New Leniency Regulations of 2022

30th Nov 2022

On 18 November 2022, the Immunity and Reduction of Administrative Fines in cases of Restrictive Collusions Infringing Section 3 of the Cyprus Competition Law and/or Article 101 TFEU (Leniency Programme) Regulations of 2022 (hereinafter the “Leniency Programme Regulations”) were published in the Official Gazette, for the purposes of harmonising Cyprus  law with Directive (EU) 2019/1 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, the so-called “ECN+ Directive”.

With their entry into force, the previous Leniency Programme Regulations of 2011 were repealed.

The scope of the Regulations is limited to undertakings which disclose to the Commission for the Protection of Competition (the “CPC”) their participation in a secret cartel, in breach of article 3 of the Cyprus Competition Law and article 101 TFEU.

Immunity from fines

Subject to certain specified conditions set out in the Regulations, the CPC grants immunity from the imposition of administrative fines which would otherwise have been imposed to an undertaking which files a relevant application, in which it discloses its participation in a secret cartel and where it is the first that submits to the CPC evidence which:

  • at the time the CPC receives the application, it enables it to carry out a targeted inspection in connection with the secret cartel, provided that the CPC did not yet have in its possession sufficient evidence to carry out such an inspection or had not already carried out such an inspection; or
  • in the CPC’s view, is sufficient for it to find an infringement of article 3 of the Cyprus Competition Law and/or Article 101 TFEU, provided that the CPC did not yet have in its possession sufficient evidence to find such an infringement and that no other undertaking previously qualified for immunity from fines under point (i) in relation to that secret cartel.

In order to benefit from the immunity, the applicant undertaking must fulfil cumulatively the following conditions, set out in detail in regulation 6 of the Leniency Programme Regulations:

  • it must cooperate genuinely, fully, on a continuous basis and expeditiously with the CPC from the date of submission of its application until completion of the administrative procedure of the case in relation to all parties under investigation, by adopting a decision (this includes inter alia, remaining at the CPC’s disposal to answer any request that may contribute to the establishment of facts, making directors, managers and other members of staff available for interviews with the CPC, not destroying, falsifying or concealing relevant information or evidence from the CPC, or disclosing the fact of, or any of the content of, its leniency application before the CPC has issued objections in the enforcement proceedings before it)
  • it must have ended its involvement in the alleged secret cartel at the latest immediately following its leniency application, except where, in the CPC’s view, the continuation of its involvement would be reasonably necessary to preserve the integrity of its investigation
  • during the contemplation of making a leniency application to the CPC it must not have: (i) destroyed, falsified or concealed evidence of the alleged secret cartel; or (ii) disclosed the fact of, or any of the content of, its contemplated application, other than to the European Commission or to the competition authorities of other member states or third countries.

Reduction of fines

 The CPC grants to an undertaking a reduction of administrative fines which would otherwise be imposed, where the undertaking:

  • does not fulfil the conditions for immunity from fines, and
  • fulfils cumulatively the conditions, set out in regulation 6 of the Leniency Programme Regulations, which must also be fulfilled for the application for immunity and are set out in the above section, and
  • discloses to the CPC its participation in a secret cartel
  • submits to the CPC evidence of the alleged secret cartel which represents significant added value for the purpose of proving an infringement covered by the leniency programme, relative to the evidence already in the CPC’s possession at the time of the application for reduction of fines.

The CPC grants a reduction to administrative fines, only where the involved undertaking has not taken steps to coerce other undertakings to join a secret cartel or to remain in it.

Application Procedure

The Regulations provide in Appendix 1 the application form for the leniency programme, either for the immunity from or for the reduction of administrative fines. The application includes all information and evidence that must be provided to the CPC. Apart from Greek, applications may now be submitted by the applicant undertaking in any other official language of the EU, as previously agreed between the CPC and the undertaking in question.

Furthermore, under the Leniency Programme Regulations the CPC may accept leniency statements in oral form to be recorded by any means that the CPC considers appropriate. In such case, applicants will not take possession, custody, or control of such submitted statements, however, the latter are made available to them following submission of the statements, so that the undertaking may approve the relevant content and ensure that they have been recorded accurately.

Summary Applications, Marker System and other procedural matters

The Regulations retain the system of summary applications and marker system and these may apply to both types of leniency applications – that is either for immunity from fines or for a reduction in fines.

Summary applications allow undertakings to submit a leniency application to the CPC containing a limited set of information where a full application has been submitted to the European Commission in relation to such an alleged cartel.

Pursuant to the marker system, undertakings can initially apply for a marker which protects their place in the queue for a given period of time. This allows the applicant to gather the necessary information and evidence to meet the relevant evidentiary threshold. The application needs to be substantiated, such that the applicant must explain why the information cannot be provided immediately and justify the length of the marker period. The CPC has discretion on whether or not to grant it.

Τhe Regulations also set out the conditions and limitations under which access to leniency statements may be granted to parties subject to relevant proceedings before the CPC and for the purposes of exercising their rights of defence.

Τhe CPC protects the identity of an undertaking which has submitted a leniency application, the content of such application and the fact of cooperation between the same and the undertaking up until the issuance of statements of objections. 

This legal update is provided for information purposes only and is not intended to constitute legal advice or be a substitute for reference to the detailed provisions of applicable laws and regulations.

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