1 Relevant Authorities and Legislation

1.1 Who is/are the relevant merger authority(ies)?

The authority with competence over merger control in Montenegro is the Agency for the Protection of Competition [Agencija za zaatitu konkurencije] ("Agency"), established by the 2012 Law on the Protection of Competition. Although formally newly established in the form of a "public agency", it is a successor of the Directorate for the Protection of Competition, functional as of 2008. The website of the Agency is accessible at www.uzzk.gov.me.

The Agency, competent to enforce competition law in its totality and not just merger control rules, is an independent governmental agency responsible for its work to the Government of Montenegro, which also elects the Director of the Agency. Merger control decisions can be challenged before the Administrative Court of Montenegro [Upravni sud] ("Administrative Court").

1.2 What is the merger legislation?

Merger control rules are regulated by the recently adopted Law on the Protection of Competition [Zakon o zaatiti konkurencije] (Official Gazette of the RMN, no. 44/2012) ("Competition Act"), which came into force on 9 October 2012. The Competition Act supersedes the 2005 Law on the Protection of Competition (Official Gazette of the RMN, no. 69/2005 and 37/07), which regulated merger control rules until the entry into force of the Competition Act.

The Competition Act regulates both the substantive and procedural aspects of merger control. To the extent that some procedural rules are not regulated by the Competition Act, the Law on General Administrative Proceedings [Zakon o opatem upravnom postupku] (Official Gazette of the RMN, no. 60/03, 32/11) applies subsidiarily.

Certain aspects of merger control, namely relevant market definition and contents of merger notifications, are further regulated by the following bylaws:

  • the Guidelines on Criteria for Determining the Relevant Market [Uputstvo o kriterijumima za utvrđivanje relevantnog trziata] (Official Gazette of RMN, no. 77/2005); and
  • the Guidelines on Form and Content of a Request for Issuance of Approval for Implementation of a Concentration [Uputstvo o obliku i sadr~ini zahtjeva za izdavanje odobrenja za sprovođenje koncetracije] (Official Gazette of the RMN, no. 77/2005),

which regulate how relevant markets are to be defined, and the contents and the form of merger notifications respectively (hereinafter jointly "Guidelines"). However, the Guidelines are to be replaced with new ones (in the first half of 2013) pursuant to the Competition Act.

Fines for competition law violations, including those pertaining to merger control, are imposed in misdemeanour proceedings by a court, on the initiative of the Agency. Misdemeanour proceedings are regulated by the Law on Misdemeanours [Zakon o prekraajima] (Official Gazette of the RMN, no. 1/2011, 6/2011, 39/2011).

1.3 Is there any other relevant legislation for foreign mergers?

There are no specific rules regarding foreign mergers. General merger control rules apply also to foreign mergers provided that the respective jurisdictional thresholds are met (please see questions 2.4 and 2.6 below).

1.4 Is there any other relevant legislation for mergers in particular sectors?

The Competition Act applies to mergers irrespective of the sectors they pertain to. However, certain sector-specific regulations apply to mergers in certain sectors:

  • Banking: The acquisition of a qualified shareholding (i.e. 10%, 20%, 33%, or 50%) in Montenegrin banks are subject to prior approval by the Central Bank of Montenegro pursuant to the Banks Act (Official Gazette of the RMN, no. 17/08 and 44/10, and 40/11).
  • Insurance: Acquisitions of a qualified shareholding (i.e. 10%, 20%, 33%, 50% or any acquisition of shares that confers factual control upon the acquirer) in a Montenegrin insurance company is subject to prior approval by the regulatory insurance body of Montenegro pursuant to the Insurance Act (Official Gazette of the RMN, nos. 78/06, 19/07, 53/09, 73/10 and 40/11).
  • Media: The Media Act (Official Gazette of the RMN, nos. 51/02, 62/02 and 46/10) prohibits all transactions which result in the creation of a monopoly in media sectors in general, while the Electronic Media Act (Official Gazette of the RMN, no. 46/10, 40/11 and 53/11) regulates concentrations in the (electronic) media sector.
  • Telecommunications: The Electronic Communications Act (Official Gazette of the RMN, no. 50/08, 53/09, 70/09, 40/10, 49/10 and 32/11) provides for the establishment of the Agency for Electric Communications and Postal Activities whose competences will be the monitoring of the market, cooperation with the Agency and determining whether an operator has a significant market power, as well as imposing measures aimed to mitigate or prevent negative effects on a relevant market.
  • Concessions: The Concessions Act (Official Gazette of the RMN, no. 8/09) explicitly provides that the change of control in concession companies is subject to approval by the concession grantor (i.e. the Government, the Parliament or the Municipality). The Concession Commission, established pursuant to The Concession Act, keeps the register of all changes regarding the concession contracts.
  • Energy: The Energy Act (Official Gazette of the RMN, no. 28/10) establishes the Administrative Agency for Energy which, inter alia, may perform all activities regarding the licensing of the companies involved in the energy sector as well as the monitoring and regulating of the energy market.

