Before 2009, the Bosnian merger control regime was well known for being very diligent in imposing fines for late merger filings (even if a filing was only a few days late). These fines often reached hundreds of thousands of euros. The jurisdiction was also known for being a frequent ‘rest of the world’ jurisdiction for a large number of European deals, as well as for its relatively long review periods. However, following amendments to the merger control regime in 2009, and the resulting higher turnover thresholds, there has been a sharp decrease in the number of filings made each year. Under the 2005 regime, on average the Competition Council processed around 60 to 80 merger notifications each year, while over the past few years this number has dropped to around 20 per year.

The main regulation concerning antitrust matters in Bosnia and Herzegovina is the Competition Law. The Law was initially enacted by the Parliamentary Assembly of Bosnia and Herzegovina in 2005 and was significantly amended in 2009. Together with the law governing general administrative procedures, the implementing regulations (e.g., the Regulation on Form and Content of Merger Notifications, the Regulation on Criteria for Assessment of Relevant Markets, the Fee Tariff Regulation – around a dozen regulations in total) and non-binding opinions issued by the Competition Council pertaining to specific matters, these constitute the bulk of competition law in Bosnia and Herzegovina.

The Competition Law is modelled on the EU competition rules and encompasses the standard measures regarding restrictive agreements and practices, abuse of dominant position and merger control. It also sets out the mandate of the Competition Council, and prescribes certain specific procedural matters.

The first competition law in Bosnia and Herzegovina was enacted in 2001. However, it did not follow the relevant solutions and achievements of the modern EU acquis communautaire, and this led to the enactment of the Competition Law of 2005. The first members of the competition authority in Bosnia and Herzegovina were appointed in 2004, pursuant to the Law of 2001.

Since 2008, when the stabilisation and association agreement between the EU Member States and Bosnia and Herzegovina (SAA) was signed, the Bosnian competition rules have been formally exposed to the influence and case law of the European Union. The SAA came into force in June 2015.

Under the SAA, Bosnia and Herzegovina formalised its commitment to harmonise its legislative framework with that of the EU, and furthermore stipulated that the criteria for interpretation used in the EU will be implemented insofar as the SAA is concerned. The SAA stipulates that EU law should be applied to certain cases concerning inter-party trade. While no practice of this sort has occurred so far, it means that, concerning the territorial scope of certain infringements (such as export bans or selective distribution systems), trade between Bosnia and Herzegovina and the EU will be treated in a similar manner to EU interstate trade. Furthermore, the Competition Council readily accepts the decisional practice of the European Commission and of the courts as a persuasive authoritative source of law.

The Central European Free Trade Agreement (CEFTA), similarly to the SAA, envisions the application of EU competition law principles and rules to all matters in which trade among the member countries may be affected. Therefore, while normally Bosnian competition law would not apply to sales outside Bosnia and Herzegovina, the CEFTA rules will, together with the laws of Bosnia and Herzegovina and the laws of the EU, which the national authorities are obliged to follow. Practice of the Competition Council involving cross-border trade is still to be developed.

Certain specific rules and regulations, including the occasional deviation from the general competition law regime, are contained in the appropriate sector legislation: for example, banking regulations, telecom rules (ex ante regulation and special rules regarding significant market power operators), public health norms (maximisation of drug prices) and media laws.

The seat of the competent authority, the Competition Council of Bosnia and Herzegovina, is in Sarajevo. In addition to its main premises, it has two branches, located in Banja Luka (the Republic of Srpska) and in Mostar.

The Competition Council consists of six members who are appointed to reflect the structure of Bosnia and Herzegovina’s main ethnic groups (referred to as ‘constituent peoples’). The Head of the Council is appointed annually by the Council of Ministers of Bosnia and Herzegovina from among the members of the Competition Council. Council members are appointed by three governmental bodies: three members (one from each of the three constituent peoples) are appointed by the Council of Ministers of Bosnia and Herzegovina, two members are appointed by the Government of the Federation of Bosnia and Herzegovina and one member is appointed by the Government of the Republic of Srpska.

Of the Council’s current members, four are lawyers and two are economists.

The quorum for decision-making is five members of the Council, and at least one member from each of the constituent peoples of Bosnia and Herzegovina, who must vote for the decision.

The Competition Council is a member of the International Competition Network. The Competition Council has signed memoranda on cooperation with the competition authorities of Bulgaria, Turkey, Serbia, Croatia and Macedonia, and is one of the founders of the regional competition initiative called the Sofia Competition Forum, which is supported by the United Nations Conference on Trade and Development.


Compared with the period before the 2009 amendments to the Competition Law, the merger control aspect of the Competition Council’s activities has been somewhat diminished in favour of restrictive agreements and abuse of dominance cases. Besides the increase of the merger control thresholds, this might simply be due to market structure and activity, or to an intentional emphasis on these issues by the Council.

