CELEX: 51997PC0233
Language: en
Date: 1997-06-18
Title: Proposal for a Decision of the Council and the Commission concerning the conclusion of the Agreement between the European Communities and the Government of the United States of America regarding the application of positive comity principles in the enforcement of their competition laws

,-«, V J ,        COMMISSION OF THE EUROPEAN COMMUNITIES
 ^ .•&
                                                 B^ssek 18.06. Ï997
                                                 COM(97) 233 Snal
                                                 97/0178 (CNS)
           COMMUNICATION FROM THE COMMISSION TO THE COUNCIL
             concerning the Agreement between the European Communities and
the Government of the United States on ths application of positive comity principles
                         in the enforcement of their competition laws
                                         Propos*! for a
                 DECISION OF THE COUNCIL AND THE COMMISSION
    concerning the conclusion of the Agreement between the European Communities
    and the Government of the United States of Arnica regarding the application of
            positive comity principles in the Qjaforsemeafi of their competition laws
                                (presented by the Commission)
 ---pagebreak---  ---pagebreak---              COMMUNICATION FROM THE COMMISSION TO THE COUNCIL
                concerning the Agreement between the European Communities and
      the Government of the United States on the application of positive comity principles
                               in the enforcement of their competition laws
 L       Introduction
 Today, many companies are operating world wide or are concluding strategic alliances to have
 a greater presence in foreign markets through an international partner. The economic effects of
 mergers, restrictive practices or abuses of dominant positions are often felt in countries other
 than those in which the firms concerned are incorporated or based.
 Extraterritorial Application of Competition Rules
One way for competition authorities to deal with restrictive practices with an international
dimension is the use of extraterritorial jurisdiction. Many jurisdictions, including the
European Community, seek to apply their competition rules under certain circumstances to
behaviour taking place in a foreign country which may harm their markets.
The United States has expanded its extraterritorial jurisdiction more than any other country. In
particular, the US claims jurisdiction to apply its competition laws to behaviour occurring
outside its territory in order to address market access problems experienced by US exports,
regardless of whether or not US consumers are harmed by the activity in question. This
expansion of jurisdiction has caused political frictions in EC/US bilateral relations where it
concerns behaviour occurring in the European Community.
Not only does the extraterritorial application of laws create political frictions but practical
problems are also encountered due to a lack of personal jurisdiction and the difficulty of
obtaining evidence located abroad.
International Cooperation
The extraterritorial application of laws is not the only means competition authorities have to
ensure that anticompetitive behaviour occurring outside its territory is brought to an end. It is
becoming increasingly obvious that, in order to regulate the anticompetitive behaviour of
companies operating on the world wide market, efficiently and effectively, competition
authorities need to cooperate with each other. Cooperation between competition enforcement
agencies can also ensure that companies are not made the subject of conflicting decisions.
The Commission and the Government of the United States of America recognized this on
23 September 1991 when they entered into an agreement regarding the application of their
competition laws (the "1991 Agreement")1. The 1991 Agreement facilitates cooperation between
the Parties competition authorities and the coordination of their enforcement activities. As well as
        Following a decision by the European Court of Justice, this Agreement and the exchange of
        interpretative letters dated May 31 and July 31, 1995 were subsequently approved on behalf of the
        European Community and the European Coal and Steel Community by a joint decision of the Council and
        the Commission of 10 April 1995 (OJ No L 95,27.4.1995, pp. 45 - 50).
 ---pagebreak--- facilitating coordination, the 1991 Agreement requires a Party to take into account the
important interests of the other Party at all stages of its enforcement activities ("traditional" or
"negative" comity).
Positive Comity
The 1991 Agreement introduces the concept of positive comity in EC/US relations. Article V
provides that a Party adversely affected by anticompetitive behaviour carried out in the
territory of the other Party may request that other Party to take enforcement action.
It is clearly preferable, from the European Community's point of view, that the United States
avail of the principle of positive comity when considering anticompetitive behaviour taking
place within the European Community rather than seeking to apply US competition laws.
