WORLD TRADE WT/WGTCP/W/69
30March 1998
ORGANIZATION(98-1264)
Original: English Working Group ontheInteraction
between Trade andCompetition Policy
COMMUNICATION FROM POLAND
Thefollowing communication, dated 11March 1998, hasbeenreceived fromthePermanent
Representation oftheRepublic ofPoland withtherequest thatitbecirculated toMembers.
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1. Introduction
Thefirstlegalprovisions related tocompetition policy wereintroduced intoPolish lawin1987
bytheActonCounteractingMonopolisticPracticesinNationalEconomy.Forstartingthetransformation
fromthecentrally-planned tothemarket economy twoother legalactswereofgreat importance: the
Actof23December 1988onBusiness Activities andtheActof13July1990onPrivatization ofState-
owned Enterprises.
Before thetransition period, duetotheState monopoly offoreign trade andhardcurrency
regulations, imports andexports weredirectly andfullyregulated andcontrolled bythegovernment.
Insuchcircumstances, there wasnoneedforspecific trade policy instruments suchasanti-dumping
provisions, onthecontrary, imports atdumping prices werewelcomed asdecreasing expenditure of
foreign currency (national currency being unconvertible). Only aslateasinthenewCustoms Law
adopted in1989 some anti-dumping andsafeguards measures were included.
Progressing transformation intothemarket economy required further adjustments ofthelegal
provisions inforce, soconsequently newlawshavebeenadopted, which aredescribed below.
2. Polish competition law
Asmentionedabove,thefirstlegalactinthefieldofcompetitionwastheActof28January1987
onCounteracting Monopolistic Practices intheNational Economy. Itwassuperseded bytheActof
February1990on"CounteractingMonopolisticPractices"(hereinafterreferredtoastheAct)asamended
bytheActof3February 1995 andtheActof30August 1996, provides forageneral prohibition of
monopolistic practices, setsoutalistofexamples ofprohibited restrictive agreements andabuses of
adominant position, andprovides formerger control. Byvirtue ofthisActtheAntimonopoly Office
wasestablished ascompetition authority onthecentral State administration level.
Within theframework ofthereform ofthecentral public administration which tookplace in
Poland inthesecond halfof1996, thescope ofresponsibilities oftheformer Antimonopoly Office
wassignificantly extended.
Since 1October 1996 thetasks related tocounteracting monopolistic practices, development
ofcompetition andconsumer protection areexecuted bythePresident oftheOffice forCompetition
andConsumer Protection (OCCP). Simultaneously, theActwasamended byaddition toArticle 5WT/WGTCP/W/69
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(chapter 2)ofanewexample oftheabuse ofadominant market position, i.e."creating forconsumers
onerous conditions ofthelegalredress".
ThePresident isthecentral stateadministration bodyaccountable totheCouncil ofMinisters
andperforms histasks bytheintermediary oftheOCCP.
Atthesame time, theActof16April 1993 onCombating Unfair Competition wasamended
toexpand thePresident 'scompetence forauthority toapply tocourts incaseoftheactofunfair
competition withtherequest torenounce forbidden practices andeliminate theirconsequences aswell
astoannounce asingle orrepeated statement intherequested textorform. Such action maybe
undertaken bythePresident incaseofactsofunfair competition enumerated intheAct.
Thelatest amendments totheActwere introduced in1997 where theformer subject tothe
Act"business entity" wasreplaced by"entrepreneur" andthescope oftheOCCP control over
concentration levelonthecapital market wasextended: since January 1998acquisition ortaking over
ofthesignificant block ofshares subject topublic trading must benotified.
TheActdefines inthepreamble thefollowing objectives:
"Inorder toensure thedevelopment ofcompetition, protection ofentrepreneurs exposed
tomonopolistic practices andprotection ofconsumer interest, thefollowing shallbe
enacted;"
andinChapter 1,Article 1settles itsgeneral provisions:
"This Actdetermines theconditions forthedevelopment ofcompetition, governs the
rulesandprocedures ofcounteracting monopolistic practices andabuses ofconsumer
interests byentrepreneurs andthecombinations thereof, which cause ormaycause
effects within theterritory oftheRepublic ofPoland, anddefines theauthorities
competent intheabove matters."
