Cemex 2012 Annual Report Download - page 112

Notes to the
consolidated
financial
statements
112
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• On December 8, 2010, the European Commission (“EC”) informed CEMEX that it has decided to initiate formal proceedings
in respect of possible anticompetitive practices in Austria, Belgium, the Czech Republic, France, Germany, Italy, Luxembourg,
the Netherlands, Spain and the United Kingdom, which include CEMEX and seven other companies. The proceedings may
lead to an infringement decision or, if the objections raised by the EC are not substantiated, the case might be closed. In
April 2011, the EC requested CEMEX to deliver a material amount of information and documentation. CEMEX filed an appeal
before the General Court of the European Union for the annulment of such request for information and documentation on
the grounds that it is contrary to several principals of European Union Law. Nonetheless, the request was fulfilled by CEMEX
on August 2, 2011. On September 16, 2011, without discussing the main arguments of the claim, the EC rejected the claim
from CEMEX asking for the annulment of the request. On December 15, 2011, CEMEX complied with the terms of this
decision and submitted a new reply with the amendments and clarifications identified in the revision and audit process. On
December 21, 2011, CEMEX filed its reply to the EC’s rejection. The EC filed its rejoinder on March 27, 2012. The hearing
is scheduled for February 6, 2013. If the alleged infringements are substantiated, the EC may impose a maximum fine of
up to 10% of the total turnover of the relevant companies for the last year preceding the imposition of the fine for which
the financial statements have been approved. CEMEX intends to defend its position vigorously in this proceeding and is
fully cooperating and will continue to cooperate with the EC in connection with this matter. As of December 31, 2012, the
extent of the charges and the alleged infringements are unknown, and it is not clear which revenues would be used for the
determination of the possible penalties. As a result, CEMEX cannot assess the likelihood of an adverse result or the amount
of the potential fine, but, if adversely resolved, it may have a material adverse impact on CEMEX’s financial position.
• On October 26, 2010, CEMEX, Inc., one of CEMEX’s subsidiaries in the United States, received an Antitrust Civil Investigative
Demand from the Oce of the Florida Attorney General, which seeks documents and information in connection with an
antitrust investigation by the Florida Attorney General into the ready-mix concrete industry in Florida. As of December 31,
2012, CEMEX is working with the Oce of the Florida Attorney General to comply with the civil investigative demand, and
it is unclear at this stage whether any formal proceeding will be initiated by the Oce of the Florida Attorney General.
• In September 2009, ocers from the EC, in conjunction with local ocials of the Spanish national competition enforcement
authority (Comisión Nacional de la Competencia or ”CNC”), conducted an unannounced inspection at CEMEX‘s oces in
Spain. The EC alleges that CEMEX may have participated in anti-competitive agreements and/or concerted practices. This
investigation is related to unannounced previous inspections carried out by the EC in the United Kingdom and Germany
in November 2008. CEMEX has received requests for information from the EC in September 2009, October 2010 and
December 2010, and CEMEX has fully cooperated by providing the relevant information on time. As of December 31, 2012,
CEMEX cannot assess the likelihood of an adverse result, or quantify the potential damages that could be borne by CEMEX.
Nonetheless, CEMEX would not expect a material adverse effect on its financial position.
• On June 5, 2010, the Secretaría Distrital de Ambiente de Bogotá, the District of Bogota’s environmental secretary (or the
“Environmental Secretary”), ordered the suspension of CEMEX Colombia’s mining activities at El Tunjuelo quarry, located in
Bogotá, as well as those of other aggregates producers in the same area. The Environmental Secretary claims that during the
past 60 years CEMEX Colombia and the other companies have illegally changed the course of the Tunjuelo River, have used
the percolating waters without permission and have improperly used the edge of the river for mining activities. In connection
with the injunction, on June 5, 2010, CEMEX Colombia received a notification from the Environmental Secretary informing
the initiation of proceedings to impose fines against CEMEX Colombia based on the above mentioned alleged environmental
violations. CEMEX Colombia responded to the injunction by requesting that it be revoked based on the fact that the mining
activities at El Tunjuelo quarry are supported by the authorizations required by the applicable environmental laws and that
all the environmental impact statements submitted by CEMEX Colombia have been reviewed and permanently authorized
by the Ministerio del Medio Ambiente, Vivienda y Desarrollo Territorial. On June 11, 2010, the local authorities in Bogotá,
in compliance with the environmental secretary’s decision, sealed off the mine to machinery and prohibited the removal of
our aggregates inventory. Although there is not an ocial quantification of the possible fine, the environmental secretary
has publicly declared that the fine could be as much as 300 billion Colombian pesos (US$170 or $2,184). The temporary
injunction does not currently compromise the production and supply of ready-mix concrete to our clients in Colombia. CEMEX
Colombia is analyzing its legal strategy to defend itself against these proceedings. At this stage, we are not able to assess the
likelihood of an adverse result or potential damages which could be borne by CEMEX Colombia.