Category: COMESA

“How much for this merger filing?” – Clarifying the COMESA fees

Posted on by andreasstargard

COMESA old flag color
We have recently seen several articles and law firm client alerts incorrectly identifying the filing fee schedule of COMESA.  This post is designed to clarify and to provide accurate information to our readers.

Rule: The filing fee for a merger notification under the COMESA regime is the lower of:   [1]   500,000 COMESA-$,  or    [2]   0.5% of parties’ combined annual turnover or asset value within the COMESA market.

The confusion as to “higher of” vs. “lower of”, which has sprung up in many firm publications, may be due to the somewhat awkwardly worded language of the amendments to the original 2004 Competition Rules.  The amendments changed the text of Rule 55(4), dealing with the fee schedule and its calculation.

Example:  The two notifying parties have a combined turnover of 90m COM$ in the common market of COMESA.  In this scenario, 0.5% of 90m COM$ equals 450,000 COM$, which is lower than the maximum fee of 500,000.  Thus, the fee to be paid by the parties is 450,000 COM$.

As a rule of thumb, if the combined annual turnover/revenues/asset values of the notifying parties is 100 million COMESA-$, then the fee will be the maximum 500,000 amount.  Otherwise, it will be lower.

Kenyan Competition Authority Disputes COMESA Jurisdiction

Posted on by andreasstargard

kenya
The Kenyan Competition Authority (CAK) has asked for formal guidance from the Kenyan Attorney General (and via his office from COMESA) as to notification requirements of mergers over which national competition authorities used to exercise exclusive or semi-exclusive jurisdiction.

John Oxenham, at Nortons in Johannesburg (South Africa) has said to Global Competition Review that the CCC would inevitably “encounter teething problems. However, it is clear that the landscape in relation to merger notifications across the region has been dramatically reinforced with COMESA coming into operation”.

COMESA member states have the procedural option of requesting a referral-“down” from the COMESA’s CCC (Competition Commission), once they gleaned that a notification has been submitted to the CCC and under circumstances that make it likely that the notified transaction may be harmful to competition within that member state’s market.

COMESA CCC now functional

Posted on by andreasstargard

COMESA old flag color
COMESA Fundamentals:

COMESA (Common Market for Eastern and Southern Africa) is a supra-national group of 19 sovereign African countries; it is the successor entity to the 1982 Preferential Trade Area Agreement among eastern and southern African nations.  For starters, here is a map of COMESA’s member states, which are as follows: Burundi, Comoros, the Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe.

Notably absent from its membership is the largest economy of the region, namely South Africa.  Likewise, Tanzania is no longer a member, having left the bloc in 2000.

What is the competition-law relevance of COMESA:

Headquartered in Lusaka (Zambia), the 19 year-old organisation has recently upped the ante for companies engaged in commercial activities within the borders of COMESA member states…  It has created and activated the COMESA Competition Commission (the “CCC”).

The CCC, based in Lilongwe (Malawi), is tasked with supervising and enforcing competition-related matters within the bloc.  In this function, it may be compared to the Directorate General Competition (“DG COMP”) of the European Union, as a supra-national enforcement authority, specialised in antitrust / competition-law matters.  The CCC’s primary areas of responsibility are, unsurprisingly:

  1. Merger enforcement (using an “SLC” – substantial lessening of competition – test)
  2. Cartel conduct and other horizontal and potentially also vertical agreements
  3. Unilateral conduct (i.e., abuse of a dominant position in the market)

The COMESA Board of Commissioners is an appellate authority in relation to the CCC.  Companies may also maintain actions against COMESA member states before the Court of Justice, provided they have fully exhausted their national-court remedies.