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Select Topics
Relevant legislation and authorities
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  1. Is a merger control regulation in force?
  1. Which authorities enforce the merger control regulation?
  1. Relevant regulations and guidelines with links:
  1. Does general competition regulation apply to mergers or ancillary restrictions?
  1. May an authority order a split-up of a business irrespective of a merger?
  1. Other authorities that also require merger filing or may prohibit transaction
    (Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)
  1. Are any parts of the territory exempted or covered by particular regulation?
Voluntary or mandatory filing
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  1. Is merger filing mandatory or voluntary?
Types of transactions to file – what constitutes a merger
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  1. Is there a general definition of transactions subject to merger control?
  1. Is "change of control" of a business required?
  1. How is "control" defined?
  1. Acquisition of a minority interest
  1. Joint ventures/joint control – which transactions constitute mergers?
Thresholds that decide whether a merger notification must be filed
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  1. Which thresholds decide whether a merger notification must be filed?
  1. Special thresholds for particular businesses
  1. Rules on calculation and geographical allocation of turnover
  1. Special rules on calculation of turnover for particular businesses
  1. Series of transactions that must be treated as one transaction
Exempted transactions and industries (no merger control even if thresholds ARE met)
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  1. Temporary change of control
  1. Special industries, owners or types of transactions
  1. Transactions involving only foreign businesses (foreign-to-foreign)
  1. No overlap of activities of the parties
  1. Other exemptions from notification duty even if thresholds ARE met?
Merger control even if thresholds are NOT met
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  1. May a merging party file voluntarily even if the thresholds are not exceeded?
  1. May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?
Referral to and from other authorities
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  1. Referral within the jurisdiction
  1. Referral from another jurisdiction
  1. Referral to another jurisdiction
  1. May the merging parties request or oppose a referral decision?
Filing requirements and fees
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  1. Stage of transaction when notification must be filed
  1. Pre-notification consultations
  1. Special rules for acquisitions on stock exchanges and public takeover bids
  1. Forms available for completing a notification
  1. Languages that may be applied in notifications and communication
  1. Documents that must be supplied with notification
  1. Filing fees
Implementation of merger before approval – "gun jumping" and "carve out"
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  1. Is implementation of the merger before approval prohibited?
  1. May the parties get permission to implement before approval?
  1. Due diligence and other preparatory steps
  1. Veto rights before closing and “Ordinary course of business” clauses
  1. Implementation outside the jurisdiction before approval – "Carve out"
  1. Consequences of implementing without approval/permission
The process – phases and deadlines
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  1. Phases and deadlines
Assessment and remedies/decisions
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  1. Tests or criteria applied when a merger is assessed
  1. May any non-competition issues be considered?
  1. Special tests or criteria applicable for joint ventures
  1. Decisions and remedies/commitments available
Publicity and access to the file
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  1. How and when will details about the merger be published?
  1. Access to the file for the merging parties and third parties
Judicial review
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  1. Who can appeal and what may be appealed?

 
CROATIA

Mario Krka (Mr)
Partner

Mario.Krka@dtb.hr

Tel: +385 1 5391 614

Lea Mužic (Ms)
Senior Associate

Lea.Muzic@dtb.hr

Tel: +385 1 5391 646

No new regulation adopted or proposed

Note that relevant regulations may be changed before your contemplated transaction is completed. Mergerfilers.com and our national experts keep information on regulations up to date and even provide alerts on adopted or proposed changes that have not come into force yet but may come into effect before the transaction is completed. When this field is green, we have no knowledge of such imminent changes to the relevant regulations.

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes, the merger regulation is contained in the Croatian Competition Act. 

2) Which authorities enforce the merger control regulation?

The Croatian Competition Agency. Decisions of the Croatian Competition Agency may be appealed before the High Administrative Court.

