On November 27 2009, the Anti-Monopoly Bureau of the Ministry of Commerce (MOFCOM) publicised its long-awaited regulations on examinations and notifications of mergers under the PRC Anti-Monopoly Law ("AML"). The first drafts of the regulations were circulated for public consultation almost a year ago and, according to the announcement, the regulations were internally adopted on 15 July 2009.
The final version of the regulation on examinations of concentrations contains no dramatic changes compared with the first draft. However, in the regulation on the notification of mergers, there are two changes that may have significant impact:
- All guidance as to how to interpret the concept of control under the AML has been removed.
- All guidance on joint ventures and if/when joint ventures constitute concentrations under the AML has been removed.
Observations and Outlook
Without formal rules limiting the kind of transactions covered by merger review, MOFCOM may be tempted to argue that acquisitions of minority shareholdings and limited control rights, as well as the creation of joint ventures of a more limited nature, have to be notified where the thresholds are met. This will be particularly relevant if MOFCOM identifies a specific transaction that it really wants to investigate.
However, it is our view that the removed wording in the draft regulation will continue to provide a best guess as to MOFCOM’s interpretation of the AML until new guidance is provided or MOFCOM in practice deviates from this interpretation of the law.
This hot topic does not contain a complete list of the changes to the regulations nor does it provide a description of the full content of the regulations. If you require rough translations of the two regulations, please contact us directly.
Contacts
If you would like to discuss anything in this Hot Topic further, please contact antitrust specialists Erik Söderlind (852) 2901 5358), Cheng Yuan (86) 10 6505 8590 ext 1009) or any of the following members of our China Practice Group:
Hong Kong
Betty Yap (852) 2842 4896)
Celia Lam (852) 2901 5268)
Andrew Mackie 852) 2901 5108)
Beijing
Paul Chow (86) 10 6505 8590 x1025)
Thomas Ng (86) 10 6505 8590 x1029)
Shanghai
Fang Jian (86) 21 2891 1858)
Simon Poh (86) 21 2891 1828)
