By: Marcos Ibargüen
Guatemala’s Congress is in the process of enacting a Competition Lawbefore the year ends. A November 30 deadline has been set in the EU-Central America Association Agreement (“Association Agreement”). Unlike the rest of Latin America Guatemala does not have a Competition Law.
The Association Agreement was signed by the European Union and its Central American counterparts (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) June 19, 2012. Under Section 279 of the Association Agreement, member states agreed to adopt or maintain complete competition laws in order to effectively deal with anticompetitive practices, such as cartels, price fixing, abuse of market domain and concentrations, among others. They also agreed to have a Competition Authority.
While there are certain competition law principles set in the Guatemalan Constitution, Commercial Code and Penal Code, Guatemala does not have legislation that implements those principles, nor a Competition Authority. Thus, the European Union counterpart to the Association Agreement is expecting the adoption of new legislation shortly.
The Guatemalan Executive did submit a proposed Competition Law Bill before Congress earlier this year. But there are several other Competition Law bills in Congress and to this date, there is no certainty as to what the legislation to be adopted by Congress will look like.
Given the impact that the new legislation may have on commercial practices, mergers & acquisitions andthe economy, the business community has its eyes opened wide for the next couple of months.
In the meantime, some big questions remain open: (i) How will the Competition authority be appointed?; (ii) how will it be funded?; (iii) will mergers and concentrations require preapproval? For those who are interested, our firm will continue tobe closely monitoring these events in Guatemala. We will keep you posted!