COSTA RICA Law and Practice Contributed by: Claudio Donato Monge, Marco Lopez, Claudio A Donato Lopez and Carolina Retana, Zurcher, Odio & Raven
In practice, the individual threshold is particularly rele - vant because it excludes transactions involving target businesses with minimal local operations, even where the acquiring group independently exceeds the joint threshold. 2.6 Calculations of Jurisdictional Thresholds The jurisdictional thresholds can be met either by val - ue of the parties’ productive assets in Costa Rica or by the parties’ revenues in Costa Rica. It is important to note that the only assets or revenues taken into con - sideration are those that are located in Costa Rica or that are generated in, or from sales to, Costa Rica. As such, multinational companies that have a minimum insignificant participation in Costa Rica do not neces - sarily meet the individual jurisdictional threshold. The sales or assets value booked in a foreign cur - rency should be converted according to the official exchange rate of the Costa Rican Central Bank. In the asset-based threshold, the asset value to be consid - ered is the fair market value of such assets. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds Generally, the seller’s turnover is not taken into con - sideration with the turnover of the target, but this should be analysed on a case-by-case basis. The group-wide definition generally applies to calcu - late the thresholds for the buyer. If there have been acquisitions or divestments that are not reflected in the most recent financial statements, there should be some observations made in the filing. The Competition Commission revises the merger control submission in detail, and there will almost certainly be questions made in the request for information (RFI) regarding this issue if it is not explained beforehand by the parties. However, this should be analysed individually for each specific case. 2.8 Foreign-to-Foreign Transactions Foreign-to-foreign transactions are subject to merger control. As long as the entities have executed activi - ties with an incidence in Costa Rica during the previ - ous two years, the transaction should be notified if the other jurisdictional thresholds are met. A filing is not
required when a target has no sales (direct or indirect) or assets in the jurisdiction, since it will not have an incidence in Costa Rica, which is one of the require - ments to trigger the obligation to notify. 2.9 Market Share Jurisdictional Threshold There is no market share threshold. Market shares are not taken into consideration when determining whether the obligation to notify is triggered. None - theless, providing market shares of relevant affected markets is mandatory, regardless of the party’s par - ticipation, as it forms a fundamental part of relevant market effects assessment. 2.10 Joint Ventures Joint ventures that meet the definition of concentra - tion provided by the law are subject to merger con - trol. Again, the main issue is whether or not there is a change of control. If a joint venture results in the adop - tion of certain commercial measures that may impact the decision-making processes of the companies, the joint venture may be subject to notification. There are no special rules pertaining to the application of the thresholds to joint ventures. Lastly, joint ventures between competitors should also be analysed to determine whether or not they may represent a prohibited horizontal agreement accord - ing to the law. 2.11 Power of Authorities to Investigate a Transaction The Competition Commission may call in a transac - tion that does not meet the jurisdictional thresholds. However, if the parties clearly demonstrate that the transaction did not meet the thresholds and was not subject to mandatory notification, the Competition Commission may not impose any sanctions or con - duct any further investigation of such transaction. The Competition Commission has the power to authorise, condition and reject a transaction. If gun-jumping occurs, the Competition Commission may hold an investigation and conduct a sanctioning proceeding.
121 CHAMBERS.COM
Powered by FlippingBook