Ukraine adopts Guidelines on Definition of Control

Ukraine
The Antimonopoly Committee of Ukraine (AMC) recently adopted a Methodological Recommendations on Definition of Control (the Guidelines), which incorporate EU best practices in this area.

The document's purpose is to provide up-to-date and user-friendly guidance on the definition and assessment of control. While the Guidelines are not legally binding, they reflect the AMC’s decisional practice and views on what practices may constitute control.

The key points of the Guidelines include:

  • Concept and means of control: The Guidelines clarify and define concepts such as control, controlling entity, sole and joint control, acquisition of control, etc. In particular, control is widely defined and can be acquired through the acquisition of shares or assets, on a contractual basis or by any other legal or de facto means that – either separately or in combination – confer the possibility of exercising decisive influence over an undertaking.
  • Positive and negative control: The Guidelines explain the difference between positive and negative control, and clarifies typical situations where negative control occurs (e.g. the veto of strategic decisions).
  • Sole and joint control, de jure and de facto control: The AMC clarifies its interpretation of sole and joint control where a single undertaking or where two or more undertakings together acquire decisive influence over another undertaking. The Guidelines also set out examples that may be treated as de facto control (e.g. control through a minority shareholder).
  • Other considerations: The AMC also brings more clarity to specific cases including acquisition of control on the basis of rights over assets, outsourcing agreements, transfer of intellectual property, and acquisition of control by investment funds.

The AMC confirms that specific foreign law rules concerning the concept of control, although different from those applied in Ukraine, may also be taken into account when assessing control relations in cross-border transactions.

Legislation: Methodological Recommendations on the Application of Definition of Control approved by the decision of the AMC on 1 November 2018 (available in Ukrainian only).

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