COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 18.05.1995 
COM(95) 157 final 
95/0104 (CNS) 
Proposai 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 Czech Republic of the other part, signed in Brussels on 4 October 
1993, with regard to the adoption of the necessary rules for the implementation of Article 
64 para. l(i) and (ii) and para 2 of the Europe Agreement. 

EXPLANATORY MEMORANDUM 
Article 64 (3) of the Europe Agreement establishing an association between the European 
Communities and their Member States, of the one part, and the Czech Republic, of the 
other part, signed in Brussels on 4 October 1993, provides that the necessary rules for the 
implementation of paragraphs 1 and 2 of that Article (i.e. the competition provisions) shall 
be adopted by the Association Council. The time-limit for these rules to be adopted is 
three years from the entry into force of the Agreement; in accordance with Article 124, 
the time-limit runs from 1 January 1992. 
The competition provisions are one of the basic points of the Europe Agreement between 
the European Communities and the Czech Republic. 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 t hat 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 19 
December 1994 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 three Communities. Article 87, 
228 and 235 of the EC Treaty as well as Article 65 and 66 of the ECSC Treaty are 
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, specifically because of the inclusion of all types of mergers 
and acquisitions, including those falling outside the scope of Article 86 of the Treaty in the 
text of the implementing rules. As a result, it is desirable that the Council and the 
Commission should adopt the attached decision. 
The Commission therefore requests the Council to adopt the attached proposal for a 
Council and Commission Decision. 
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 Czech Republic of the other part, signed in Brussels on 4 October 
1993, with regard to the adoption of the necessary rules for the implementation of Article 
64 para. l(i) and (ii) and para 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 para. 2, second sentence and para. 3, 
first section, 
Having regard to the Treaty establishing the European Coal and Steel Community, in 
particular Article 65 and 66, 
Having regard to the opinion of the European Parliament, 
Having regard to the Decision of the Council and the Commission of 19 December 1994 
on the conclusion of the Europe Agreement between the European Communities and their 
Member States, of the one part and the Czech Republic, of the other part, and in 
particular Article 2(1) thereof, 
Whereas resort to Article 235 of the Treaty establishing the European Community is 
necessary since Article 7 of the draft Decision of the Association Council deals with 
provisions of Council Regulation (EEC) 4064/89, which is mainly based on 
aforementioned Article 235, 
Whereas Article 64 (3) of the Europe Agreement lays down that the Association Council 
shall adopt the rales necessary for the implementation of paragraphs 1 and 2 of that 
Article, 
Whereas Article 8 (3) of Protocol 2 to the Europe Agreement on products covered by the 
ECSC Treaty lays down that the Association Council shall adopt the necessary rules for 
the implementation of paragraph 1 and 2 of that Article, 
HAVE DECIDED AS FOLLOWS : 
The position to be taken by he Community within the Association Council established by 
the Europe Agreement between the European communities and their Member States, of 
the one part, and llic Czech republic, of the other part, with regard to the rules 
implementing Article 64 (1) (i), (1) (ii) and (2) of the aforementioned Europe Agreement, 
and to the rules implementing Article 8(1) (i), 1 (ii) and 2 of the Protocol 2 on ECSC 
products to the Europe Agreement shall be based on the draft decision of the Association 
Council annexed to this Decision. 
Done at Brussels 
For the Council For the Commission 
Association between the European Union 
and the Czech Republic 
The Association Council 
Draft decision n° .J95 of the Association Council 
between the European Communities and their Member States, of the one part, 
and the Czech Republic, of the other part, 
of ...195 
adopting the necessary rules for the implementation of Article 64 (i), (1) (ii) and (2) of the 
Europe Agreement between the European Communities and their Member States, of the 
one part, and the Czech Republic, of the other part, and the rales for the implementation 
of Article 8 (1) (i), (1) (ii) and (2) of Protocol 2 on ECSC products to the same 
agreement, 
The Association Council, 
Having regard to the Europe Agreement establishing an association between the European 
Communities and the Member States, of the one part, and the Czech Republic, of the 
other part, and in particular Article 64 (3) thereof, 
Having regard to Protocol 2 on ECSC products to the aforementioned Europe 
Agreement, and in particular Article 8 (3) thereof, 
Whereas Article 64 (3) of the Europe Agreement lays down that the Association Council 
shall, within three years of the entry into force of the Agreement, adopt by decision the 
necessary rules for the implementation of paragraph 1 and 2 of that Article, 
Whereas Article 8 (3) of Protocol 2 to the Europe Agreement lays down that the 
Association Council shall, within three years of the entry into force of the Agreement, 
adopt by decision the necessary rules for the implementation of paragraphs 1 and 2 of that 
Article, 
HAS DECIDED AS FOLLOWS : 
The necessary rales implementing Article 64 (1) (i), (1) (ii) and (2) of the Europe 
Agreement establishing an association between the European Communities and their 
member States, of the one part, and the Czech Republic, of the other part, and the rules 
implementing Article 8 (1) (i), (ii) and (2) of Protocol 2 on ECSC products to the 
aforementioned Europe Agreement, as set out in the Annex to this Decision, are hereby 
adopted. 
