RUSSIA

Get in contact or get a price estimation from our partner in Russia Get in contact
Due to the COVID-19 pandemic, certain merger control processes may be affected. We suggest to contact our local partners for more information.
Content last updated: 26-10-2020

Choose the type of information you seek

  • Merger Control Regime
  • Merger Screening
  • Merger Filing

1. Supranationality

1.1 Membership of Supranational Organization

1.1.1 Is the jurisdiction a member of/party to a supranational jurisdiction?

Yes.

In addition to the Russian domestic antimonopoly legislation, supranational competition regulation is applied and actively developed within the Eurasian Economic Union (EAEU). The EAEU is an integrated, supranational association of the 5 member states (Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia) in Eurasia, solidifying their regional presence and jointly developing the reunified single market in the post-Soviet space.

1.1.2 Is the jurisdiction itself a supranational jurisdiction?

No.

1.1.3 If the answer to Section 1.1.1 and/or 1.1.2 above is in the affirmative, what are the implications hereof?

Annex 19 to the Treaty on the Eurasian Economic Union (EAEU) establishes competition regulation principles for the EAEU member states, such as prohibition of anti-competitive agreements, abuse of dominant position on the market, unfair competition, etc. Mostly, the EAEU competition regulation is similar to Russian, but there are some peculiarities. However, there is no merger control regulation on the EAEU level.

2. Nature of merger control regime

2.1 Mandatory or voluntary

2.1.1 Is filing mandatory or voluntary?

Filing is mandatory if the thresholds described in Section 2.3.1 under the Merger Screening Schedule below are met.

2.2 Suspensory effect

2.2.1 Must completion of the transaction await clearance by the relevant authorities?

Transactions exceeding the thresholds in Section 2.3.1 of the Merger Screening Schedule must be notified prior to their implementation – they cannot be implemented until the Federal Antimonopoly Service grants its clearance.

Russian law does not provide for a formal deadline for pre-closing notifications; the only rule is that such transactions must be notified before the closing date. The Federal Antimonopoly Service’s decision upon consideration of pre-closing notification is valid for 1 year only. Therefore, in case the transaction is not closed within 1 year from the date of issuance of the clearance, pre-closing notification shall be submitted once again.

In intra-group transactions, the parties have the right to apply for special post-closing procedure as an alternative option that may be applied instead of obtaining pre-completion clearance. Please see Section 1.1.1 under the Merger Screening Schedule for more information.

1. What type of transactions are caught by the merger control regime?

1.1 Concentrations

1.1.1 Type of transactions that are caught by the merger control rules?

The following transactions are caught by the merger rules:

Acquisitions of the following types:

voting shares in a joint-stock company: by an entity (or a group of entities) of more than 25%, 50%, or 75% of the voting shares in a Russian joint-stock company;

participatory interest in a limited liability company: by an entity (or a group of entities) of more than one-third, one-half, or two-thirds of a participatory interest in a Russian limited liability company;

assets: by an entity (or a group of entities) of more than 20% of production and/or intangible assets located in Russia (such as machinery and production facilities, except for land plots and/or buildings, unfinished buildings, structures, premises and parts thereof and other facilities, unless such assets are used for industrial purposes); or

control rights: by an entity (or a group of entities) of direct or indirect rights that enable it to determine the terms of implementation of business activities by the target company (namely, non-Russian company, which had a turnover in Russia exceeding RUB 1,000,000,000 in the year preceding the transaction’s closing or Russian company), its commercial policy or to perform the functions of its management body or to elect or propose candidates of the company’s CEO or more than 50% of its collective management bodies.

Incorporation of a new company, where:

its charter capital is to be paid with shares and/or participatory interest and/or assets of another company (namely, non-Russian company, which had a turnover in Russia exceeding RUB 1,000,000,000 in the year preceding the transaction’s closing or a Russian company); and

the new company acquires the rights with respect to such shares and/or participatory interest and/or assets.

Acquisition of financial institutions: when more than 10% of assets (excluding the cash) of a financial institution is acquired.

Joint Venture agreements: concluded between competitors when joint activities or combination of assets or business in Russia is planned.

There is an exemption for intra-group transactions. In that case, neither pre-completion nor post-closing filing is required. However, the exception applies only if the entities concerned are connected through shareholding of more than 50% at each level, i.e. if the transaction is entered between companies, one of which holds directly or indirectly more than 50% shares in the other (vertical shareholdings chain).