Antitrust proceedings canbeinitiated exofficio orupon amotion oftheinterested party.
Administrative decision ofthePresident oftheOCCP canbeappealed against totheVoivodship Court
inWarsaw-Antimonopoly Court andfinally besubject tocessation oftheSupreme Court.
Astheresult ofassessing monopolistic practices, depending ontheircharacter, thePresident
oftheOCCP may:
- order theircessation;
- issue adecision forbidding execution ofanagreement;
- impose afine;
- order price reduction;
- interdict aplanned merger, intention ofwhich issubject toobligatory notification or
impose conditions tobefulfilled before suchconcentration;
- order division ordissolution ofbusiness entity holding adominant market position
which permanently restricts competition.WT/WGTCP/W/69
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Generally thePolish competition lawisinlinewiththatoftheEuropean Communities which
reflects ourwishforEUmembership. Since signing theEurope Agreement in1991, Poland became
anassociated country andconsequently wasaiming attheapproximation ofnational lawswiththeacquis
communautaire .When assessing in1997 ourcountry 'sapplication formembership, theEuropean
Commission 'sopinion about competition lawwasfavourable, although some further approximation
isstillneeded. Assumptions andadraftnewActtaking intoaccount thenecessary amendments should
beready thisyear.
3. Trade policy instruments
AbolitionoftheStatemonopolyinforeigntradeandsuccessiveloweringoftariffbarriersresulted
inopening ofthePolish market tocompetition butatthesametimerequired adoption ofsome protective
measuresforthenationalindustry.Poland'smembershiptotheWTOalsohadanimpactonthenecessity
ofamendments totheexisting legislation.
AnewCustoms Code wasintroduced on1July1997 andthefollowing lawscame intoforce
on1January 1998:
(1) Lawonprotection against dumped imports intothePolish customs territory;
(2) Lawonprotection against excessive imports ofgoods intothePolish customs territory;
(3) Lawonprotection against excessive imports ofsome textile andclothing products into
thePolish customs territory;
(4) Lawonadministrative management offoreign trade turnover ingoods andservices
andonspecial turnover.
Thefirstoneapplies toallkinds ofgoods. Asaresult ofanti-dumping procedures, theMinister
ofEconomy mayimpose thefollowing measures: temporary anti-dumping duties, finalanti-dumping
duties orprice commitments.
TheLawonprotection against excessive imports isaddressed toallimported goods withthe
exception of:
- textile products notcovered byfirstandsecond stage ofintegration;
- agricultural products covered bythelawonresources, conditions andprocedures of
imposing surcharge onsome imported agricultural products;
- goods onwhich anti-dumping orcountervailing duties havebeenimposed.
Byvirtue ofthesaidLaw, thefollowing measures canbeapplied:
(a) measures ofpermanent protection intheform ofanadditional customs duty, global
quota ornon-automatic registration ofimports onselective basis against non-WTO
Member State;
(b) measure oftemporary protection intheform ofadditional dutyimposed foraperiod
notlonger thansixmonths.WT/WGTCP/W/69
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TheLawonprotection against excessive imports ofsome textile andclothing products provides
forthepossibility toestablish aquantitative quota inthecaseofexcessive imports which cancause
aninjury tothenational industry.
Thelastoneprovides for,inter alia,procedures toestablish quotas, ceilings, turnover
registration, etc.
Inviewoftheglobalization andliberalization oftheinternational trade, theimportance oftariffs
(with theexception ofsome sensitive sectors) astrade barriers isdecreasing, nevertheless other
instruments, suchascertification orphytosanitary control maybeveryeffective inprotecting national
markets andareused, andsometimes evenabused, bymany countries.