Through positive comity the Commission can retain control, where it so wishes, of
enforcement procedures addressing such behaviour. Positive comity also has advantages for
companies as it helps to reduce the number of cases being examined by more than one
competition authority, thus reducing compliance costs and the possibility of conflicting
decisions being made by different competition authorities.
In addition, there are potential benefits for the European Community if it can request the
US competition authorities to investigate and bring to an end anticompetitive activities
occurring in the territory of the United States but adversely affecting interests of the
Europe Community. Positive Comity can enable problems encountered in the extraterritorial
application of jurisdiction, such as difficulties in obtaining evidence located abroad to be
overcome.
 II.      The Agreement between the European Communities and the Government of the
          United States of America on the Application of Positive Comity Principles in the
          Enforcement of their Competition Laws
Before the European Community can enter into deeper cooperation with the US it is necessary
to address the wide jurisdictional claims made by the US in the application of its antitrust laws.
It was recognized that positive comity provides a method of addressing anticompetitive
behaviour, occurring outside a country's territory, without giving rise to the need to exert
extraterritorial jurisdiction
Accordingly, on 25 October 1996 the Commission was granted a mandate by the Council to enter
into negotiations with the United States to seek to reach an agreement which would strengthen the
positive comity provisions of the 1991 Agreement.
The Commission has negotiated a Draft Agreement2 with the American authorities. The
Draft Agreement applies where certain anticompetitive activities are occurring in whole or in a
substantial part in the territory of one Party and yet at the same time also have adverse effects on
the interests of the other Party. In such cases, the latter Party, may request the Party in whose
territory the conduct is principally occurring to take enforcement action pursuant to its own
competition rules.
          Agreement between the European Communities and the Government of the United States of America
          on the application of positive comity principles in the enforcement of their compétition laws.
                                                            3
 ---pagebreak---  The Draft Agreement is an important step forward from Article V of the 1991 as it not only
 provides guidelines on how positive comity requests should be dealt with, it raises a presumption
 that in certain circumstances a Party will normally defer or suspend its own enforcement activities.
 The presumption of deferral or suspension arises where the anticompetitive activities at issue do not
 have a direct, substantial and reasonably foreseeable impact on the Requesting Party's consumers,
 or where the anticompetitive activities occur principally in and are directed principally towards the
 other Party's territory. In other words the presumption arises where the Requesting Party is
 seeking to protect its export trade or where the centre of gravity of the anticompetitive activities is
 within the territory of the other Party.
 There are a number of other conditions which also must be satisfied in order for the presumption of
 deferral or suspension to arise, including, a willingness on the part of the Requested Party to deal
 with the matter, to keep the Requesting Party informed of all developments and to take the latters
 concerns on board prior to the conclusion of the investigation. The Requested Party can only act
 on the basis of its own competition rules and to the extent that the relevant behaviour is caught by
 those rules.
 While the Requested Party must agree to a number of conditions in order to give rise to the
 presumption of a suspension or deferral, it is not obliged to do so. There is therefore noriskthat a
 Requested Party would be obliged to investigate a case where it was not within its interests to do
 so. However, very often it will be in the Requested Party's interest to bring an end to
 anticompetitive behaviour occurring on its territory and it may be extremely beneficial to have such
behaviour brought to its attention.
The Draft Agreement recognizes that there may be circumstances where it is appropriate for both
Parties to undertake parallel investigations, for example when the public interest requires that
particularly serious anticompetitive activity is subject to sanction in both jurisdictions. This
recognition of the possible appropriateness of parallel investigations only applies where both
markets are harmed and would not apply where one Party was seeking to protect its export trade.
Mergers are not within the scope of the Draft Agreement due to US and EC merger
legislation, which would not allow a deferral or suspension of action as envisaged by the
Draft Agreement, due to the obligation to adopt afinaldecision within tight time limits.
The Explanatory Memorandum set out in Annex 1 gives a detailed description of the
provisions of the Draft Agreement.
