CYPRUS Law and Practice Contributed by: Marios Pelides, Dominique Pelides and Konstantinos Efthymiadis, Georgiades & Pelides
1.3 Enforcement Authorities The competent authority responsible for enforcing merger control legislation in Cyprus is the CPC. This is the entity to which merger control notifications are submitted, and which issues decisions (both Phase I and Phase II) with respect to these notifications. The CPC is assisted by the CPC’s Service (the “Service”), which investigates notifications and submits a report to the CPC. The CPC’s decisions may be appealed (by way of administrative recourse) to the Administrative Court. Decisions of the Administrative Court may, in turn, be appealed to the Administrative Court of Appeal, with decisions of the Administrative Court of Appeal being in turn appealed to the Supreme Constitutional Court (on certain grounds and subject to leave). Additionally, the Minister for Energy, Commerce and Industry (the “Minister”) has the authority to declare that a particular concentration is of major importance, in which case the provisions of the Law will apply to the concentration, even if the concentration in ques - tion does not meet the usual thresholds (see 2.5 Juris- dictional Thresholds ). The Minister may also declare that a concentration is “of major public interest”, in which case the relevant concentration is referred to the Council of Ministers, which may approve or reject the proposed concentration (overriding whatever decision the CPC may have reached). This power has very rarely been used. If a transaction is expected to produce a “concentra - tion of major importance” (see 2.3 Types of Transac- tions ), it must be notified to the Service. There is no deadline within which parties must notify the Service, but the transaction cannot be put into effect before CPC clearance is obtained. There is no exception to the obligation to notify, although the CPC has the dis - cretion to permit implementation of parts or the entire - ty of a transaction prior to clearance being obtained (see 2.14 Exceptions to Suspensive Effect and 2.15 Circumstances Where Implementation Before Clear- ance Is Permitted ). 2. Jurisdiction 2.1 Notification
2.2 Failure to Notify The CPC has the power to impose severe penalties for implementation of a concentration without CPC clearance, which would take effect if a concentration is implemented without being notified to the Service. Additionally, the CPC has the power to impose daily fines. These fines and other penalties are discussed in more detail in 2.13 Penalties for the Implementation of a Transaction Before Clearance . 2.3 Types of Transactions Transactions that constitute “concentrations of major importance” must be notified to the CPC before they are implemented. There are, therefore, two ques - tions to consider: (i) does the transaction in question amount to a “concentration”; and (ii) if it does, is it a “concentration of major importance”? Concentrations A “concentration” will occur where a change of control on a lasting basis results from: • the merger of two or more previously independent undertakings (or parts of undertakings); • the acquisition, by one or more persons who already control at least one undertaking, or by one or more undertakings – whether by purchase of securities or assets, by contract (eg, conclusion of a shareholders’ agreement) or by any other means (eg, by amending an entity’s articles of association) – of direct or indirect control of the whole or parts of one or more other undertakings; or • the creation of a joint venture which permanently fulfils all of the functions of an independent eco - nomic unit. The Law provides a specific definition of control, which should be borne in mind when assessing whether a concentration has occurred. Control would also include negative control (see 2.4 Definition of “Control” ). There are certain exceptions to the definition of con - centration. These are: • temporary holdings acquired by financial or insur - ance companies whose usual activity includes dealing in securities, provided the holder does not
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