PARAGUAY LAW AND PRACTICE Contributed by: Manuel Arias, Carla Sosa, Martin Carlevaro, Milena Sljivich, Alexander Berkemeyer and Antonio Villa Berkemeyer, BKM - Berkemeyer
ment of the public bid or the acquisition of a control - ling interest. Process and Timeframe for Notification The law sets out a period of 90 business days as a maximum term for the resolution of the merger con - trol filing, counting from the date the Department of Merger Control declares that the filing is complete and all required documents were filed. The evaluation is divided into two phases. The maximum duration for Phase 1 is 30 business days and the maximum dura- tion for Phase 2 is 60 business days. CONACOM may issue a clearance decision during Phase 1 if the merger does not lead to a significant impediment to effective competition. Phase 2 applies to those mergers that require more in-depth analysis and to those that were not resolved during Phase 1. If CONACOM issues a request for information (RFI) during Phase 1, the parties must respond without a specific timeframe (albeit within a maximum of six months, or else the filing will lapse). If the RFI is sent during Phase 2, the parties must respond within 15 days. This 15-day timeframe may be extended once for the same period. The issuance of an RFI stops the terms for analysis of the filing. CONACOM has five days for each RFI, to determine whether the docu - ments submitted are complete. All timeframes should be counted as business days. The opening of Phase 2 is normally ordered due to the complexity of the transaction, but this does not mean that a competition concern has arisen. Prima facie, merger control filings are ex post under Paraguayan merger control rules. However, in a ruling issued in July 2020, CONACOM expressed an opinion that can be interpreted to mean that the Paraguayan merger control regime is ex ante (based on CONACOM’s reading of Article 14.1 of the Regulatory Decree). 6.2 Criteria for Antitrust/Competition Review Mergers are evaluated considering market structure, the need to maintain effective competition, the mar - ket power and financial strength of the participants, and access to supply and demand. Factors such as consumer interests and technical progress are also considered.
Mergers are permissible if they do not create or strengthen a dominant position nor significantly hin - der competition. CONACOM may reject or impose measures on mergers that threaten competition by reinforcing market dominance. 6.3 Remedies and Commitments In addition to being able to reject merger operations that pose a significant obstacle to effective competi - tion, CONACOM may impose appropriate measures for the establishment of effective competition, includ - ing banning the merger operation or approving the merger operation but imposing conditions that make a sufficient contribution to compensating for the restric - tive effects on competition. 6.4 Antitrust/Competition Enforcement CONACOM has the ability to refuse the authorisa - tion of a merger, before or after the merger has taken place. In this scenario, the ultimate decision-maker is the Tribunal de Cuentas , which is the competent court to consider the substantiation and resolution of con - tentious administrative appeals. Its resolutions may be challenged in the Supreme Court of Justice. Consequences of Making an Investment Without Prior Approval If CONACOM takes notice of a transaction that was required to be filed but was not, it may summon the parties to notify the transaction within a maximum term of 20 days, and may also impose penalties. It is worth noting that the fines imposed under Paraguayan Competition Law are set for any breach of the law, including merger control rules, which can consist of cease-and-desist orders, declaring the transaction null or imposing monetary fines. To that end, fines may amount to up to 150% of the profits obtained from the infraction or up to 20% of the gross turnover relating to the sales of products affected by the infraction during the last 12 months (excluding tax) following the beginning of administra - tive proceedings. No penalties for failing to notify a transaction seem to have been issued to date.
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