III.     Legal Basis
In so far as the Draft Agreement relates to the competition rules of the EC Treaty, the legal
basis for the Council to conclude the Agreement is Article 87 of the EC Treaty in conjunction
with the first subparagraph of Article 228 paragraph 3 thereof. The European Parliament must
be consulted before the Council can conclude the Agreement. To the extent that the
Agreement applies to ECSC products, Articles 65 and 66 of the ECSC Treaty form the legal
basis for the Commission to conclude the Draft Agreement.
In contrast to the 1991 Agreement, Article 235 of the EC Treaty does not apply as cases
falling under the Merger Regulation are not within the scope of the Draft Agreement.
 ---pagebreak--- IV.     Conclusion
The Commission believes that the Draft Agreement is an important development in relations
with the US and represents a political commitment on the part of the US to cooperate with the
Commission rather than seeking to apply its antitrust laws extraterritorially in the EU.
The Draft Agreement if entered into will formally institutionalize the political commitment that
the US will normally refrain from addressing anticompetitive behaviour which does not
affect US consumers, or is directed principally in and directed principally towards the
European Community, where the Commission is prepared to deal with the matter.
Due to the advantages of positive comity described above, and the reinforcement
thereof resulting from the important presumptions created by the Draft Agreement, the
Commission proposes that the Council jointly with the Commission adopt a decision to
conclude the attached Draft Agreement. To this end, a proposal for a joint Council and
Commission Decision concluding the Agreement between the European Communities and the
Government of the United States of America on the application of positive comity principles in
the enforcement of their competition laws is set out in Annex 2.
 ---pagebreak---                                                                                      ANNEX 1
                                EXPLANATORY MEMORANDUM
 The Agreement between the European Communities and the Government of the
 United States of America on the Application of Positive Comity Principles in the
 Enforcement of their Competition Laws
 Description of the Agreement
 Objective
 The main objective of the Draft Agreement is to encourage the use of positive comity principles
and to specify the circumstances in which positive comity should be invoked and how requests for
positive comity should be dealt with.
Article I - Scope and Purpose
Article 1.1 of the Draft Agreement sets out the circumstances in which the agreement will
apply. Namely, where anticompetitive activities are occurring in whole or in substantial part in
the territory of one Party but are adversely affecting the interests of the other Party. The
activities in question must be impermissible under the competition laws of the Party in whose
territory the activities are occurring.
Article 1.2 sets out that the purpose of the Draft Agreement is to remove impediments to trade
and investment flows and to establish through cooperation the most effective and efficient
method for the enforcement of competition laws.
Article II - Definitions
The definitions used in Article II are the same as those used in the 1991 Agreement, with the
important exception of the definition of competition laws. Here, on both the EC and US sides,
mergers have been specifically excluded due to US and EC merger legislation, which would
not allow a deferral or suspension of action as envisaged by the Draft Agreement, due to the
obligation to adopt a final decision within tight time limits. Uke the 1991 Agreement, it is
necessary to provide for an extension of the definition of competition laws to take into
account the possibility that further laws or implementing regulations may be adopted in the
future. The need for both parties to consent in writing to any extension of the definition of
competition laws ensures that there is no danger of the definition being extended beyond its
intended scope.
Three new definitions also appear; "Adverse effects"               and "Adversely     affected",
"Requesting Party" and "Requested Party".
 ---pagebreak--- Article III - Positive Comity
Article III sets out the principle of positive comity. Article III provides that where a Party
believes that anticompetitive activities, c>ccurring in the territory of the other Party, are adversely
affecting its interests, it may request the other Party's competition authority to initiate appropriate
 enforcement activities. This possibility applies even if the first Party lias commenced or
contemplates taking enforcement action itself.
Article IV - Deferral or Suspension of Enforcement Activities
Article IV. 1 provides that the parties may agree that the Requesting Party will defer or
suspend enforcement activities while the Requested Party is investigating the activities.
