Law no. 5/18, of 10th of May – Competition Law.
On the 10th of May of this year, the first Competition Law was approved in Angola. The said Law applies to (i) the economic activities carried out in Angola, whether on a permanent or occasional basis and (i) to the public companies, private companies, cooperative and other kinds of business association, with or without legal personality.
By virtue of the said Law, a Competition Regulatory Authority was created, whose legal regime, as well as the organization and functioning, is regulated in a legal document to be approved by the President of the Republic, as the Head of the Executive Power.
In accordance with the Competition Law, constitutes as detrimental to competition the following:
- The abuse of a dominant position (e.g.: breaking in whole or in part, a commercial relationship without a justification;
- The economic dependence abuse (e.g.: demand directly or indirectly, unfair purchase, sale or other unequal trading conditions;
- Collective practices prohibited, in particular, restrictive agreements of competition (e.g.: restricting or preventing access to new undertakings on the market), such as concerted practices and decisions by associations of undertakings with competitive advantages.
As a general rule, violations of the Competition Law are punishable by a fine, which may or may not be accompanied by its accessory sanctions.
- The fine cannot be less than 1% or exceed 5% of the previous year’s business volume for each of the undertakings concerned in the case of infringements:
- The lack of communication of the concentration process, in the terms foreseen in the Law;
- The failure to provide information or the provision of false information, inaccurate or incomplete in response to the requests that came from the Competition Regulatory Authority;
- The failure to cooperate with the Competition Regulatory Authority or prevent the exercise of the powers of investigation and inspection.
The fine cannot be less than 1% or more than 10% of the business volume of the last year for each of the companies which will participate in the following practices:
- Abuse of dominant position;
- Abuse of economic dependence;
- Prohibited collective practices;
- Horizontal and vertical agreements.
The fine cannot be less than 1% or more than 10% of the remuneration received for the performance of its duties in the infringing company, in the case of an unjustified absence when there is a notification, as witnesses, experts or representatives of the complainants or offenders companies.
In addition to the fines, the Competition Law provides for the application of the following accessory sanctions:
- Publication of the sanction in the newspaper of greater circulation. The offender defrays the costs of publication;
- The offender is prevented from participating in public procurement procedures for a period of up to 3 years;
- Demerger of the company, transfer of the shareholding control, sale of assets, partial suspension of the activity or any other act or action required for the elimination of the harmful effects to the competition.
- The Competition Regulatory Authority may decide on the application of a penalty payment for each day of delay, in the amount of 10% of the daily average of the last year business volume, in case of (i) failure to comply with its determinations that imposed a penalty or required certain actions and (ii) in the case of non-disclosure or false information, on the occasion of a company’s concentration operation.
The Competition law also states a sanctioning procedure which operates by opening an inquiry, whenever in any way through, the Competition Regulatory Authority, becomes aware of strong evidence of practices restricting the competition by notifying a target party. The Competition Regulatory Authority shall make known to the Company or group of companies concerned the conduct of the investigation, its purpose and duration. The inquiry shall be conducted in confidence to safeguard companies.
Provisions concerning the procedure for the control of concentrations between companies and for studies, inspections, audits and monitoring of public aid are also laid down.
Article compiled by Neuza Dias of Angolan member firm Avocats FBL