What should a competition agency do in a country that has a mandatory merger control but lacks FDI screening?: The case of Chile and Latin America

29.11.2022

CeCo Chile

Felipe Irarrázabal Ph. Fiscal Nacional Económico entre 2010 y 2018. Socio en Philippi, Yrarrázaval, Pulido & Brunner entre 1999 y 2010. Stagiaire en Cleary Gottlieb Steen & Hamilton LLP (Nueva York, EE.UU.) en 1999. Profesor U. de Chile de Análisis Económico del Derecho, entre el 2000 y el 2013. Visiting Scholar, Stanford University el 2019. Director de CeCo UAI.

This contribution addresses what a competition agency –particularly in emerging economies like Chile and throughout Latin America– should do when faced with the dilemma of reviewing a merger with a national security issue involved. The article analyzes the specific challenges faced by the Chilean competition authority when reviewing mergers that involve both foreign direct investment (FDI) and national security issues. Then, it refers to similar challenges in other countries in Latin America and tries to specify the difficulties that FDI screening control entails (in countries of the region).

*This article was discussed by Felipe Irarrázabal, as a guest speaker, in the OECD’s roundtable «The Relationship between FDI Screening and Merger Control Reviews»,  on November 30, 2022 (Paris, France).

«Countries in transition to economic development may present special challenges regarding the control of FDI. They need investment, whether national or foreign, to keep growing, especially if they experience a concentrated economy and are dependent on the countries to which they export. In addition, since they have less political and commercial influence, these countries have difficulties in understanding and deciding strategies on intelligence issues, having incentives to seek neutrality regarding global tension»