2 Transactions Caught by Merger Control Legislation

2.1 Which types of transaction are caught – in particular, how is the concept of "control" defined?

Pursuant to the Competition Act, a concentration arises where:

  • two or more independent undertakings or parts thereof merge;
  • one or more undertakings or natural persons controlling at least one undertaking acquire (directly or indirectly) control over another undertaking or part thereof; and
  • at least two independent undertakings establish a new undertaking on the market or when they acquire joint control over a existing undertaking, which operates on a lasting basis and has all the functions of an independent undertaking (i.e. joint ventures).

"Control" is the possibility to exercise (solely or jointly) decisive influence over an undertaking, on a de jure or de facto basis. This will in particular be so in the case of a majority shareholding or voting rights, or the possibility to appoint the majority of board members or representatives of an undertaking.

2.2 Can the acquisition of a minority shareholding amount to a "merger"?

Yes, provided that the acquisition of a minority shareholding confers (sole or joint) de jure or de facto control over the target on the acquiring undertakings (see also question 2.1).

2.3 Are joint ventures subject to merger control?

Yes, joint ventures are subject to merger control. However, only certain joint ventures are subject to merger control, i.e. when two or more independent undertakings establish a new undertaking, or when they acquire joint control over an existing undertaking, which operates on a lasting basis and has all the functions of an independent undertaking (i.e. full-function joint ventures) and which does not purport to coordinate the market activities of the independent undertakings acquiring control.

However, if the establishment of a joint venture purports to coordinate the market activities of two or more independent undertakings, the joint venture is not deemed a concentration but shall be assessed under rules regulating restrictive agreements.

2.4 What are the jurisdictional thresholds for application of merger control?

Under the Competition Act a transaction has to be notified if either of the following thresholds is met:

  • the aggregate local turnover of at least two parties to the concentration exceeds EUR 5 million; or the
  • aggregate worldwide turnover of the parties to the concentration exceeds EUR 20 million, provided that at least one of the parties achieved a turnover of EUR 1 million within the territory of Montenegro.

Upon learning that a concentration has been performed, the Agency can order the participants to the concentration to notify the concentration if their joint market share in the relevant market in Montenegro is at least 60%. The burden of proof that the 60% market share threshold is met lies with the Agency.

Turnovers are calculated by taking into account all revenues derived from sale of products or provision of services in the year preceding the year in which the concentrations is notified, after the deduction of exercise duties. The turnover of an undertaking assumes the total turnover of the group it belongs to, save for intragroup sales which are not taken into account. For the calculation of local (national) turnover, in addition to the foregoing, the value of exports has to be deducted. If control is acquired over part of an undertaking, only the turnover attributable to that part is to be taken into account. In case of joint ventures, total group turnovers of both joint venture partners are to be taken into account.

According to currently developed practice, local registered presence is not required as long as the thresholds are reached through sales conducted in the territory of Montenegro.

Special rules for the calculation of turnover apply to banks, credit institutions, financial entities and insurance companies. As regards banks, credit institutions and financial companies, the relevant turnover shall consist of the income from interest charged, net profits from financial transactions, commissions charged, income from securities held by these organisations and of income from other business activities. As regards insurance companies, the turnover is calculated with respect to the value of written gross premiums.

