CYPRUS Law and Practice Contributed by: Marios Pelides and Dominique Pelides, Georgiades & Pelides
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.
transaction in question amount to a ”concentra - tion” and (ii) if it does, is it a concentration “of major importance”? A “concentration” will occur where a change of control on a lasting basis results from: • the merger of two or more previously inde - pendent undertakings (or parts of undertak - ings); • the acquisition, by one or more persons who already control at least one undertaking or by one or more undertakings, and 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 perma - nently fulfils all of the functions of an inde - pendent economic 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 concentration. These are: • temporary holdings acquired by financial or insurance companies whose usual activity includes dealing in securities, provided the holder does not exercise the voting rights attached to the security in question with the aim of determining the undertaking’s competitive conduct (or the voting rights are exercised in preparation for a sale of the undertaking, its assets or the securities in
2. Jurisdiction 2.1 Notification
If a transaction is expected to produce a “con - centration of major importance” (see 2.3 Types of Transactions ), it must be notified to the Ser - vice. There is no deadline within which parties must notify the Service, but the transaction can - not be put into effect before CPC clearance is obtained. There is no exception to the obligation to notify, although the CPC has the discretion to permit implementation of parts or the entirety of a transaction prior to clearance being obtained (see 2.14 Exceptions to Suspensive Effect and 2.15 Circumstances Where Implementation Before Clearance Is Permitted ). 2.2 Failure to Notify The CPC has the power to impose severe penal - ties for implementation of a concentration with - out 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 questions to consider: (i) does the
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