Number range CHAPTER**[AGREEMENT]{.mark}**

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**[BETWEEN]{.mark}**

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**[THE GOVERNMENT OF THE UNITED STATES OF AMERICA]{.mark}**

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**[AND]{.mark}**

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**[THE GOVERNMENT OF CANADA]{.mark}**

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**[ON THE APPLICATION OF POSITIVE COMITY PRINCIPLES]{.mark}**

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**[TO THE ENFORCEMENT OF THEIR COMPETITION LAWS]{.mark}**

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[**THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF
CANADA** (hereinafter "the Parties"):]{.mark}

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[**HAVING REGARD** to the August 1995 Agreement between the Government
of the United States of America and the Government of Canada Regarding
the Application of Their Competition and Deceptive Marketing Practices
Laws (hereinafter "the 1995 Agreement");]{.mark}

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[**RECOGNIZING** that the 1995 Agreement has contributed to
coordination, cooperation and avoidance of conflicts in competition law
enforcement;]{.mark}

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[**NOTING** in particular Article V of the 1995 Agreement, commonly
referred to as the "Positive Comity" article, which calls for
cooperation regarding anticompetitive activities occurring in the
territory of one Party that adversely affect the important interests of
the other Party;]{.mark}

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[**BELIEVING** that further elaboration of the principles of positive
comity and of the implementation of those principles would enhance the
1995 Agreement\'s effectiveness in relation to such anticompetitive
activities; and]{.mark}

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[**NOTING** that nothing in this Agreement or its implementation shall
be construed as prejudicing either Party\'s position on issues of
competition law jurisdiction in the international context,]{.mark}

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[**HAVE AGREED** as follows:]{.mark}

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# [[ARTICLE I]{.underline}]{.mark}

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[**[Scope and Purposes of this Agreement]{.underline}**]{.mark}

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[1. This Agreement applies where the competition authorities of a Party
satisfy the competition authorities of the other Party that there is
reason to believe that the following circumstances are present:]{.mark}

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[(a) Anticompetitive activities are occurring in whole or in substantial
part in the territory of one of the Parties and are adversely affecting
the important interests of the other Party; a]{.mark}nd

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[(b) The activities in question may be subject to penalties or other
relief under the competition laws of the Party in whose territory the
activities are occurring.]{.mark}

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[2. The purposes of this Agreement are to:]{.mark}

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[(a) Help ensure that trade and investment flows between the Parties and
competition and consumer welfare within the territories of the Parties
are not impeded by anticompetitive activities for which the competition
laws of one or both Parties can provide a remedy, and]{.mark}

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[(b) Establish cooperative procedures to achieve the most effective nd
efficient enforcement of competition law, whereby the competition
authorities of each Party will normally avoid allocating enforcement
resources to dealing with anticompetitive activities that occur
principally in and are directed principally towards the other Party's
territory, where the competition authorities of the other Party are able
and prepared to examine and take effective sanctions under their law to
deal with those activities.]{.mark}

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## [ARTICLE II]{.mark}

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## [Definitions]{.mark}

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[As used in this Agreement:]{.mark}

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[1. "Adverse effects" and "adversely affected" mean harm caused by
anticompetitive activities to:]{.mark}

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[(a) the ability of persons, either natural or legal,]{.mark} in the
territory of a Party to export to, invest in, or otherwise compete in
the territory of the other Party, or

\(b\) competition in a Party's domestic or import markets.

2\. "Anticompetitive activities" means any conduct or transaction that
may be subject to penalties or other relief under the competition laws
of a Party.

3\. "Competition authorities" means:

\(a\) for Canada, the Commissioner of Competition (referred to as the
Director of Investigation and Research in the 1995 Agreement), and

> \(b\) for the United States of America, the Antitrust Division of the
> United States Department of Justice and the Federal Trade Commission.
>
> *- 2 -*
>
> 4\. "Competition law(s)" means:

\(a\) for Canada, the *Competition Act*, R.S.C. 1985, c. C-34, as
amended, except sections 52 through 60, 74.01 through 74.19, 91 through
103, and 108 through 124 of that Act, and

\(b\) for the United States of America, the Sherman Act (15 U.S.C.
§§1-7), the Clayton Act (15 U.S.C. §§12-27, except as it relates to
investigations pursuant to Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, 15 U.S.C. §18a), the Wilson Tariff Act (15
U.S.C. §§8-11), and the Federal Trade Commission Act (15 U.S.C. §§41-58,
except as these sections relate to consumer protection functions),

as well as such other laws or regulations as the Parties shall jointly
agree in writing to be a "competition law" for the purposes of this
Agreement.

5\. "Enforcement activities" means any investigation or proceeding
conducted by the competition authorities of a Party in relation to its
competition laws.

6\. "Requested Party" means a Party in the territory of which
anticompetitive activities appear to be occurring.

7\. "Requesting Party" means a Party that is adversely affected by
anticompetitive activities that appear to be occurring in whole or in
substantial part in the territory of the other Party.

**[ARTICLE III]{.underline}**

**[Positive Comity]{.underline}**

The competition authorities of a Requesting Party may request the
competition authorities of a Requested Party to investigate and, if
warranted, to remedy anticompetitive activities in accordance with the
Requested Party\'s competition laws. Such a request may be made
regardless of whether the activities also violate the Requesting
Party\'s competition laws, and regardless of whether the competition
authorities of the Requesting Party have commenced or contemplate taking
enforcement activities under their own competition laws.

