EN Official Journal of the European Union CE 88/595

(2004/C 88 E/0608)

WRITTEN QUESTION P-0264/03

by Joachim Wuermeling (PPE-DE) to the Commission

(30 January 2003)

Subject: Discrimination against EU investors in the Czech Republic

Since the borders were opened, EU citizens have been attempting to set up small and medium-sized businesses in the Czech Republic. With a view to the scheduled EU enlargement in May 2004, the Czech Republic has undertaken to adapt to EU legal standards and establish a functioning administrative and judicial system in order to meet the Copenhagen criteria.

Is the Commission aware of cases of discrimination against EU citizens by comparison with citizens of the Czech Republic as regards setting up businesses and service companies?

Is it correct that the Czech legal system makes no provision for complaints against action taken by the authorities?

Is it true that the payment of bribes can speed up the entry of firms in the commercial register by up to a year?

Is the Commission aware of the case in Bozi Dar involving Mr Engert, who is experiencing a number of problems owing to the fact that he runs a ski school?

Answer given by Mr Verheugen on behalf of the Commission

(28 February 2003)

The Commission informs the Honourable Member that a small number of complaints have been presented to the Commission by Union citizens or companies in connection with establishing businesses/providing services in the Czech Republic. However, claims of discrimination are rare, most issues raised are general problems linked to the legal business environment.

Considering that in recent years the Czech Republic has been the largest recipient of the foreign direct investment per capita amongst the Candidate Countries, the number of complaints — on any basis — is remarkably small.

Any complaints, whatever their grounds, are treated seriously and are dealt with on a case-by-case basis. The Commission is aware of imperfections in the Czech legal framework for business and highlighted them in its Regular Reports. The current legislative framework is being further amended with new legislation on the Act on Trades (Business Act), public procurement and bankruptcy, which is currently under preparation and closely monitored by the Commission with a view to ensuring full alignment with Community legislation.

It is not correct to say that the Czech legal system makes no provision for complaints against action taken by the authorities. All decisions and other acts of administrative bodies (central or local government and other entities if exercising public authority) which affect subjective rights and obligations of natural or legal persons are in principle, subject to full judicial review, unless otherwise provided for by law. The exceptions to this general rule, in Act 150/2002 Coll. on Administrative Courts Procedure Code, are relatively few, and mostly concern classified information and State security matters (e.g. decisions on security screening — which are important for individuals to qualify for a number of posts in civil service).

Civil Courts are competent to review decisions by administrative bodies addressing civil law, family law, labour law and commercial law relationships (cf. Articles 7 and 244ss. of the Civil Procedure Code), whereas courts (in principle special panels of Regional Courts) acting as administrative courts (under the Administrative Courts Procedure Code) have jurisdiction for all other litigation challenging decisions, illegal infringements not constituting decisions and inaction by any public or private entity acting as an administrative body (cf. Articles 2-4 and 65ss of Act 150/2002 Coll.).

Judicial review of administrative decisions is still a relatively new concept in the current Czech legal environment and therefore whilst basic texts are reasonably clear, implementation in practice can be uneven. The Supreme Administrative Court, which should unify the case law of Regional Courts acting in their administrative judiciary capacity is now becoming operational.

The Czech Republic also has a well-established Ombudsman's office, to which complaints about administrative affairs can be submitted.

As regards the Honourable Member's reference to bribes, the Commission does not posses any material proof of such allegations.

Several initiatives have been taken to improve the operation of the Commercial Register, but they have been unsuccessful for the time being. A Member of Parliament's draft Act to privatise the Commercial Register (to make it independent and accountable) was rejected by the Chamber of Deputies in December 2001.

Issues relating to the Commercial Register have been regularly raised by the business community (both Czech and Community) and the Chambers of Commerce in the Czech Republic. The question of the efficient functioning of the Commercial Registers was highlighted in the 2002 Regular Report and the Commission continues to monitor the situation.

Finally, the Commission is not aware of the case in Bozi Dar referred to by the Honourable Member and would be happy to consider any substantiated complaint from Mr Engert.