With regard to intra-group transactions when the companies comprise the same group of persons based on some other factors (for example, when one and the same person performs functions of the CEO in two entities that are parties to the transaction or when more than 50% of collective executive board in such entities is comprised by the same persons), the parties have the right to apply for special post-closing procedure as an alternative option that may be applied instead of obtaining pre-completion clearance.

A post-closing filing is valid only if one of the parties submits a list of the group of persons (disclose the organizational chart of the group) to the Federal Antimonopoly Service no later than 1 month prior to the closing of the transaction to be notified. The list shall indicate the basis for the inclusion of each of the group members into a single group of persons. Within 10 days of receipt of such list, the authority informs the applicant whether it accepts the submitted list or rejects it as incompatible with the statutory requirements. The Federal Antimonopoly Service publishes the list as filed on its official website.

Please do also see Section 2.4.1 below for sector-specific transactions.

1.2 Joint ventures

1.2.1 What types of joint ventures are caught by the merger control rules?

Conclusion of the following types of joint venture agreements (whether full-function or non-full-function) may be subject to pre-merger filing in Russia:

Joint venture agreement on incorporation of a new company in case its share capital is paid with the shares and/or assets of other companies doing business in Russia;

Joint venture agreement as a result of which the founders will combine their resources and/or make mutual investments for the purposes of performing joint activities on the territory covering Russia.

It shall be noted that only joint venture agreements concluded between competitors (actual or potential) in the Russian market whose combined assets exceed RUB 7,000,000,000 or combined turnover exceeds RUB 10,000,000,000 are subject to merger control. That said, conclusion of a joint venture agreement with the formation of a new entity, with participation in an existing one or unrelated to participation in any entity might trigger the filing obligation if the joint venture is supposed to entail any activities in Russia.

It shall be noted that in cases when joint venture agreements concluded between competitors do not formally require pre-completion clearance by Federal Antimonopoly Service within merger control procedure, parties to the joint venture have a right to submit a voluntary application to Federal Antimonopoly Service to verify that the joint venture is compliant with the Russian competition legislation, and to mitigate the risk of its qualification as an anticompetitive agreement in future.

1.3 Definition of "control"

1.3.1 How are the concepts of "control" and "change of control" defined?

Russian competition law does not provide for a clear definition of the concept of “control”.

Generally, the test of whether a transaction is caught by the Russian merger control regime does not explicitly require an acquisition of control itself —with the exception of the “acquisition of control” type transactions. The term “control” might be derived from the concept of group of persons established by the existing legislation. Therefore, if the transaction leads to acquisition of rights to perform functions of the CEO, appoint more than 50% of the collegial executive body or the right to give binding instructions to the acquired entity (active control, i.e. the ability to cause the company to take action rather than blocking rights), the deal might be regarded as notifiable in Russia, assuming the thresholds are met.

1.4 Minority shareholdings

1.4.1 Are minority and other interests less than control caught by the merger control rules?

Acquisitions of minority or other interests in a non-Russian company that do not lead to an acquisition of control via acquisition of contractual control rights in addition to a minority interest do not fall within the Russian merger control rules.

Acquisitions of minority or other interests less than control are caught but only in respect of Russian companies. This is the case where there is a direct acquisition of more than 25% of the voting shares of a Russian joint-stock company or 1/3 of the voting interest in a Russian limited liability company.

2. Establishing jurisdiction for notification of mergers

2.1 Merging parties/undertakings concerned

2.1.1 Which undertakings are considered parties to the merger ("undertakings concerned") in the various types of transactions identified under Section 1.1.1 and 1.2.1.

In case of acquisition of the voting shares in a joint-stock company or participatory interest in a limited liability company, the undertakings concerned are the direct acquirer (and its group) and the target* company, stocks/participatory interest of which are acquired (and its group).

In case of acquisition of assets, the undertakings concerned are the direct acquirer (and its group) and the target* company, assets of which are acquired (and its group).

In case of acquisition of control rights, the undertakings concerned are the entity acquiring control (and its group) and the target* company, control over which is acquired (and its group).

In case of incorporation of a new company, the undertakings concerned are the founders (and their groups) and the company (and its group), shares and/or participatory interest and/or assets (rights in respect of shares and/or participatory interest and/or assets) of which are acquired.