4. Multilateral andregional agreements
Allinternational agreements signed byPoland contain provisions related tocompetition policy
andtrade. Their importance isnotlimited tomutual concessions theParties totheagreements are
granting eachother, butalsotheobligations taken atthemoment ofsigning theagreement, constitute
astimulus andincentive fortheeconomic development andfurther liberalization ofcompetition and
tradepolicy. Itisnormal forhuman nature thatnoteverybody isofthesameopinion andconsequently
inthenational economy there aresectors andindividuals trying todelay transformation. Therank
oftheinternationalagreementishighenoughtoenforcekeepingtheagreedscheduleofnecessarychanges
inlegislation andstructure oftheeconomy.
Since 1993, Poland hasbeenamember ofEFTA andCEFTA. Applying formembership in
theOECD within theframeworks oftheprogramme "Partners inTransition", Poland effected several
veryimportant adjustments initslegislation andeconomy which resulted inbecoming anOECD member
country in1996.
Since July1995, Poland belongs totheWTO andconsequently, stepbystep, isadopting
provisions oftheGATT, GATS andTRIPS Agreement.
Atpresent, thebiggest challenge wearefacing isconnected withtheforthcoming beginning
ofPoland 'snegotiations foraccession totheEuropean Communities. TheEurope Agreement signed
in1991 already required bigefforts inthetransformation ofthenational economy, enforcement of
thecompetition policy andliberalization intrade, andfurther efforts arestillneeded toadopt fully
theacquis communautaire .
5. Trade versus competition policy
Polandsharestheopinionofthemajorityofdelegates,thatgoalsoftradeandcompetitionpolicies
arebasically thesame -theyareaimed attheeconomic efficiency andwelfare. Nevertheless, they
areusingdifferenttoolsandtherearesomefieldsoftheirpossibleconflicts.Givensignificantdifferences
inindividual countries 'strength anddevelopment level, national markets needprotection andthus
competition islimited. Some States andundertakings intheirtrade policy usemethods which arenot
fairandconsequently trade liberalization cannot befull. Theapproach ofbothpolicies tocertain
problems alsodiffers. Forinstance, within competition policy SMEs aretreated withasignificantly
morelenient approach, sotheirposition isrelatively morecomfortable. Onthecontrary, when dumping
procedures areinvolved, SME'sposition ismuch weaker. Inthecaseofagroundless complaint upon
whichinvestigationwasinitiated,bigundertakingsandespeciallymultinationalconglomeratescanafford
longandcostly procedures andmaintain theirmarket position; SMEs faced withsuchaccusations
arepractically without anychances.WT/WGTCP/W/69
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With therecent development ofelectronic trade, theworld isbecoming oneGlobal Market,
butthisphenomenon isrelated toseveral potential dangers notonlyfortheconsumers 'welfare, but
aswellforefficient andfaircompetition. Duetothetransborder character ofthisform oftrade, a
company located inanother territory caneasily advertise goods which advertising isforbidden onthe
domesticmarketofthecountrytowhichsuchadvertisingisaddressed(e.g.alcoholicbeverages,tobacco,
advertising tochildren) andconsequently practice unfair competition withdomestic undertakings and
breach trade policy rules ofthehostcountry. Atthesame time, thecompany inquestion isacting
withlegalsafety ifduetodifferences innational legislation suchactivity ispermitted initscountry
oforigin.
Generally, weareoftheopinion thattheproblem ofpotential conflicts andoverlapping of
competition andtrade policies isnotlimited onlytothelegalprovisions, competition rulesandtrade
instruments adopted inagiven country, butsignificantly depends onthespirit withwhich theyare
applied. Anti-dumping measures, legitimate protection ofthenational industry canbeabused torestrict
potential competition, specific duties maybeapplied toprotect anational monopolistic entrepreneur
aswellasobjectives oftheeffective competition canbeclaimed toachieve adominant ormonopolistic
market position.
Itisourstrong belief thattrying toprevent suchabuses requires notonlyadoption oftherelevant
legislation butalsomutual understanding andgood willofinterested countries, exchange ofopinions
andexperience between asmany partners aspossible. Inviewoftheabove, theWTO isanappropriate
forum toapproach allrelevant issues.
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