3) Relevant regulations and guidelines with links:

Original Croatian version

Unofficial English translation

Zakon o zaštiti tržišnog natjecanja (NN 79/2009)

The Croatian Competition Act (2009) 

 

Zakon o izmjenama i dopunama Zakona o zaštiti tržišnog natjecanja (NN 80/2013)

Unofficial consolidated version  

Act on the Amendments to Competition Act(2013)

No English translation of the consolidated version of the Act available.

Uredba o načinu prijave i kriterijma za ocjnenu koncentracija poduzetnika (NN 38/2011)

Regulation on Notification and Assessment of concentrations

Filing forms in Croatian may be downloaded in PDF format from the Croatian Competition Agency:

Obrazac prijave koncentracije (Filing form "full notification"

Kratki obrazac prijave koncentracije (Filing form "Simplified notification")

 

 

Filing form "full notification" - no English translation available

Filing form "Simplified notification" - no English translation available

Obrazac obavijesti o stjecanju ili držanju dionica ili udjela s namjerom daljnje prodaje

Notification form for the acquisition or holding of shares with intent to resell - no English translation available

Obrazac prijave mjera praćenja poslovanja i/ili strukturnih mjera i uvjeta kojima se otklanjaju negativni učinci koncentracije

Application form for business monitoring measures and / or structural measures and conditions to eliminate negative effects of the merger - no English translation

 

4) Does general competition regulation apply to mergers or ancillary restrictions?

Generally, restrictions of competition that are ancillary to the merger, for instance a standard non-competition obligation on the seller, are considered inherent parts of the merger and are not subject to separate scrutiny under the general competition regulation. However, restrictions that go beyond what may be considered ancillary may be caught by the general prohibition on anti-competitive agreements.

The general competition regulation may in special circumstances be used to oppose a transaction which would otherwise not be subject to merger control (because the thresholds are not exceeded). For instance, the general prohibition on anti-competitive agreements may be applied to full-function joint ventures that have coordination of the market behaviour of the parent companies as their object or effect.

5) May an authority order a split-up of a business irrespective of a merger?

Theoretically, yes, but in practice highly unlikely.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Electronic communications networks and services

Mergers that involve electronic communications networks and services are subject to approval from the Croatian regulatory authority for network industries (HAKOM) in cases where merger control thresholds, prescribed by the Croatian Competition Act, are not met.

Electronic media

Mergers that involve electronic media are also subject to approval from the Electronic Media Agency 

Credit institutions

Mergers that involve credit institutions are also subject to approval from the Croatian National Bank. 

Investment firms

Mergers that involve investment firms are also subject to approval from the Croatian Financial Services Supervisory Agency.

7) Are any parts of the territory exempted or covered by particular regulation?

No.

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory.

Types of transactions to file – what constitutes a merger

9) Is there a general definition of transactions subject to merger control?

Yes, according to the Croatian Competition Act a transaction subject to merger control is defined as a transaction whereby:

  1. two or more previously independent undertakings amalgamate into one undertaking;
  2. an undertaking acquires direct or indirect control or prevailing influence of one or more undertakings or in part or parts of other undertakings, for instance by acquiring the majority of shares or holdings or majority of voting rights;
  3. there is a change of control over an undertaking which arose in some other way prescribed by the Croatian Company’s Act and accompanying bylaws (e.g. certain entrepreneurial contracts).

Note that certain transactions of a temporary nature are not considered to be mergers subject to merger control (see topics 19 and 20).

10) Is "change of control" of a business required?

Yes, generally a merger will only be considered to take place if the transaction results in a change of control over a business. However, transactions that result in the establishment of a full-function joint venture will also be subject to merger control.

11) How is “control” defined?

The Croatian Competition Act states that an undertaking is deemed to have direct or indirect control over another undertaking if the controlling undertaking: (i) has more than half of shares in the controlled undertaking; (ii) may exercise more than half of the voting rights; (iii) has the right to appoint more than half of the members of the Management Board, the Supervisory Board or the appropriate management bodies of the controlled undertaking, or (iv) is otherwise entitled to manage the business of the controlled undertaking.

