CELEX: 51994PC0639
Language: en
Date: 1994-12-15
Title: 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 Hungary, of the other part, signed at Brussels on 16 December 1991, with regard to the adoption of the necessary rules for the implementation of Article 62 (1) (i), (1) (ii) and (2) of the Europe Agreement

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                           COM(94) 639 final
                                                           Brussels, 15.12.1994
           PROPOSAL FOR A COUNCIL AM) 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 Hungary, of the other part, signed
  at Brussels on 16 December 1991, with regard to the adoption of the necessary rules
   for the implementation of Article 62(1 )(i), (l)(ii) and (2) of the Europe Agreement
 ---pagebreak---  ---pagebreak---                      EXPLANATORY MEMORANDUM
Article 62(3) of the Europe Agreement establishing an association between
the European Communities and their Member States, of the one part, and
the Republic of Hungary, of the other part, signed in Brussels on 16
December 1991, 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 J a n u a r y 1992;
consequently the three-year time-limit for the adoption of the rules necessary
to implement the competition rules referred to in Article 62 expires on
31 December 1994.
The competition provisions are one of the basic points of the Europe
Agreement between the European Communities and Hungary. 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 13 December 1993 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. These are, specifically, Article 113 of
the Treaty establishing the European Community, in conjunction with the
first sentence of Article 228(2) of that Treaty, and Article 95 of the Treaty
establishing the European Coal and Steel Community. The Community's
position must, consequently, be laid down by a decision of the Council and
the Commission. This makes it necessary for the ECSC Consultative
 Committee to be consulted on the ECSC aspects. As a result, it is necessary
that the Council and the Commission should adopt the attached decision.
The Commission therefore asks the Council to adopt the attached proposal
 for a Council and Commission Decision.
 ---pagebreak---                                                                                         -Ah
         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 Hungary, of the other part, signed
 at Brussels on 16 December 1991, with regard to the adoption of the necessary rules
   for the implementation of Article 62(1) (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,
Having regard to the Treaty establishing the European Coal and Steel Community,
Having regard to the Decision of the Council and the Commission of
13 December 1993 on the conclusion of the Europe Agreement between the European
Communities and their Member States, of the one part, and the Republic of Hungary,
of the other part, and in particular Article 2(1) thereof,
Whereas the provisions to which that Article refers are, in essence. Article 113 of the
Treaty establishing the European Community, in conjunction with the first sentence of
Article 228(2) of that Treaty, and Article 95 of the Treaty establishing the European
Coal and Steel Community;
Whereas Article 62(3) of the Europe Agreement lays down that the Association
Council shall adopt the rules necessary for the implementation of paragraphs 1 and 2 of
that Article,
HAVE DECIDED AS FOLLOWS:
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 Hungary, of the other part, with regard to
the rules implementing Article 62(1 )(i), (l)(ii) and (2) of the aforesaid 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
 ---pagebreak--- Association between
the European Union
  and Hungary
The Association Council
               DRAFT DECISION No .../94 OF THE EC-HUNGARY
                         ASSOCIATION COUNCIL OF ... 1994
     adopting the necessary rules for the implementation of Article 62(1) (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 Hungary, of the
                                        other part
THE ASSOCIATION COUNCIL,
Having regard to the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Hungary, of the other part, and in particular Article 62 thereof,
Whereas Article 62(3) of the aforesaid Agreement lays down that the Association
Council shall, within three years of the entry into force of the Agreement, adopt the
necessary rules for the implementation of paragraphs 1 and 2 of that Article and
whereas, in accordance with Article 124 of the Agreement, that time-limit expires on
31 December 1994,
HAS DECIDED AS FOLLOWS:
The necessary rules for implementing the competition provisions referred to in
Article 62(l)(i), (l)(ii) and (2) of the Europe Agreement establishing an association
between the European Communities and their Member States, of the one part, and the
Republic of Hungary, of the other part, as set out in the Annex to this Decision, are
hereby adopted.
Done at Brussels,
                                                    For the Association Council
                                                            The President
The Secretaries
 ---pagebreak---                                                                                                  î aà
Implementing Rules for the Application of the competition provisions applicable to
undertakings provided for in Art. 62 para, li), 1 ii) and 2 of the Europe Agreement between
the EC and Hungary.
ARTICLE 1 : GENERAL PRINCIPLE
Cases relating to agreements between undertakings, decisions by associations of undertakings
and concerted practices between undertal ings 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 Hungary as a whole or in a substantial part thereof,
which may affect trade between the EC and Hungary shall be settled according to the
principles contained in Article 62 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 Office of Economic Competition (GVH) on the Hungarian side.
The competences of the EC Commission and the GVH to deal with these cases shall follow
from the existing rules of the respective legislations of the EC and Hungary, 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 Hungarian Act LXXXV1 of 1990 on the Prohibition of Unfair Market Practices for the
 GVH.
 ECONOMIC ACTIVITIES UNDER THE EC TREATY
 ARTICLE 2: COMPETENCE OF BOTH COMPETITION AUTHORITIES
 Cases under Article 62 of the Europe Agreement which may affect both the EC and the
 Hungarian market and which may fall under the competence of both competition authorities
 shall be dealt with by the EC Commission and the GVH, according to the rules 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.
 ---pagebreak--- 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 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 GVH 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.
 ---pagebreak--- 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.
ARTICLE 4: REQUEST FOR INFORMATION
Whenever the competition authority oi' 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 62 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 62 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 EC shall be applied integrally. The GVH shall be
 informed of any procedure related to the adoption, abolition or modification of Block
 Exemptions by the EC.
 ---pagebreak--- Where such Block Exemption Regulations encounter serious objections on the Hungarian 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 EC or Hungarian
competition policies.
ARTICLE 7
With regard to mergers which fall within Council Regulation (EEC') No 4064/89 and have
significant impact on the Hungarian economy, the GVW 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 62 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 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 Hungarian market affected by the agreement,
         respectively.
 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 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 3 months following the request.
 ---pagebreak--- 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 62 para 6 of the Europe Agreement. 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 GVH 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 Hungary 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 62 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 GVH will provide for practical arrangements for mutual
  assistance or any other appropriate solution concerning in particular the question of
  translations.
 ---pagebreak---  ---pagebreak---                                                                      ISSN 02S4-1475
                                                              COM (94) 639 final
                                                      DOCUMENTS
EN                                                                         i l 02
                                Catalogue number : CB-CO-94-669-EN-C
                                                             ISBN 92-77-83934-1
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