In case of conclusion of Joint Venture agreement, the undertakings concerned are the parties of such agreement (and their groups).

* The target must have local nexus to qualify under the definition. “Target” is defined as 1) the target being incorporated in Russia (even dormant), 2) the non-Russian target having a direct/indirect subsidiary incorporated in Russia (even dormant), 3) the non-Russian target having a turnover in Russia exceeding RUB 1,000,000,000 in the calendar year preceding the transaction’s closing, 4) the non-Russian target having a direct/indirect non-Russian subsidiary which had a turnover in Russia exceeding RUB 1,000,000,000 in the calendar year preceding the transaction’s closing, 5) the target having assets located or registered in Russia. For the definition of turnover in relation to the target, see Section 3.3.2 below.

See also Section 3.3.2 and 3.5.1 for information on the undertakings whose turnover and assets is taken into account, respectively.

2.2 Date for establishing jurisdiction

2.2.1 Which date is relevant for concluding whether the transaction is notifiable?

No special requirements. The date of filing of the notification to the Federal Antimonopoly Services. Generally, the thresholds are considered for the last financial year.

2.3 General thresholds

2.3.1 Threshold(s) for when a concentration must be notified under the general merger control regime?

Transactions, as defined above, are subject to the Russian merger control regime if one of the below thresholds based on turnover and assets value is met.

The first alternative threshold:

  • the combined global assets of the undertakings concerned exceeded RUB 7,000,000,000 in the last balance sheet, and the global assets of the target exceeded RUB 400,000,000 in the last balance sheet.

The second alternative threshold:

  • the combined global turnover of the undertakings concerned exceeded RUB 10,000,000,000 in the last calendar year, and the global assets of the target exceeded RUB 400,000,000 in the last balance sheet.

The target must have local nexus. See Section 2.1.1 above for more information.

The acquirer refers to direct acquirer of shares under the relevant agreement.

In order to determine whether the foreign parties to the transaction that prepare their financial accounts in a foreign currency meet the above thresholds, relevant financial data shall be recalculated into RUB in accordance with the exchange rates as of the end of the year preceding the transaction closing.

2.3.2 For each threshold, can the threshold be triggered by only one undertaking having local turnover?

The turnover threshold can be triggered by only one party (target) having local turnover.

2.3.3 For each threshold, can the threshold be triggered without any undertaking having local turnover?

Both of the two alternative thresholds can be formally triggered without any party having local turnover in the event the acquirer acquires control over a dormant company registered under the Russian laws and this company does not generate any revenues. In such case, if the thresholds are met, the merger control clearance is required.

2.3.4 Are there any circumstances where transactions falling below these thresholds may be still investigated?

Formally, transactions falling below the jurisdictional thresholds may not be investigated by the Federal Antimonopoly Service. However, such transactions may trigger filing under sector rules, described in Section 2.4.1 below (Strategic investments clearance).

Considering the absence of a clear concept of control, as described in Section 1.3.1 above, theoretically there might be cases where the Federal Antimonopoly Service may come to a conclusion that filing is required notwithstanding the fact that the grounds are not obvious. This more likely in high-profile cases.

2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)

2.4.1 Relevant thresholds for sector-specific or other ex ante merger control rules?

There is separate regulation for certain industries.

There are special thresholds triggering the duty to notify the deal applicable only to transactions in the financial services sector. The thresholds are established by the Russian Government and regularly reviewed on the basis of the Federal Antimonopoly Service’s recommendations to the Russian Central Bank.

Special rules are also applied to the insurance sector, mass media (possession of more than 20% of shares in mass media by foreign investors is prohibited). Specific thresholds are applicable to acquisition of natural monopolies (companies providing railway transport services, postal services, seaport and airport services, and electricity transmission services, etc.), such as acquisition of more than 10% of the fixed production assets of a company operating in the sphere of natural monopolies.

In addition, Russian law separately regulates foreign investments in companies of strategic importance for national defense and state security. In general, there are 47 types of such activities related to military, nuclear industry, oil and gas, etc. However, upon the decision of the Russian Prime Minister, any transactions of foreign investors with regard to Russian companies might require strategic investments clearance. Pre-transaction strategic clearance is necessary for establishment of control and other transactions with voting shares and rights, or acquisition of fixed production assets of strategic companies. In this case, a foreign investor shall obtain preliminary consent of the Government Commission. The Federal Antimonopoly Service in such proceedings acts like an intermediary between the Government Commission and parties to the transaction.

