June 2011

When a merger, acquisition or joint venture is connected to the Chinese market and is treated as a concentration under China’s Anti-monopoly Law, a company’s first question to its lawyer is likely to be whether the transaction must be filed with the Ministry of Commerce.

The reason for the problem is clear. The law and relevant regulations state that a concentration which meets the filing threshold must be filed. However, the low threshold for filing a concentration in China means that the understaffed ministry has a large number of filings to review. As a result, filing is a time-consuming process. Chinese competition lawyers will also be aware that there are no specific provisions of law that penalise failure to file. Some undertakings weigh the risk of being caught against the potential time saving and choose to not to file, instead discreetly proceeding with the transaction. This practice has become an open secret in China.Continue Reading Can Companies Avoid Filing Concentrations?