building a STRONGER foundation - Cemex
building a STRONGER foundation - Cemex
building a STRONGER foundation - Cemex
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February 7, 2011, CEMEX Polska received a formal response to its appeal from the Protection Office in which the Protection Office<br />
made an application to the Polish Court of Competition and Consumer Protection to reject CEMEX Polska’s appeal. The response<br />
from the Protection Office argued that CEMEX Polska’s appeal is not justified, and it maintained all of the statements and arguments<br />
from the Protection Office’s decision issued on December 9, 2009. On February 21, 2011, CEMEX Polska sent a letter to the court in<br />
which it kept its position and argumentation from the appeal and widely opposed to arguments and statements included in the response<br />
of the Protection Office. The decision on the fines will not be enforced until two appeal instances are exhausted. According to the<br />
current Polish court practices these two appeal proceedings should take at least three years. On December 31, 2010, the accounting<br />
provision created in relation with this proceeding was Polish Zloty 72.3 million (approximately U.S.$27.22 million as of April 30,<br />
2011, based on an exchange rate of Polish Zloty 2.6559 to U.S.$1.00).<br />
Antitrust Investigations in Europe by the European Commission. On November 4, 2008, officers of the European Commission,<br />
in conjunction with officials of the national competition enforcement authorities, conducted unannounced inspections at our offices in<br />
Thorpe (United Kingdom) and Ratingen (Germany). Further to these inspections, on September 22 and 23, 2009 CEMEX’s premises<br />
at Madrid, Spain were also subject to an inspection from the European Commission.<br />
In conducting these investigations, the European Commission has alleged that we may have participated in anti-competitive<br />
agreements and/or concerted practices in breach of Article 101 of the Treaty on the Functioning of the European Union (formerly<br />
Article 81 of the EC Treaty) and Article 53 of the European Economic Area (“EEA”) Agreement in the form of restrictions of trade<br />
flows in the EEA, including restrictions on imports into the EEA from countries outside the EEA, market sharing, price coordination<br />
and connected anticompetitive practices in the cement and related products markets. Since the inspections, we have received requests<br />
for information from the European Commission in September 2009, October 2010 and December 2010, and we have fully cooperated<br />
by providing the relevant information on time.<br />
On December 8, 2010, the European Commission informed us that it has decided to initiate formal proceedings in respect of the<br />
investigation of the aforementioned anticompetitive practices. These proceedings would affect Austria, Belgium, the Czech Republic,<br />
France, Germany, Italy, Luxembourg, the Netherlands, Spain and the United Kingdom. The European Commission has indicated that<br />
we, as well as seven other companies, will be included in these proceedings. These proceedings may lead to an infringement decision,<br />
or if the objections raised by the European Commission are not substantiated, the case might be closed. This initiation of proceedings<br />
relieves the competition authorities of the Member States of the European Union of their competence to apply Article 101 of the<br />
Treaty on the Functioning of the European Union to the same case. We intend to defend our position vigorously in this proceeding and<br />
are fully cooperating and will continue to cooperate with the European Commission in connection with this matter.<br />
If the allegations are substantiated, significant penalties may be imposed on our subsidiaries operating in such markets. In that<br />
case, pursuant to European Union Regulation 1/2003, the European Commission may impose penalties of up to 10% of the total<br />
turnover of the relevant companies for the last year preceding the imposition of the fine for which the financial statements have been<br />
approved by the shareholders’ meeting of the relevant companies.<br />
On April 1, 2011, the European Commission notified CEMEX S.A.B. de C.V. a decision under Article 18(3) of Council<br />
Regulation (EC) No 1/2003 of December 16, 2002 on the implementation of the rules on competition set forth in Article 81 of the EC<br />
Treaty (current Articles 101 and 102 of the EC Treaty). CEMEX is preparing all the requested information in order to provide a timely<br />
and complete reply within the deadlines imposed by the European Commission. As of April 18, 2011, CEMEX submitted the reply to<br />
one of the questions and is due to submit the rest of the requested information by the end of June 2011.<br />
Antitrust Investigations in Spain by the CNC. On September 22, 2009, the Investigative Department (Dirección de<br />
Investigación) of the Spanish Competition Commission (Comisión Nacional de la Competencia, “CNC”), applying exclusively<br />
national antitrust law, carried out another inspection, separate from the investigation conducted by the European Commission, in the<br />
context of possible anticompetitive practices in the production and distribution of mortar, ready-mix concrete and aggregates within<br />
the Chartered Community of Navarre (“Navarre”). We fully cooperated and provided the CNC inspectors all the information<br />
requested. On December 15, 2009, the CNC started a procedure against CEMEX España and four other companies with activities in<br />
Navarre for alleged practices prohibited under the Spanish competition law. The allegations against CEMEX España relate to several<br />
of our ready-mix plants located in Navarre, which we operated from January 2006 (as a result of the RMC acquisition) until<br />
September 2008, when we ceased operations for these plants.<br />
On November 3, 2010, the CNC Investigative Department provided CEMEX España with a Statement of Facts (similar to a<br />
statement of objections under European Union competition law) that included allegations that could be construed as a possible<br />
infringement by CEMEX España of Spanish competition law in Navarre. The<br />
Statement of Facts was addressed to CEMEX España, but also indicated that its parent company, New Sunward, could be jointly and<br />
severally liable for the investigated behavior.<br />
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