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The Federal Trade Commission plans to reduce the paperwork burden stemming from mergers of foreign companies with United States operations. Speaking to the American Bar Association’s antitrust section, FTC Associate Director Marian Bruno said the agency intends to alter a recently proposed test for determining if a deal among foreign firms must be reported to the U.S. government. The proposed rule would have required foreign firms to calculate how much revenue their U.S. operations have generated since the end of their most recent fiscal year. That amount then would have been added to the amount of revenue the company reported earning from U.S. operations in its previous full fiscal year. If that amount exceeded $50 million, then the company would have had to file a Hart-Scott-Rodino notice. Antitrust experts complained the proposed rule could have required a firm to count up to 23 months of revenue when determining if an HSR is required. That law only envisions looking at one year’s worth of revenue, they contended. Bruno said the agency has decided to address the antitrust community’s concerns, though she said the exact remedy has not been determined. One option under consideration is to require the foreign companies to report revenue from U.S. operations for the four most recent quarters. “This is something we are planning on changing,” she said. Victor L. Cohen, an attorney with the Washington, D.C., office of law firm Howrey, Simon, Arnold & White, said he could live with the four most recent quarters proposal. “Anything is better than calculating it for more than a year,” he said. That point was echoed by Neil Imus, a partner in the Washington, D.C., office of the Vinson & Elkins law firm. He said the FTC ideally should let firms use their most recent fiscal year when calculating U.S. revenue. He noted that many foreign firms do not separate out U.S. revenue each quarter. The rule changes were prompted by enactment last year of changes to the Hart-Scott-Rodino Act. Congress essentially altered the law to require companies involved in larger mergers to pay higher filing fees. As compensation, the government agreed to exempt more small deals from the filing requirement. Bruno said HSR filings are down 72 percent since the law took effect Feb. 1, compared with the same period last year. The agency had only anticipated a 52 percent drop in filings. Copyright (c)2001 TDD, LLC. All rights reserved.

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