The beginning of 2015 witnessed a low level of competition law activity in Bosnia and Herzegovina, due to the problems in functioning of the Competition Council (specifically, the head of the National Competition Authority for 2015 could not be appointed since the body that was supposed to make the appointment was not able to convene). These problems were resolved by the spring of 2015 and the Council’s activity levels quickly got back to normal.

Based on decisions available on the authority’s website, the Council has continued to be active on the merger control front – in 2015, it cleared around a dozen notified mergers. In addition, in several notified transactions the applications were eventually dismissed, in situations where the Council established that such transactions did not amount to notifiable concentrations within the meaning of Bosnian competition law. When certain concentrations approved by virtue of lapse of the deadline for the Council’s decision are taken into account, the total number of merger cases dealt with by the Council in the previous year rises to around 20.

In 2015, the Court of Bosnia and Herzegovina, which is entrusted with examining the decisions of the Competition Council, was as active as always, rendering more than a dozen judgments in competition law cases. As a rule, the court tends to affirm the decisions of the Council, which is a trend that has continued from the previous period.


i Definition of concentration

The Competition Law defines concentrations in the same way as the European Merger Regulation (EUMR). Essentially, all forms of ‘amalgamations’ of previously independent undertakings qualify as concentrations. In formal terms, a concentration can result from:

  • a mergers and other status changes in which a fusion of undertakings occurs in terms of the law regulating the status of companies (i.e., mergers by combination and mergers by acquisition);
  • b acquisition of direct or indirect control by one or more undertakings over another undertaking or part of an undertaking. This includes the ability or possible ability to exert a material influence on the business of an undertaking by way of rights, agreement or any other legal or factual means, and in particular:
  • • ownership or right of use of some or all of the property of an undertaking; or
  • • the ability (arising from an agreement or otherwise) to have a determinable influence on the composition, work or decision making of another undertaking; and
  • c full-function joint ventures, where full functionality is interpreted similarly to the EUMR’s interpretation (creation of a new undertaking by two or more independent undertakings that will exercise joint control over the new undertaking, but that will be independent from its shareholders and have full access to the market).

The notion of control is practically identical to that used in the EUMR.

The following are not concentrations:

  • a temporary acquisitions of shares by banks and other financial institutions in the course of regular business activities, assuming they intend to dispose of the shares and assuming there is no change of control on a lasting basis;
  • b acquisitions of shares by investment funds, assuming the shares are used only for maintaining the value of the business;
  • c cooperative joint ventures; and
  • d acquisition of control by a bankruptcy administrator.
ii Merger control thresholds

Merger filings are mandatory in Bosnia and Herzegovina if the following two thresholds have been met:

  • a the total annual turnover of all the parties to the concentration in the world market in the previous accounting year exceeds 100 million convertible marks; and
  • b the total annual turnover of each of at least two of the parties to the concentration in the Bosnian market exceeds 8 million convertible marks for the previous accounting year or their combined market share on the relevant market exceeds 40 per cent.

Alternatively, for parties that are only registered locally, a merger filing is required regardless of threshold (a).

Intra-group turnover is not taken into account.

The Competition Law also applies to foreign-to-foreign mergers, provided that the prescribed thresholds are exceeded. Local mergers are prescribed a different filing regime, in that, as noted, for mergers involving locally registered parties for the filing obligation to arise it is sufficient that the threshold under (b) has been exceeded.

The Competition Council has in many cases examined and issued clearances in foreign-to-foreign transactions. Normally, foreign-to-foreign mergers without any competition concerns in the local Bosnian market will be processed through fast-track (Phase I) proceedings.

iii Procedure
Filing deadline

The merger notification must be filed with the Competition Council within 15 calendar days as of the time of entering into the agreement, the announcement of the public offer or the acquisition of controlling shares, whichever occurs first. This deadline is very strict, and if the applicant is late with filing (even by a day), the Competition Council, in general, imposes very severe fines (up to 1 per cent of the acquirer’s worldwide turnover realised in the previous year). The filing can be made based on a letter of intent, or any similar document showing the parties’ intent to enter into the transaction.

Pre-notification discussions

The Competition Law does not provide for pre-notification discussions with the Competition Council. Members of the Council and case handlers are generally reluctant to enter into any verbal discussions with prospective applicants.


