Competition update: Regulations on Merger clearance
Applicable Industries: All corporate

The Ministry of Commerce of Cambodia issued three additional implementing regulations pertaining to the acquisition of merger certification on June 14, 2023. Prakas 177 ("Prakas 177") outlines the conditions and procedures for registering business combinations that require prior notification; Prakas 178 ("Prakas 178") specifies the protocols to be followed after a merger; and Prakas 179 ("Prakas 179") delineates the prerequisites and processes involved in obtaining an advance ruling certificate.

Pre-Merger Notification

In regard to transactions that satisfy the Pre-Merger Notification Thresholds, the procedure for submitting the mandatory post-completion registration is elucidated in Prakas 177. Prakas 177 stipulates that one of the parties to the merger must submit a registration form and the requisite supporting documentation to the CCC within 30 working days of the substantive completion of the business combination. The CCF will issue a notice certifying the completion of the registration requirements or identifying any deficiencies or omissions in the submitted documents within seven business days of receiving the registration form.

The applicant is granted an extended period of 15 working days to resubmit any missing or inadequate documentation. It is of the utmost importance to act promptly, as failure to furnish the necessary documentation within the designated timeframe will lead to the nullification of the registration. A deadline extension for the submission of additional documents may be granted, however, if the applicant provides the CCF with reasonable justification.

Post-Merger Notification

Prakas 178 elaborates on the Post-Merger Notification obligation that is imposed in cases where a prospective business combination fails to meet the Pre-Merger Notification Thresholds but meets at least 50% (but not 100%) of one or more of the Pre-Merger Notification Thresholds.

Parties are required, if applicable, to inform the CCC within thirty business days of the completion of the business combination. The documentation prerequisites and the process for submitting the post-merger notification are delineated in Prakas 178.

Advanced Ruling Certificate (“ARC”)

In order to obtain an ARC, parties to a business combination are required to submit an application to the CCC prior to finalizing the transaction. An ARC will be issued by the CCC if there are no grounds to challenge or prohibit the proposed business combination and its potential effects on relevant markets, following which the CCC will review the transaction. The CCC may also impose conditions on the ARC.  When the CCC receives deceptive or insufficient information, it may suspend the ARC and grant the parties an opportunity to submit supplementary evidence within a period of seven business days.  A business combination is shielded from challenges under Article 11 of the Law on Competition for a period of one year from the date of issuance, on the same grounds that an ARC was issued.

Furthermore, in the event that the CCC concludes that issuing an ARC is not warranted, it may instead issue a "No-Action Letter" which explicitly states that the CCC has no intention of contesting the business combination in violation of Article 11 of the Law on Competition.  An organization that is subject to the Pre-Merger Notification and receives a "No-Action Letter" may qualify for a streamlined notification process.