EGYPT Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Hegui Taha and Farida Koura, GLA & Company
not determined in the articles of association or any other agreements, the joint venture will be assumed to perform on a lasting basis. However, if the duration of the joint venture’s operation has been determined, it must be assessed whether that duration is sufficient to consider the joint venture as set up to operate on a lasting basis according to the nature of the market. 2.11 Power of Authorities to Investigate a Transaction The ECA, with the approval of the Cabinet of Ministers, reserves the right to commence an examination of an “economic concentration” that does not exceed the Financial Thresholds if it possesses evidence or indications that could restrict or harm competition within a period not exceeding one year from the date of implement - ing the ”economic concentration”. The circumstantial evidence that can be consid - ered is as follows: • restriction of the technological development and innovation; • controlling the market by any act that may lead to an increase or decrease in prices; • reducing the quality of products; and • creating barriers to entry or expansion in the market. 2.12 Requirement for Clearance Before Implementation Under Article 22 bis d of the Egyptian Com - petition Law, a notifiable transaction cannot be implemented unless the ECA’s clearance is granted. Failing to comply with the obligation to notify in line with Article 19 bis a and Article 19 bis e of the Egyptian Competition Law is punish - able with a fine of between 1% and 10% of the total annual turnover, or value of assets of the parties to the notifiable “economic concentra -
tion” or value of the transaction, whichever is higher, according to the latest audited consoli - dated financial statements of each concerned person. The fine should not be less than EGP30 million and not more than EGP500 million. There is no mention under the Egyptian Compe - tition Law or the Executive Regulations of a reg - ularisation mechanism for notifiable “economic concentrations” implemented without proper notification to the ECA. If the ECA has concerns about implementing an “economic concentration”, its parties may sub - mit a commitments offer to make it comply with the Egyptian Competition Law during phase I or phase II of the review, in line with Articles 19 bis c and 19 bis d of the Egyptian Competition Law and Article 57 of the Executive Regulations. This offer consists of one or more behavioural or structural remedies. The ECA then evaluates whether the commitments submitted should suf - fice to mitigate the harmful effects on competi - tion that may result from the implementation of the ”economic concentration”. If the commit - ments are approved, the ECA issues a condi - tional clearance decision that contains the terms of the agreement, the length of any applicable validity periods and a method for tracking the compliance of the parties involved. In cases of conditional clearances, the ECA may require the parties to the “economic concentra - tion” to appoint a monitoring trustee. The moni - toring trustee will be responsible for monitoring the compliance of the parties with the commit - ments/conditions set out in the ECA’s decision, subject to the ECA’s approval.
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