When deliberating the permissibility of a concentration, the Competition Council in particular takes into consideration the following:

  • a the structure of the relevant market;
  • b the effects of the concentration on actual and potential competitors;
  • c the market position of the parties, their market shares and their economic and financial power;
  • d the possibility to choose suppliers and customers;
  • e economic, legal and other barriers to entry in the relevant market;
  • f the level of domestic and international competitiveness of the parties;
  • g supply and demand trends for relevant products or services;
  • h technical and economic development trends; and
  • i the interests of consumers.
Length of review

Upon receiving a merger notification, the Competition Council reviews its completeness. If the Competition Council considers a notification to be incomplete, it will ask the notifying party to complete it within eight days. After the notification is declared complete and the Council issues the certificate of completeness, the Competition Council then has 30 days to either render a decision in fast-track proceedings (Phase I) or, if it finds that the merger might have significant negative effects on competition, to open in-depth proceedings (Phase II).

In Phase II, the Council has three months to render a final decision (as of the date of the commencement of the Phase II proceedings). However, if the Council decides that additional evidence or analysis is necessary, or the concentration concerns especially sensitive markets or industries, it has the right to extend the Phase II time frame for additional three months (six months in total). If the transaction is not cleared (conditionally or unconditionally) or prohibited within these deadlines, the merger is considered to be cleared.

Confidential information

Information regarding the merger control proceedings may be classified as confidential and shall not be published by the Council. The decisions of the Council (including the whole reasoning of the clearance decision), apart from information classified as confidential, are regularly published on the Council’s website.

Standstill obligation

The law prescribes a standstill obligation – the parties must suspend the implementation of the transaction before the clearance is issued, or before the statutory deadlines have expired. Mandatory stay of the concentration does not prevent the implementation of a takeover notified to the relevant authority pursuant to the law regulating the takeover of joint-stock companies.

Merger clearances with commitments

Even though the law clearly entitles the Competition Council to issue conditional clearances, the Council has so far not issued any merger decision with strings attached. There have been instances where the applicants have offered commitments to the Competition Council and the Competition Council could theoretically have issued conditional clearances, but as far as we are aware, in all these cases, the Competition Council failed to issue its decision within the prescribed deadlines and, as a result, the mergers were deemed cleared due to the lapse of time.

In-depth merger control procedure

The Competition Council shall initiate an in-depth procedure (i.e., Phase II or inquiry proceedings) when it finds that the concentration in question raises serious competition concerns (if the concentration may lead to a significant prevention, limitation or distortion of competition on the relevant market).

The Council has a deadline of 30 days from receipt of the complete filing to decide where it will initiate the Phase II procedure. Once the Phase II procedure has been initiated, it must be completed within three months, which deadline can be extended once for additional three months (to six months from the start of Phase II in total).

When the Competition Council commences an in-depth (Phase II) procedure, the applicant still cannot know what direction the Council’s enquiries during the Phase II procedure will take. It is common for the authority to contact the parties’ main competitors, their largest suppliers and buyers in order to assess what their expectations of the concentration in question are (i.e., whether the competitors, suppliers and buyers estimate that their position will be degraded or perhaps improved by the implementation of the concentration). During Phase II and prior to the adoption of the final decision, the Council may deliver to the parties the draft decision for comments.

Prohibited concentrations

To our knowledge, the Competition Council has decided to prohibit a concentration in only one case; in 2009, the Council decided to prohibit a merger in the market for the production of bread, fresh pastry goods and cakes. The main reason for the prohibiting decision was the creation of a dominant position.

The main reason for not allowing a merger is assumed creation or strengthening of the acquirer’s dominant position in the relevant market. However, even though such mergers can raise serious competition concerns, it can be the case that the competition authority does not prohibit the transaction at all, but will rather decide to clear the merger with acquirer commitments (conditional clearance) or even without any commitment whatsoever. As noted above, the Competition Council has never issued a conditional clearance.

Normally, the prohibition of a merger would take place following an in-depth procedure and after the dismissal of the applicant’s offered commitments (conditions and obligations). The procedure is often very complex and burdensome for both the competition authority and the applicant. As these are, by their nature, very complicated cases, the case handlers would collect a significant amount of documents and information from the parties involved, and from public sources, parties’ competitors, suppliers and buyers. Sometimes, even economic, technical or other experts could be involved.

Fees and penalties

Concerning merger control, there are two fees that are most relevant in Bosnia and Herzegovina: the filing fee and the clearance fee. The initial fee for filing the merger notification is 2,000 convertible marks. The fee for issuance of the decision will vary depending on whether the Competition Council issued the decision in the summary proceedings, in which case the clearance fee is 2,500 convertible marks, or in the inquiry proceedings (Phase II), in which case the clearance fee is 25,000 convertible marks.

The fine for failure to notify within the 15-day filing deadline is up to 1 per cent of the concerned undertaking’s annual worldwide turnover realised in the previous accounting year. The responsible person within the company can also be fined an amount of between 5,000 convertible marks and 15,000 convertible marks. The statute of limitations for failure to notify is three years. In practice, fines have mostly ranged between 190,000 convertible marks and 400,000 convertible marks.