12) Acquisition of a minority interest

Acquisition of a minority interest that does not result in a change of control over a business is not subject to merger control.

However, if acquisition of a minority interest confers someone with de facto control of a business, the transaction will be subject to merger control. This is, for instance, the case if the buyer is provided with veto rights regarding decisions that are essential for the strategic behaviour of the business or if the remaining shares are spread over a large number of shareholders and the acquired shares de facto confer the buyer with a decisive influence on general meetings.

13) Joint ventures/joint control – which transactions constitute mergers?

Establishment of a joint venture by two or more independent undertakings that acts as an independent economic entity on a more lasting basis, constitute a merger subject to merger control.

A joint venture that is not “full function”, because it does not, on a lasting basis, perform all the functions of an autonomous economic entity, is not subject to merger control but may be scrutinized under the general prohibition on anti-competitive agreements. Whether a joint venture is considered “full function” or merely “cooperative” depends on the level of the joint venture’s dependence on its parents and to what extent the joint venture has an independent presence in the market.

Even if a joint venture is “full function” and therefore subject to merger control (provided the thresholds are met), the general prohibition on anti-competitive agreements may also be applied if the joint venture has coordination of the market behaviour of the parent companies as object or effect.

Thresholds that decide whether a merger notification must be filed

14) Which thresholds decide whether a merger notification must be filed?

a) Turnover thresholds

A merger notification must be filed if the following is met cumulatively:

  1. the combined annual worldwide turnover of all the parties to the merger amounts to at least HRK 1 billion in accordance with the financial statements for the financial year preceding the merger, if at least one of the parties to the merger is established and/or has a subsidiary in the Republic of Croatia, and
  2. the total turnover of each of at least two parties to the concentration in the Republic of Croatia, amounts to at least HRK 100,000,000 in accordance with the financial statements for the financial year preceding the merger.

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

Special rules apply for mergers in the media market (see topic 15).

15) Special thresholds for particular businesses

The thresholds stated in topic 14 apply to all transactions, apart from mergers in the media market, where merger filing is obligatory regardless of the turnover or size of the parties.

16) Rules on calculation and geographical allocation of turnover

Turnover is calculated on the basis of the most recent audited accounts of a financial year of the participating undertakings as well as any undertakings associated with each participating undertaking, including any direct or indirect parent companies, subsidiaries, joint ventures and subsidiaries of parent companies (although the Croatian Competition Act may be interpreted as excluding parent’s subsidiaries, in practice the Competition Authority includes them in the calculation). Any turnover derived from the sale of products and services between associated undertakings is excluded.

There are no set rules for geographical allocation of turnover, but the Competition Agency would rely on the European Commission’s Consolidated Jurisdictional Notice.

17) Special rules on calculation of turnover for particular businesses

Insurance undertakings

For an insurance undertaking the value of the gross premiums written applies. This includes all premiums received by the undertaking during the relevant year. Amounts paid by the undertaking for reinsurance are not deducted.

Credit institutions and other financial undertakings
Turnover is calculated as the sum of:

  1. Interest income and similar income
  2. Income from shares
  3. Fees and commissions receivable
  4. Net profit on financial operations
  5. Other operating income.

18) Series of transactions that must be treated as one transaction

Two or more transactions between the same parties/groups carried out over a period of two years shall be considered as one merger carried out on the day of the last transaction. 

See also topic 19 regarding temporary control.

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control

Merger filing is only required if there is a change of control on a lasting basis.

Control may for instance be considered temporary in the situations mentioned under 1) and 2) in topic 20.

