LUXEMBOURG Law and Practice Contributed by: Marcus Peter and Kate Yu Rao, GSK Stockmann SA
tion Authority is invested with regulatory, investigatory and sanctioning powers in the field of competition, as the power to apply national and European legislation relating to the prohibition of agreements and abuse of a dominant position. At the European level, the applicable antitrust regu - lation is the EU Merger Regulation on the control of concentrations between undertakings, which gives the European Commission competence to regulate mergers if certain thresholds are met and certain pro - visions of the Luxembourg competition law are fol - lowed. For mergers, acquisitions, and joint ventures that fall outside the scope of the EU Merger Regulation, as mentioned in 2.1 Acquiring a Company , the 8296 Bill aims to establish a pre-emptive screening and notifi - cation procedure by the National Competition Author - ity. Once the proposed transaction has been noti - fied, the National Competition Authority will assess whether to authorise the transaction or initiate a more detailed examination where there are serious doubts about potential harm to competition. Within 90 days, the National Competition Authority may decide to authorise the transaction, impose conditions, or pro - hibit it altogether. 2.5 Labour Law Regulations According to the Luxembourg Labour Code, in the event of an asset sale, the company’s employees’ representative or the employees must be directly informed about the sale before the assets are trans- ferred to the buyer. There is no need to inform or con - sult the employees in the case of a share sale as the employees remain employed by the same entity. In general, the employee participation rights apply to (i) a Luxembourg public limited liability company that has had at least 1,000 employees for the previous three years; and (ii) any company incorporated in the form of a Luxembourg public limited liability company of which the Luxembourg government holds a finan - cial participation of 25% or more or that benefits from a “concession” from the Luxembourg government in relation to the exercise of its activity and is named by Grand-Ducal regulation.
Moreover, the Merger Control Law introduces addi - tional rights for employees, creditors and sharehold - ers in cross-border conversions, mergers and divi - sions among the EU, including the right to be informed and consulted and ensuring the participation of their representatives in negotiations and on the board of their company. 2.6 National Security Review See 2.3 Restrictions on Foreign Investments . 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Know Your Customer/Anti-Money Laundering The two main legislative developments in the field of know your customer (KYC) and anti-money launder - ing (AML) in Luxembourg are the Law of 13 Janu - ary 2019 (the “RBO Law”) introducing a register of beneficial owners (RBO) for legal entities registered in the Luxembourg Trade and Companies Register ( Registre de commerce et des sociétés , or RCS), and the Law of 10 July 2020 (the “RFT Law”) establish - ing a register of fiducies and trusts and introducing a series of measures increasing the transparency of the beneficial ownership of trusts, fiducies (ie, fiduciary arrangements) and similar legal arrangements. Such legal framework has a major impact on M&A trans - actions where the structures are meant to hide the beneficial owners from the purchasers following the sale, whether for tax or for other purposes. On 29 July 2022, a law was published with the aim of aligning the Law of 12 November 2004 (the “AML Law”) with the wording of the Financial Action Task Force (FATF) Recommendations and increasing inter - national co-operation between supervisory authorities for investigations and on-site inspections. The Law of 29 July 2022 also amended the RFT Law, clarifying that the beneficial owner information shall be updated within one month of any change. Moreover, on 29 November 2022, the Court of Justice of the European Union ruled that the “public access” feature of the Luxembourg RBO (as required by Article 30 of Directive (EU) 2018/843 – ie, AMLD V) consti -
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