Press Release
C. 20-13 th
El Salvador, September 6 , 2013.
Alba Petroleos did not inform the CS purchase of service stations Alba Petroleos de El Salvador recognize before the Competition Superintendence (CS) the omission of requesting authorization to purchase certain service stations. Said company also reported that the acquisition of two real estate properties had not been informed to the CS. The request filed by ANEP to intervene in this procedure was denied by the Superintendence because it is not an agent directly affected by the infringement committed by Alba Petroleos. “Alba Petroleos recognized not having requested the prior authorizations for purchases of certain service stations; operations which constitute acquisitions that require said prior authorization. Now, the Superintendence is analyzing the case, evaluating the sanction to be imposed, and investigating other sectors where Alba Petroleos participates”, affirmed Francisco Diaz Rodriguez, Competition Superintendent.
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The past month of July the Competition Superintendence began an administrative sanctioning procedure to determine if the company Alba Petroleos 1 de El Salvador omitted to request authorization to the CS before executing certain operations that could constitute acquisitions that require prior authorization from the competition agency. This omission could be an infringement to Provisions 33 of the Salvador Competition Law (CL) and 23 of its Regulations. After expiring the term to present allegations, Alba Petroleos filed a writ recognizing not having requested the prior authorizations related with certain commercial transactions regarding the acquisition of real estate that contain infrastructure to operate service stations. In said writ, Alba Petroleos also reported two other transactions where it did not request said prior authorization to the Competition Superintendence. . All these acquisitions have been allegedly executed amongst independent economic agents, which exceeded the thresholds set forth in Provision 33 of the CL. The Competition Superintendence has accepted the recognition by Alba Petroleos; hence, the CS will omit the probatory phase and continue with the confidentiality procedure, integrating the file and sending it to the Board of Directors (BD) for final ruling.
“This is a violation to the Competition Law that must the punished. We are analyzing a case that has no precedent in the history of the Competition Superintendence. No other company which has been sanctioned in the past has ever recognized its responsibility. On the contrary, most the sanctioned economic agents have sued the BD of the SC before the Administrative Contentious Tribunal (ACT), impugning the legality of the rulings and sanctions imposed by the Superintendence”, asserted the Competition Superintendent, Francisco Diaz Rodriguez.
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Alba Petróleos de El Salvador Sociedad por Acciones de Economía Mixta de Capital Variable (S.E.M. de C.V.)
Pursuant to the CL before executing a merger or acquisition, the economic agents are obliged to request authorization from the Competition Superintendence in order for said agency to analyze whether the operation might significantly limit competition. The CS is legally empowered to authorize, condition, or deny the authorization to carry on a merger or acquisition. Provision 31 of the CL states that merger or acquisition is considered to exist when: a) Economic agents that have been independent from each other enter into: act, contracts or agreements, with the purpose of totally of partially merging, acquiring, consolidating, integrating, or combining their businesses; and, b) When one or more economic agents who control at least one other economic agent acquire through any means whatsoever, the direct or indirect, total or partial control of more economic agents. According to Provision 33 of the CL: “Mergers or acquisitions whose combined total assets exceed fifty thousand minimum urban annual wages in the industrial sector or whose total income exceeds sixty thousand minimum urban annual wages in the industrial sector shall request the Superintendence prior authorization”. About ANEP´s request to intervene in the procedure The National Association of the Private Enterprise (ANEP, its Salvadoran acronym) requested the Competition Superintendence to intervene in the administrative sanctioning procedure against Alba Petroleos. Pursuant to the respective analysis, the CS concluded that ANEP is not being directly affected by this procedure; process whose purpose is to investigate the infringement of the obligation to file a prior request for a merger or acquisition. In its decision on the aforementioned matter, the Superintendence pointed out that the parties in a sanctioning procedure are: a) the complainant when the process initiates by virtue of a complaint that complies with the requirements set forth in Provisions 42 of the CL and 62 of the LC Regulations; and, b) the defendant or investigated party when the process is began ex-officio. Anyone how pretends to intervene as a third party in this kind of procedure must prove that said process directly affects it; if the aforementioned is not proven the request must be rejected. Ergo, ANEP´s lack of own, direct, and legitimate interest in said procedure whose purpose is to investigate the infringement of the obligation to file a prior request for a merger or acquisition, which will only affect the investigated economic agent, did not make it possible to grant the requested intervention. Necessary is to emphasize that ANEP, according to the historic files of the Competition Superintendence, has never before requested to intervene as a third party in any other administrative procedure.