20) Special industries, owners or types of transactions

The Croatian Competition Act specifies that there is no obligation to file a merger notification in the following situations:

  1. Where credit institutions or other financial undertakings, investment funds or insurance companies whose regular activities include transactions and dealing in securities are temporarily in possession of interests in an undertaking acquired with the intention to resell, provided that they do not exercise voting rights in such a way to influence competitive conduct of that undertaking. The disposal has to take place within one year (possibility of prolongation for additional twelve months) of the date of acquisition;
  2. Where control is transferred onto a professional insolvency administrator or liquidator who has powers under applicable insolvency legislation; or
  3. Acquisition of shares as a result of internal restructuring of affiliated undertakings.

21) Transactions involving only foreign businesses (foreign-to-foreign)

At least one of the parties to the merger must be established in or have a subsidiary in Croatia. 

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities, but there is a simplified procedure potentially available if there is no overlap (see topic 33).

23) Other exemptions from notification duty even if thresholds ARE met?

As a consequence of the EU "one-stop shop" principle, the Croatian merger control rules do not apply if the thresholds for EU merger control are exceeded and the European Commission has not referred the merger to the Croatian Competition Agency.

Merger control even if thresholds are NOT met

24) May a merging party file voluntarily even if the thresholds are not exceeded?

No. 

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

Only in case of referral from the European Commission (see topic 27).

Referral to and from other authorities

26) Referral within the jurisdiction

N/A

27) Referral from another jurisdiction

The Croatian Competition Agency cannot handle mergers based on referrals from other jurisdictions, except referrals from the European Commission.

The European Commission may refer a merger or a part of a merger to the Croatian Competition Agency. In that case, the Croatian Competition Agency may handle the merger even if the thresholds for merger notification in Croatia are not exceeded. In the case of a partial referral, the European Commission will handle certain (international) aspects of the merger, whereas the Croatian Competition Agency will handle the strictly Croatian aspects.

A referral of a merger from the European Commission may be requested either by the Croatian Competition Agency or by the merging parties.

28) Referral to another jurisdiction

If the thresholds for merger notification are met in at least three EU member states, the parties may request that a single merger notification is made to the European Commission in place of notifications to each of the relevant national authorities (see topic 29).

The Croatian Competition Agency may also request the European Commission to examine a merger that does not have an EU dimension within the meaning of Article 1 of the EU Merger Regulation (No. 139/2004) but affects trade between EU member states and threatens to significantly affect competition in Croatia. Such a request shall be made within 15 working days of the date on which the merger was notified to the Croatian Competition Agency. The European Commission shall immediately notify the other EU member states of the request and will decide whether to examine the merger within 25 days after this notification.

Besides referral to the European Commission, a merger cannot be referred to competition authorities in other jurisdictions.

29) May the merging parties request or oppose a referral decision?

Referral to the Croatian Competition Agency:

If a merger is subject to EU merger control, the parties may – prior to an EU merger notification – request that the merger is referred to the Croatian Competition Agency, provided that the merger may significantly affect competition in a distinct market in Croatia. If the Croatian Competition Agency does not oppose such referral, the European Commission may decide to refer the merger in whole or in part.

The European Commission must decide whether to refer a merger within 25 working days of receipt of the request (reasoned submission).

The European Commission may also, on its own initiative or upon request from the Croatian Competition Agency, decide to refer a merger that has already been notified to the European Commission to the Croatian Competition Agency. Such a referral decision must be taken within 65 working days after the merger notification has been filed. The merging parties cannot oppose such a referral decision.

Referral from the Croatian Competition Agency:

If a merger is not subject to EU merger control but is subject to merger control in Croatia and at least two other EU member states, the parties may request that a single merger notification is made to the European Commission in place of notifications to each of the relevant national authorities. If none of the relevant authorities oppose the referral, the European Commission will handle the merger notification and no notifications are needed in Croatia or any other EU member state. If any of the national authorities in question oppose the referral within 15 working days, the merger must be notified to each of the relevant national authorities.