Post-transaction notification shall be filed in case of acquisition of 5% or more of voting shares or participatory interests in the share capitals of strategic companies and, in case of closing of transactions preliminary approved by the Government Commission.

Separately, in case of acquisition by foreign states, international organizations, or organizations under their control, of more than 25% of the shares or other possibility to block decisions of managerial bodies of Russian companies, preliminary clearance is required. The procedure for getting such a clearance is similar to that established for strategic investments.

2.4.2 Are any such schemes mandatory or voluntary?

Mandatory.

2.5 Foreign-to-foreign mergers

2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?

Like many other jurisdictions, Russian competition law reaches conduct undertaken outside Russian under the “effects doctrine”. Therefore, any foreign-to-foreign transaction that involves elements related to Russia, e.g. assets in Russia, shares in Russian companies and/or turnover in Russia, are covered by Russian merger control regime regardless of the jurisdiction where such transactions are carried out. Thus, the transactions meeting the jurisdictional thresholds have to be notified to the Federal Antimonopoly Services.

3. Calculation and allocation of turnover, asset value, transaction value etc.

3.1 Relevant turnover

3.1.1 How is turnover defined (e.g. is income from other sources than "ordinary activities to be included, and how are rebates, taxes, internal turnover etc. treated)?

The relevant turnover to be taken into account is the net turnover related to the sale of goods and/or services in the ordinary course of business exclusive of (i) value added tax and other taxes directly related to the turnover, and (ii) internal group sales.

3.1.2 Identification and link to any official rules, guidance etc. on how to calculate turnover?

The turnover calculation process described in the Regulation On the Accounting “Company’s revenues” ПБУ 9/99 approved by the Order of Ministry of Finance of the Russian Federation as of May 5, 1999 No. 32н.

Link to Russian version:

http://www.consultant.ru/document/cons_doc_LAW_6208/1f46b0f67e50a18030cbc85dd5e34849b2bf2449/

3.2 Relevant period for calculation of turnover

3.2.1 Which financial year(s) is relevant for the calculation of turnover?

The turnover threshold is to be calculated for the last calendar year.

The RUB 1,000,000,000 threshold for foreign target companies shall be calculated for the calendar year preceding closing of the transaction.

3.2.2 Should adjustments be made for e.g. divestitures, acquisitions, closings and other changes of the economic reality of the undertaking concerned made after or during the relevant financial year?

Changes in the business during the reference period are to be taken into account. 

3.3 Relevant undertakings for the calculation of turnover

3.3.1 The undertakings whose turnover is taken into account?

The turnover threshold is calculated on the group-wide basis, i.e. the acquirer’s group turnover as well as the target’s group turnover.

In the determination of whether the Target has local nexus, the RUB 1,000,000,000 turnover-rule relates to the direct turnover of the non-Russian Target or the Target’s non-Russian subsidiary and not on a group level.

3.3.2 Shall the turnover of the existing seller be included in the target's group turnover?

The Competition Law in Russia does not provide for a special rule excluding the seller’s turnover from the combined turnover. However, considering that the Competition Law directly excludes the seller’s assets from the combined value of assets we believe that the overall interpretation of the Competition Law might be applied for the turnover calculation purposes.

3.4 Geographical allocation of turnover

3.4.1 The principles for the geographical allocation of turnover?

The turnover should be allocated geographically based on where the goods were actually delivered or services actually provided.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

The asset value threshold is calculated on the group-wide basis, i.e. the acquirer’s group assets as well as the target’s group assets, excluding the seller’s assets if as a result of the transaction it loses control over the target.

3.6 Calculation of other thresholds

3.6.1 The principles for calculation of metrics for other thresholds (e.g. transaction value, market share, share of supply etc.)?

Not applicable.

3.7 Special rules

3.7.1 Do any special rules or principles apply to the calculation, allocation etc. of turnover, assets etc. for specific undertakings (e.g. State-owned undertakings, investment funds, credit and financial institutions, insurance companies, financial holding companies, others)?

As described in Section 2.4.1 above, special thresholds apply to financial institutions. However, there are no specific rules for calculation and allocation of turnover and assets of such companies.

3.7.2 Does any exemptions apply?

Not applicable.

3.8 Currency conversion

3.8.1 The exchange rate applied and applicable exchange rate date for conversion of the value of turnover and assets of undertakings in other jurisdictions?