2.5 Does merger control apply in the absence of a substantive overlap?

Yes. The applicability of merger control rules does not require the existence of a substantive overlap. The only criterion for the applicability of merger control rules is the fulfilment of one of the turnover thresholds outlined in question 2.4 above.

2.6 In what circumstances is it likely that transactions between parties outside Montenegro ("foreign-to-foreign" transactions) would be caught by your merger control legislation?

Any foreign-to-foreign merger is subject to merger control in Montenegro if the jurisdictional thresholds are met. A domestic effects doctrine has not yet been adopted by the Agency, although Article 2 of the Competition Act provides that the Competition Act applies to acts which have or might have effects on competition in the territory of Montenegro. However, the decisional practice so far is not supporting the view that a transaction, besides meeting the jurisdictional thresholds, also needs to have an effect on competition in Montenegro in order to trigger a filing obligation. Hence, foreign-to-foreign transactions that meet the jurisdictional thresholds of the Competition Act trigger a filing obligation in Montenegro.

2.7 Please describe any mechanisms whereby the operation of the jurisdictional thresholds may be overridden by other provisions.

There are no mechanisms which provide for the jurisdictional thresholds to be overridden. However, the applicability of the sector-specific regulation outlined in question 1.4 does not require the turnover thresholds stipulated in the Competition Act to be met. Direct or indirect acquisitions of qualified shareholdings in certain sectors in principle require approval of the competent regulator irrespective of the aggregate turnovers of the parties to the concentration. However, if the jurisdictional thresholds are exceeded, merger clearance is also required in addition to the approval of the sector-specific regulator.

2.8 Where a merger takes place in stages, what principles are applied in order to identify whether the various stages constitute a single transaction or a series of transactions?

In the event of staggered transactions, the obligation to notify is triggered at the moment of the acquisition of the share that enables the acquirer to exercise decisive influence over the target. Two or more transactions between identical undertakings performed within a period of two years shall be deemed a single concentration.

3 Notification and its Impact on the Transaction Timetable

3.1 Where the jurisdictional thresholds are met, is notification compulsory and is there a deadline for notification?

Notification is compulsory when the thresholds set by the Competition Act are met (please see question 2.4 above) save for certain exceptions (please see question 3.2 below).

A concentration has to be notified within fifteen days following any of the following acts, whichever occurs first: (i) the conclusion of an agreement; (ii) announcement of a public bid or offer or closing of the public offer; or (iii) the acquisition of control.

However, the parties may notify a transaction to the Agency even before one of the abovementioned events if they demonstrate their serious intent to enter into an agreement, e.g. by signing a letter of intent, publicising their intent to make an offer or by any other way which precedes any of the triggering events mentioned.

Under the Competition Act, if control over the whole or part of one or more undertakings is acquired by another undertaking, the notification has to be submitted by the undertaking acquiring control. In all other cases, the notification has to be submitted jointly by the undertakings concerned.

3.2 Please describe any exceptions where, even though the jurisdictional thresholds are met, clearance is not required.

The following acquisitions of control shall not be deemed concentrations:

  • when a banking or other financial institution temporarily acquires shares for further resale to be performed within a period of 12 months (with a possible additional 6-month extension) and provided that during this period the shareholders' rights are not used to influence business decisions of the respective undertaking towards its competitors;
  • when control over an undertaking is acquired by a person in the capacity of a bankruptcy or liquidation receiver [stečajni ili likvidacioni upravnik]; and
  • when a joint venture has for its aim to coordinate the market activities between the two or more undertakings that retain their independence (as it shall be assessed under rules regulating restrictive agreements).

3.3 Where a merger technically requires notification and clearance, what are the risks of not filing? Are there any formal sanctions?

The Competition Act imposes fines in case the parties to the transaction fail to file the merger notification within the fifteen-day time period. In such a case, the parties to the concentration may be subject to fines in the range of EUR 4,000-40,000. The responsible persons within the undertaking in violation may be fined in the range of EUR 1,000-4,000.

If an undertaking performs a concentration without prior clearance of the Agency (in violation of the suspension obligation) or performs a prohibited concentration, it may be fined in the amount of 1-10% of the total annual turnover in the financial year preceding the violation. The responsible persons within the undertaking in violation may be fined in the range of EUR 1,000-4,000.

