Member Article

Under Bolivian law, there is no specific set of regulations or special norm regarding a system of merger control applicable to the different sectors of the economy(1). The antitrust provisions, restrictions and penalties for each particular sector (telecommunications, electricity, hydrocarbons, transport, water, etc.) are established in the “Sectorial” laws, and in general in the Bolivian Constitution, the Criminal Code and Code of Commerce.

The Sectorial Regulation System (SIRESE) was created by Law No. 1600 of October 28, 1994, with the purpose of regulating, controlling and overseeing the provision of public utilities in the different sectors of the economy. To this extent, articles 15 to 21 of the abovementioned law include antitrust and competition defense provisions.

Specifically, article 18 of Law No. 1600 indicates the following:

“The merger of companies or entities subject to regulation under this Law, and leading to the creation or strengthening of a dominant position within a specific market are prohibited. For the purposes of this Law, an enterprise holds a dominant position in a market if, as offer or require of a certain type of goods or services subject to regulation, it is the only one in the market or when not the only one, is nor exposed to substantial competition within such market.”

According to the current Political Constitution of the State (“CPE”), all monopolies within production and economic services activities in the country are abolished and prohibited, except for those state monopolies established by Law (article 134).

In addition, article 14 of Investment Law No. 1182 clearly refers to what the Political Constitution indicates in connection with the lack of recognition of any type of private monopoly.

Under such context, chapter VII of Supreme Decree No. 21060 also refers to monopolies, particularly in the following articles:

Art. 137.- “Within the framework of the Political Constitution of the State, all monopolies within production and economic services activities in the country are abolished and prohibited, except for those state monopolies established by Law. Within a term of ninety (90) days, the Executive Power will present a preventive legislative proposal on monopolistic and oligopolistic conduct and practices of the private sector to the Legislative Power.”(2)

Art. 138º. - Any individual or entity, whether public or private, may engage in any activity not considered as monopoly by the Republic.

After taking into consideration all the abovementioned legislation, the specific regulations regarding each sector should be considered:
Article 15 of the Electricity Law (Law 1604) indicates the following: “The Electricity Companies in the National Interconnected System shall be segregated into Generation, Transmission and Distribution companies and each shall be engaged in only one of these activities. For the purposes of this article, the Electricity Companies shall register, in the Superintendence of Electricity, the shareholders or partners whose interest in the capital stock of the company exceeds five percent (5%) of the total, pursuant to regulation.”

On the other hand, Title XI, article II of the Telecommunications Law (Law No. 1632) regulates mergers, acquisitions and transfers between operator companies of basic telecommunication services, establishing that any of such acts must request the previous authorization of the Superintendence of Telecommunications.

Similar provisions are stipulated for the other regulated Sectors, which necessarily must count with the Administrative Resolution issued by the corresponding Sectorial Superintendence previous to execution of any merger between companies providers of services.

Article 66 of the Code of Commerce effective as of January 1st., 1978, refers to disloyal competition, and establishes: “The commercial activity that constitutes disloyal competition, according to dispositions of this Code and relative laws, will be sanctioned in agreement with the provisions established in the Criminal Code”. In addition, article 69 of the same legislation enumerates the acts that constitute disloyal competition

Finally, articles 226, 233 and 237 of the Criminal Code effective as of March 10, 1997, sanction and penalize some forms of monopoly like the speculation, monopoly of import, production or distribution of markets and customer poaching. Prison terms may result varying from six months to three years.

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1. The Bolivian government doesn’t have in agenda any legislative or formal proposal to enact general merger control legislation for all sectors of the economy. In our internal legislation, the Sectoral Superintendence’s are the direct regulators who maintain the balance between consumers, lenders of service and the State, as intent for the Elimination of Monopolistic and Restrictive Practices Affecting Free Competition.

2. It should be clarified that this article has not been thoroughly complied with, since no Antimonopoly Law has been presented to the Legislative Power within the term established.