Filing requirements and fees

30) Stage of transaction when notification must be filed

A merger notification must be filed when a binding agreement has been concluded, a takeover bid has been published or a controlling interest has been acquired. There is no specific deadline, but the transaction may not be implemented before the merger has been approved by the Croatian Competition Agency.

The Croatian Competition Agency may agree to handle a notification before a binding agreement has been concluded or a public takeover bid has been announced if the parties can demonstrate a good faith intention to conclude an agreement or – in case of a public takeover bid – if the parties have publicly announced an intention to make such a bid. However, in practice, the Competition Agency does not handle such notifications in case of public takeover bids.

31) Pre-notification consultations

The parties may, on-case-by-case basis, request informal pre-notification consultations with the Croatian Competition Agency, however such consultations do not include reviews of draft notifications.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

No special rules. 

33) Forms available for completing a notification

There are two forms available: one for simplified notification and one for full notification. Both are available in Croatian only (see links under topic 3).

Simplified notification is possible in each of the following cases:

  1. two businesses acquire or establish a joint venture that will only have insignificant business in Croatia;
  2. a business goes from having joint control to having sole control over another business;
  3. the merging parties are not active on the same markets or vertically connected markets;
  4. the merging parties are active on same markets but do not have a combined market share exceeding 15% in Croatia; or
  5. the merging parties are active on vertically connected markets (but there are no horizontal overlaps) and none of the parties have market shares exceeding 25% in Croatia on those connected markets.

Please note that the Croatian Competition Agency may always request a full notification, even if the conditions for simplified notification are present, and even after having accepted and declared a simplified notification complete.

34) Languages that may be applied in notifications and communication

Croatian.

35) Documents that must be supplied with notification

The following documents should always be supplied with a merger notification whether simplified or full:

  1. the most recent audited annual financial statements and annual reports for each of the parties to the merger;
  2. documentation regarding undertakings that have been sold or acquired after the conclusion of the most recent financial year;
  3. all documents concerning the merger, regardless of whether the merger is brought about by agreement between the parties to the merger, acquisition of a controlling interest or a public takeover bid;
  4. group chart/overview for each of the parties to the merger;
  5. Excel file with contact information for most significant competitors, suppliers and customers;
  6. any documentation on which the parties have based their market definition and assessment of market shares;
  7. non-confidential version of the notification (to be supplied to third parties); and
  8. documentation of payment of the applicable filing fee.

For full notification, a range of further documents may be relevant, including analyses, reports, minutes of board meetings and similar documents related to the merger.

36) Filing fees

The filing fee for merger control notification is HRK 7,000.

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

Yes.

38) May the parties get permission to implement before approval?

Yes, the Croatian Competition Agency may permit certain implementing actions before approval, at the parties’ request.

39) Due diligence and other preparatory steps

There are no guidelines on what may be considered acceptable preparatory steps. 

Generally, due diligence must be conducted in a way that prevents sensitive market information from being used for purposes other than assessing the viability of the merger.

An explicit exemption is not required for standard due diligence and other preparation measures without effect on the market.

40) Veto rights before closing and "Ordinary course of business" clauses

An "ordinary course of business" clause that prevents the target company from taking decisions outside the course of its ordinary business until the closing date is generally considered acceptable, but there has been no formal decision of the Competition Agency in that respect yet.

However, it must be assessed on a case-by-case basis to what extent the parties may discuss – or provide each other with veto rights concerning – any decisions in their respective businesses.

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific rules on “carve out” of the Croatian part of a transaction to avoid delaying implementation in the rest of the world pending approval in Croatia.

If the Croatian part of the transaction and the rest of the transaction are interdependent, it is advisable to request a specific permission to implement outside Croatia from the Croatian Competition Agency (see topic 38).

42) Consequences of implementing without approval/permission

The parties may be fined if the merger is implemented before approval is obtained. The amount of the fine will be fixed based on the nature, gravity and duration of the infringement, and the fine cannot exceed 10% of the parties’ worldwide turnover.

