Proposal for a Council Decision on the position to be taken by the Community in the Association Council established by the Europe Agreement between the European Communities and their Member States, of the one part, and Poland, of the other part, concerning a dispute on the interpretation of the application of Articles 10(4) and 25 of the Europe Agreement with regard to Polish legislation concerning the price fixing of pharmaceutical products (Regulation from the Minister of Finance on the introduction of the obligation to apply official margins and the principles for setting prices in the sales of imported ready medicaments, serums, vaccines and contraceptives of 31 March 2000) [SEC(2004) 494]
Date: 2004-04-28
Institutions: European Commission
Subjects: Poland, agreement (EU), fixing of prices, import, infringement of EU law, pharmaceutical product, restriction on competition

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.04.2004 
COM(2004) 335 final 

Proposal for a 

COUNCIL DECISION 

On the position to be taken by the Community in the Association Council established by 
the Europe Agreement between the European Communities and their Member States, of 
the one part, and Poland, of the other part, concerning a dispute on the interpretation of 
the application of Articles 10(4) and 25 of the Europe Agreement with regard to Polish 
legislation concerning the price fixing of pharmaceutical products (Regulation from the 
Minister of Finance on the introduction of the obligation to apply official margins and 
the principles for setting prices in the sales of imported ready medicaments, serums, 
vaccines and contraceptives of 31 March 2000) 

(presented by the Commission) 

[SEC(2004) 494] 

EN 

   EN 

 
 
 
  
 
 
 
EXPLANATORY MEMORANDUM 

The  European  Community  and  its  Member  States  are  of  the  opinion  that  there  is  a  dispute 
with  Poland  on  the  interpretation  of  the  application  of  Articles  10(4)  and  25  of  the  Europe 
Agreement between the European Communities and their Member States, of the one part, and 
Poland,  of  the  other  part,  approved  by  the  Decision  of  the  Council  and  of  the  Commission 
(1993/743/EC,  ECSC,  Euratom)  of  13  December  19931,  with  regard  to  Polish  legislation 
concerning  the  price  fixing  of  pharmaceutical  products  (Regulation  from  the  Minister  of 
Finance on the introduction of the obligation to apply official margins and the principles for 
setting  prices  in  the  sales  of  imported  ready  medicaments,  serums,  vaccines  and 
contraceptives of 31 March 2000). 

The dispute originates from complaints from the pharmaceutical industry importing in Poland, 
based on the threat that enormous penalties and reimbursement orders would be imposed upon 
them because of alleged violation of this legislation. 

The European Community and its Member States consider that this former Polish legislation 
regarding  the  price  fixing  of  pharmaceuticals  was  discriminatory  against  imported  products 
and  therefore  in  breach  of  Article  10(4)  of  the  Europe  Agreement,  and  constituted  an 
infringement to Article 25 of this Agreement, because it rendered trade between Poland and 
the Community more difficult. 

Contrary  to  the  European  Community  and  Member  States’  position,  Poland  considers  its 
former  legislation  regarding  the  price  fixing  of  pharmaceutical  products  non-discriminatory 
and not in breach of Article 25 of the Europe Agreement. Poland appears to be ready to apply 
measures imposing fines because of alleged violation of this legislation. Such measures would 
be  applied  in  connection  with  the  results  of  investigations  conducted  in  relation  to  various 
importing  pharmaceutical  companies  (covering  the  period  1  May  2000-9  April  2002)  and 
could have serious financial consequences for EU companies involved. 

The  European  Community  and  its  Member  States  strongly  believe  that  there  is  sufficient 
ground  to  establish  that  Poland’s  behaviour  in  this  matter  in  connection  with  its  former 
legislation is in breach of Article 25 of the Europe Agreement. 

The  Commission  services  have  undertaken  considerable  efforts  in  the  framework  of  the 
Association Committee and through letters as well as meetings at the highest level to urge the 
Polish Government to reconsider its position and to unambiguously ensure the full respect of 
the Europe Agreement. However, the Polish Government does not seem to be willing to make 
any commitments in this respect. 

The Commission has recommended to the Presidency of the Council to refer the issue to the 
EU-Poland Association Council according to Article 105 of the Europe Agreement, in order 
to  settle  the  dispute  by  means  of  a  decision  and,  if  necessary,  to  launch  an  arbitration 
procedure. It is therefore proposed to the Council to adopt this proposal for a Decision of the 
Association Council. 

1 

OJ L 348, 31.12.1993, p. 1 

2 

 
 
  
 
                                                 
Proposal for a 

COUNCIL DECISION 

On the position to be taken by the Community in the Association Council established by 
the Europe Agreement between the European Communities and their Member States, of 
the one part, and Poland, of the other part, concerning a dispute on the interpretation of 
the application of Articles 10(4) and 25 of the Europe Agreement with regard to Polish 
legislation concerning the price fixing of pharmaceutical products (Regulation from the 
Minister of Finance on the introduction of the obligation to apply official margins and 
the principles for setting prices in the sales of imported ready medicaments, serums, 
vaccines and contraceptives of 31 March 2000) 

THE COUNCIL OF THE EUROPEAN UNION 

Having  regard  to  the  Europe  Agreement  between  the  European  Communities  and  their 
Member  States,  of  the  one  part,  and  Poland,  of  the  other  part,  and  in  particular  Article  105 
thereof, 

Whereas: 

(1) 

(2) 

(3) 

The  Europe  Agreement2  establishes  an  association  between 
the  European 
Communities and their Member States, of the one part, and Poland, of the other part. 
Its Article 105 provides for a procedure to settle any dispute relating to the application 
or interpretation of the Europe Agreement. 

