Bosnia to Change Merger Filing Fees?

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Bosnia to Change Merger Filing Fees?

Compared to its neighbors, Bosnia and Herzegovina has been known as a jurisdiction with relatively low merger filing fees. Will it stay like that if the proposed changes to the filing fees go through?

What is the merger filing fee in Bosnia now?

If you want to obtain a merger clearance in Bosnia and Herzegovina, you first need to pay BAM 2,000 (approx. EUR 1,000) for the notification itself. Later, once the merger is cleared, you would need to pay an additional, clearance, fee, the amount of which depends on whether the transaction was cleared in Phase I (for which the clearance fee is BAM 2,500) or Phase II (for which the fee is BAM 25,000).

Therefore, based on the current rules, for a Phase I clearance you would in Bosnia need to pay BAM 4,500 (approx. EUR 2,250) in total. In Serbia, that amount would be more than ten times higher (EUR 25,000) and in Montenegro almost seven times as high (EUR 15,000).

And if the Bosnian competition authority cleared your transaction only after Phase II, you would be paying BAM 27,000 (approx. EUR 13,500) in total. For the same procedure, you would in Serbia have to pay almost four times as much (EUR 50,000) and in Montenegro EUR 6,500 more than in Bosnia (EUR 20,000).

What is the new proposal?

Based on the draft new tariff of the Bosnian competition authority, the initial notification fee of BAM 2,000 is to remain the same. However, the fee for the issuance of a clearance decision is to be increased – for Phase I mergers, at least.

According to the published proposal, the clearance fee for mergers approved in Phase I is to be raised from BAM 2,500 to BAM 5,000. On the other hand, the clearance fee for mergers cleared in Phase II may actually decrease, as it is to be calculated as:

 “…0.03% of the total annual turnover which each of at least two parties generated on the Bosnian market in the previous year, capped at BAM 50,000.”

As stated above, currently the total merger filing fee for Phase IIs is BAM 27,000 fixed. And if the “0.03%” formula be applied, the fee could actually be less than that.

How can the proposal lead to lower Phase II fees?

Based on the Bosnian Competition Act, a concentration is notifiable if the following two cumulative conditions are met:

  1. The combined worldwide turnover of all concentration participants exceeded BAM 100 million in the previous year and
  2. The Bosnian turnover of each of at least two concentration participants exceeded BAM 8 million in the previous year, or their combined market share exceeds 40%.

Therefore, the minimum combined Bosnian turnover triggering a merger filing in Bosnia is BAM 16 million. And 0.03% of that amount is BAM 4,800 – which would be a significantly lower fee for a Phase II clearance than the currently applicable BAM 25,000.

Actually, in order for the merger clearance fee to reach the BAM 50,000 cap, the combined Bosnian turnover of the parties would need to be at least BAM 167 million (approx. EUR 83.5 million), which is significant even for markets larger than the Bosnian one.

So, the new merger filing fees in Bosnia may actually be good for the applicants – at least those whose filings go into Phase II.

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