On 14 June 2023, the Ministry of Commerce issued three new implementing regulations for obtaining merger clearance in Cambodia. These new regulations include Prakas 177 on conditions and procedures for registration of business combinations which are subject to prior notification (“Prakas 177”), Prakas 178 on the procedures for post-merger notifications (“Prakas 178”), and Prakas 179 on requirements and procedures for issuance of an advance ruling certificate (“Prakas 179”).
Following on the issuance of Sub-Decree 60 on Requirements and Procedures for Business Combinations dated 6 March 2023 (“Sub-Decree 60”) and the decision on thresholds for pre-merger notifications (“Pre-Merger Notification Thresholds”), guidance has now been provided to assist in determining whether business combinations which potentially affect markets in Cambodia (whether conducted in Cambodia or abroad) may be subject to either a Pre-Merger Notification, or a Post-Merger Notification to the Cambodia Competition Commission (“CCC”). In addition, guidance has been provided on the process to request an advanced ruling certificate (“ARC”) from the CCC.
For transactions that meet the Pre-Merger Notification Thresholds, Prakas 177 clarifies the process for submitting the required post-completion registration. Prakas 177 states that one of the parties to the merger must submit a registration form to the CCC within 30 working days after the substantive completion of the business combination, along with the required supporting documentation. Within seven working days of receiving the registration form, the CCF will issue a notice confirming the fulfilment of the registration requirements or identifying any deficiencies or omissions in the documents submitted.
In the case of deficiencies or omissions, the applicant has 15 working days to provide additional documentation. Prompt action is crucial, as failure to provide the required documentation within the specified time will result in the registration being invalidated. However, if the applicant provides reasonable grounds to the CCF a deadline extension for submitting additional documents can be granted.
Prakas 178 provides details on Post-Merger Notification which is required where a potential business combination does not satisfy the Pre-Merger Notification Thresholds but reaches 50% or more (but less than 100%) of one or more of the Pre-Merger Notification Threshold.
If applicable, parties must notify the CCC within 30 working days after the business combination has been completed. The required documents as well as the procedure for completion of the post-merger notification are set out in Prakas 178.
Issuance of the ARC
Parties to a business combination who wish to request an ARC must submit an application to the CCC before completing the transaction. The CCC will conduct a review of the proposed business combination and its potential effects in relevant markets and issue an ARC if there are no grounds to challenge or prohibit the transaction. The CCC may also issue the ARC with conditions. In cases where false or incomplete information is provided, the CCC may suspend the ARC and allow the parties to provide additional evidence within seven working days. Issuance of an ARC protects a business combination from challenges under Article 11 of the Law on Competition for one year from the issuance date on the same grounds for which the ARC was issued.
Additionally, if the CCC determines that it is not appropriate to issue an ARC, it may issue a “No-Action Letter” stating simply that the CCC does not intend to challenge the business combination under Article 11 of the Law on Competition. A transaction which receives a “No-Action Letter”, and is subject to the Pre-Merger Notification, is eligible for a simplified notification.
The new regulations provide further guidance on Cambodia’s merger regime which is expected to come into effect on 6 September 2023.
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The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.