## ARTICLE IV

**[Deferral or Suspension of Investigations in Reliance]{.underline}**

**[on Enforcement Activity by the Requested Party]{.underline}**

1\. The competition authorities of the Parties may agree that the
competition authorities of the Requesting Party will defer or suspend
pending or contemplated enforcement activities during the pendency of
enforcement activities of the Requested Party.

*- 3 -*

2\. The competition authorities of a Requesting Party will normally
defer or suspend their own enforcement activities in favor of
enforcement activities by the competition authorities of the Requested
Party when the following conditions are satisfied:

\(a\) The anticompetitive activities at issue:

\(i\) do not have a direct, substantial and reasonably foreseeable
impact on consumers in the Requesting Party's territory, or

\(ii\) where the anticompetitive activities do have such an impact on
the Requesting Party's consumers, they occur principally in and are
directed principally towards the other Party's territory;

\(b\) The adverse effects on the important interests of the Requesting
Party can be and are likely to be fully and adequately investigated and,
as appropriate, eliminated or adequately remedied pursuant to the laws,
procedures and available remedies of the Requested Party. The Parties
recognize that it may be appropriate to pursue separate enforcement
activities where anticompetitive activities affecting both territories
justify the imposition of penalties within both jurisdictions; and

\(c\) The competition authorities of the Requested Party agree that in
conducting their own enforcement activities, they will:

\(i\) devote adequate resources to investigate the anticompetitive
activities and, where appropriate, promptly pursue adequate enforcement
activities;

\(ii\) use their best efforts to pursue all reasonably available sources
of information, including such sources of information as may be
suggested by the competition authorities of the Requesting Party;

\(iii\) inform the competition authorities of the Requesting Party at
reasonable intervals which normally shall not exceed six weeks, or on
request, of the status of their enforcement activities and intentions,
and where appropriate provide to the competition authorities of the
Requesting Party relevant confidential information. The use and
disclosure of such information shall be governed by Article V;

> \(iv\) promptly notify the competition authorities of the Requesting
> Party of any change in their intentions with respect to investigation
> or enforcement;

\(v\) use their best efforts to complete their investigation and to
obtain a remedy or initiate proceedings within a specified period to
which the competition authorities of the Parties shall agree, which
shall be as short a period as is reasonably feasible. The competition
authorities of the Parties shall agree on such time period within three
months of the time at which a request under Article III of this
agreement is made;

*- 4 -*

\(vi\) fully inform the competition authorities of the Requesting Party
of the results of their investigation, and take into account the views
of the competition authorities of the Requesting Party, prior to any
settlement, initiation of proceedings, adoption of remedies, or
termination of the investigation; and

\(vii\) comply with any reasonable request that may be made by the
competition authorities of the Requesting Party.

When the above conditions are satisfied, a Requesting Party which
chooses not to defer or suspend its enforcement activities shall inform
the competition authorities of the Requested Party of its reasons.

3\. The competition authorities of the Requesting Party may defer or
suspend their own enforcement activities if fewer than all of the
conditions set out in paragraph 2 are satisfied.

4\. Nothing in this Agreement precludes the competition authorities of a
Requesting Party that choose to defer or suspend independent enforcement
activities from later initiating or reinstituting such activities. In
such circumstances, the competition authorities of the Requesting Party
will promptly inform the competition authorities of the Requested Party
of their intentions and reasons. If the competition authorities of the
Requested Party continue with their own investigation, the competition
authorities of the two Parties shall consider coordination of their
respective investigations under the criteria and procedures of Article
IV of the 1995 Agreement.

**[ARTICLE V]{.underline}**

**[Confidentiality and Use of Information]{.underline}**

Where pursuant to this Agreement the competition authorities of one
Party provide information to the competition authorities of the other
Party for the purpose of implementing this Agreement, that information
shall be used by the latter competition authorities only for that
purpose. However, the competition authorities that provided the
information may consent to another use, on condition that where
confidential information has been provided pursuant to Article IV.2 (c)
(iii) on the basis of the consent of the source concerned, that source
also agrees to the other use. Disclosure of such information shall be
governed by the provisions of Article X of the 1995 Agreement.

# [ARTICLE VI]{.underline}

**[Relationship to the 1995 Agreement]{.underline}**

This Agreement shall supplement and be interpreted consistently with the
1995 Agreement, which remains fully in force.

**[ARTICLE VII]{.underline}**

###  Existing Law

Nothing in this Agreement shall be interpreted in a manner inconsistent
with the existing laws, or as requiring any change in the laws, of the
Parties or of their respective Provinces or States.

*- 5 -*

## ARTICLE VIII

**[Entry Into Force and Termination]{.underline}**

1\. This Agreement shall enter into force upon signature.

2\. This Agreement shall remain in force until 60 days after the date on
which either Party notifies the other Party in writing that it wishes to
terminate the Agreement.

**IN WITNESS WHEREOF**, the undersigned, being duly authorized, have
signed this Agreement.

**DONE** in duplicate at Washington, on this fifth day of October, 2004,
in the English and French languages, each text being equally authentic.

**FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF**

#### THE UNITED STATES OF AMERICA: CANADA:

Date: October 5, 2004 Date: October 5, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_/s/\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_/s/\_\_\_\_\_\_\_\_\_\_\_\_\_\_

John Ashcroft Michael Kergin

Date: October 5, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_/s/\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Deborah Platt Majoras

*- 6 -*