Legal Guideline: Notification of economic concentration in Vietnam

RESPONSIBLE PARTIES MUST SUBMIT A DOSSIER FOR THE NOTIFICATION OF AN ECONOMIC CONCENTRATION 

Undertakings intending to take part in an economic concentration must jointly submit a set of economic concentration notification documents, in cases where undertakings are required to notify the economic concentration.
 

WHEN MUST TRANSACTIONS BE NOTIFIED?

Not all economic concentration transactions are subject to obligation to notify. Only if it falls within the specified threshold of one of the four criteria below with the parties be required to make a notification.

Notes 1: Before carrying out the act of economic concentration, undertakings must carefully assess, on the basis of the above criteria, whether they are required to notify the economic concentration and, if so make a notification.
 

PROCEDURES FOR NOTIFYING OF AN ECONOMIC CONCENTRATION 

(*)     If the enterprise does not submit additional documents within 30 days, the NCC shall return the dossier.
(**)     If the NCC has not issued a notice on the results of the preliminary appraisal upon expiry 30 days from the receipt of the valid dossier, the economic concentration transactions may be carried out.
(***)    In complicated cases, the deadline for the official appraisal of the economic concentration may be extended, but not more than 60 days, and the NCC shall inform the applicant in writing.
The NCC must send the decision on the economic concentration to the parties involved in the economic concentration procedure within 05 working days from the date of issuing of the decision.
 

PRELIMINARY APPRAISAL CRITERIA

Criteria that the NCC shall consider in preliminary appraisal process: 

Economic concentration transactions are subject to unconditional clearance  if they fall into one of the following situations:

Economic concentration transaction must be subject to an official appraisal if it does not fall into the four cases above.

OFFICIAL APPRAISAL CRITERIA

Criteria that the NCC shall consider in official appraisal process:

WHAT IS CONDITIONAL CLEARANCE?
A conditional clearance is an economic concentration transaction that is permitted to proceed but must meet one or more of the following conditions:

WHEN IS AN ECONOMIC CONCENTRATION PROHIBITED?

Note 2: During the process of official appraisal of an economic concentration, the NCC may request the parties to submit additional documentation but not more than twice, and the deadline for submitting additional documentation shall not be included in the deadline of appraisal of the economic concentration. If the requested parties fail to provide additional documentation or provide insufficient documentation, the NCC shall consider the application and decide on the basis of the available information and documents.

Note 3: The law does not provide a specific threshold for the official appraisal criteria, but depends on the assessment of the competent authority based on the actual market situation

DOSSIER FOR NOTIFICATION OF ECONOMIC CONCENTRATION

Notes 4: For foreign documents, the party who involved in the transaction must legalize overseas them and translate them into Vietnamese before submitting them.

HOW TO SUBMIT THE DOSSIER?
Submit in person or by post service.
 

RESULT OF PROCEDURE IMPLEMENTATION
Image of an Official Letter approving conditional economic concentration.

SANCTION FOR FAILURE TO NOTIFY AN ECONOMIC CONCENTRATION
A fine of between 01% and 05% of the total turnover in the relevant market in the financial year preceding the year in which the infringement was committed shall be imposed on each undertaking in the economic concentration without complying with the notification obligations.

In addition, after the notification of an economic concentration, a party to the economic concentration may still be subject to administrative sanction if it commits any of the following violations[2]:

Violation Act	Fine level	Basis for calculation of fine
Implementation of an economic concentration without notification of the results of the preliminary appraisal of the NCC	0,5% - 01%	Total turnover in the relevant market in the financial year preceding the year of committing acts of violation of each enterprise participating the economic concentration
Implementation of economic concentration without NCC decisions in case the economic concentration is subject to official appraisal	0,5% - 01%
Non-implement or insufficient fulfillment of the conditions in the decisions on conditional economic concentration	01% - 03%
Implementation of economic concentration if there is a decision of the NCC on the prohibited economic concentration*	01% - 03%

(*) In the event of the decision of the NCC on a prohibited economic concentration, the parties implementing the economic concentration may be subject to additional sanctions and remedies as prescribed by laws, depending on the form of the economic concentration[3]

 

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[1] Clause 1 Article 29 of Law on Competition 2018.

[2] Article 14 of Decree 75/2019/ND-CP dated September 26, 2019 on sanctioning of administrative violations in the field of competition (“Decree 75/2019/ND-CP”).

[3] Clause 2 Article 10, Clause 2, Clause 3 Article 11, Clause 2 Article 12, Clause 2, Clause 3 Article 13 of the Decree 75/2019/ND-CP.