COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 04.03.1998 
COM(1998) 119 final 
98/ 0075 (CNS) 
Proposal for a 
COUNCIL AND COMMISSION DECISION 
on the position to be taken by the Community within the Association Council 
established by the Europe Agreement between the European Communities and their 
Member States of the one part, and the Republic of Lithuania, of the other part, signed 
in [...] on [...], with regard to the adoption of the rules for the implementation of 
Article 64 l(i), l(ii) and 2 of the Europe Agreement 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
Article 64 (3) of the Europe Agreement between the European Communities and their 
Member States, of the one part, and the Republic of Lithuania, of the other part, 
signed in [...] on [...] provides that the necessary rules for the implementation of 
paragraphs 1 and 2 of that Article (i.e. the competition provisions applicable to 
undertakings), shall be adopted by the Association Council within the time limit of 31 
December 1997. The ratification of the Europe Agreement with Lithuania is close to 
full completion and its entry into force is foreseen by early 1998. 
The Free Trade Agreement with Lithuania entered into force on 1 January 1995. The 
Joint Committee under the Free Trade Agreement, on its meetings 1 April 1996 and 
16 June 1997, agreed that each Party would start procedures for the adoption of 
implementing rules for undertakings as provided in Articles 64 (1) (i) and (ii). 
The competition provisions are one of the basic points of the Europe Agreement 
between the European Communities and Lithuania. Their actual implementation, 
through the adoption of the attached rules by the Association Council, is a prerequisite 
for the smooth development of trade relations between the two parties. The proposed 
decision lays down procedures for cooperation between the two parties' competition 
authorities. It is confirmed that the principles embodied in the block exemption rules 
in force in the Community will apply, and there is provision for a consultation 
procedure within the Association Council should disagreement arise between the two 
competition authorities. 
According to Article 2 (1) of the Decision of the Council and the Commission of [...] 
on the conclusion of the Europe Agreement, the position to be taken by the 
Community within the Association Council shall be laid down in accordance with the 
corresponding provisions of the Treaties establishing the European Communities. 
Articles 87, 235 and 228 of the EC Treaty as well as Articles 65 and 66 of the ECSC 
Treaty are the appropriate legal basis for the position to be adopted by the Community 
in the Association Council with regard to rules for the implementation of the 
competition provisions applicable to undertakings. As a result, it is desirable that the 
Council and the Commission should adopt the attached decision. 
It is therefore proposed that the Council approves the attached proposal for a Council 
and Commission decision. 
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Proposal for a Council and Commission Decision 
on the position to be taken by the Community within the Association Council 
established by the Europe Agreement between the European Communities and their 
Member States of the one part, and the Republic of Lithuania, of the other part, signed 
in [...] on [...], with regard to the adoption of the rules for the implementation of 
Article 64 l(i), l(ii) and 2 of the Europe Agreement 
THE COUNCIL OF THE EUROPEAN UNION, 
THE COMMISSION OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Community, and in particular 
Articles 87 and 235 in connection with Article 228 paragraph 2, second sentence and 
paragraph 3, first section, 
Having regard to the Treaty establishing the European Coal and Steel Community, 
and in particular Articles 65 and 66, 
Having regard to the Decision of,the Council and the Commission of [...] on the 
conclusion of the Europe Agreement between the European Communities and their 
Member States, of the one part, and the Republic of Lithuania, of the other part, and in 
particular Article 2 (1) thereof, 
Having regard to the Opinion of the European Parliament, 
Whereas pursuant to Article 64 (3) of the Europe Agreement the necessary rules for 
the implementation of paragraphs 1 and 2 of that Article shall be adopted by 31 
December 1997 by an Association Council Decision. 
HAVE DECIDED AS FOLLOWS : 
The position to be adopted by the Community in the Association Council set up under 
the Europe Agreement between the European Communities and their Member States, 
of the one part, and the Republic of Lithuania, of the other part, with regard to the 
rules for the implementation of Article 64 l(i), l(ii) and 2 of the said Agreement shall 
be based on the draft Decision of the Association Council annexed to this Decision. 
Done at Brussels on, 
For the Council For the Commission 
Draft Decision N° /98 
of the Association Council between the European Communities and their Member 
States, of the one part, and the Republic of Lithuania, of the other part, of... 
adopting the necessary rules for the implementation of Article 64 l(i), l(ii) and 2 of 
the Europe Agreement between the European Communities and their Member States, 
of the one part, and the Republic of Lithuania, of the other part, 
THE ASSOCIATION COUNCIL, 
Having regard to the Europe Agreement between the European Communities and their 
Member States, of the one part, and the Republic of Lithuania, of the other part, and in 
particular Article 64 (3) thereof, 
Whereas pursuant to Article 64 (3) of the Europe Agreement the necessary rules for 
the implementation of Article 64 (1) and (2) thereof should be adopted by the 
Association Council; 
HAS DECIDED AS FOLLOWS : 
Article 1 
The necessary rules implementing Article 64 l(i), l(ii) and 2 of the Europe 
Agreement between the European Communities and their Member States, of the one 
part, and the Republic of Lithuania, of the other part, as set out in the Annex to this 
Decision, are hereby adopted. 