Furthermore, the merger may be prohibited, and the Croatian Competition Agency may decide to split up the merged entity or take any other measures necessary to restore efficient competition.

The process – phases and deadlines

43) Phases and deadlines

Phase

Duration/deadline

Pre-notification phase:

There are no formal rules on pre-notification consultations.

No set duration or deadline

Phase I:

The merger is either approved (with commitments if relevant) or it is decided to initiate a phase II investigation of the merger.

In practice the Croatian Competition Agency may undertake the same types of investigations under phase I and II, and the authority may also negotiate commitments in both phases. However, complex and/or problematic mergers will often require the longer deadlines applicable in phase II.

30 days from the date when the notification was complete.

Phase II:

The merger is either approved, approved with conditions/commitments or prohibited.

Normally, the Croatian Competition Agency will provide the parties with a preliminary statement after initiating phase II.

The investigation is likely to involve detailed market surveys, economic analysis and possibly negotiation of commitments that may eliminate the concerns that the authority may have regarding anti-competitive effects of the merger. 

If the Croatian Competition Agency expresses serious concerns about the merger, the parties will be granted one month to propose commitments.

3 months from the date when the phase II investigation was initiated.

(Parties have one month to propose commitments when serious concerns have been expressed)

Extension:

Possible extension of additional 3 months.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

It is assessed whether the merger will "significantly impede effective competition – in particular due to the creation or strengthening of a dominant position".

A range of factors may be taken into consideration, including efficiencies that may be gained from the merger (efficiency defence) and whether one of the parties is likely to fail as an independent business (failing firm defence).

45) May any non-competition issues be considered?

No.

46) Special tests or criteria applicable for joint ventures

The assessment for joint ventures is the same as for other mergers, but if the joint venture also has coordination between the owners as object or effect, it will also be assessed whether such coordination is acceptable under the general prohibition against anti-competitive agreements.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions/commitments or prohibited.

If the Croatian Competition Agency expresses serious concerns about the merger, the parties will be granted one month to propose commitments. Commitments may take any form and they can be either structural or behavioural and with or without time limitations.

The authority may revoke an approval if at any time it becomes aware that incorrect or misleading information has been provided by the parties or if the parties do not comply with the conditions/commitments contained in the approval.

If a merger has been implemented without approval, the Croatian Competition Agency may prohibit the merger and order a separation of the businesses or any other measure capable of restoring competition. In any case, the Competition Agency will issue a fine.

Publicity and access to the file

48) How and when will details about the merger be published?

The Croatian Competition Agency will make a public announcement when it has received a complete merger notification, inviting comments from third parties, and again when a decision has been taken. The latter announcement will include a non-confidential version of the decision. 

To protect business secrets, the parties are requested to provide a non-confidential description of the transaction with the notification and to identify any confidential information in the notification.

49) Access to the file for the merging parties and third parties

The merging parties:

The merging parties have a right to access to the file, which includes correspondence with third parties that the Croatian Competition Agency may have had, including market survey questionnaires as well as an overview of all documents/correspondence in the file. 

Third parties:

Third parties do not have access to the file, but the Croatian Competition Agency may decide to provide third parties with a non-confidential version of the notification and other documents in connection with its market surveys.

Judicial review

50) Who can appeal and what may be appealed?

A party to the merger may file an administrative lawsuit to the High Administrative Court of the Republic of Croatia within 30 days from the delivery of the Competition Agency’s decision. The Court shall decide on:

  1. violations of substantive competition law regulations;
  2. a material breach of the procedural provisions;
  3. incorrectly or incompletely established facts; and
  4. wrong decisions on the administrative-penal measure (i.e. fine) and other issues decided by the Agency.

The administrative lawsuit does not suspend the execution of the decision, except in the part of the decision that relates to the imposed administrative-penal measure.

Appeals against the Agency's decisions on procedural issues do not suspend the course of proceedings.


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