We have already written about the effects of the COVID-19 outbreak on merger control in Serbia. Now, the issue of deadlines in the merger control procedure during the state of emergency in Serbia has been clarified by a Government decree.
Serbia in a state of emergency
On March 15, the Serbian government declared a state of emergency and adopted measures aimed at limiting the spread of the coronavirus. The movement of people is restricted and business such as cafes, restaurants, and shopping malls have been ordered to close. Government agencies are also working in a downsized mode, as communication with parties has been largely moved online.
What are the merger control deadlines in Serbia?
In Serbia’s merger control procedure, there are two main deadlines merger filing applicants should be aware of: 1) the deadline for submitting the merger filing; and 2) the deadline within which the Serbian NCA is supposed to decide on the notified merger.
The deadline for submitting the merger filing is a specificity of Serbia’s merger control regime and it provides that the applicant (generally, this would be the acquirer) is supposed to submit the merger filing within 15 days of the signing of the transaction document (in most cases, this would be an SPA). There is even a potential fine for failure to notify within this deadline.
As for the deadline for deciding on the notified transaction, the Serbian Competition Act prescribes that the NCA is supposed to decide on the notified merger within one month from the filing. Within this deadline, the NCA is supposed to either clear the transaction in Phase I or open a Phase II probe of the merger.
How is the newly adopted Government decree affecting the Serbian merger control deadlines?
On March 24, the Serbian Government adopted a Decree on the Application of Time Limits in Administrative Proceedings During the State of Emergency. The decree affects the time limits both in the general administrative procedure and in special administrative procedures, such as the merger control procedure, regulated by the Serbian Competition Act.
The decree has two important effects on merger control in Serbia, as it affects both the deadline for notifying the transaction and the deadline within which the Serbian NCA is supposed to decide on the merger:
- The deadline for submitting the merger notification: a party cannot bear any consequence for failure to meet the deadline during the state of emergency;
- The deadline within which the NCA is supposed to decide on the merger: any such deadline will be deemed to have passed 30 days from the end of the state of emergency.
In this context, it can be expected that: 1) a number of parties will wait for the end of the state of emergency to notify their transaction; and 2) the pending merger control proceedings may take more time to complete than it would have been the case in normal circumstances.
And what about the standstill obligation?
The Serbian merger control rules prescribe for a standstill obligation, i.e. the parties are supposed to wait with implementing their transaction until the Serbian NCA clears it. As it stands, the standstill obligation remains, and, while they do not have to notify their merger within 15 days of the signing of the transaction agreement, parties are still supposed to refrain from completing their transaction until the Serbian NCA OKs it.