In case a concentration is performed without clearance or contrary to the conditions under which it is approved, the Agency may also impose structural or behavioural measures, should performance of such a concentration restrict, distort or prevent competition. These measures may in particular include divestment of shares or limitation/prohibition of use of voting rights.

3.4 Is it possible to carve out local completion of a merger to avoid delaying global completion?

In light of the fact that the Agency is very young and not sufficiently experienced, we deem it unlikely that it is susceptible to "holdseparate solutions". The only possibly permissible carve-out mechanism, in our opinion, is the temporary acquisition of shares by banks and other financial institutions with the aim of re-selling the acquired shareholding within the next 12 months (18 months in case an additional 6-month extension is granted). Please also see question 3.2 above.

3.5 At what stage in the transaction timetable can the notification be filed?

Parties to a transaction may notify it to the Agency as soon as they can demonstrate their serious intent to enter into an agreement, e.g. by signing a letter of intent, publicising their intent to make an offer or by any other way which precedes any of the triggering events (please see question 3.1 above).

3.6 What is the timeframe for scrutiny of the merger by the merger authority? What are the main stages in the regulatory process? Can the timeframe be suspended by the authority?

Upon submission of a complete notification, the Agency is bound to deliver a decision approving the concentration unconditionally within 105 working days, or a decision approving the concentration subject to conditions within 125 working days. If the concentration creates or strengthens a dominant market position and consequently prevents, restricts or distorts competition, the Agency shall prohibit the concentration within 130 working days.

The Agency shall render a decision within 25 days if the notified concentration does not meet the jurisdictional thresholds (please see question 2.4 above).

If the Agency does render a decision within the abovementioned deadlines, the transaction is deemed to be cleared. However, the Agency proved to be efficient in practice as it renders merger control clearance usually within a month and a half.

3.7 Is there any prohibition on completing the transaction before clearance is received or any compulsory waiting period has ended? What are the risks in completing before clearance is received?

Yes. The Competition Act expressly provides that the undertakings involved in a concentration are obliged to suspend implementation of a concentration until the Agency clears the transaction or until the compulsory waiting period has ended.

If an undertaking performs a concentration without prior clearance of the Agency (in violation of the suspension obligation), it may be fined in the amount of 1-10% of the total annual turnover in the financial year preceding the violation. The responsible persons within the undertaking in violation may be fined in the range of EUR 1,000-4,000.

In case a concentration is performed without clearance or contrary to the conditions under which it is approved, the Agency may also impose structural or behavioural measures, should performance of such a concentration restrict, distort or prevent competition. These measures may in particular include divestment of shares or limitation/prohibition of use of voting rights.

3.8 Where notification is required, is there a prescribed format?

Yes. The format and contents of merger notifications is regulated by the Guidelines on Form and Content of a Request for Issuance of Approval for Implementation of a Concentration [Uputstvo o obliku i sadr~ini zahtjeva za izdavanje odobrenja za sprovođenje koncetracije] (Official Gazette of the RMN, no. 77/2005). However, these guidelines are to be replaced with new ones (in the first half of 2013) pursuant to the Competition Act.

The notification shall be submitted in Montenegrin, and all documents in foreign language need to be supplied with corresponding certified translations. Certain documents may need to be notarised and super-legalised, as the case may be. Should it deem the merger notification incomplete, the Agency is empowered to request any other documents and information it considers relevant for the assessment of the intended concentration. Similarly, the applicant may submit other documents and information that it considers relevant for the assessment of the envisaged concentration. The Agency may revoke its decision if it is based on incorrect or incomplete information submitted by the parties.

3.9 Is there a short form or accelerated procedure for any types of mergers? Are there any informal ways in which the clearance timetable can be speeded up?

There is no short form procedure for any types of mergers. However, in case of acquisition of control through a public offer, the Agency may upon a reasoned request of the notifying party render a decision with urgency if it is required for the protection of that party's rights or the assets of the acquired undertaking. In all other cases, the only way to speed up the clearance timetable is to supply the Agency with a notification that is as detailed as possible, in accordance with relevant rules applicable to the contents of notifications (please see question 3.8 above).

