Montenegro: changes to the Competition Act

The amendments have not yet been passed by the Parliament, but they are expected to be adopted and implemented within the next months. The changes represent part of Montenegro's ongoing efforts to align its framework with EU acquis in preparation for accession. The major novelties, proposed at this stage, are:

• The turnover merger control thresholds remain unchanged. It is now clarified that the relevant turnover refers to revenue generated from the sale of goods and/or the provision of services.
• The 15-day filing deadline for filing a merger notification is abolished. There is no deadline for filing, although the transaction cannot be closed before the clearance is received.
• The deadline for approving a concentration is shortened from 105 working days to 30 calendar days from the date of receipt of a complete notification. The Agency Protection of Competition ("Agency") is to issue a certificate of completeness, which will include the date from which the notification is deemed complete i.e., the date when the 30-day deadline starts running. If Phase II is initiated, the Agency must decide within four months from the submission of the notification (not the date from which it is deemed complete / Phase II is initiated).
• Abolition of the individual exemption mechanism – Restrictive agreements that meet the conditions for individual exemption from the prohibition will no longer require formal notification to and approval from the Agency. Thus, parties will have to do a self-assessment of the restrictive agreement.
• The Agency will only consider an objection of the parties against whom an investigation procedure is initiated if the objection is submitted within 8 days. This can make the party's defence more difficult, considering the short 8-days statutory deadline.
• The Agency's powers during dawn raids – Agency can only access business books and records outside official premises based on prior authorisation from the Administrative Court, issued upon the Agency's request.
• Amount of fines – The current Competition Act prescribes a fine ranging from 1% to 10%. The Proposal removes the lower bound of 1% and ties the amount of the fine to "total worldwide annual turnover", thereby clarifying which turnover is referred to. A fine of up to 10% of turnover can be imposed if the prohibited concentration is implemented.
• Stricter procedural fines – The Proposal replaces the current fines ranging from EUR 4,000 to EUR 40,000 with a fine of up to 1% of total worldwide annual turnover, applicable in cases of: obstruction of dawn raid; abuse of privileged communication; failure to provide or provision of inaccurate information; and implementation of a concentration prior to clearance.
• Cooperation with EU – In preparation of EU accession, the Proposal regulates in detail the cooperation between the Agency, judicial authorities, and the European Commission; mutual assistance in conducting investigative procedures; the Agency's actions upon requests from competent authorities of EU Member States for enforcement of fines. These provisions shall apply from the day Montenegro becomes an EU Member State.

The Proposal introduces other novelties as well (like a new leniency programme and amendments to limitation periods). The misdemeanour court remains competent to impose fines.

The Proposal will be presented to the Parliament in the coming days. Some modifications of the text of the Proposal are possible, although not likely. We will continue to monitor developments, and report on the final version of the rules that will apply in Montenegro in the upcoming period.

authors: Srdjana Petronijevic, Danijel Stevanovic, Marija Vranic