The value of turnover and assets should be converted based on the established currency rate for foreign currency provided by the Central Bank of the Russian Federation as of the reporting date. In case the data is provided for the whole year, the figures shall be converted as of 31 December of the respective year.

1. Practical information

1.1 Responsibility for filing

1.1.1 The parties responsible for filing?

The obligation to notify the Federal Antimonopoly Service rests (i) with the acquiring entity in case of acquisition type transactions (direct acquirer), (ii) with the founding entities in case of incorporation of a new company and (iii) with the interested or newly established entity in case of post-notification.

Point (iii) relates to intra-group transaction (see Section 1.1.1 under the Merger Screening Schedule). In most cases the interested party is the direct acquirer.

1.2 Deadlines for filing

1.2.1 Are there any mandatory deadlines for filing, and, if so, how these are calculated?

There are no mandatory deadlines for filing.

However, a transaction meeting the thresholds has to be notified to the Federal Antimonopoly Service prior to its implementation.

1.2.2 Are there any sanctions for not filing within the deadlines?

The Federal Antimonopoly Service may impose administrative fines for a failure to comply with Russian merger control law.

For failure to notify a transaction subject to pre-closing notification, the fine is RUB 300,000 to 500,000 for legal entities and RUB 15,000 to 20,000 for officers.

The fines are lower for a failure to notify a transaction subject to post-closing-notification requirement; they are RUB 150,000 to 250,000 for legal entities and RUB 5,000 to 7,000 for officers.

Moreover, Russian merger control rules entitle the Federal Antimonopoly Service to initiate judicial proceedings to invalidate, liquidate a newly established company, or reorganize a post-merger-entity by split-off or split-up, if the required clearance is not obtained. However, in order to invalidate a transaction, the Federal Antimonopoly Service should prove beyond reasonable doubt in court that the transaction in question either led to or strengthened a dominant position in the respective market or otherwise restricted competition.

1.2.3 What are the sanctions for not filing a notifiable transaction?

Violation of the filing obligation, as well as closing the transaction without Federal Antimonopoly Service clearance (even when the documents have been submitted to the Federal Antimonopoly Service but the parties decided to close without waiting for a clearance decision), may result in imposition of an administrative fine in the amount RUB 300,000 to 500,000 levied on the acquirer. Depending on the gravity of the violation, the Federal Antimonopoly Service decides on the final amount of fine to be imposed.

In rare cases, for insignificant violations the fine might be substituted by oral warning. However, this decision is fully at the discretion of the Federal Antimonopoly Service.

Administrative liability in the form of a fine may also be imposed on the CEO of the acquirer in the amount of RUB 15,000 to 20,000.

The fines are lower for failure to notify a transaction subject to post-closing-notification. These are RUB 150,000 to 250,000 for legal entities and RUB 5,000 to 7,000 for officers.

Moreover, the Competition Law also provides for a possibility to reverse or invalidate the transaction, liquidate a newly established company, or reorganize a post-merger-entity by split-off or split-up. If the Federal Antimonopoly Service establishes that the transaction implemented without its approval has resulted, or may result, in the restriction of competition in Russia, the Federal Antimonopoly Service may file a lawsuit and a court may declare the transaction void and as a result “reverse” the transaction. However, in order to invalidate a transaction, the Federal Antimonopoly Service must prove beyond reasonable doubt in court that the transaction in question either led to or strengthened a dominant position in the respective market or otherwise restricted competition.

Another risk is the risk of spoiling relations with the regulator and huge mass media campaign against the violators.

If the transaction was subject to obligatory strategic investment clearance, Russian law provides for the following types of sanctions:

i) Transactions executed in breach of the Strategic Investments Law are null and void. In practice, though, it is difficult to declare only the Russian part of a global transaction null and void and therefore, the law contains the provision that if it is impossible to apply the consequences of invalidity of a void transaction, the court may, upon the lawsuit of the Federal Antimonopoly Service, adopt a decision to deprive a foreign investor of its right to vote at the shareholders meeting of the Russian strategic company or invalidate the decisions of the management bodies of the strategic company adopted after the establishment of control in breach of the Strategic Investments Law.

ii) An administrative fine may be imposed on the acquirer in the amount of up to RUB 1,000,000.

If the transaction was subject to obligatory foreign investment clearance, consequences are the same.