3.10 Who is responsible for making the notification and are there any filing fees?

Under the Competition Act, if control over the whole or part of one or more undertakings is acquired by another undertaking, the notification has to be submitted by the undertaking acquiring control. In all other cases, the notification has to be submitted jointly by the undertakings concerned.

Until the Competition Act entered into force, there were no filing/clearance fees. The Competition Act stipulates that the Agency shall enact a tariff code. However, no such tariff code has yet been enacted.

3.11 What impact, if any, do rules governing a public offer for a listed business have on the merger control clearance process in such cases?

Pursuant to the Competition Act, a concentration has to be notified 15 days from an announcement of a public bid or offer, or closing of the public offer, whichever occurs first. Also, undertakings that make a public offer in accordance with the law regulating the takeover of joint-stock companies, and consequently acquire control in terms of the Competition Act, must notify the Agency of the public offer.

In case of acquisition of control through a public offer, the parties to a concentration may finalise the public offering, notwithstanding the obligations to suspend the concentration, if the acquirer does not exercise voting rights or does so only so as to maintain the value of the target undertaking until clearance has been issued.

Furthermore, the Agency may upon a reasoned request of the notifying party, render a decision with urgency if it is required for the protection of that party's rights or the assets of the acquired undertaking.

3.12 Will the notification be published?

Pursuant to the Competition Act, the Agency is obliged to publish certain information from the merger notification in the Official Gazette of the Republic of Montenegro. Such information includes:

(i) the names of the undertakings concerned; (ii) a brief description of the transaction; and (iii) the economic sector to which the transaction occurs.

Furthermore, the operative part of the Agency's decision shall be published in the Official Gazette of the Republic of Montenegro and on the Agency's website.

4 Substantive Assessment of the Merger and Outcome of the Process

4.1 What is the substantive test against which a merger will be assessed?

The question at the heart of the substantive test is whether a concentration shall create or strengthen a dominant position, as a result of which effective competition on the relevant market may be restricted, distorted or prevented. If the answer is affirmative, such a concentration shall be prohibited, unless the parties to the concentration demonstrate that resulting consumer benefits outweigh the negative effects resulting from the creation or the strengthening of a dominant position.

When assessing the effects of a concentration, the Agency shall consider the following criteria:

  • the structure and concentration of the relevant market(s); actual and potential competitors;
  • the market position of the parties to the concentration and their economic and financial power;
  • the possibility to choose sources of supply and purchasers; legal and other barriers to enter the relevant market;
  • the domestic and international level of competitiveness of the parties to the concentration;
  • the trends of supply and demand of relevant goods/services;
  • the trends of technical and economic development; and
  • the interests of consumers.

4.2 To what extent are efficiency considerations taken into account?

The substantive test against which the admissibility of the concentration will be assessed requires that the negative and positive effects of the concentration be weighed and balanced. Consequently, the efficiencies stemming from the concentration need to be taken into account by the Agency so as to assess its admissibility.

This is also reflected by the mandated contents of the merger notification which require that expected benefits from the point of view of consumers (such as lower prices, improved quality, increased R&D and increased consumer choice) be named and reasoned. Efficiency considerations can also be seen in the decisional practice of the Agency, as it analyses possible efficiencies resulting from the concentration in its decisions. However, to the best of our knowledge, significant attempts to substantiate and/or quantify efficiencies have not yet been undertaken by the Agency.

4.3 Are non-competition issues taken into account in assessing the merger?

No. The Competition Act and applicable bylaws are not concerned with non-competition issues, nor are they given a prominent role in merger analysis, although they may be reflected upon by the Agency in the course of review.

4.4 What is the scope for the involvement of third parties (or complainants) in the regulatory scrutiny process?

The Agency is obliged to publish a description of the notified transaction in the Official Gazette of the RMN, and in particular: (i) the names of the participant in the concentration; (ii) a brief description of the transaction; and (iii) the economic sector in which the transaction occurs, with the aim that third parties get acquainted with the intended concentration. Although the matter is not regulated further by the Competition Act or bylaws, we believe third parties can provide the Agency with information, data and opinions relevant for the transaction under review.

