The Legal 500

On June 18, 2012 the Antimonopoly Committee of Ukraine (AMC) announced that starting from July 1, 2012 it will be imposing the maximum statutory fines for unauthorized mergers. Thus, companies closing transactions without the Ukrainian clearance may be hit with a fine of 5% of their global group-wide annual turnover. This announcement followed after the largest fine in AMC's history (approx. EUR 41.5M) was imposed last week on the manufacturers of wood-based panels, members of a bid rotation cartel.

Licensing Regime

On 25 July 2011, the National Bank of Ukraine (the "NBU") adopted an amendment (the "Amendment") to the Regulations enacted by NBU's Resolution No. 266 dated 17 June 2004, pursuant to which payments by Ukrainian sureties to foreign lenders in connection with loans provided to Ukrainian borrowers were exempted from the NBU licensing regime (the "Exemption") which previously required obtainment of an NBU's individual license for each such payment. The Exemption applies, if such payment is made to fulfill Ukrainian borrower's obligations under a loan agreement registered by the NBU. The Amendment has come into force on 5 September 2011.

The Anti-monopoly Committee has strengthened its cooperation with the Ministry of Internal Affairs in cartel investigations. The agencies recently signed an agreement on their collaboration and their respective powers. The rules will help to enhance ongoing consultations and the exchange of information during investigations into anticompetitive behaviour. Among other things, they provide for the committee to engage the ministry to conduct inspections, thereby ensuring that access to the premises of undertakings that are suspected of cartel involvement is effected correctly.

This article provides a brief overview of certain aspects of the Ukrainian antimonopoly regulations that may be of some help while considering the necessity of obtaining Ukrainian antimonopoly clearance in transborder M&A transactions.

The Anti-monopoly Committee has introduced a new system of scrutiny and close monitoring in order to identify and prosecute concerted actions and mergers implemented without proper clearance.

The global financial crisis significantly affected cross-border M&A transactions in Ukraine. The overall value of M&A declined substantially in 2008 and 2009. According to M&AIntelligence, 87 major M&A transactions with a total value of $21.49 billion were announced in 2007. In 2008 this figure dropped to 36 transactions with a total value of $3.69 billion, rising again in 2009 with 37 deals valued at $13.94 billion. The 2009 increase was primarily due to the acquisition of shares in a leading Ukrainian mobile telecom operator, Kyivstar, by the Russian VimpelCom for $13.08 billion. This deal was a part of a larger transnational restructuring between ultimate owners of Kyivstar and VimpelCom, Norway’s Telenor and Russia’s Alfa Group. Another major deal was the acquisition in early 2010 of one of the major industrial groups, Industrial Union of Donbas (ISD), by a group of Russian investors funded by Vnesheconombank, which reportedly valued ISD group at approximately $2 billion.

What are the legal sources that set out the antitrust law applicable to vertical restraints?

On 14 April 2010 Verkhovna Rada (Ukrainian Parliament) passed in the first reading draft Law of Ukraine No. 6122 "On Introduction of Amendments to Certain Laws of Ukraine on Lending and Stimulation of Foreign Investment" (the "Draft Law"). The purpose of the Draft Law is to remove restrictions to the cross-border lending and foreign investment rules introduced by the Law of Ukraine No. 1533-VI, dated 23 June 2009, "On the Introduction of Amendments to Certain Laws of Ukraine for Overcoming the Negative Consequences of the Financial Crisis" (the "Law No. 1533"), which became effective on 24 November 2009.