Article IV.2 sets out in the detail the conditions which, if satisfied, will give rise to a
presumption that the Requesting Party will defer or suspend its enforcement activities.
Article IV.2. (a) (i) is noteworthy as it contains a presumption of deferral or suspension of
enforcement activities where the anticompetitive activities do not have an impact on the
Requesting Party's consumers. This means that the presumption of deferral or suspension shall
apply where the anticompetitive behaviour affects only exports.
 There is also a presumption of deferral or suspension in Article IV.2 (a) (ii) if the centre of
gravity of the anticompetitive activities is in the territory of the other Party. The centre of
gravity of an activity is defined in the Draft Agreement as the territory in which the activities
"occur principally in and are directed principally towards".
Article IV.2. (b) states that the presumption of deferral or suspension shall only apply if the
adverse effects on the Requesting Party are likely to be fully and adequately investigated and
remedied by the Requested Party. The Parties recognize that there may be circumstances where
it is appropriate for both Parties to undertake parallel investigations. This may be the case where
due to the particularly serious nature of the anticompetitive activity public interest requires that it is
subject to sanction in both jurisdictions. This recognition of the possible appropriateness of parallel
investigations only applies where the markets of both Parties are harmed.
Article IV.2 (c) sets out a number of requirements which the Requested Party must agree to in
order for the presumption of deferral or suspension to arise. It is necessary to set out these
commitments in order for the Requesting Party to have the confidence to defer or suspend
action. The Requested Party must agree that it will use its best efforts and adequate resources
to investigate the activity and that it will keep the Requesting Party informed of the status of
their enforcement activities and of their intentions. The Requested Party must agree to
complete their investigation within six months of the deferral or suspension or within such
time as agreed to by the competition authorities. The Requested Party must also agree to take
into account the views of the Requesting Party prior to any conclusion of the investigation and
to comply with any reasonable request made by the Requesting Party.
Where it is appropriate to provide confidential information to the Requesting Party in order to
keep that Party informed of any action being taken, the consent of the source of that
information must be obtained. Community law provides a high level of protection to
confidential information provided to the Commission, and it will be necessary that any consent
obtained is sufficient to discharge the Commission from its obligation of confidentiality as
 ---pagebreak---  provided by general principles of Community Law, the case law of the European Court
 of Justice and Article 20(2) of Regulation No. 17. Like the rest of the Draft Agreement, this
 Article must be read in conjunction with Article VU, which states that existing laws remain
 unchanged.
 If the Requesting Party chooses not to defer or suspend its enforcement activities, where the
 conditions of Article IV.2 are satisfied, it must inform the Requested Party of its reasons. This
 duty to give reasons will allow such situations to be closely monitored and explained.
 Article IV. 3 simply states that a Requesting Party may choose to defer or suspend their
 enforcement activities even if some of the conditions set out in Article IV.2 are not satisfied.
 Article IV. 4 recognizes that a Party that has deferred or suspended action may later initiate or
 reinstitute enforcement activities. In such circumstances that Party must inform the other Party of
 its intentions and reasons. This duty to provide reasons will impose a control over such cases and a
method for understanding why cooperation has failed to meet the expectations of the Requesting
Party. Where both Parties take enforcement action they shall, where appropriate, cooperate under
the 1991 Agreement.
Article V- Confidentiality and Use of Information
Article V of the Draft Agreement makes it clear that information provided under the Agreement
may only be used for the implementation of the Agreement unless the competition authority that
provided the information has consented to another use. A further safeguard is provided to those
who have consented to certain confidential information being disclosed, in that such information
may not be used for any other purpose unless the competition authority and the source of the
information consent.
The confidentiality of all information provided under the Draft Agreement is protected by
Article VIII of the 1991 Agreement and the exchange of letters dated May 31 and July 31,1995 3 .
Article VI'- Relationship to the 1991 Agreement
Article VI firmly ties the 1991 Agreement to the Draft Agreement and makes it clear that the
Draft Agreement supplements the 1991 Agreement by developing the concept of positive comity.