1.3 Early filing

1.3.1 Is it possible to file before the signing of merger agreement?

It is possible to file before the signing of a merger agreement.

1.4 Filing fees

1.4.1 Are there any fees for filing, and, if so, please describe how such fees are calculated?

The fee for review of a pre-closing notification is RUB 35,000. Post-closing notifications require no fee.

1.4.2 When must the filing fee must be paid?

Filing fee must be paid before filing is made. 

1.5 Publicity

1.5.1 When and in which format will the authority publish receiving a notification?

Information on the receipt of a notification is to be published on the official website of the Federal Antimonopoly Service to invite third parties to comment on the proposed transaction. The Competition Law does not provide the term for such publication. In practice, the Federal Antimonopoly Service rarely publishes this information.

1.5.2 How will the authority in general handle the case publicly, e.g. will it usually comment in the media, send out press releases etc.?

As for the confidentiality, the Federal Antimonopoly Service may disclose information on the parties and the essence of the transaction even if the entire notification was submitted as confidential.

In case certain information is marked by the respective party as its commercial secret, special protection measures are applied by the Federal Antimonopoly Service (including restricted access to file), and the authority must not disclose such information publicly.

1.5.3 Will third parties be able to review the notification?

Third parties are not able to review the notification.

However, third parties are generally allowed to provide their comments on the notified transactions. In respect of transactions that raise competition concerns, the Federal Antimonopoly Service usually publishes information about them on its website, allowing all interested parties to provide any comments or objections they may have about the transaction.

2. Procedure and timing

2.1 Normal and simplified procedures

2.1.1. Does the regime allow for a simplified (fast track) procedure, and, if so, what are the criteria for using the simplified procedure?

There is no simplified notification procedure in Russia.

2.2 Procedural stages (cf. timetable below)

2.2.1 The various stages of (i) a simplified procedure and (ii) a normal procedure?

The parties are entitled to conduct pre-notification in order to discuss the matter with the Federal Antimonopoly Service prior to formal submission of the notification. Within the scope of these preliminary discussions of a transaction, the parties may propose their voluntary commitments aimed at ensuring competition in the market. The provided information and results of the discussions might be taken into account when considering the transaction upon formal submission of the notification.  It shall be noted that such an option is generally used when there is a complex and high-profile cross border transaction, parties to which have strong market power in Russia.

Once the notification has been submitted, the Federal Antimonopoly Service has 30 days to consider it (Phase I). Within the first 10 days from the day it receives the notification, the Federal Antimonopoly Service may return the notification if it finds it incomplete. After the initial 10-day period has expired, the notification shall be considered as submitted in full. At the same time, it is common practice that the authority may require additional input from the parties.

The authority may extend the general 30-day review period for an additional 2 months (Phase II) if it determines that an in-depth review of the transaction is necessary or if it needs to request more data from the parties to the transaction.

A merger shall be prohibited or made conditional by the Federal Antimonopoly Service if it leads to creation or strengthening of dominance or otherwise limits competition in the relevant Russian market.

In order to identify the potential effects of a transaction on the Russian market, the authority defines the relevant product market and analyzes the competitive environment therein. 

The authority carries out its analysis and evaluation of competitive environment in the following several stages: (i) defining time interval for analysis, (ii) defining product and geographical markets, (iii) defining customers and competitors active in the markets, (iv) evaluating market volumes and shares of entities present, (v) evaluating concentration level in the relevant market, (vi) examining entry barriers, (vii) establishing dominance (if any) of legal entity(-ies), (viii) analyzing competitive environment in the relevant market and (ix) drafting analytical report.

When making its market assessment, the authority uses its broad information-gathering powers. It is entitled to request information it considers necessary for its merger review from federal or regional executive authorities, legal entities and nonprofit organizations. Moreover, the Federal Antimonopoly Service actively uses waivers to ensure cooperation with other competition authorities analyzing the high-profile cross border transactions requiring clearances not only in Russia but in other jurisdictions as well. In most of the cases, it cooperates with the competition authorities of BRICS and EAEU countries.

If the Federal Antimonopoly Service determines that the transaction may lead to certain competition restrictions, the authority may delay clearance until the parties to the transaction fulfil certain preliminary conditions within the period of time set by the authority. Such period should not exceed 9 months. It shall be noted that such option is rarely used since, in practice, it may be more efficient and acceptable for both the Federal Antimonopoly Service and the parties to issue post-closing remedies.