Article 2 
The Decision shall be published in the Official Journal of the European Communities 
and Valstybes Zynios (Lithuanian Official Journal). 
Article 3 
This Decision shall enter into force on the day of its adoption. 
Done at Brussels on, For the Association Council 
The President (s) 
4 
ANNEX 
IMPLEMENTING RULES FOR COMPETITION PROVISIONS 
APPLICABLE TO UNDERTAKINGS 
Implementing Rules for the application of the competition provisions applicable to 
undertakings provided for in Article 64 para, li), lii) and 2 of the Europe Agreement 
between the European Communities and their Member States, of the one part, and the 
Republic of Lithuania, of the other part : 
ARTICLE 1 : GENERAL PRINCIPLE 
Cases relating to agreements between undertakings, decisions by associations of 
undertakings and concerted practices between undertakings which have as their object 
or effect the prevention, restriction or distortion of competition as well as to abuses of 
a dominant position in the territories of the Community or of Lithuania as a whole or 
in a substantial part thereof, which may affect trade between the Community and 
Lithuania shall be settled according to the principles contained in Article 64 para. 1 
and 2 of the Europe Agreement. 
For this purpose, these cases are dealt with by the Commission of the European 
Communities (DG IV) on the Community side and the State Competition and 
Consumer Protection Office (SCO) on the Lithuanian side. 
The competences of the EC Commission and the Lithuanian State Competition and 
Consumer Protection Office to deal with these cases shall flow from the existing rules 
of the respective legislation of the Community and Lithuania, including where these 
rules are applied to undertakings located outside the respective territory. 
Both authorities shall settle the cases in accordance with their own substantive rules, 
and having regard to the provisions set out below. The relevant substantive rules of 
the authorities are the competition rules of the Treaty establishing the European 
Community as well as the ECSC Treaty including the competition-related secondary 
legislation, for the EC Commission and the Law on Competition and relevant by laws, 
for the Lithuanian State Competition and Consumer Protection Office. 
ECONOMIC ACTIVITIES UNDER THE EC TREATY 
ARTICLE 2 : COMPETENCE OF BOTH COMPETITION AUTHORITIES 
Cases under Article 64 of the Europe Agreement which may affect both the 
Community and the Lithuanian market and which may fall under the competence of 
both competition authorities shall be dealt with by the EC Commission and the State 
Competition and Consumer Protection Office, according to the rules under this 
Article. 
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2.1 Notification 
2.1.1 The competition authorities shall notify to each other those cases they are 
dealing with, which, according to the general principle laid out in Article 1, appear to 
fall as well under the competence of the other authority. 
2.1.2. This situation may arise in particular in cases concerning activities that : 
Involve anticompetitive activities carried out in the other authority's 
territory, 
Are relevant to enforcement activities of the other competition 
authority, 
Involve remedies that would require or prohibit conduct in the other 
authority's territory. 
2.1.3. Notification under this article shall include sufficient information to permit an 
initial evaluation by the recipient party of any effects on its interests. Copies of the 
notifications shall be submitted on a regular basis to the Association Council. 
2.1.4. Notification shall be made in advance, as soon as possible and at the latest at 
the stage of an investigation still far enough in advance of the adoption of a settlement 
or decision, so as to facilitate comments or consultations and to enable the proceeding 
authority to take into account the other authority's views, as well as to take such 
remedial actions it may find feasible under its own laws, in order to deal with the case 
in question. 
2.2 Consultation and Comity 
Whenever the EC Commission or the State Competition and Consumer Protection 
Office consider that anticompetitive activities carried out on the territory of the other 
authority are substantially affecting important interests of the respective Party, it may 
request consultation with the other authority, or it may request that the other Party's 
competition authority initiate any appropriate procedures with a view to take remedial 
action under its legislation on anticompetitive activities. This is without prejudice to 
any action under the requesting Party's competition law and does not hamper the full 
freedom of ultimate decision of the authority so addressed. 
2.3 Finding of an Understanding 
The competition authority so addressed shall give full and sympathetic consideration 
to such views and factual materials as may be provided by the requesting authority 
and, in particular, to the nature of the anticompetitive activities in question, the 
enterprises involved and the alleged harmful effects on the important interests of the 
requesting Party. 
Without prejudice to any of their rights or obligations, the competition authorities 
involved in consultations under this Article shall endeavour to find a mutually 
acceptable solution in the light of the respective important interests involved. 
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ARTICLE 3 : COMPETENCE OF ONE COMPETITION AUTHORITY ONLY 
3.1 Cases falling under the exclusive competence of one competition authority, in 
accordance with the principle laid down in Article 1, and which may affect important 
interests of the other Party, shall be handled having regard to the provisions set out in 
Article 2, and taking account of the principles set out below. 
3.2 In particular, whenever one of the competition authorities undertakes an 
investigation or proceeding in a case which is found to affect important interests of the 
other Party, the proceeding authority shall notify this case to the other authority, 
without formal request by the latter. 
