MONTENEGRO Trends and Developments Contributed by: Bisera Andrijasevic, BDK Advokati
complete notification, as confirmed in the con - firmation of completeness which would also be introduced and issued by the Agency. However, the final wording of these provisions remains to be seen when the amendments are adopted. Enforcing “Gun-Jumping” Cases and Fining Local Companies for Breaches Against Their Related Entities In 2023, out of a total of 75 approved concen - trations, only five were implemented in Monte - negro, while the remaining 70 were extraterrito - rial, which is an ongoing trend. In spite of this, in recent years, the Agency has taken a more active role in addressing unnotified and prema - turely implemented transactions – commonly referred to as “gun-jumping”. Most cases involve transactions that were notified but implemented before clearance was granted. Notably, a con - cerning trend has emerged wherein the Agency initiates misdemeanour proceedings against Montenegrin-related entities of foreign acquir - ers. This occurs even when these entities are not direct wholly-owned subsidiaries of the acquir - ers and have had limited or no involvement in the transaction. For instance, in 2021, the Agency initiated mis - demeanour proceedings against a Montenegrin company for the acquisition of a Slovenian target by its Serbian affiliate. The transaction was ulti - mately cleared by the Agency but was found to have been implemented before clearance. The initial first-instance ruling of the Misdemeanour Court was in favour of the company. However, on the Agency’s appeal, the Higher Misdemean - our Court quashed the decision and referred the case back to the Misdemeanour Court. Fol - lowing the new proceedings, the first-instance court found the company guilty of infringement and imposed a record fine of more than EUR 800,000. The fine corresponded to about 1% of
the company’s turnover in 2019 (the year pre - ceding that in which the infringement occurred) despite the company’s lack of direct involvement in the concentration. On the second appeal, the Higher Misdemean - our Court partially upheld the company’s appeal against the decision of the Misdemeanour Court, and ruled that the undertaking did not commit the offence it was charged with, as the concen - tration did not constitute a prohibited concen - tration under the Montenegrin Competition Act. It appears that the Agency, as is known in at least one other case, had initiated misdemean - our proceedings on the wrong legal basis, ie, for the implementation of a prohibited concentration instead of the implementation of a concentration before clearance. These are two distinct grounds under the Competition Act. But the Agency deemed any concentration implemented without prior approval to be a prohibited concentration. This ruling of the Higher Misdemeanour Court should put an end to such practice. However, the Higher Misdemeanour Court still imposed a fine on the entity for late filing, even though this entity did not have the obligation to notify the concentration, or the right to notify it, as it was neither an undertaking concerned nor its parent company. This approach, grounded in the concept of a single economic entity, raises questions about the fairness and proportionality of holding Montenegrin entities accountable for infringements committed by their foreign affili - ates, even in cases when those affiliates are not parents or direct subsidiaries of the undertaking which committed the infringement. The Higher Misdemeanour Court has once again missed the opportunity to substantially weigh in on the Agency’s practice of initiating misde - meanour proceedings for competition breaches
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