Yes, the framework is provided by Federal Law 4 of 2012 and its implementing regulations.

The Federal Ministry of Economy and the Committee for the Regulation of Competition.

No, there is not a supranational agency that has, or may have exclusive competence. 

Yes, in the Federal Law 4 of 2012 ("Competition Law") and its implementing regulations.

A merger clearance request is triggered (and must be filed) in cases where there is an "economic concentration" unless an exemption applies.

The concept of economic concentration is defined in the Competition Law as follows:

"Any act resulting in a total or partial transfer (merger or acquisition) of property, usufruct rights, rights, stocks, shares or obligations from one establishment to another, empowering the establishment or a group of establishments to directly or indirectly control another establishment or another group of establishments."

The requirement to submit a merger clearance request is accordingly triggered in all cases where there is an economic concentration, irrespective of whether the parties to the concentration have a formal, licensed presence in the UAE. The test is an effect-based test (see Article 3 of the Competition Law), hence why foreign-to-foreign transactions must also be notified if they otherwise qualify for a filing.

Cabinet Resolution 13 of 2016 ("Ratios Resolution") further stipulates that merger clearance is required to be sought where the overall market share of the parties to the transaction exceeds 40% of the relevant market.

For the purposes of this analysis, the Ratios Resolution does not stipulate any conditions or formulate how the threshold must be met. In other words, it does not appear to be relevant whether the parties to an economic concentration together or separately meet the threshold, so long as together (i.e., after the concentration is complete), they would have a market share of at least 40% of the relevant market. An agreement that restricts competition would generally be exempt from competition if the parties to such an agreement hold no more than 10% of the total transactions in the relevant market.

As noted above, there are a number of exemptions contained in the Competition Law. To the extent that one or more of the concerned parties to a concentration qualify for an exemption, the obligation to seek merger clearance does not arise.

The Competition Law contains the following sector-specific exemptions:

• Telecommunication;
• Financial sector;
• Cultural activities (readable, audible and visual);
• Oil & gas;
• production and delivery of pharmaceutical products;
• Postal services including the express mail service;
• Activities relating to the production, distribution and transportation of electricity and water;
• Activities on the treatment of sewerage, garbage disposal, hygiene and the like, in addition to supportive environmental services thereof; and
• Land, marine or air transport, railway transport and services related thereto.

In addition, there is a carve-out for entities that are owned by the Federal or an Emirate level government. In order to qualify for this exemption the relevant business must be at least 50% owned by the Federal or an Emirate level government. It is yet to be seen whether indirect ownership qualifies. It is important to note that the Ministry has discretion to interpret the scope of each exemption and as such, if an exemption is to be relied upon, this is something that must be discussed with the Ministry on a case-by-case basis.

Finally, there is an exemption for businesses that are classified as small and medium-sized ("SME"). The term “SME” has been defined in Cabinet Resolution 22 of 2016, as follows:

• Trade sector:
  • Micro-sized: Less than or equal to 5 employees, or revenue of less than AED 3 million;
  • Small-sized: Between 6 and 50 employees; or annual revenue of less than AED 20 million; and
  • Medium-sized: Between 51 and 200 employees or annual revenue of less than AED 200 million.
• Industry sector:
  • Micro-sized: Less than or equal to 9 employees; or revenue of less than AED 3 million;
  • Small-sized: Between 10 and 100 employees; or annual revenue of less than AED 50 million; and
  • Medium-sized: Between 101 and 250 employees; or annual revenue of less than AED 250 million.

Yes, if market concentration will be created or increased.

There is no formal exemption for overseas transactions. The national rules relate to the "relevant market" and the requirement to seek clearance is triggered to the extent that the market share of the relevant parties in the UAE meets the relevant threshold. Our experience is that the Ministry requires foreign-to-foreign transactions to be notified if the local effects test is satisfied with respect to the local (UAE) market.

40% of the total transactions in the relevant market in the UAE.

The filing is mandatory.

There is uncertainty as to the correct time for the filing of a merger clearance application. While the Competition Law requires that an "economic concentration" be notified to the Ministry at least 30 days before the completion of the transaction, the Implementing Regulations (Cabinet Decision 37 of 2014) require that such notification be filed at least 30 days prior to the conclusion of the draft agreements for the transaction. In any case, both the Competition Law and the Implementing Regulations require that the relevant entities abstain from implementing the proposed transaction until such time as they have received a decision, or alternatively, until the prescribed statutory time periods for a decision have elapsed and a decision has not been issued (in which case, the law states that the transaction can proceed). Nevertheless, in cases where parties to a transaction have decided to seek competition clearance, they would be well advised to start this process before executing any binding documents in connection with the transaction.

There is no automatic waiting period as such. However, the application must be made at least 30 days prior to the date that the relevant contract or agreement is prepared for signature. The Ministry is supposed to issue its decision on an application within 90 days from the date of receipt of the complete application, which may be extended for a further 45 days. If no decision is taken within this period, then the application is deemed accepted. In practice, experience suggests that the Ministry does not issue a formal acknowledgment of submission or receipt, thereby making it impossible to determine the point at which the waiting period commences.

The Ministry has issued an Arabic language form that is required to be completed and filed in Arabic and in hard copy. The initial filing is required to be accompanied by copies (translated into Arabic) of the basic constitutional documents of the parties involved and information concerning their respective market share and activities in the UAE. The Arabic language form and any supporting documents must be provided to the Ministry in triplicate.

No, there are no filing fees. 

The application must be made at least 30 days prior to the date that the relevant contract or agreement is prepared for signature. The Ministry is supposed to issue its decision within 90 days of receipt of the complete application, which may be extended by 45 days. The Ministry could make a decision on an application in fewer than 90 days; however, the parties would be unable to compel the Ministry to do so. In practice, experience suggests that the Ministry does not issue a formal acknowledgment of submission or receipt, thereby making it impossible to determine the point at which the waiting period commences.

The Ministry must make a determination that the positive economic impact of the transaction would surpass any negative effects it might have on competition.

The Ministry can either approve or deny the application. The Ministry also has the authority to approve an application subject to conditions it may impose at its discretion.

Although not expressly addressed by the national rules, the parties may proactively offer commitments to the Ministry in support of the application.

The filing of an incorrect or incomplete application with the Ministry would make the applicant potentially subject to a fine of up to AED 100,000.

Implementation of a merger before clearance could result in a fine of up to AED 500,000. Implementation of a merger without clearance could result in a fine of up to 5% of the overall sales value of the products or service revenues in the UAE during the most recent financial year, or a fine of AED 5 million if the quantification of sale revenue is impossible.

The Ministry (or an interested third party) may review and/or challenge mergers that have not been notified pursuant to the Competition Law.

The Ministry could assess a fine on the supposed offender. Alternatively, it could issue a notice to the supposed offender asking that it explain the reason for proceeding with the transaction without notification.

The Competition Law remains largely untested as there have been a very limited number of clearance requests submitted. However, the Ministry is keen to ensure that the UAE competition regime is seen to be enforced and is active in following up anti-competitive practices, in particular those which it considers to have a harmful effect on UAE consumers.

Enforcement action is not made public and there is no official guidance or published decisions provided by the Ministry on the enforcement and application of the Competition Law.