Brazilian Competition Authority Plans to Modernise Merger Review Applications
Although the Brazilian Competition System (comprised of the Secretariat of Economic Accompaniment – SEAE, the Secretariat of Economic Law – SDE and the Administrative Economic Defence Council – CADE) recently signalled that its focus is turning more to clamping down on anticompetitive conduct, merger review is still on the agenda (despite the number of notifications reviewed has fallen from 517, in 2003, to 372 this year). Indeed, on November 24, 2006, CADE announced that it was making available for public consultation, until December 23, 2006, draft Resolution 45, which institutes a new questionnaire for merger review notifications (thereby replacing the well known “Annex I” of CADE Resolution 15/98) and aims to enhance the information provided in notifications and to expedite the review procedure (by contemplating on-line filings and submission of documents in electronic format). The new questionnaire disclosed by CADE is far more extensive than that contained in “Annex I” of CADE Resolution 15/98 (the number of items increasing from 35 to 78) and goes into greater depth in respect of the economical information pertaining to the “Involved Persons” (which is the new definition adopted and refers to any persons – whether Brazilian or foreign individuals or corporate entities – effectively involved in the transaction, i.e., that have had their corporate structure or asset composition effectively affected by the transaction notified), the transaction itself and the affected markets. CADE expects that by the Involved Persons providing such information, SEAE’s and SDE’s review of the transaction (prior to the same being ruled upon by CADE) will be speeded up. The greatest breakthrough in terms of speed, however, is the possibility of notifications being submitted on-line (in a similar fashion to Brazilian tax returns, which for years have been completed and filed on-line). The SDE is expected, as from April 1, 2007, to provide the software for such purpose. Up to and including March 31, 2007, merger review notifications can still be made under the terms of “Annex I” of CADE Resolution 15/98, which requires them to be filed with the SDE, in Brasilia, in three equal sets. The draft Resolution also contemplates the possibility of the underlying documentation to the notification being submitted electronically (in “read only pdf” format and non-reusable media). However, it is important to stress that the draft Resolution does not eliminate the need to file one set of the notification and underlying documentation with the SDE, the date of such filing being that taken into account for the purposes of ascertaining whether or not it was made within the 15 business day deadline contemplated by the Brazilian Competition Law. Felsberg e Associados participates in a series of legal study groups in Brazil (CESA, IBRAC, OAB/SP) that shall submit constructive criticism and comments to CADE on the draft Resolution by December 23, 2006.