GILS Antitrust law: Kyrgyzstan

KYRGYZSTAN

1. Is the mandatory merger control regime in force in Kyrgyzstan?

Yes.

2. Which authority is responsible for the merger control regime in Kyrgyzstan?

Antimonopoly Regulation Service under the Ministry of Economy and Commerce of the Kyrgyz Republic.

3. What is the definition of concentration?

Economic concentration - transactions, other actions of a business entity, the implementation of which affects the state of competition.

4. Is pre-merger filing or post-merger filing required?

Pre-merger filing is required.

5. Examples of key concentration types caught by merger control rules in Kyrgyzstan.

1) reorganisation through merger, consolidation, transformation of economic entities (their associations);

2) establishment of business entities, more than 5 percent of shares (participation shares in the authorised capital) of which belong to the state;

3) establishment of economic entities, the participants of which are affiliated persons and/or a group of persons;

4) establishment, liquidation and reorganisation through merger and consolidation of state and municipal enterprises.

Business entities taking decisions on creation, liquidation and reorganisation by merger, annexation, transformation, in cases provided above, shall obtain the consent of the antimonopoly authority.

In addition to that, acquisition by a business entity occupying a dominant position of shares (stakes in the authorised capital) of another business entity operating in the market of the same goods, as well as the purchase by any legal entity or citizen of a controlling block of shares (stakes in the authorised capital) of a business entity occupying a dominant position, shall be carried out with the prior consent of the antimonopoly authority.

6. What are the notification thresholds, which a concentration must trigger for a merger control filing to be required?

Please see our answer to the question 5 above. 

Some of the thresholds are indicated above but some are not. This suggests that the threshold is very low and the very fact of economic concentration occurring shall be a ground for merger control filing.

7. Does the authority have any discretion to review transactions that do not meet the notification thresholds?

No, they do not. 

8. Do the merger control rules apply to foreign-to-foreign transactions taking place outside Kyrgyzstan?

No.

9. Are there specific merger control rules relating to the notification thresholds (e.g., specific merger control notification thresholds for specific sectors; different rules to calculate turnover for specific industry sectors such as banks and insurances or retail, specific rules relating to foreign subsidies, companies, etc.)?

No, there are no specific merger control rules aside from those indicated in our answer to the question 5 above. 

10. Whether Kyrgyzstan requires the payment of filing fees and if yes, when?

No.

11. Whether there is a filing deadline in Kyrgyzstan requiring a notification to be filed within a certain period of time following a particular transactional event (e.g., signing a share and purchase agreement)?

The application and all documents for merger control filing shall be submitted to the antimonopoly authority prior to registration of the business entity and/or registration of transactions with the relevant state authorities of the Kyrgyz Republic.

The day of submission of the application to the antimonopoly authority shall be the day of receipt of all required documents.

12. What information and documents must be disclosed or provided to the authority for the purposes of merger clearance? 

The documents attached to the application for merger clearance must be true and complete, submitted as an original or in the form of a duly certified copy.

Information constituting a trade secret shall be provided with the mandatory marking "confidential".

The application shall contain:

1) information about the applicant:

for legal entities - name of the legal entity and its location, surname, first name, patronymic of the head, telephone number and fax number;

for individuals - surname, first name, patronymic, place of residence, telephone number. A copy of the identity document shall be attached;

for a person authorised to act and represent the interests of a person (applicant) - surname, name, patronymic, place of residence, telephone number, power of attorney certifying the representative's authority;

2) information on the subject of actions subject to state control;

3) the applicant shall attach the following documents to the petition:

in case of reorganisation by merger, consolidation of business entities (their associations), in case of merger, consolidation of state and municipal enterprises:

- information on the purpose of merger and/or consolidation of business entities (their associations), merger, consolidation of state and municipal enterprises;

- copies of constituent documents and registration certificates;

- copies of decisions of participants of each business entity on reorganisation in the form of merger and/or consolidation;

- plan of merger and/or consolidation with indication of planned changes in the legal entity's activities after the merger and/or consolidation;

- balance sheet, financial and economic indicators for the last reporting period;

- information on the main types of activities, information on the volume of production and sale of goods, export and import of goods to the Kyrgyz Republic, produced and sold by the reorganised business entities during 2 years preceding the day of submission of the said application or notification, or during the period of activities, if it is less than two years, indicating the codes of nomenclature of goods;

- information on the founders:

• for individuals - place of work, position, place of residence and legal address. A copy of the identity document is attached;
• for legal entities - full name, registration data, legal and actual addresses, contact phone number. Copies of constituent documents and balance sheet are attached.