Done at Brussels, 
The secretaries For the Association Council 
The President 
Implementing Rules for the Application of the competition provisions apphcable to 
undertakings provided for in Article 64 of the Europe Agreement between the EC and 
Czech Republic : 
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 
dominant position in the territories of the Community or of Czech Republic as a whole or 
in a substantial part thereof, which may affect trade between the EC and Czech Republic 
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 EC Commission (DG IV) on the EC 
side and the Czech Ministry for Economic Competition (MEQ on the Czech side. 
The competences of the EC Commission and the MEC to deal with these cases shall 
follow from the existing rales of the respective legislations of the EC and Czech Republic 
including where these rules are applied to undertakings located outside the respective 
territory. 
Both authorities shall settle the case 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 Czech Competition Protection Act for the MEC. 
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 EC and the 
Czech market and which may fall under the competence of both competition authorities 
shall be dealt with by the EC Commission and the MEC, according to the rales under this 
Article. 
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. 
5" 
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 under 
the Europe Agreement. 
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 action 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 MEC 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. 
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 reveals 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. 
G 
ARTICLE 4 : REQUEST FOR INFORMATION 
Whenever the competition authority of a Party becomes aware of the fact that a case, 
falling as well 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 to 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 Agreements as provided for in Articles 2 
and 3 above, the competition authorities shall ensure that the principles contained in the 
Block Exemption Régulations in force in the EC shall be applied integrally. The MEC 
shall be informed of any procedure related to the adoption, abolition or modification of 
Block Exemptions by the EC. 
Where such Block Exemption Regulations encounter serious objections on the Czech 
side, and having regard to the approximation of legislation as foreseen in the Europe 
Agreement, consultations shall take place in the Joint Committee or Association Council, 
in accordance with the provisions contained in Article 9 
The same principles shall apply regarding other significant changes in the EC or Czech 
competition policies. 
ARTICLE 7 : MERGER CONTROL 
With regard to mergers which fafl within Council Regulation (EEC) n° 4064/89 and have 
significant impact on the Czech economy, the MEC 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 considérai ion lo thai 
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 the 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 
EU 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 EC common market affected by the agreement, and the Czech market 
affected by the agreement. 
ARTICLE 9 : ASSOCIATION COUNCIL 
9.1 Whenever the procedures provided for in Articles 2 and 3 above do not lead to a 
mutually acceptable solution, as well as in other cases explicitiy mentioned in the 
present implementing rules, an exchange of views shall take place in the Association 
Council at the request of one Party within 3 months following the request. 
9.2. Following this exchange of views, or after expiration of the delay stated above, the 
Association Council may make appropriate recommendations for the settlement of 
these cases, without prejudice to Article 64 para 6 of the Europe Agreements. In 
these recommendations, the Association Council may take into account eventual 
failure of the requested authority to give its point of view to the requesting authority 
within the delay provided for in Art. 9.1. 
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 MEC 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 EC and Czech Republic 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 to 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 10 above shall also apply with respect to the coal 
and steel sector as referred to in Protocol 2 to the Europe Agreement. 
ARTICLE 12 : ADMINISTRATIVE ASSISTANCE (LANGUAGES) 
The EC Commission and the MEC will provide for practical arrangements for mutual 
assistance or any other appropriate solution concerning in particular the question of 
translations. 
Done at 

ISSN 0254-1475 
COM(95) 157 final 
DOCUMENTS 
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Catalogue number : CB-CO-95-180-EN-C 
ISBN 92-77-88229-8 
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