The Draft Agreement must be interpreted consistently with the 1991 Agreement.
Article VII - Existing Law
Article VQ states that the existing laws of the US and the EC remain unchanged by the Agreement
and that the Agreement must be interpreted consistently with those existing laws. It is important to
note that the Agreement cannot permit either of the Parties' competition authorities to do any act
that they do not already have the power to do.
Article VIII - Entry into Force and Termination
Article VIE states that the Agreement will enter into force upon signature. The Agreement may be
terminated by either Party upon giving 60 days notice of that intention.
          See footnote 1
 ---pagebreak---                                                                                       ANNEX 2
                                               Proposal for a
                   DECISION OF THE COUNCIL AND THE COMMISSION
        concerning the conclusion of the Agreement between the European Communities
        and the Government of the United States of America regarding the application of
              positive comity principles in the enforcement of their competition laws
THE COUNCIL OF THE EUROPEAN UNION,
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community, and in particular Article 87
in conjunction with the first subparagraph of Article 228(3) thereof,
Having regard to the Treaty establishing the European Coal and Steel Community, and in
particular Articles 65 and 66 thereof,
Having regard to the proposal from the Commission4,
Having regard to the opinion of the European Parliament5,
Whereas the Agreement of 23 September 1991 between the European Communities and
the Government of the United States of America regarding the application of their
competition laws, and the exchange of interpretative letters dated 31 May and 31 July 1995
in relation to that Agreement (together hereinafter "the 1991 Agreement"), attached to
Decision 95/145/EC, ECSC of the Council and the Commission has contributed to
coordination, cooperation and avoidance of conflicts in competition law enforcement6;
Whereas Article V of the 1991 Agreement, commonly referred to as the "Positive Comity"
article, calls for cooperation regarding anticompetitive activities occurring in the territory of
one Party that adversely affect the interests of the other Party;
Whereas further elaboration of the principles of positive comity and of the implementation of
those principles would enhance the 1991 Agreement's effectiveness in relation to such
conduct;
Whereas, to this end, the Commission has negotiated an Agreement with the Government of
the United States of America on the application of positive comity principles in the
enforcement of the competition rules of the European Communities and of the United States
of America;
Whereas the Agreement should be approved,
         OJ No L 95, 27.4.1995, p. 45; corrigendum in OJ No L 131, 15.6.1995, p. 38.
                                                      9
 ---pagebreak--- HAVE ADOPTED THIS DECISION:
                                            Article 1
The Agreement between and the European Communities and the Government of the
United States of America regarding the application of positive comity principles in the
 enforcement of their competition laws is hereby approved on behalf of the
European Community and the European Coal and Steel Community.
The text of the Agreement, drawn up in the Spanish, Danish, German, Greek, English, French,
Italian, Dutch, Portuguese, Finnish and Swedish languages, is attached to this Decision. ,
                                            Article 2
The President of the Council is hereby authorized to designate the person(s) empowered to
sign the Agreement on behalf of the European Community.
The President of the Commission is hereby authorized to designate the person(s) empowered
to sign the Agreement on behalf of the European Coal and Steel Community.
