On 20 November 2018, the Antimonopoly Committee of Ukraine (the “AMC”) imposed an unprecedentedly high fine reaching approx. EUR 500,000 for the acquisition of control over Brokbusinessbank without obtaining prior approval for concentration. This is also the first precedent of a fine imposed on an individual as the ultimate beneficiary owner (the “UBO”) of the acquiring undertaking.
The fine of UAH 15,000,000 was imposed on Mr. Serhiy Kurchenko despite the absence of a formal ownership link between the UBO and eleven individuals who allegedly acquired Brokbusinessbank for the benefit of the UBO.
The investigation preceding this fine lasted for several years and was conducted in collaboration with the Prosecution Office of Ukraine and the National Security Service of Ukraine. This collaboration allowed the AMC to obtain evidence of a control chain and to identify the UBO as the acquirer.
While the fine is within the statutory limit of 5 per cent of the annual worldwide turnover of the acquirer, it appears that the AMC may have deviated from its own fine calculation guidelines and imposed a higher fine taking into account the peculiarities of the case, including the unwillingness of the defendant to cooperate with the investigation.
Further details of the case may become known when the AMC publishes the full text of its decision. However, even at this stage it is obvious that the AMC intends to increase the level of fines for merger control violations in order to have a greater deterrent effect.
The previous highest fine for completion of a concentration without obtaining prior approval was imposed in December 2016 amounting to approx. EUR 100,000 (UAH 3,015,000).