ARTICLE 4 : REQUEST FOR INFORMATION 
Whenever the competition authority of a Party becomes aware of the fact that a case, 
falling also or only under the competence of the other authority, appears to affect 
important interests of the first Party, it may request information about this case from 
the proceeding authority. 
The proceeding authority shall give sufficient information to the extent possible and at 
a stage of its proceedings far enough in advance of the adoption of a decision or 
settlement to enable the requesting authority's views to be taken into account. 
ARTICLE 5 :SECRECY AND CONFIDENTIALITY OF INFORMATION 
5.1 Having regard to Article 64 para. 7 of the Europe Agreement, neither 
competition authority is required to provide information to the other authority if 
disclosure of that information to the requesting authority is prohibited by the law of 
the authority possessing the information, or would be incompatible with important 
interests of the Party whose authority is in possession of the information. 
5.2. Each authority agrees ^o maintain, to the fullest extent possible, the 
confidentiality of any information provided to it in confidence by the other authority. 
ARTICLE 6 : BLOCK EXEMPTIONS 
In the application of Article 64 of the Europe Agreement as provided for in Articles 2 
and 3 above, the competition authorities shall ensure that the principles contained in 
the block exemption regulations in force in the Community shall be applied in full. 
The State Competition and Consumer Protection Office shall be informed of any 
procedure related to the adoption, abolition or modification of block exemptions by 
the Community. 
Where such block exemption regulations encounter serious objections on the 
Lithuanian side, and having regard to the approximation of legislation as foreseen in 
the Europe Agreement, consultations shall take place in the Association Council, in 
accordance with the provisions contained in Article 9. 
The same principles shall apply regarding other significant changes in the Community 
or Lithuanian competition policies. 
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ARTICLE 7 : MERGER CONTROL 
With regard to mergers which fall within Council Regulation (EEC) n° 4064/89 on 
the control of concentrations between undertakings1 and which have a significant 
impact on the Lithuanian economy, the State Competition and Consumer Protection 
Office shall be entitled to express its view in the course of the procedure, taking into 
account the time limits as provided for in the aforementioned Regulation. The EC 
Commission shall give due consideration to that view, without prejudice to any action 
under the Parties' respective competition laws.. 
ARTICLE 8 : ACTIVITIES OF MINOR IMPORTANCE 
8.1 Anticompetitive activities whose effects on trade between the Parties or on 
competition are negligible, do not fall under Article 64 para 1 of the Europe 
Agreement, and therefore, are not to be treated under Articles 2 to 6 of the present 
implementing rules. 
8.2 Negligible effects in the sense of Article 8.1 are generally presumed to exist 
when 
the aggregate annual turnover of the participating undertakings does 
not exceed ECU 200 millions, and 
the goods or services which are the subject of the agreement together 
with the participating undertakings' other goods or services which are 
considered by users to be equivalent in view of their characteristics, 
price and intended use, do not represent more than 5% of the total 
market for such goods or services in the area of the common market 
affected by the agreement, and the Lithuanian market affected by the 
agreement. 
ARTICLE 9 : ASSOCIATION COUNCIL 
9.1 Whenever the procedures provided for in Articles 2 an 3 above do not lead to a 
mutually acceptable solution, as well as in other cases explicitly mentioned in the 
present implementing rules, an exchange of views shall take place in the Association 
Council at the request of one Party within three months following the request. 
9.2 Following this exchange of views, or after expiry of the period referred to in 
para. 9.1., the Association Council may make appropriate recommendations for the 
settlement of these cases, without prejudice to Article 64 para 6 of the Europe 
Agreement. In these recommendations, the Association Council may take into account 
any failure of the requested authority to give its point of view to the requesting 
authority within the period referred to in para. 9.1. 
1 OJ n° L 395 of 30.12.89, as last modified by Regulation (EC) n° 1310/97 (OJ n° L 180 of 
09.07.1997). 
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9.3 These procedures in the Association Council are without prejudice to any 
action under the respective competition laws in force in the territory of the Parties. 
ARTICLE 10 : NEGATIVE CONFLICT OF COMPETENCE 
When both the EC Commission and the State Competition and Consumer Protection 
Office consider that neither of them is competent to handle a case on the basis of their 
respective legislation an exchange of views shall take place on request in the 
Association Council. The Community and Lithuania shall endeavour to find a 
mutually acceptable solution in the light of the respective important interests involved 
with the support of the Association Council, which may make appropriate 
recommendations, without prejudice of Article 64 para. 6 of the Europe Agreement, 
and the rights of individual EU Member States on the basis of their competition rules. 
ECONOMIC ACTIVITIES UNDER THE ECSC TREATY 
ARTICLE 11 : TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL 
COMMUNITY (ECSC) 
The provisions contained in Articles 1 to 6 and 8 to 10 above shall also apply with 
respect to the coal and steel sector. 
ARTICLE 12 : ADMINISTRATIVE ASSISTANCE (LANGUAGES) 
The EC Commission and the State Competition and Consumer Protection Office will 
provide for practical arrangements for mutual assistance or any other appropriate 
solution concerning in particular the question of translations. 

ISSN 0254-1475 
COM(98) 119 final 
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ISBN 92-78-31640-7 
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