It shall be separately noted that under currently discussed draft amendments to the Competition Act, the Federal Antimonopoly Service will also be able to suspend the above-mentioned review period in case involvement of experts for the purposes of performance of comprehensive analysis is required. Another significant amendment concerns the provision of voluntary commitments. If amendments come into force, the parties would be entitled to provide their voluntary commitments reflecting obligations aimed at ensuring competition in the relevant markets that the parties are able to undertake at any time before the final decision on the notification is issued (currently, the Competition Act formally indicates the possibility to provide voluntary commitments only during pre-notification procedure as stated above).

There are no deadlines for review of post-closing notifications.

2.2.2 Is pre-notification contact with the relevant authorities customary/obligatory/encouraged/etc.?

The parties are entitled to conduct pre-notification. This is mostly done, however, on cross border transactions involving parties which have a strong market position in Russia. See also Section 2.2.1 above.

2.2.3 Are there any sanctions for not filing within the deadlines?

See Section 1.2.2 above.

2.3 Timetable (cf. timetable below)

2.3.1 The statutory timetable/deadlines for review of a notification?

See Section 2.2.1 above.

2.3.2 Can the statutory timetable/deadlines be suspended ("stop-the-clock"), and if so under which conditions?

Currently, it is possible only in case the Federal Antimonopoly Service comes to the conclusion that a separate filing under the Federal Law No. 57-FZ of Apr. 29, 2008, On Procedure for Foreign Investments in Companies of Strategic Importance for National Defense and State Security is required. In this case, the merger review process is suspended until the relevant clearance has been obtained.

Under the currently discussed draft amendments to the Law on Competition (so-called “Fifth Antimonopoly Package”), the Federal Antimonopoly Service will be able to suspend the review process in case involvement of experts is required for the purposes of performance of a comprehensive analysis.

2.3.3 If pre-notification with the relevant authorities contact is possible/customary, how long will the duration of such contact usually be?

There is no statutory timetable/deadline for pre-notification in Russia and the duration of such period may vary from a couple of weeks to a month, depending on namely the complexity of the transaction at hand.

3. Format and content of notification

3.1 Notification forms

3.1.1 Must the notifying parties use any mandatory notification forms, e.g. for simplified and normal procedures, and, if relevant, add a link to the relevant forms?

The notification shall be drafted in compliance with the requirements of Order No. 129 of Apr. 17, 2008, On approval of the Form for the submission of the information when filing the applications and notifications according to Articles 27-31 of Law on Competition to the Federal Antimonopoly Service.

3.2 Supporting documentation

3.2.1 List of the supporting documentation which must as a minimum be submitted along with the notification?

Cf. checklist below.

3.3 Originals, legalization and apostillation (cf. checklist below)

3.3.1 List of all documents which must be submitted in original/legalized versions and whether any documents must be apostilled?

Power of attorney shall be notarized and apostilled (legalized) in case an applicant is a non-Russian company and the notification is submitted by power of attorney;

copies of incorporation documents of the applicant and the non-Russian target company shall be notarized and apostilled (legalized).

3.3.2 If the merger regime has a mandatory filing deadline, must all the documents identified under Section 3.3.1 be submitted within this deadline?

Not applicable.

3.4 Language

3.4.1 Which languages may be used for drafting and filing a notification?

Russian.

Any foreign documents have to be translated into Russian.

3.4.2 Does translations have to be certified/legalized and apostilled?

Translations have to be notarized by local notary in Russia.

Statutory timetable

Step Description Time
1

Pre-notification

The parties are entitled to conduct pre-notification in order to discuss the matter with the Federal Antimonopoly Service prior to formal submission of the notification. Within the scope of these preliminary discussions of a transaction, the parties may propose their voluntary commitments aimed at ensuring competition in the market. The provided information and results of the discussions might be taken into account when considering the transaction upon formal submission of the notification.  It shall be noted that such an option is generally used when there is a complex and high-profile cross border transaction, parties to which have a strong market power in Russia.


There is no statutory timetable/deadline for pre-notification in Russia and the duration of such period may vary from a couple of weeks to a month, depending on namely the complexity of the transaction at hand.

2

Phase I

There is no simplified notification procedure in Russia.

Once the notification has been submitted, the Federal Antimonopoly Service has 30 days to consider it (Phase I).

30 days. 

