UAE Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled Abuorabi and Habiba Wahdan, GLA & Company
practices and competition-related activities and transactions. There is no limitation on the Competition Depart - ment’s ability to investigate an activity or a trans - action. During the investigation, the Competition Department can either hold interviews or request information from the enforcement or competent authorities in the UAE. Following the investiga - tion, the Competition Department prepares a report and submits it to the Minister for a deci - sion to be issued. 2.12 Requirement for Clearance Before Implementation Following receipt of the regulatory notifica - tion, the Competition Department will assess it and ensure that it meets the formal require- ments under the Competition Regulations. After assessing the notification, the Competition Department will notify the Minister a final deci - sion can be issued. Legally speaking, a transaction (if it meets the regulatory thresholds and is considered an “eco - nomic concentration” transaction in law) should not be completed without obtaining clearance from the Minister. From a procedural point of view, a transaction could still be completed with - out clearance as the Federal and local authori - ties will not require it as part of the documents needed to effect a transaction in the public records and relevant constitutional documents such as commercial licences, commercial reg - istries, notarised share transfer agreements, etc. There is a clear provision in the Competition Law prohibiting the relevant “undertakings” from concluding any transactions during the merger control review period. Obtaining clearance from the Minister is therefore usually included as a condition precedent in the ”agreements” of an
“economic concentration” transaction, making obtaining clearance a condition for closing the transaction. 2.13 Penalties for the Implementation of a Transaction Before Clearance Failing to comply with the regulatory requirement to suspend the implementation of a transaction during the merger control review, until: • a clearance is obtained; or • the specified deadline expires, will lead to a fine of between AED50,000 and AED500,000 being imposed. 2.14 Exceptions to Suspensive Effect There are no exceptions under the UAE Compe - tition Legislation to the suspensive effect of the regulatory notification. 2.15 Circumstances Where Implementation Before Clearance Is Permitted Implementation before clearance is not permit - ted under the Competition Law.
3. Procedure: Notification to Clearance 3.1 Deadlines for Notification
There is uncertainty over precisely when the transaction must be notified to the Competition Department. The Competition Law states that “economic concentration” transactions have to be notified at least 90 days before completion of the transaction. Practically speaking, notifications should be made shortly after entering into the transaction documents as it is usually a condition precedent to obtain the regulatory approval prior to clos -
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