- 1.What is the relevant antitrust legislation?
The relevant antitrust legislation in Nicaragua is the Antitrust Law, Law No. 601, published on 26 October 2006 and entered into effect on 24 June 2007 and the Regulation of the Antitrust Law, Decree No. 79-2006, published on 15 January 2007.
- 2.Which authorities enforce antitrust legislation?
The authority in charge to enforce the antitrust legislation is the Instituto Nacional de Promoción de la Competencia (PROCOMPETENCIA), a public institute with legal personality and own patrimony.
- 3.Are decisions of the antitrust authorities subject to administrative or judicial review?
Yes, they are. The decisions of the antitrust authorities are subject to administrative review: revision recourse; and appellate recourse. After those recourses, the decision could be subject of revision by the Supreme Court.
- 4.What practices can be deemed as anti-competitive under the legislation?
Practices among competing economic agents:
• establish agreements to fix, raise, arrange or manipulate the price or other conditions of sale or purchase of goods or services under any shape, which are offered or demanded in the markets, or exchanging information with the same object or effect.
• divide, distribute, assign, or impose portions or segments of a current or potential market for goods and services, customers, vendors, suppliers, by type of sold products, times or determinable spaces; or by any other means.
• conclude agreements to eliminate other companies of the market or restrict access to the same from other firms from his position of buyers or sellers of specific products.
• fixed or limited quantities of production; establishing the obligation not to produce; process; distribute or sell only a quantity restricted or limited of goods or the provision of a number, volume or frequency restricted or limited services.
• established, agreed or coordinate positions setting, abstaining or limiting prices at auction or in any other form of tendering in accordance with the law matter, except offer jointly submitted by economic agents that is clearly identified as such in the document submitted by the suppliers.
Practices between non-competitors economic agents:
• the unjustified recruitment or agreement for the exclusive distribution of goods or services between non-competing economic agents; or when the provider or wholesale distributor of a product sold only under the condition that the retail buyer don’t buy or distribute competing products
• the taxation of prices and other conditions that a distributor or retailer must retain at the time of providing goods or services to buyers.
• the sale of a conditional good to the acquisition of another or use a service, or the provision of a service subject to the usage of another or the acquisition of a good.
• the purchase or sale subject to the condition not to use or acquire, sell or supply, goods or services produced, processed, distributed or sold by third parties.
• the refusal to sell, provide, or buy, to certain economic, goods or services that are normal and usual way agent available or offered to third parties and that does not exist, in the relevant market, available alternative providers operating under normal conditions.
• the application of dissimilar conditions to equivalent, placed at a disadvantage compared to other competitors.
• the conjunction between various economic agents or the invitation to them to exert pressure against any customer or supplier, with the purpose of deter certain conduct, apply reprisals or forced to act in a certain sense.
• the predatory practices.
Concentrations that may affect the competition in the market.
- 5.Do antitrust violations incur administrative, civil or criminal liability?
Antitrust violations could incur in administrative, civil and criminal liability.
- 6.What are the penalties for antitrust and criminal violations?
The administrative sanctions for antitrust violations, without prejudice to civil actions, are:
• By engaging in the practices referred to in the general prohibition and between agents competing, from 100 minimum wages up to a maximum of 10,500 minimum wages.
• By engaging in practices between economic agents not competing and unfair competition, from 25 minimum wages up to a maximum of 8,000 minimum wages.
• By not having notified concentrations subject to such obligation; of a minimum of 100 minimum wages up to a maximum of 600 minimum wages
• PROCOMPETENCIA may impose sanctions to the economic agents for each day of delay that intentionally or negligently do not supply information and required collaboration or do so incomplete or inaccurate. The sanction shall be of 15 minimum wages per each day of delay.
• Natural persons who participate directly, as accomplices or accessories in the practices listed above, either in its personal character or as representative of a economic agent; will apply fines from 15 minimum wages up to a maximum of 100 minimum wages. In case of recidivism of competitive practices or prohibited conduct, economic agents declared responsible shall be punished by a fine equivalent to double the fine imposed by PROCOMPETENCIA.
The sanctions for criminal violations would be frrom 600 to 1000 fine days or from two to six years in prison.
- 7.How are investigations initiated and what are the procedural steps?
