KUWAIT Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled Al Makhezeem and Liana Rashid, GLA & Company
cial statements of the last fiscal year before the concentration; • where the parties to the concentration collec - tively achieve aggregate annual sales exceed - ing KWD750,000, according to the audited financial statements of the last fiscal year before the concentration; and • where the value of the registered assets of the parties to the concentration in Kuwait exceeds the value of KWD2.5 million, accord - ing to the audited financial statements of the last fiscal year before the concentration. The Kuwait Competition Law exempts specific activities from being considered economic con - centrations. These are as follows: • banks, insurance companies and financial institutions whose activities include trading in securities are exempt, provided they do not exercise the substantive voting rights conferred by these securities. In order to be exempt, the security must generally be disposed of within one year from the date of acquisition; • acquisitions resulting from insolvencies, defaults, debt restructuring, compositions with creditors or similar transactions are exempt; and • restructuring within the same group of com - panies is exempt. These activities will also not be considered eco - nomic concentrations. • In cases of acquisition of control as a result of insolvency, default, debt rescheduling, settle - ments with creditors or analogous proceed - ings. • In cases where the persons that form one economic group perform restructuring proce - dures within the same group.
Based on the authors’ practical experience, an exemption for a client on the basis of restruc - turing procedures taking place within the same group may also be successfully obtained. It is important to note that the persons desiring to perform an economic concentration, where an application is required, are forbidden from per - forming any actions or procedures to complete the concentration operations before the Kuwait CPA’s determination is issued under the Kuwait Competition Law. If the Kuwait CPA becomes aware of any steps taken towards completing a transaction before the appropriate clearance is obtained from the Kuwait CPA, penalties may be imposed. 2.2 Failure to Notify The Kuwait CPA has the authority to indepen - dently initiate research, investigations, evidence collection and inquiries in line with the provisions of the Kuwait Competition Law. Any person may report any agreements, acts or actions that vio - late the Kuwait Competition Law. The Kuwait Competition Law established a disciplinary board, which is responsible for deciding disciplinary actions referred to it by the Kuwait CPA in relation to violations of the Kuwait Competition Law and complaints filed by various stakeholders. The disciplinary board may impose financial penalties of no more than 10% of the total revenues earned by the parties to the economic concentration during the previ - ous fiscal year in the event of failure to submit the application for concentration or for providing misleading or incorrect information on an appli - cation. Since the issuance of the Kuwait Competition Law, the Kuwait CPA has consistently increased
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