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Guernsey's New Competition Law Effective

by Jason Gorringe, Tax-News.com, London

03 August 2012


On August 1, 2012, Guernsey's new Competition Law became effective, which introduces more stringent rules on Guernsey entities' business practices and seeks to prevent abuses of market dominance.

Specifically, the new law prohibits anti-competitive agreements, ensures that businesses in a market do not abuse a dominant position, and requires that certain mergers and acquisitions be approved in advance by relevant authorities. The legislation has led to the creation of the Guernsey Competition and Regulatory Authority which will work with the Jersey Competition and Regulatory Authority under the title of the Channel Islands Competition and Regulatory Authorities (CICRA). Prior to the introduction of Guernsey's first competition law, Guernsey largely used UK law for the basis of its rules, notably, for instance, in relation to mergers and acquisitions.

Organizations in Guernsey that don’t comply with the law may face a fine of up to 10% of annual turnover (for a period of up to three years of the infringement) which will be paid to the States of Guernsey. Where a cartel exists (i.e. an agreement between businesses not to compete with each other), businesses that report their activity to CICRA, and co-operate with the investigation, are to be treated leniently.

Commenting on the impact of the new law, Wayne Atkinson of Collas Crill's newly formed competition team, explained: "With the Competition Law coming into force we suggest that businesses use this as an opportunity to consider their behaviour and position in the marketplace. Those that use price fixing of any kind, or have arrangements with competitors limiting or controlling their output are likely to be in violation of the new law and anyone planning any kind of merger or takeover of another business would be advised to take legal advice early on."

TAGS: compliance | business | law | mergers and acquisitions (M&A) | international financial centres (IFC) | Guernsey | Jersey | offshore | agreements | legislation

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