Done at Brussels,
For the Council                                               For the Commission
The President                                                 The President
                                                 10
 ---pagebreak---            AGREEMENT BETWEEN THE EUROPEAN COMMUNITIES AND
             THE GOVERNMENT OF THE UNITED STATES OF AMERICA
              ON THE APPLICATION OF POSITIVE COMITY PRINCIPLES
               IN THE ENFORCEMENT OF THEIR COMPETITION LAWS
The European Community and the European Coal and Steel Community of the one part
(hereinafter "the European Communities"), and the Government of the United States of
America of the other part:
Having regard to the September 23, 1991 Agreement between the European Communities and
the Government of the United States of America Regarding the Application of Their
Competition Laws, and the exchange of interpretative letters dated May 31 and July 31, 1995
in relation to that Agreement (together hereinafter "the 1991 Agreement");
Recognizing that the 1991 Agreement has contributed to coordination, cooperation, and
avoidance of conflicts in competition law enforcement;
Noting in particular Article V of the 1991 Agreement, commonly referred to as the
"Positive Comity" article, which calls for cooperation regarding anticompetitive activities
occurring in the territory of one Party that adversely affect the interests of the other Party;
Believing that further elaboration of the principles of positive comity and of the
implementation of those principles would enhance the 1991 Agreement's effectiveness in
relation to such conduct; and
Noting that nothing in this Agreement or its implementation shall be construed as prejudicing
either Party's position on issues of competition law jurisdiction in the international context;
Have agreed as follows:
                                              Article I
                                Scope and Purpose of this Agreement
1.       This Agreement applies where a Party satisfies the other that there is reason to believe
         that the following circumstances are present:
         (a)     Anticompetitive activities are occurring in whole or in substantial part in the
                 territory of one of the Parties and are adversely affecting the interests of the
                 other Party; and
         (b)     The activities in question are impermissible under the competition laws of the
                 Party in the territory of which the activities are occurring.
                                                    11
 ---pagebreak--- 2. The purposes of this Agreement are to:
   (a)      Help ensure that trade and investment flows between the Parties and
            competition and consumer welfare within the territories of the Parties are not
            impeded by anticompetitive activities for which the competition laws of one or
            both Parties can provide a remedy, and
   (b)      Establish cooperative procedures to achieve the most effective and efficient
             enforcement of competition law, whereby the competition authorities of each
            Party will normally avoid allocating enforcement resources to dealing with
            anticompetitive activities that occur principally in and are directed principally
            towards the other Party's territory, where the competition authorities of the
            other Party are able and prepared to examine and take effective sanctions under
            their law to deal with those activities.
                                        Article II
                                        Definitions
   As used in this Agreement:
1. "Adverse effects" and "adversely affected" mean harm caused by anticompetitive
   activities to:
   (a)      the ability of firms in the territory of a Party to export to, invest in, or
            otherwise compete in the territory of the other Party, or
   (b)      competition in a Party's domestic or import markets.
2. "Requesting Party" means a Party that is adversely affected by anticompetitive
   activities occurring in whole or in substantial part in the territory of the other Party.
3. "Requested Party" means a Party in the territory of which such anticompetitive
   activities appear to be occurring.
4.  "Competition iaw(s)" means
   (a)      for the European Communities, Articles 85, 86, and 89 of the Treaty
            establishing the European Community (EC), Articles 65 and 66(7) of the
            Treaty establishing the European Coal and Steel Community (ECSC), and their
            implementing instruments, to the exclusion of Council Regulation (EEC)
            No 4064/89 on the control of concentrations between undertakings, and
   (b)      for the United States of America, the Sherman Act (15 U.S.C. §§1-7), the
            Clayton Act (15 U.S.C. §§12-27, except as it relates to investigations pursuant
            to Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
            15 U.S.C. §18a), the Wilson Tariff Act (15 U.S.C. §§8-11), and the Federal
            Trade Commission Act (15 U.S.C. §§41-58, except as these sections relate to
            consumer protection functions),
   as well as such other laws or regulations as the Parties shall jointly agree in writing to
   be a "competition law" for the purposes of this Agreement.
                                               12
 ---pagebreak--- 5.      "Competition authorities" means.
        (a)     for the European Communities, the Commission of the European Communities,
                as to its responsibilities pursuant to the competition laws of the European
                Communities, and
       (b)      for the United States, the Antitrust Division of the United States Department of
                Justice and the Federal Trade Commission.
6.      "Enforcement activities" means any application of competition law by way of
       investigation or proceeding conducted by the competition authorities of a Party.
7.      "Anticompetitive activities" means any conduct or transaction that is impermissible
       under the competition laws of a Party.