4.5 What information gathering powers does the regulator enjoy in relation to the scrutiny of a merger?

Pursuant to the Competition Act, the Agency may utilise a wide range of information gathering powers. Although most of these are specifically designed for behavioural investigations (e.g. cartel investigations), the Competition Act nevertheless explicitly states that they may also be utilised in relation to merger control proceedings. Although it is unlikely that the Agency would actually use most of these powers in merger control proceedings, it nevertheless may: request from the parties to the concentration that they provide certain information and documents; conduct on-sight investigations, i.e. inspect business premises, business records and other documents, copy or scan business documents, and seal business premises and documents; take statements from representatives and employees of the parties to the concentration; take expert witnesses' testimony; hold oral hearings; conduct sectoral investigations, etc. The Agency may also contact other state authorities to collect relevant information and/or to verify facts.

At the request of the Agency, undertakings (as well as other legal and natural persons) are obliged to provide it with information and documents of relevance for a given proceeding before the Agency within a period of fifteen days. Undertakings that fail to comply with such requests can be subjected to fines in the range of EUR 500-5,000 for each day of non-compliance, but not more than 3% of the total annual turnover achieved in the previous financial year.

4.6 During the regulatory process, what provision is there for the protection of commercially sensitive information?

On the basis of a request of the party supplying commercially sensitive information, the Agency may allow that such data or the source of such data be protected, if the request is justified and outweighs the public interest to access such data. However, the party making the request is obliged to prove that it would incur damage should such data or its source be made publicly available. Client-attorney communication is considered privileged communication.

5 The End of the Process: Remedies, Appeals and Enforcement

5.1 How does the regulatory process end?

Pursuant to the Competition Act, the Agency may either:

  • reject the notification if the jurisdictional thresholds are not met;
  • cease the procedure if the notification is withdrawn;
  • clear the concentration unconditionally;
  • clear the concentration subject to conditions; or
  • prohibit the concentration.

In case the Agency clears the concentration based on incorrect or untrue data and/or facts, it shall declare the clearance null and void.

5.2 Where competition problems are identified, is it possible to negotiate "remedies" which are acceptable to the parties?

Yes. If the Agency concludes that the notified concentration shall restrict, distort or prevent competition, it shall notify the parties to the concentration of the facts and conditions on which it intends to base its decision. In their answer to the Agency, the parties to the concentration may suggest measures to be undertaken before or after the concentration is performed, with the goal to remove any anti-competitive concerns. The Competition Act allows for both behavioural and structural measures. If the Agency is of the view that such measures are sufficient and as a result of them the concentration shall not restrict, distort or prevent competition, it shall clear the concentration subject to conditions.

The terms and conditions under which the concentration shall be cleared, as well as methods of monitoring/supervision of their implementation, shall be stipulated in the clearance. If the parties fail to implement the remedies, the Agency shall revoke its decision.

5.3 To what extent have remedies been imposed in foreignto- foreign mergers?

There are no official statistics available on the decisional practice of the Agency. To the best of our knowledge, no (foreign-to-foreign) concentration has yet been approved subject to conditions.

5.4 At what stage in the process can the negotiation of remedies be commenced? Please describe any relevant procedural steps and deadlines.

If the Agency concludes that a notified concentration shall restrict, distort or prevent competition, it shall notify the parties to the concentration of the facts and conditions on which it intends to base its decision. In their answer to the Agency, the parties to the concentration may suggest measures to be undertaken before or after the concentration is performed.

However, although the Competition Act suggests that remedies are offered only once the Agency has notified the parties that it intends to prohibit the concentration, we are of the opinion that remedies could be offered from the outset of the merger review process.

5.5 If a divestment remedy is required, does the merger authority have a standard approach to the terms and conditions to be applied to the divestment?

The Competition Act expressly provides that the Agency may require divestment as a remedy. However, it does not regulate in detail how it shall approach the terms and conditions to be applied to the divestment.

The Competition Act provides that remedies need to be proportionate and directly aimed at the competitive concern they aim to remedy. As a general proposition, structural remedies shall be required if no equally effective behavioural remedy may be imposed, or if a behavioural remedy would be a greater burden on the parties to the concentration than a structural remedy.