The  European  Community  and  its  Member  States  consider  that  the  former  Polish 
legislation  regarding  the  price  fixing  of  pharmaceuticals  was  discriminatory  against 
imported products and therefore in breach of Article 10(4) of the Europe Agreement. 

The  European  Community  and  its  Member  States  consider  that  the  former  Polish 
legislation regarding the price fixing of pharmaceuticals constituted an infringement to 
Article 25 of the Europe Agreement, because it rendered trade between Poland and the 
Community more difficult. 

(4)  While the abovementioned legislation has been replaced through the adoption of a new 
pricing  regime  (Act  on  Prices  of  5  July  2001),  the  European  Community  and  its 
Member  States  are  of  the  opinion  that  applying  measures  imposing  fines  because  of 
alleged violation of legislation that was discriminatory and that infringed the Europe 
Agreement is unacceptable. 

(5) 

The Commission services have repeatedly asked the Polish authorities to clarify their 
intentions  with  regard  to  the  pecuniary  consequences  of  investigations  conducted  in 
relation  to  various  importing  pharmaceutical  companies,  covering  the  period  1  May 
2000-9 April 2002. 

2 

OJ L 348, 31.12.1993, p. 1 

3 

 
 
  
 
                                                 
(6) 

The  position  taken  by  Poland  has  led  the  Commission  to  believe  that  the  Polish 
Government would not hesitate to apply measures imposing fines because of alleged 
violation  of  legislation  regarding  the  price  fixing  of  pharmaceutical  products  in 
connection  with  the  results  of  the  abovementioned  investigations,  with  possible 
financial consequences for the economic operators concerned. 

(7) 

The  Polish  Government  does  not  seem  to  be  willing  to  make  any  commitments  to 
unambiguously ensure a full respect of the Europe Agreement. 

HAS DECIDED AS FOLLOWS: 

Sole Article 

In order to settle a dispute on the interpretation of the application of Articles 10(4) and 25 of 
the  Europe  Agreement  with  regard  to  Polish  legislation  concerning  the  price  fixing  of 
pharmaceutical products (Regulation from the Minister of Finance on the introduction of the 
obligation  to  apply  official  margins  and  the  principles  for  setting  prices  in  the  sales  of 
imported  ready  medicaments,  serums,  vaccines  and  contraceptives  of  31  March  2000),  the 
Community  shall  refer  the  issue  to  the  Association  Council  established  by  the  Europe 
Agreement between the European Communities and their Member States, of the one part, and 
Poland, of the other part. 

The  position  to  be  taken  by  the  Community  in  the  Association  Council  shall  be  based  on  a 
draft Decision of the Association Council attached to this Decision. 

Done at Brussels, […] 

For the Council 
The President 

4 

 
 
  
 
 
 
ANNEX 

Proposal for an 

EC-Poland ASSOCIATION COUNCIL DECISION No… /2004 
concerning a dispute on the interpretation of the application of Articles 10(4) and 25 of 
the Europe Agreement with regard to Polish legislation concerning the price fixing of 
pharmaceutical products (Regulation from the Minister of Finance on the introduction 
of the obligation to apply official margins and the principles for setting prices in the 
sales of imported ready medicaments, serums, vaccines and contraceptives of 31 March 
2000) 

THE ASSOCIATION COUNCIL, 

Having  regard  to  the  Europe  Agreement  between  the  European  Communities  and  their 
Member  States,  of  the  one  part,  and  Poland,  of  the  other  part,  and  in  particular  Article  105 
thereof, 

Whereas: 

(1) 

The Association Council, having examined a claim by the European Community that 
the  former  Polish  legislation  regarding  the  price  fixing  of  pharmaceuticals  was 
considered  discriminatory  against  imported  products  and  therefore  in  breach  of 
Article  10(4)  of  the  Europe  Agreement,  and  that,  moreover,  this  legislation 
constituted  an  infringement  to  Article  25  of  the  Europe  Agreement  because  it 
rendered trade between Poland and the Community more difficult, has come to the 
conclusion that the claim was justified and, therefore, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Poland  shall  not  apply  any  measures  imposing  fines  because  of  alleged  violation  of 
discriminatory  and  infringing  legislation  on  the  price  fixing  of  pharmaceutical  products 
(Regulation  from  the  Minister  of  Finance  on  the  introduction  of  the  obligation  to  apply 
official  margins  and  the  principles  for  setting  prices  in  the  sales  of  imported  ready 
medicaments, serums, vaccines and contraceptives of 31 March 2000) in connection with the 
results of investigations conducted in relation to various importing pharmaceutical companies, 
covering the period 1 May 2000-9 April 2002. 

This decision shall enter into force on the first day of the month following its adoption. 

Article 2 

It shall be applicable from 1 April 2004. 

Done at Brussels, […] 

For the Association Council 

The President 

5