TANZANIA – AMENDMENTS TO THE PENALTY PROVISIONS IN THE FAIR COMPETITION ACT NOW IN EFFECT

By Chris Green,Xolani Nyali Friday, July 24, 2020
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With effect from 1 July 2020, the penalty provisions in the Fair Competition Act, 2003 (Competition Act) have been amended – clarifying that financial penalties for competition law contraventions in Tanzania will now be limited to turnover sourced in Mainland Tanzania.

Prior to the amendment, section 60 of the Competition Act provided that where a person commits, or is involved in, an offence, the Fair Competition Commission (Commission) ‘may impose on that person a fine of not less than five percent of his annual turnover and not exceeding ten percent of his annual turnover’.

This section did not prescribe the geographic ambit by reference to which the fine had to be calculated, although section 6(1) of the Competition Act prescribes that the Competition Act applies to Mainland Tanzania.

Following the amendment, section 60 of the Competition Act now provides that where a person commits, or is involved in, an offence, the Commission ‘may impose on that person a fine of not less than five percent but not exceeding ten percent of his annual turnover which has a source in Mainland Tanzania’.

Although the amendment does not change the percentage of the penalty that will be payable, it does clarify that the penalty will be calculated by reference to annual turnover ‘which has a source in Mainland Tanzania’.

While the provisions in section 60 of the Competition Act have been clarified, a similar provision in paragraph 2 of the Fair Competition (Threshold for Notification of a Merger) (Amendment) Order, 2017 remains unchanged. This provision states that the financial threshold triggering merger notification obligations is TZS 3.5 billion and the ‘calculation of the threshold shall be based on the combined market value of assets or turnover of the merging firms’. This provision remains silent on the geographic ambit of its application.