Serbia is well known as a jurisdiction with low merger filing thresholds. In addition to the red tape they create, such low filing thresholds mean that even minor transactions require a careful examination whether a merger filing is required. In a recently published opinion, the Serbian Competition Commission looked at whether aircraft lease amounts to a concentration.
Specifically, a party turned to the Commission asking whether there was a merger filing obligation in case of sublease of an airplane. In a nutshell, while it did not rule out in entirety that in similar cases a filing could be required, the Commission established that in the case at hand no such obligation arose.
The main factor was a relatively short lease period (five years). The Commission found this was insufficient time for a change of control to occur on a lasting basis. This appears to be at odds with some previous cases in the Commission’s practice – for instance, in one case the Commission considered that even lease (of land) as short as one year was sufficient for a concentration to arise.
Does this mean that even a one-year aircraft lease can lead to a merger filing obligation in Serbia? This is particularly relevant now when the Commission has issued its first fine for gun-jumping.
What exacerbates the uncertainty are low merger filing thresholds in Serbia, which can be triggered even if the target has no local presence. Since it is sufficient that during the relevant year the acquirer generated EUR 100 million worldwide and EUR 10 million in Serbia, basically any airline which makes 10 million euros in Serbia would potentially need to make a merger filing in Serbia for any aircraft it leases anywhere in the world.
Filing such mergers would hardly contribute to safeguarding competition in Serbia. To avoid the possibility of such an outcome, perhaps an overhaul of the existing thresholds for merger filing in Serbia should be considered.