, it is worth mentioning that merger control is one of the last areas of competition law where fines are measured in several dozen thousand Euro, as opposed to several dozen million Euro fines being imposed for cartels and abuse of dominance. In May 2012, the AMC imposed a fine of about Euro 20,000,000 on Ukrspirt, a state-owned spirit manufacturing company, for charging economically unjustified monopolistic prices. In early June 2012, the fine of about Euro 42,000,000 on Mebelderevprom, an industry association of wood furniture production companies, for distorting the results of public procurement tenders by allocating bids between its members. Each of these recent fines has set the maximum record in its area and we expect this trend to continue in all aspects of competition law enforcement, including merger control.