Information shall be submitted for each business entity (their association), state and municipal enterprise participating in the reorganisation and the form of merger and/or consolidation;

in case of reorganisation by means of transformation of economic entities (their associations):

- information on the purpose of transformation of business entities (their associations);

- copies of constituent documents and registration certificate;

- copies of decisions of participants on reorganisation in the form of transformation;

- balance sheet, financial and economic indicators for the last reporting period;

- information on the volume of production and sale of goods, export and import of goods to the Kyrgyz Republic, produced and sold by the reorganised economic entities during two years preceding the day of submission of the said application or notification, or during the period of activity, if it is less than two years, with indication of codes of nomenclature of goods;

- information about the founders:

for individuals - place of work, position, place of residence and legal address. A copy of the identity document is attached;

for legal entities - full name, registration data, legal and actual addresses. Copies of constituent documents and balance sheet are attached;

in case of liquidation of state and municipal enterprises it is necessary to indicate the reason for liquidation and submit a full package of liquidation documents;

in case of acquisition by a business entity occupying a dominant position of shares (stakes in the authorised capital) of another business entity operating in the market of the same goods, as well as the purchase by any legal entity or citizen of a controlling block of shares (stakes in the authorised capital) of a business entity occupying a dominant position, copies of documents on the acquisition of shares (stakes in the authorised capital) of another business entity and/or controlling block shall be submitted:

- substantiation of the purpose of the said transactions;

- copies of constituent documents and registration certificates of the parties to the transaction;

- copy of the draft transaction agreement agreed upon by the parties;

- information on the expected date of the acquisition transaction;

- description and assessment of the expected ownership and control structure after completion of the transactions or actions (signing of the agreement), including assessment of the scope of rights to be acquired as a result of completion of the transactions;

- balance sheet for the most recent reporting period;

- description of business conditions after the transaction and description of the expected impact of the transaction on the competitiveness of the business entity's goods on the commodity market;

- a list of all activities of the parties to the transaction and information on the volume of production and sale of goods, export and import of goods to the Kyrgyz Republic, produced and sold by the business entity during the two years preceding the day of submission of the said application or notification, or during the period of activity, if it is less than two years, with indication of codes of nomenclature of goods;

when establishing business entities, more than five percent of shares (participatory interests in the authorised capital) of which are owned by the state, and establishing business entities, the participants of which are affiliated persons and/or a group of persons as well as the establishment of state and municipal enterprises shall be submitted:

• a list of affiliated persons and persons belonging to the group at the time of establishment with an indication of the share in the authorised capital and an indication of the commodity market in which the said persons, who are participants in the business entity being established, operate;
• information on the actions (through its establishment and/or reorganisation) under which the business entity is created.

13. What are the time periods within which the authority must reach a decision on the merger clearance? Is any fast track or simplified procedures available? 

The antimonopoly authority shall consider applications for merger clearance no later than 10 working days from the date of receipt.

14. What are the penalties which the authorities may impose for "failure to file" or "late notification"?

Article 292. Failure to submit petitions, notifications (statements) and information to the authorised body in the sphere of antimonopoly regulation

Failure to submit applications and notifications (statements) to the authorised body in the sphere of antimonopoly regulation, if submission of such applications and notifications (statements) is mandatory in accordance with the antimonopoly legislation of the Kyrgyz Republic; submission of applications and notifications (statements) containing knowingly false information, as well as violation of the procedure and deadlines for submission of applications and notifications (statements), information at the request of the authorised body in the sphere of antimonopoly regulation, established by the antimonopoly legislation, shall be punishable by a fine of 650 calculation indices.

650 calculation indices are equal to KGS 65 000 (approximately USD 780).

15. Have there been any recent developments regarding the merger control regime in Kyrgyzstan?

Yes, there have been some developments regarding the merger control regime in the Kyrgyz Republic. 

To name a few: 

• Withdrawal of the State Antimonopoly Service from the Law of the Kyrgyz Republic "On the Procedure for Conducting Inspections of Business Entities" in order to assign to the Antimonopoly Service the regulation of relations related to monopolistic activities, protection and development of competition in the market of financial services (except for banking services).
• Introduction of the principle of extraterritoriality of actions of the Antimonopoly Agency for: - identification of horizontal agreements (cartels); - realisation of interdepartmental cooperation of antimonopoly authorities; - cooperation of antimonopoly authorities in the investigation of abuse of foreign economic entities.
• Changing the definition of dominant companies, namely including "foreign legal entities" in the definition of dominant companies in order to prevent antimonopoly law violations by representatives of large foreign companies.
• Introduction of State Monopoly in order to regulate the procedure and procedures for conducting inspections by the state antimonopoly authority on the grounds of overstatement of consumer prices in anti-competitive actions of economic entities, vesting the antimonopoly authority with the authority to access automated databases (information systems).

The above changes are currently being discussed in the parliament, the adoption of these changes is likely to take place in September-October of 2024. 

Authors: Nurlan Kyshtobaev, Tamirlan Muktarov