AmCham Macedonia Spring 2015 (Issue 45) | Page 12

ANALYSIS transactions where all participants are foreign undertakings. Defining the relevant market (product and geographical market) is an important step in the notification process which significantly affects the time needed to prepare the notification and the duration of CPC review process itself. The practice and track record of the European Commission Directorate General for Competition (and the CPC, to some extent) is extremely helpful in identifying relevant market segments. In cases where concentrations are carried out without CPC notification or without being declared legally compliant, the CPC may impose temporary, behavioural and structural measures aimed at restoring competition on the affected relevant market. Failure to obtain CPC clearance for a transaction can result in serious legal sanctions. Parties in such cases Photo by: Maja Janevska-Ilieva will be ordered to sell or transfer the stocks or shares in question or the CPC could prohibit or restrict the exercise of voting rights related with the stocks or shares of the participants in the concentration. It could also order the termination of the joint venture or other forms of acquiring control. Parties also face misdemeanour sanctions and fines of up to 10% of the aggregate annual income of the undertaking in the business year preceding to the year when the misdemeanour was com- mitted. A temporary ban may also be imposed on the performance of a specific business activity as well as individual bans on practicing one’s profession. For all of these reasons, a professional analysis by competition experts on the need for CPC approval is highly important when structuring any legal transaction, particularly with respect to its legal perfection and maintaining timelines for its successful closing. 1 Due to the obligations undertaken with the Stabilisation and Association Agreement between the Republic of Macedonia (RM) and the European Communities (EC) and their member states and the ongoing process of harmonisation of the Macedonian legislation with the EU acquis, the Macedonian Law on the Protection of Competition (LPC) entered into force on 13 November 2010 (Official Gazette of the RM No. 145/10), as the country’s primary source of competition regulation. Its purpose is to ensure free competition on the domestic market to stimulate economic efficiency and consumer welfare. The Law applies to all forms of prevention, restriction or distortion of competition that affect the territory of the RM, even when they are caused by activity outside of the territory of the RM. Further, EU competition criteria are used to assess competition distortions that may affect trade between RM and EC. 2 “Undertaking” refers to any type of business venture, regardless of the manner of its organisation or the form of its management (trade company, sole proprietor, public undertaking, cooperative undertaking, association of undertakings, etc.), freelance profess [ۜ