CELEX: 51995PC0157
Language: en
Date: 1995-05-18
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 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. 1(i) and (ii) and para 2 of the Europe Agreement

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.
 ---pagebreak---  ---pagebreak---                             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.
 ---pagebreak---                      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
 ---pagebreak--- 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
 ---pagebreak--- 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"
 ---pagebreak--- 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
 ---pagebreak--- 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.
                                           £
 ---pagebreak--- 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.
 ---pagebreak--- 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
 ---pagebreak---  ---pagebreak---                                                                     ISSN 0254-1475
                                                             COM(95) 157 final
                                              DOCUMENTS
EN                                                                         08 11
                                     Catalogue number : CB-CO-95-180-EN-C
                                                              ISBN 92-77-88229-8
Office for Official Publications of the European Communities
L-2985 Luxembourg
                                        AD