CHILE Law and Practice Contributed by: Claudio Lizana, Daniela León, Tomás Appelgren and María Jesús Gaete, Estudio Lizana
2.12 Requirement for Clearance Before Implementation Standstill Obligation In Chile, the mandatory merger control regime imposes a strict prohibition on early implemen - tation of concentrations. In other words, the parties may only implement (close) the noti - fied transaction once the FNE (or the court) has issued its clearance decision. 2.13 Penalties for the Implementation of a Transaction Before Clearance Implementation Before Clearance If the transaction is implemented before clear - ance, the FNE may file a lawsuit before the TDLC requesting the imposition of fines and/ or other types of corrective, preventive or pro - hibitive measures. Specifically, violations of the standstill obligation are subject to the general fine regime for antitrust violations established by Article 26 (c) of DL 211, which involves fines of up to (i) 30% of the sales of the offender cor - responding to the line of products or services associated with the infringement for the period for which it was extended or (ii) up to twice the economic benefit obtained by the offender due to the infringement. If it is not possible to deter - mine the sales and economic benefit obtained by the offender, the TDLC may impose a fine of up to UTA60,000 (today, approximately USD52 million). To date, there has only been one case of this type brought to court ( FNE v Minerva and JBS ), in which the FNE accused the parties of closing the deal before obtaining clearance. However, no fines were ultimately imposed, because the case was settled, with the accused companies agreeing to pay a sum of money for tax benefits equivalent to USD1 million.
2.14 Exceptions to Suspensive Effect There are no exceptions to the suspensive effect of merger notifications. Therefore, the parties are always obliged to wait until clearance to imple - ment the transaction. 2.15 Circumstances Where Implementation Before Clearance Is Permitted The law does not provide for any circumstance or exception that allows closing the transaction before clearance. There are no specific rules on carving out the Chilean part of a transaction, but the FNE has generally stated that it does not consider “carve- outs” to be a viable mechanism to avoid merger control and that it is therefore likely to consider it a gun-jumping breach of Chilean merger regu - lation. The parties may file the notification at any time before the closing of the deal, as long as there is a serious intention to carry out the transac - tion. Therefore, there are no deadlines, provided that the parties do not breach the duty to notify the transaction and comply with the standstill obligation. 3.2 Type of Agreement Required Prior to Notification The notification can be filed as soon as the par - ties have a serious intention to carry out the transaction, which may be demonstrated by a letter of intent, a memorandum of understand- ing, a commitment letter, a public announcement 3. Procedure: Notification to Clearance 3.1 Deadlines for Notification
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