It has been rumored for a while that Montenegro is about to get a new Competition Act. It seems those rumors had some substance, as draft amendments to the Competition Act have been officially published and far-reaching changes of the Montenegrin competition law regime are on the cards.
NCA to get the power to impose fines
Probably the biggest proposed novelty is that the Montenegrin competition authority, the Agency for Protection of Competition, will finally be able to impose fines for antitrust infringements. Currently, imposition of fines is the prerogative of misdemeanor courts – once it establishes an infringement of competition, the competition authority can only submit a request for the initiation of misdemeanor proceedings and the possible fine is then imposed by the misdemeanor court.
Granting the competition authority the power to impose fines is likely to give tooth to the Montenegrin competition law enforcement, since the competition watchdog can be expected to be more keen on imposing antitrust fines than a misdemeanor court. This sounds like bad news for antitrust infringers.
Minimum amount of fine to be scrapped
Another proposed novelty related to fines is that the minimum amount of fine for antitrust infringements will be scrapped.
Currently, the Montenegrin competition authority can impose fines amounting to between 1% and 10% of the infringer’s annual turnover. Due to such wording of the law, a fine for a competition law infringement cannot be lower than 1% of the infringer’s annual turnover, even for the most innocuous of infringements. If the proposed change becomes the law, the Montenegrin authority will also be able to impose a fine in the amount lower than 1% of the infringer’s turnover. In this respect, antitrust infringers have something to look forward to.
Individual exemptions to be possible during antitrust investigations
At the moment, Montenegro has a system of individual exemption of restrictive agreements based on prior notification to the competition authority, similar to the one that existed in the EU under Regulation 17/62. In such system, in order to benefit from an individual exemption based on the Montenegrin counterpart of Article 101(3) TFEU, the parties need to notify their agreement to the authority in advance. This can lead to inappropriate results, as an agreement could end up being prohibited just because it was not notified to the authority and even if it satisfied the substantive conditions for exemption.
According to the draft amendments to the Montenegrin Competition Act, this is about to change. Specifically, it is proposed that parties to a restrictive agreement can claim that the agreement satisfies the conditions for individual exemption even once the competition authority has already started an antitrust investigation of the agreement. This proposed change is most welcome and one can only hope that Serbia and Bosnia and Herzegovina will soon adopt similar solutions, too.
Fifteen-day deadline for submitting a merger filing to be scrapped
Another welcome proposed change is that the deadline for filing a merger to the Montenegrin competition authority will be scrapped.
Currently, same as Serbia and Bosnia and Herzegovina, Montenegro has a 15-day deadline for submitting a merger filing to the competition authority. This deadline most commonly starts to run from the date of the signing of the SPA and in practice has been forcing applicants to often submit incomplete filings just so that they would meet the filing deadline. Companies who file in Montenegro, as well as their lawyers, can be expected to hail this change.
***
For more information, please contact Dr. Dragan Gajin, Head of Competition at Doklestic Repic & Gajin.