                                           Article HI
                                         Positive Comity
The competition authorities of a Requesting Party may request the competition authorities of a
Requested Party to investigate and, if warranted, to remedy anticompetitive activities in
accordance with the Requested Party's competition laws. Such a request may be made
regardless of whether the activities also violate the Requesting Party's competition laws, and
regardless of whether the competition authorities of the Requesting Party have commenced or
contemplate taking enforcement activities under their own competition laws.
                                           Article IV
                      Deferral or Suspension of Investigations in Reliance
                        On Enforcement Activity by the Requested Party
1.     The competition authorities of the Parties may agree that the competition authorities of
       the Requesting Party will defer or suspend pending or contemplated enforcement
       activities during the pendency of enforcement activities of the Requested Party.
2.     The competition authorities of a Requesting Party will normally defer or suspend their
       own enforcement activities in favor of enforcement activities by the competition
       authorities of the Requested Party when the following conditions are satisfied:
                                                  13
 ---pagebreak--- (a) The anticompetitive activities at issue:
    (i)      do not have a direct, substantial and reasonably foreseeable impact on
             consumers in the Requesting Party's territory, or
    (ii)     where the anticompetitive activities do have such an impact on the
            Requesting Party's consumers, they occur principally in and are
             directed principally towards the other Party's territory;
(b) The adverse effects on the interests of the Requesting Party can be and are
    likely to be fully and adequately investigated and, as appropriate, eliminated or
    adequately remedied pursuant to the laws, procedures, and available remedies
    of the Requested Party. The Parties recognize that it may be appropriate to
    pursue separate enforcement activities where anticompetitive activities
    affecting both territories justify the imposition of penalties within both
    jurisdictions;
(c) The competition authorities of the Requested Party agree that in conducting
    their own enforcement activities, they will:
    (i)      devote adequate resources to investigate the anticompetitive activities
             and, where appropriate, promptly pursue adequate enforcement
             activities;
    (ii)     use their best efforts to pursue all reasonably available sources of
             information, including such sources of information as may be suggested
             by the competition authorities of the Requesting Party;
    (iii)    inform the competition authorities of the Requesting Party, on request
             or at reasonable intervals, of the status of their enforcement activities
             and intentions, and where appropriate provide to the competition
             authorities of the Requesting Party relevant confidential information if
             consent has been obtained from the source concerned. The use and
             disclosure of such information shall be governed by Article V;
    (iv)    promptly notify the competition authorities of the Requesting Party of
            any change in their intentions with respect to investigation or
            enforcement;
    (v)     use their best efforts to complete their investigation and to obtain a
            remedy or initiate proceedings within six months, or such other time as
            agreed to by the competition authorities of the Parties, of the deferral or
            suspension of enforcement activities by the competition authorities of
            the Requesting Party;
                                       14
 ---pagebreak---                   (vi)   fully inform the competition authorities of the Requesting Party of the
                         results of their investigation, and take into account the views of the
                         competition authorities of the Requesting Party, prior to any settlement,
                         initiation of proceedings, adoption of remedies, or termination of the
                        investigation; and
                  (vii) comply with any reasonable request that may be made by the
                        competition authorities of the Requesting Party.
        When the above conditions are satisfied, a Requesting Party which chooses not to
        defer or suspend its enforcement activities shall inform the competition authorities of
        the Requested Party of its reasons.
 3.     The competition authorities of the Requesting Party may defer or suspend their own
        enforcement activities if fewer than all of the conditions set out in paragraph 2
        are satisfied.
4.      Nothing in this Agreement precludes the competition authorities of a Requesting Party
        that choose to defer or suspend independent enforcement activities from later
        initiating or reinstituting such activities. In such circumstances, the competition
        authorities of the Requesting Party will promptly inform the competition authorities of
        the Requested Party of their intentions and reasons. If the competition authorities of
        the Requested Party continue with their own investigation, the competition authorities
        of the two Parties shall, where appropriate, coordinate their respective investigations
        under the criteria and procedures of Article IV of the 1991 Agreement.