The investigations could be initiated by an interested party or by PROCOMPETENCIA directly. Regarding investigations of acts related to unfair competition, PROCOMPETENCIA will initiate investigations only if it is requested by an interested party.
The request for investigation shall be filed in writing complying with certain requirements established in the law. PROCOMPETENCIA will review the writ and order the commencement of investigations. The party investigated will be notified of the procedure, who will have 30 business days to present evidences, documents and information related to the accusation. Afterwards, there will be a 90 business days period on which the parties will be able to present evidences and PROCOMPETENCIA shall graduate the evidences presented according to the civil procedure rules. Once this period is finished, the parties will have 10 business days to present their conclusions.
Personnel designated in PROCOMPETENCIA will have 10 business days to send the file to its president, who shall issue a final resolution in 90 business days from the next day of reception of the file.
- 8.What are the possible mitigating factors of anti-competitive practices?
The only mitigating factor recognised in the law is in the event that an economic agent who participated in any agreement or in any act violating the law provides information to PROCOMPETENCIA related to those acts, that economic agent will be exonerated of any monetary fine applicable by law. This provision shall apply, provided that the implementing authority has not had prior knowledge of such agreements or practices, or when there is no other company that is already cooperating with PROCOMPETENCIA in an investigation of the same agreement.
- 9.Is there a leniency programme? What are the basic features?
- 10.Is there a provision for merger control in the antitrust legislation? What kinds of transactions are caught?
Yes, there are provisions related to merger control. It is prohibited any concentration of economic agents which effect is or can be to decrease, restrict, harm or impede free economic competition in respect of same, similar or substantially related goods or services.
- 11.What are the thresholds (turnover, etc) for filing, and is it voluntary or mandatory?
Concentrations are subject to mandatory notification when:
• the merger leads to the acquisition of a market share of, at least 25 per cent of the relevant market of a product or service; or
• the parties’ combined gross revenue exceeds 642,857 minimum wages.
The gross income includes the value of all assets and income accrued by the merging parties during its last fiscal year, in a periodical, eventual or occasional manner, may them be represented by cash, goods and compensations originating from the sale, lease or utilities, or originating from the sale of goods produced, manufactured, treated or purchased within or outside of Nicaragua, from the rendering of services, leases, sub-leases, jobs, remunerated tasks of any kind, profits or benefits produced by moveable or real estate goods, capital gains and other income of any nature, before the corresponding tax deductions.
According to the Competition Law, concentrations are considered to occur when:
• a previously independent economic agent carries out acts, contracts or agreements which result in a partial or total merger, acquisition, consolidation, integration or combination of businesses, lacking independence from each other;
• one or more economic agents, which already have control of other economic agents, acquire partial or total control – direct or indirect – of more economic agents; and
• any other act or agreement which results in transfer of assets of one company to another economic agent, or grants to an economic agent influential power in the decision making of ordinary or extraordinary administrative matters of another company.
To define the relevant market, the following elements will be taken into account:
• goods and services produced or provided by the party requesting authorization and the possibility of national or foreign substitute products or services;
• the existence of suppliers in other markets which, even if these do not produce the good or service, may begin to produce the product or service making a small investment, without significant costs and within a short term;
• availability of substitute products within a short term as a consequence of technological innovation;
• geographical area in which such goods and services are offered or demanded, and where the consumers or providers can be reached without incurring in additional costs, taking into account the distribution costs and the possibilities to acquire it in other areas; and
• the economical restrictions and the department’s, country’s an international regulations which may limit access to substitute goods or services in any way.
- 12.What are the deadlines for filing and is there any mandatory waiting period? Are there sanctions for non-compliance? Which party should pay for them?
There is not a deadline for filling. However, the notification shall be made before the performance of any act pretending to complete a merger with the characteristics mentioned in question 11. When the concentration results from acts carried out outside of Nicaragua, the merging parties must submit the notification before such act takes effect in Nicaragua.
The sanction for non compliance will be a fine from 100 minimum wages to 600 minimum wages
- 13.What is the substantive test for clearance and overall timetable for the analysis?
The substantive test shall include;
• the relevant market where the concentration will have its effects, related also to the competitors and consumers of the services or products.
• the control of the economic agents involved.
• the dominant position that will result after the concentrations,
• the efficiency and benefits to the consumers in the relevant market that could result after the concentration.