Within the first 10 days from the day it receives the notification, the Federal Antimonopoly Service may return the notification if it finds it incomplete. After the initial 10-day period has expired, the notification shall be considered as submitted in full. At the same time, it is common practice that the authority may require additional input from the parties.

Please be aware that "stop-the-clock" is possible (cf. 2.3.2 above).
 

3

Phase II

The authority may extend the general 30-day review period for an additional 2 months (Phase II) if it determines that an in-depth review of the transaction is necessary or if it needs to request more data from the parties to the transaction.

A merger shall be prohibited or made conditional by the Federal Antimonopoly Service if it leads to creation or strengthening of dominance or otherwise limits competition in the relevant Russian market.

In order to identify the potential effects of a transaction on the Russian market, the authority defines the relevant product market and analyzes the competitive environment therein. 

The authority carries out its analysis and evaluation of competitive environment in the following several stages: (i) defining time interval for analysis, (ii) defining product and geographical markets, (iii) defining customers and competitors active in the markets, (iv) evaluating market volumes and shares of entities present, (v) evaluating concentration level in the relevant market, (vi) examining entry barriers, (vii) establishing dominance (if any) of legal entity(-ies), (viii) analyzing competitive environment in the relevant market and (ix) drafting analytical report.

When making its market assessment, the authority uses its broad information-gathering powers. It is entitled to request information it considers necessary for its merger review from federal or regional executive authorities, legal entities and nonprofit organizations. Moreover, the Federal Antimonopoly Service actively uses waivers to ensure cooperation with other competition authorities analyzing the high-profile cross border transactions requiring clearances not only in Russia but in other jurisdictions as well. In most of the cases, it cooperates with the competition authorities of BRICS and EAEU countries.

If the Federal Antimonopoly Service determines that the transaction may lead to certain competition restrictions, the authority may delay clearance until the parties to the transaction fulfil certain preliminary conditions within the period of time set by the authority. Such period should not exceed 9 months. It shall be noted that such option is rarely used since, in practice, it may be more efficient and acceptable for both the Federal Antimonopoly Service and the parties to issue post-closing remedies.

It shall be separately noted that under currently discussed draft amendments to the Competition Act, the Federal Antimonopoly Service will also be able to suspend the above-mentioned review period in case involvement of experts for the purposes of performance of comprehensive analysis is required. Another significant amendment concerns the provision of voluntary commitments. If amendments come into force, the parties would be entitled to provide their voluntary commitments reflecting obligations aimed at ensuring competition in the relevant markets that the parties are able to undertake at any time before the final decision on the notification is issued (currently, the Competition Act formally indicates the possibility to provide voluntary commitments only during pre-notification procedure as stated above).

2 months plus a possible extension. The extension should not exceed 9 months.

There are no deadlines for review of post-closing notifications.

Please be aware that "stop-the-clock" is possible (cf. 2.3.2 above).

  • Step 1 1
  • Step 2 2
  • Step 3 3
  • Not defined
  • 30 days
  • 2 months (plus extension)

Checklist

List of the supporting documentation which must as a minimum be submitted along with the notification.

Please see Merger Screening Section 2.1.1 for a definition of "Target".

Supporting documentation

This content was delivered
and last updated on 26-10-2020 by
Contact Person
German Zakharov, Partner
CONTACT DETAILS:
Contact Person 2
Natalia Raschevskaya, Senior Attorney
CONTACT DETAILS:

ALRUD  has provided all input about merger control in Russia.

ALRUD is one of the leading full service Russian law firms, serving domestic and international clients. We stand for high-quality advice, excellent service and rigorous ethical standards.

ALRUD Antitrust/Competition team is widely recognized as one of the leading and most reputable practice with market-leading expertise in all aspects of Russian competition law. We support clients on a wide range of antitrust issues: coordination of merger control transactions with Russian Federal Antimonopoly Service, cartel investigations, antitrust disputes, advising on distributorship agreements, and analyzing compliance of commercial agreements with antitrust requirements. Particularly our team is highly regarded in the field of creation of JVs and making foreign and strategic investments in Russia.

ALRUD Team works with international and Russian companies from different industries, including healthcare, energy and natural resources, media and communication, information technologies, FMCG and retail.

For more information about ALRUD and merger control in Russia, please contact our Partner directly.

Banner Logo     Banner Logo    Banner Logo    Banner Logo