                                              Article V
                               Confidentiality and Use of Information
Where pursuant to this Agreement the competition authorities of one Party provide
information to the competition authorities of the other Party for the purpose of implementing
this Agreement, that information shall be used by the latter competition authorities only for
that purpose. However, the competition authorities that provided the information may consent
to another use, on condition that where confidential information has been provided pursuant to
Article IV.2 (c) (iii) on the basis of the consent of the source concerned, that source also
agrees to the other use. Disclosure of such information shall be governed by the provisions
of Article VIII of the 1991 Agreement and the exchange of interpretative letters dated
May 3 land July 31, 1995.
                                             Article VI
                                Relationship to the 1991 Agreement
This Agreement shall supplement and be interpreted consistently with the 1991 Agreement, which
remains fully in force.
                                                    15
 ---pagebreak---                                                 Article VH
                                               Existing Law
Nothing in this Agreement shall be interpreted in a manner inconsistent with the existing laws, or as
requiring any change in the laws, of the United States of America or the European Communities or
of their respective states or Member States.
                                                Article V m
                                    Entry Into Force and Termination
1.       This Agreement shall enter into force upon signature.
2.       This Agreement shall remain in force until 60 days after the date on which either Party
         notifies the other Party in writing that it wishes to terminate the Agreement.
IN WITNESS WHEREOF, the undersigned, being duly authorized, have signed this Agreement.
DONE at                , in duplicate, this    day of           , 1997, in the Spanish, Danish, German,
Greek, English, French, Italian, Dutch, Portuguese, Finnish and Swedish languages, each one being
equally authentic.
For the European Community and for the European Coal and Steel Community
For the Government of the United States of America
                                                       16
 ---pagebreak---                                  Statement by the Commission
                               (on confidentiality of information)
  The Statement made by the Commission in April 1995 on the confidentiality of information
  and the exchange of interpretative letters dated May 31 and July 31, 1995 in relation to the
   1991 Agreement apply in their entirety to this Agreement.
  Article VII of this Agreement states that existing laws remain unchanged and that the
  Agreement must be interpreted consistently with those existing laws. This Agreement
  therefore cannot permit either of the Parties' competition authorities to do any act they do
  not already have the power to do. One consequence of this is that the Commission may
  only provide information to the US authorities where it is consistent with Community law
  to do so.
  While this Agreement envisages that it may be appropriate to provide information to the
  other party in order to keep it informed of enforcement activities, confidential information
  may only be provided with the consent of the source of that information. Community law
  provides a high level of protection to confidential information provided to the Commission,
  and it will be necessary that any consent obtained is sufficient to discharge the Commission
  from its obligation of confidentiality pursuant to general principles of Community law, the
  case-law of the Court of Justice of the European Commumties and Article 20(2) of
  Council Regulation No 17.
                                 Statement by the Commission
                                       (on transparency)
  The principles on transparency which govern the relationship between the Commission and
  the Member States in the application of the competition rules as enshrined, for example, in
  Council Regulation No 17, and the arrangements contained in the exchange of
  interpretative letters dated May 31 and July 31, 1995 in relation to the 1991 Agreement
  shall apply.
• The Member States shall be informed of all proceedings opened by the Commission as a
  result of a request by the US authorities under Article III of this Agreement.
• Member States shall be informed when the Commission makes a request to the
  US authorities under Article III of this Agreement to investigate anticompetitive activities.
• When the Commission opens proceedings following a request by the US authorities under
  Article III of this Agreement, the undertakings concerned shall be informed of the existence
  of the request, at the latest when the statement of objections is issued, or when a
  publication pursuant to Article 19(3) of Council Regulation No 17 is made.
• The annual report presented by the Commission to the European Parliament and the
   Council on the application of the 1991 Agreement shall also cover the application of
   this Agreement.
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 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 233 final
                                             DOCUMENTS
EN                                                            08 02 10 11
                                    Catalogue number : CB-CO-97-311-EN-C
                                                             ISBN 92-78-21674-7
Office for Official Publications of the European Communities
L-2985 Luxembourg
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