April 7th, 2024 Legal Updates

Egypt’s Cabinet Approves New Executive Regulations for Revised Competition Law

The Cabinet of Ministers in Egypt has granted approval for the Executive Regulations (“Amended Executive Regulations”) accompanying the newly revised Egyptian Competition Law (“Egyptian Competition Law”), marking a significant milestone in the legislative evolution of the competition framework. These revisions represent a substantial overhaul to Egypt’s competition law framework, notably introducing and applying a compulsory pre-merger notification system.

Under the previous regime, parties involved in certain transactions who met the designated thresholds were obligated to inform the Egyptian Competition Authority (“ECA”) within 30 days following the completion of a transaction. However, with the newly approved regulations, Egypt is transitioning to a pre-closing notification regime. This change mandates that parties seek approval from the ECA before completing certain transactions, enabling the ECA to review and address any competition concerns prior to deal completion.

The implementation date for the pre-closing notification system is set for June 1, 2024, with no grace period anticipated thereafter. Transactions not concluded by May 31, 2024, meeting specified thresholds will fall under the purview of the new framework.

The new framework introduces key components aimed at enhancing oversight and regulation of mergers and acquisitions within Egypt. These components include specific thresholds that determine when mandatory notification is required. For domestic transactions, notification is mandated if, in the previous fiscal year, the combined turnover or value of assets of all parties exceeded EGP 900 million, with each of at least two parties having an Egyptian turnover exceeding EGP 200 million. Similarly, for international transactions, notification is necessary if the combined worldwide turnover or asset value exceeded EGP 7.5 billion in the last fiscal year, with at least one party having an Egyptian turnover exceeding EGP 200 million.

Furthermore, a filing fee, capped at EGP 100,000, has been introduced under the Amended Executive Regulations. However, it remains unclear whether payment of this fee is a prerequisite for the commencement of the review period.

Regarding the review process, upon submission of a notification, the ECA will undertake a 30 Business Day review, with the possibility of an additional 15 Business Days extension for complete filings. Transactions raising significant competition concerns may undergo a Phase II investigation, allowing an additional 60 business days for a decision to be reached.

In terms of violations, the framework addresses violations that could lead to penalties ranging from 1% to 10% of the violating party’s turnover or asset value. Fines may range from EGP 30 to 500 million in cases where turnover or asset value is indeterminable. These provisions serve to deter parties from engaging in anti-competitive practices and ensure compliance with the regulatory framework.

For further information, please stay tuned for our comprehensive article on the Egyptian Competition Authority’s Amended Executive Regulations.

Please contact Alex Saleh, Managing Partner (alex.saleh@glaco.com), Asad Ahmad, Head of Antitrust and Competition Practice (asad.ahmad@glaco.com) and Hegui Taha, Partner (hegui.taha@glaco.com) if you have any questions