On July 15, 2022, China’s antitrust authority SAMR announced a three-year pilot program beginning August 1, 2022 to delegate the review of certain simplified-procedure merger filings that the agency currently handles on its own, to five of its local branches (“AMRs”) in Beijing, Shanghai, Guangdong, Chongqing, and Shaanxi. Each of the five local AMRs will be responsible for a specific geographic area (“Territory”) within China. This is the first step to implement China’s “categorized and classified” merger control review regime under the new Anti-Monopoly Law.
We have summarized the key changes below:
- Applicable Scenarios. Such delegation may apply to simplified-procedure cases that fall under any of the following categories: (i) at least one of the notifying parties is domiciled in the Territory; (ii) the target is domiciled in the Territory; (iii) in case of the establishment of a joint venture, the joint venture is domiciled in the Territory; (iv) the relevant geographic market falls entirely or primarily within the Territory; or (iv) the other cases as determined by SAMR. With this criteria, foreign to foreign transactions may be delegated to local AMRs.
- Termination of Delegation. Local AMRs should timely inform SAMR and SAMR should terminate the delegation if any of the following circumstances occurs: (i) the case no longer qualifies for the simplified procedure; (ii) the case involves gun jumping; (iii) notifying parties withdraw the filing due to not meeting the notification thresholds, (iv) notifying parties withdraw the filing due to the termination of, or material changes to, the transaction; or (v) the other circumstances as determined by SAMR.
- Process. The flow chart below describes the merger review process after the case delegation takes effect.
- Outlook. While SAMR intends to use the case delegation to improve efficiency in merger review, one can imagine delays and inconsistent review standards at least at the beginning of the new regime, due to inexperienced local AMRs and relatively complicated delegation process. It remains to be seen whether the new regime can help SAMR expedite its review of normal-procedure cases.
 On June 24, 2022, China’s top legislature, the Standing Committee of China’s National People’s Congress, adopted the amendments to China’s Anti-Monopoly Law, which will enter into force on August 1, 2022.