On Jun 12th,2018, The National
Assembly promulgated Competition Law which will take effectfrom July 1st,
2019 and replace the Competition Law 2004. According to Article
3.9, violation of regulations on economic concentration is one of three signs
of violation of competition law.
Firstly, economic
concentration includes the following forms: (1) Merger of enterprises; (2)
Consolidation of enterprises; (3) Acquisition of enterprises; (4) Joint venture
between/among enterprises; (5) Other forms of economic concentration under
regulation of the laws (Article 29). Subject carrying out activities of
economic concentration is enterprises and the purpose of economic concentration
is to gain control the objective enterprises and to govern the market to a
certain extent.
Secondly, economic concentration
shall be prohibited if it makes or potentially makes significant
competition-restraining impact on the Vietnamese market. Specifically, the
National Competition Commission shall assess the impact or ability making
significant competition-restraining impact of economic concentration based on
the following factors: (1) Combined market share of enterprises engaging in the
economic concentration on the relevant market; (2) The degree of concentration
on the relevant market before and after the economic concentration; (3) The
relationship of the enterprises engaging in the economic concentration in the
production, distribution or supply chain for a certain kind of goods/service or
the business lines of the enterprises engaging in the economic concentration
which are inputs or complementary to one another; (4) Competitive advantage
brought about by economic concentration in the relevant market; (5) The ability
of enterprises after the economic concentration for increasing significantly
their prices or Return on sales; (6) The ability of enterprises after the
economic concentration for removing or preventing other enterprises from market
entry or expansion; (7) Particular factors in the sectors, areas which
enterprises are engaging in economic concentration.
Thirdly, enterprises
engaging in the economic concentration shall submit notification dossier of
economic concentration to the National Competition Commission before initiating
economic concentration if they reach the threshold of economic concentration
notification. The notification threshold shall be determined based on one of
the following criterias: (1) Total assets of the enterprises engaging in the
economic concentration on the Vietnamese market; (2) Total turnover of
enterprises engaging in the economic concentration on the Vietnamese market;
(3) The transaction value of the economic concentration; (4) Combined market
share of enterprises engaging in the economic concentration on the relevant
market. For efficient preparation of dossiers, the consultation with M&A
lawyers, anti competition lawyer are suggested.
Fourthly, regarding
assessment procedure, the National Competition Commission shall receive
notification dossier of economic concentration, preliminarily assess the
economic concentration. Matters of preliminary assessment of economic
concentration include: (1) Combined market share of enterprises engaging in the
economic concentration on the relevant market; (2) The degree of concentration
on the relevant market before and after the economic concentration; (3) The
relationship of the enterprises engaging in the economic concentration in the
production, distribution or supply chain for a certain kind of goods, service
or the business lines of the enterprises engaging in the economic concentration
which are inputs or complementary to one another. Within 7 working days from
receipt of notification dossier of economic concentration, the National
Competitive Commission shall notify the applicant in writing that whether the
dossier is complete and valid. If the dossier is incomplete or invalid, the
National Competition Commission shall notify the applicant in writing of
specific content needed to amend, supplement within 30 days from the date of
notice. Upon expiry of 30 days, if no amendment, supplementation is made or the
dossier is not amended, supplemented completely at request, the National
Competition Commission shall return the notification dossier.
After preliminary
assessment of economic concentration, the National Competition Commission shall
officially assess the economic concentration within 90 days from the date of
notice of preliminary assessment result. In complicated cases, the National Competition
Commission may extend the time limit of official assessment but it can not
exceed 60 days and inform in writing enterprises submitting the notification
dossier of economic concentration. Matters of official assessment of economic
concentration include: (1) Assessing the impact or ability making significant
competition-restraining impact of economic concentration; (2) Assessing the
positive impact of economic concentration; (3) Assessing generally the ability
making competition-restraining impact and ability making positive impact of
economic concentration to. In process of official assessment of economic
concentration, the National Competition Commission require the enterprise to
submit notification dossier of economic concentration in order to supplement
information, documents but this does not exceed 2 times. The enterprise
submitting notification dossier of economic concentration shall be responsible
for supplementing the information, documents relating to economic concentration
and be responsible for the completeness and accuracy of such information,
documents at the request of the National Competition Commission. This
supplementation duration shall not be included in the time limit for assessing
economic concentration. If the enterprise fails to supplement fully
information, documents or supplement incompletely information, documents at
request, the National Competition Commission shall consider, decide on the
basis of available information, documents.
The fifth matter is
right, responsibility and authority of the parties. In process of assessing
economic concentration, the National Competition Commission is entitled to
consult the bodies managing sectors, areas which enterprises are engaging in
operating economic concentration, consult other relevant enterprises,
organizations, and individuals; be responsible for ensuring confidentiality of
information, documents provided under regulations of the laws; has the
authority to handle complaints against decisions on settlement of violations
against regulations on economic concentration. The consulted bodies are
responsible for responding to consulted matters in writing within 15 days
from the date on which the request for consultation made by the National
Competition Commission is received. Relevant bodies, organizations, and
individuals is responsible for fully, accurately and promptly providing
information, documents at request of the National Competition Commission in the
process of assessing economic concentration unless otherwise stipulated.
Sixthly, regarding
decision on economic concentration, after and based on the official assessment
of economic concentration, the National Competition Commission shall issue a
decision determining that: (1) The economic concentration is approved. This
decision shall be sent to enterprises engaging in economic concentration within
5 working days from the date of issue; (2) the economic concentration is
conditional; (3) the economic concentration is prohibited. If the National
Competition Commission issues a decision behind schedule which causes damage to
enterprises, it shall compensate for such damage under regulation of the laws.
Decision on economic concentration shall be announced, except for the matter
relating to State secrets or trade secrets.
Seventhly, conditional
economic concentration is economic concentration which is approved and it shall
meet one or more of the following conditions: (1) Division, split, resale of a
part of capital contribution and property of enterprises engaging in economic
concentration; (2) Control of the matters relating to the purchase and sale
prices of goods, services or other trading conditions in contracts of
enterprises formed after the economic concentration; (3) Other measure for
remedying the ability making competition-restraining impact on the market; (4)
Other measures for enhancing the positive impact of economic concentration.
Finally, violations
against regulations on economic concentration includes the following
violations: (1) An enterprise fails to notify of economic concentration; (2) An
enterprise implements economic concentration without receiving a notification
of preliminary assessment from the National Competition Commission; (3) An
enterprise in cases of official assessment implements economic concentration
before the National Competition Commission issues a decision; (4) An enterprise
fails to perform or incompletely perform conditions specified in the decision
on economic concentration; (5) An enterprise implements economic concentration
which is prohibited.
For consultation, we at
ANT Lawyers, a law firm in Vietnam will be available for
legal help.
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