In the case of the implementation of a concentration without clearance, the Competition Council could fine the filing party up to 10 per cent of its annual worldwide turnover from the year preceding the year of infringement. The responsible person within the company can also be fined an amount of between 15,000 convertible marks and 50,000 convertible marks. The statute of limitations for such an infringement is five years. In practice, the Court of Bosnia and Herzegovina (as the second instance) has usually validated fines imposed by the Competition Council for both late filings and mergers either lacking or contrary to the clearance received.

The Competition Council can order a reversal (demerger) of an already implemented concentration if it has been unnotified or implemented contrary to the clearance received. This can be effected by way of a split-off, sale of shares, restriction of voting rights or performance of any other action that would lead to restitution of the prior status. As far as we are aware, the Competition Council has not implemented any demerger decision to date.

The Competition Council may impose behavioural and structural measures on the merging entities to alleviate antitrust concerns. As far as we are aware, no conditional clearance has been issued by the Competition Council to date. Special sanctions might be applicable in certain particular sectors (i.e., banking or telecommunications), such as additional fines or non-registration.

Judicial review

Resolutions of the Competition Council are final in administrative proceedings. The party to the proceedings may challenge the decision before the Court of Bosnia and Herzegovina by initiating an administrative dispute through filing a claim within 30 days of receipt of the decision. The challenge does not preclude the enforcement of the decision.

The Court of Bosnia and Herzegovina may confirm the decision, annul the decision and return it to the Competition Council for reconsideration, or decide the case itself. In practice, when it wants to strike down a Council decision, the Court is reluctant to take full jurisdiction over competition law matters and prefers to set aside the Council’s decision and return it to the authority for reconsideration. More often than not, the Court confirms Council decisions.

There is no deadline for the Court to decide on the administrative dispute.

The Court of Bosnia and Herzegovina is also in charge of deciding on extraordinary legal remedies against the rulings of the same Court, namely, an extended composition of the judges decides on extraordinary legal remedies. Such extraordinary remedy may only be filed if the Court has violated the law or procedural rules where this could have affected the outcome of the proceedings.

iv Substantive assessment

As previously mentioned, the Competition Council in particular considers the following when deliberating on the permissibility of a concentration:

  • a the structure of the relevant market;
  • b actual and potential competitors;
  • c the market position of the parties and their economic and financial power;
  • d the possibility to choose suppliers and customers;
  • e legal and other barriers to entry in the relevant market;
  • f the level of competitiveness of parties;
  • g supply and demand trends for relevant goods or services;
  • h technical and economic development trends; and
  • i the interests of consumers.

The Competition Council applies the SIEC test in combination with the dominance test, based on wording that has been transposed from the EUMR. The authority can be expected to analyse the level of concentration of the market by relying on the Herfindahl–Hirschman Index index, and assess the parties’ market power based on the market share information.

Despite the SIEC test being an integral part of the assessment toolkit, in practice the Competition Council initiates Phase II proceedings, discusses remedies and blocks transactions almost exclusively by relying on the dominance test.


i Acquisition of minority shareholdings

Similarly to the EU regime, an acquisition of a minority shareholding may trigger the filing requirement provided that the minority shareholder would be able to exercise certain controlling rights that fall outside the scope of ordinary rights attributed to a minority shareholder. However, while the European Commission would normally rely on its own guidelines (the Consolidated Jurisdictional Notice), the Competition Council has enacted no such guidelines. Parties normally rely on the Consolidated Jurisdictional Notice for guidance, although in certain cases the Competition Council may use a wider interpretation of control than that found in the European Commission’s Notice.

ii Hostile takeovers

The merger control regime in Bosnia and Herzegovina places the burden for submitting the documents for review upon the applicant, which in situations of a hostile takeover may not be privy to documents and information related to the target’s business. In those instances, the acquirer must rely on the Competition Council to request such information from the target. In one case in 2012 (which was aborted), the authority expressed its willingness to obtain the necessary documents from the target. However, there are no systematic or procedural tools that are readily available to the acquirer in such hostile takeovers.


Following the amendments in 2009 to the merger control regime and the increase in turnover thresholds, all the conditions were met to enable the Competition Council to focus on general antitrust matters (cartels, restrictive practices, dominance), as well as on more complex merger cases. Measures should therefore be put in place to ensure that more straightforward merger cases are not unnecessarily delayed.

In addition, in the past, the Competition Council has focused on the formal aspects of merger control rather than the substantive review. We hope that its experiences in dealing with general antitrust matters have built its capacity to perform more thorough analyses in merger control cases.

The Competition Council is yet to render a merger clearance with strings attached. In that light, it remains to be seen how the authority will handle remedies, in particular those that are structural in nature.


1 Rastko Petaković is a partner at Karanović & Nikolić.