TANZANIA – PROPOSED AMENDMENTS TO THE PENALTY PROVISIONS IN THE FAIR COMPETITION ACT

On 12 June 2020, the Parliament of the United Republic of Tanzania issued the Finance Bill, 2020 (Bill) which inter alia proposes a clarification to the scope of the penalty provisions in the Fair Competition Act, 2003 (Competition Act).

Currently, and in terms of section 60 of the Competition Act, where a person commits, or is involved in, an offence in terms of the Competition Act, 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 does not prescribe the geographic ambit to which the fine must be calculated, although section 6(1) of the Competition Act prescribes that the Competition Act applies to Mainland Tanzania.

The Bill does not propose any changes to the range upon which a penalty would be payable but seeks to clarify that the penalty calculated will be limited to annual turnover 'which has a source in Mainland Tanzania'. This would exclude turnover derived in Zanzibar for example, which has its own competition law and regulator, and as such, achieves alignment between section 6(1) and section 60 of the Competition Act.

More significantly, this proposed amendment clarifies that firms found by the Commission to have engaged in restrictive business practices or prior implementation of notifiable mergers, would be liable for a fine of between 5% and 10% of annual turnover, limited to turnover which has a source in Mainland Tanzania. The Bill is expected to come into effect on 1 July 2020.