Hicham Naciri, Managing Partner, Naciri & Associés with Allen & Overy: Viewpoint

Viewpoint: Hicham Naciri

The business climate in Morocco has been continuously improving since the early 2000s. This is evidenced by several infrastructure and industrial projects developed recently in Morocco by multinationals and foreign investors. In order to reassure investors the Moroccan legislature has introduced new mechanisms in relation to merger control.

On June 5, 2000 the country adopted its first law related to merger control, namely Law No. 06-99, relating to the freedom of prices and competition promulgated by Dahir (King’s Decree) No. 01-00-225. Moreover, the Competition Council, a body introduced by this same legislation, became an independent authority though Article 166 of the 2011 constitution. According to Law No. 06-99, any venture triggering the creation, or strengthening, of a dominant market position through a merger or acquisition, requires the company to provide an official declaration to the office of the Prime Minister. The sole criteria triggering this obligation is that a given operation involves parties owning at least 40% of the shares in a particular market.

The reform of the competition ecosystem took place in Morocco in 2014 through the adoption of two new laws. First, Law No. 104-12, relating to the freedom of prices and competition, promulgated by Dahir No. 1-14-116 of June 30, 2014. Second, Law No. 20-13, relating to the Competition Council, promulgated by Dahir No. 1-14-117 of June 30, 2014. Law No. 104-12 established a new merger control system characterised by a priori review of the transactions, with evaluations being based on the grounds of general interest, and with merger control decision-making powers being transferred to the Competition Council. In addition, Law No. 104-12 provided two new non-cumulative criteria in relation to merger control: namely, total worldwide turnover, excluding taxes, for all parties involved in a merger control is required to be equal to or higher than Dh750m (€69.5m); or total turnover excluding taxes in Morocco reached by at least two of the parties involved in a merger control is required to be equal to or higher than Dh250m (€23.2m).

The addition of these two new laws lowered the bar for all main infrastructure transactions performed by foreign investors. They do so insofar as a given entity has a worldwide turnover exceeding Dh750m (€69.5m). This stipulation therefore applies to the majority of foreign investors and multinationals. Pursuant to the provisions of Law No. 104-12, and in the case of a merger control without notification, the Competition Council may order the parties to declare the transaction, unless they return to the status they held before the merger control. In addition, the Competition Council may impose an ad hoc penalty payment limited to a maximum of 5% of the average daily turnover, excluding taxes per day of delay from the date fixed by the Competition Council, by which to declare the transaction.

Furthermore, the Competition Council may impose a financial penalty on the persons responsible for the declaration, the maximum amount of this penalty for legal entities amounts to 5% of their turnover, excluding taxes, in Morocco during the last financial year. This figure is increased, if necessary, by the turnover in Morocco over the same period.

Despite the fact that the new competition laws are now enforceable, the members of the Competition Council have not yet been appointed, and therefore the stipulations provided by Law No. 104-12 have yet to be enforced. Therefore, the entry into force of Law No. 104-12 remains uncertain as of November 2017, at least on a practical level. This is particularly the case in view of the fact that the chief of government is still pursuant to the provisions of Law No. 06-99. With the sole criteria therefore being that the market share exceeds 40% when an application for a concentration authorisation is submitted.