Regarding the timetable for the analysis:
Preliminary resolution could take approximately 35 business days; when the proposed transaction raises competition concern, the Director of PROCOMPETENCIA can decide to carry out an in-depth investigation. This phase can take up to 180 business days.
- 14.To what extent do merger control rules apply to regulated sectors?
- 15.What remedies may the antitrust authority impose?
The resolutions of the antitrust authority could include the following:
• the declaration of the existence of any anti-competitive behaviour, unfair competition practices or inexistence thereof;
• the declaration of the existence of abuse of the dominant position of one or more economic agents or the lack thereof;
• approval or rejection of concentrations;
• to order cessation of prohibited practices within a specified period;
• to order the deconcentration, totally or partially, of economic agents;
• the imposition of fines and penalties for violation of the law.
- 16.What are the main laws and regulations related to trade remedies?
There are not local laws regulating trade remedies. Applicable legislation related to trade remedies are the World Trade Organization (WTO) treaties ratified by Nicaragua, such as the General Agreement on Tariffs and Trade 1994 (GATT 1994), Agreement on Implementation of Article VI of the General Agreement on Tariffs And Trade 1994 (Antidumping Agreement), Agreement on Subsidies and Countervailing Measures; the regional treaties ratified by Nicaragua relating to trade remedies, such as the Central American Regulations relating to Unfair Trade Practices, and the Central American Regulation relating to Safeguard Measures and; the Free Trade Agreements (FTAs) ratified by Nicaragua with other countries, for example DR-CAFTA, FTA Taiwan, FTA Mexico, FTA Chile, FTA Panama, which include regulations that are referred to trade remedies, applicable only for the Parties to such FTAs
- 17.Which are the investigating authorities? Who takes the final decision on the application of trade remedies?
The authority in charge of the investigations regarding unfair trade practices and safeguards is the Ministry of Development, Industry and Commerce (MIFIC) that also decides and imposes trade remedies.
- 18.How long does a trade investigation last?
In the case of investigations of unfair trade practices (dumping or subsidies), in accordance with the treaties ratified by Nicaragua, the period of investigation, except for special circumstances, shall be concluded in a period of 12 months. An additional period of six months can be authorised upon exceptional circumstances.
In the case of investigations on safeguards, the term will depend on the forum before which the investigation has been initiated (eg, WTO, FTAs or Central American Regulations).
- 19.What is the recent record of the authorities regarding the imposition trade remedies?
Nicaragua has not imposed anti-dumping, countervailing or safeguard measures so far. All previous investigations have been closed without imposing trade remedies.
- 20.Are information and documents provided during a trade remedies investigation treated confidentially?
The information or documentation provided by the parties shall be treated confidentially, given the nature of such information and documents, or the basis in which they were provided, nevertheless, the authorities shall request to the parties involved to furnish non-confidential summaries thereof, for the purposes of shared it with third parties involved in the investigation, that shall include enough details to allow a reasonable understanding of the substance of the information submitted under confidentiality basis. The investigating authority has the faculty to determine which information shall remain confidential.
- 21.Are verification visits permitted and are they carried out in practice?
Yes, verifications visits are permitted. The authorities may perform visits (preceded by a notification to the companies and the previous authorisation to perform it) to the companies that are being investigated, in order to verify the veracity of the information provided or to obtain further details.
- 22.Are provisional measures permitted under the anti-dumping laws and regulations?
Yes, provisional measures are allowed, provided that an investigation has been initiated, and a preliminary and affirmative determination has been made about the existence of dumping practices and consequent damages to a domestic industry might be caused. It may take the form of a provisional duty or a security such as cash deposits or bonds, which shall be equal to the amount of the anti dumping duty provisionally estimated, being not greater than the provisionally estimated margin of dumping, and such measures shall be limited to the shorter period as possible, not exceeding a four-month period, and a six-month or nine-month period in exceptional cases.
- 23.Is anti-dumping circumvention regulated? How?
No, the anti-dumping circumvention is not regulated in the Nicaraguan legislation.
- 24.Is China considered a market economy for the purposes of anti-dumping investigations? If so, is it possible to argue otherwise?
No. Due to its type of economy China is not considered as market economy for anti-dumping investigations. Article 2.2 of the WTO Antidumping Agreement, as well as the Protocol of Adhesion of the Popular Republic of China, shall apply to investigations for originating goods of China.
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