PUERTO RICO Law and Practice Contributed by: Dianette Rivera-Melendez, Oreste Ramos, Maria Trelles-Hernandez and Rosangela Sanfilippo, Pietrantoni Mendez & Alvarez LLC
business in Puerto Rico are subject to the laws of the USA and all applicable rules and regulations promul - gated by the SEC and the analogous local regulator in Puerto Rico, OCIF. See also 1.2 Regulatory Frame- work for FDI . 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview As Puerto Rico is a territory of the USA, all federal laws on antitrust and competition apply. Therefore, reference should be made to the relevant portions of the HSR, the Clayton Act and the Sherman Act. As a matter of state law, Puerto Rico has a merger control regime. Act 77-1964, also known as the Puerto Rican Anti- Monopoly Law, governs competition law in Puerto Rico (“Act 77”). In a broad and brief analysis, the Puer - to Rican Attorney General (referred to officially as the Secretary of Justice) and by their delegation the assis - tant Secretary of Justice in charge of monopolistic affairs may, at the request of an acquiring party, give their opinion on the legality of any acquisition of assets or share capital before the accomplishment thereof. The application for an opinion will be filed in writing at the Office of Monopolistic Affairs of the Puerto Rican Department of Justice. The application must disclose every material fact of the intended transaction. At any time, the applicant may be requested to furnish additional information and documents concerning its production and sales or any other necessary docu - ments to determine its economic impact. All informa - tion submitted as part of this process will be strictly confidential unless it is required for any judicial action on the part of the state against the applicant. In no case will an opinion be given on an acquisition that responds to a plan already in operation or that is inconsistent with any other provision of this Act. An opinion that the proposed acquisition is lawful may state – as necessary to keep the immunity referred to below – such conditions as will reasonably tend to safeguard the effectiveness of this Act and prevent the abuse of the immunity to be granted. Every applica - tion filed per this Act and on which the Secretary of
Justice is to render an opinion will be referred to the state Economic Development Administrator and the state Secretary of Economic Development and Com - merce, who will advise the Secretary of Justice in that respect. A favourable opinion on an acquisition carries immu - nity against any action on the part of the state for violation of this section. However, the state reserves the right to file any criminal, civil or administrative proceeding when a violation of the conditions of the opinion is committed, or when, post-acquisition, the execution of the acquisition plan or the ensuing activi - ties deviate from the facts presented to the Office of Monopolistic Affairs during the process to obtain the opinion on the acquisition. Unfavourable opinions, conversely, function solely as administrative guidance for the parties involved, as stipulated in their terms. These opinions hold no legal weight in judicial proceedings and cannot be used to establish statutory violations. Enforcement under this section rests solely with the state. 6.2 Criteria for Antitrust/Competition Review The Puerto Rican Department of Justice will determine the competitive impact of the investment as part of its review process. The process usually requires defin - ing the market at issue, its geographic boundaries, the competitors within the market, and the market concentration of the parties to the transaction before and after the potential merger, by considering meth - ods such as the Herfindahl-Harshman Index (HHI), the current economic factors and trends within the market that may affect competition, such as barriers of entry into the market, and their respective abilities before and after the merger to control prices and therefore limit competition. 6.3 Remedies and Commitments The Puerto Rican Court of First Instance (state trial court) may prevent, prohibit, enjoin or punish viola - tions of Act 77, and it will be the duty of the Secretary of Justice to institute proceedings for injunctions or any other proceeding to prevent, prohibit, enjoin or punish these violations, and to obtain such other or further relief as may be appropriate. When a party has been duly notified that an action has been filed against
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