The Agency in particular (but not exclusively) may impose the following types of structural remedies: sale of undertakings or parts thereof to an unrelated party; dissolution of a joint venture (of the company and the underlying agreement); or severance of personal ties between undertakings (e.g. decision-making and executive bodies).

To the best of our knowledge, no divestment remedies have yet been imposed by the Agency.

5.6 Can the parties complete the merger before the remedies have been complied with?

Yes. The Competition Act expressly provides that measures can be undertaken before or after the concentration is performed. However, the terms and conditions in accordance with which the measures shall be undertaken will be set-out in the clearance. If the parties fail to implement the measures, the Agency may revoke its decision.

5.7 How are any negotiated remedies enforced?

Pursuant to the Competition Act, negotiated remedies may be enforced in two ways. Firstly, if parties to a concentration fail to implement the negotiated remedies, the Agency may revoke its conditional clearance. Secondly, failure to comply with negotiated remedies may entail fines for the undertaking in violation in the amount of 1-10% of the total annual turnover in the financial year preceding the violation. Furthermore, the responsible persons within the undertaking in violation may be fined in the range of EUR 1,000-4,000.

5.8 Will a clearance decision cover ancillary restrictions?

Neither the Competition Act nor any bylaws regulate the issue of ancillary restraints. To the best of our knowledge, the Agency has not dealt with the issue of ancillary restraints in its case law.

However, at the same time, there is nothing to prevent the Agency from also clearing ancillary restraints in its decisions. Nonetheless, such restraints can, at the request of the parties, be individually exempt from prohibition by the Agency in separate proceedings.

5.9 Can a decision on merger clearance be appealed?

Yes. Merger control decisions of the Agency can be appealed before the Administrative Court of Montenegro.

The Competition Act does not set out the circle of persons that can challenge a merger control decision. According to the Administrative Disputes Act, the following persons are entitled to lodge an appeal: (i) the parties to the concentration whose rights or legally protected interests are violated by a decision; (ii) third parties whose rights or legally protected interests are violated by a decision; or (iii) the attorney general or other competent state body if the law has been violated in favour of, or to the detriment of, certain third parties.

5.10 What is the time limit for any appeal?

The time limit for appeals to the Administrative Court of Montenegro is 30 days from the day of receipt of a decision. If the appeal is to be lodged by a party that has not received the decision, the time limit is 60 days from the day of receipt of the decision by a party to whom it has been delivered.

5.11 Is there a time limit for enforcement of merger control legislation?

Fines for competition law violations, including those for merger control, are imposed in misdemeanour proceedings by a court, on the initiative of the Agency. Misdemeanour proceedings against undertakings and responsible persons within undertakings, for (i) failure to notify a concentration within the prescribed deadline, (ii) failure to suspend the concentration until clearance, (iii) failure to comply with the terms and conditions of a conditional clearance, and (iv) performing a prohibited concentration, cannot be initiated after two years from the day the violation has occurred. In any case, misdemeanour proceedings cannot be initiated after 4 years from the day a violation has occurred.

6 Miscellaneous

6.1 To what extent does the merger authority in Montenegro liaise with those in other jurisdictions?

Unfortunately, there is only very limited information available on any cooperation between the Agency and competition authorities in other jurisdictions. Pursuant to publicly available information, the Agency is a member of the International Competition Network and has also concluded certain bilateral agreements, in particular with the Bulgarian competition authority.

According to its Competition Policy Strategy published in June 2008, one of the Agency's main goals is cooperation with other national competition authorities.

6.2 Are there any proposals for reform of the merger control regime in Montenegro?

The merger control regime in Montenegro just recently underwent significant changes with the entry into force of the Competition Act. As stipulated by the Competition Act, new bylaws need to be adopted (in particular relating to relevant market definition and the form and contents of merger notifications) in order to be compliant with provisions of the Competition Act, which is expected to come into force in the first half of 2013.

6.3 Please identify the date as at which your answers are up to date.

18 September 2012.

This article appeared in the 2013 edition of The International Comparative Legal Guide to: Merger Control; published by Global Legal Group Ltd, London. www.iclg.co.uk

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.