PROTECTION OF COMPETITION UNDER SAAs AND CEFTA

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Zaštita konkurencije na osnovu sporazuma o stabilizaciji i pridruživanju i CEFTA Zaštita konkurencije na osnovu sporazuma o stabilizaciji i pridruživanju i CEFTA

Lecturer: Professor Dušan V. Popović (University of Belgrade)
Hours of lectures: 8

Under SAA, the following are incompatible with the proper functioning of the Agreement, insofar as they may affect trade between the Community and a SEE country: (i) all 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; (ii) abuse by one or more undertakings of a dominant position in the territories of the Community or a SEE country as a whole or in a substantial part thereof; (iii) any State aid which distorts or threatens to distort competition by favouring certain undertakings or certain products. Any such practices shall be assessed on the basis of criteria arising from the application of the competition rules applicable in the Community, in particular from Articles 81, 82, 86 and 87 of the EC Treaty (current Articles 101, 102, 106 and 107 TFEU) and interpretative instruments adopted by the Community institutions (EU institutions). These rules have to be enforced by an “operationally independent authority”.

Regarding state aid, the European Union on one side and a SEE country on the other side need to ensure transparency in the area of state aid, inter alia by providing to the other parties a regular annual report, or equivalent, following the methodology and the presentation of the EU survey on state aid. Upon request by one party, the other party to SAA shall provide information on particular individual cases of public aid. SEE countries are required to establish a comprehensive inventory of aid schemes instituted before the establishment of the state aid authority as well as to align such aid schemes with the EU criteria within a period of no more than 4 years from the entry into force of the Agreement. During the first five years after the entry into force of the SAA, any public aid granted by a SEE country shall be assessed taking into account the fact that a SEE country shall be regarded as an area identical to those areas of the European Union described in Article 107(3) (a) TFEU.

urthermore, SEE countries that signed the Stabilization and Association Agreements are required to progressively adjust any state monopolies of a commercial character so as to ensure that, three years after the entry into force of the Agreement, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States of the European Union and their nationals.

Under the Central European Free Trade Agreement (CEFTA), the Parties agreed to establish a free trade area in conformity with the relevant rules and procedures of the World Trade Organization. The objectives of CEFTA are, among others: (i) to eliminate barriers to and distortions of trade and facilitate the movement of goods in transit and the cross-border movement of goods and services between the territories of the Parties; (ii) to provide fair conditions of competition affecting foreign trade and investment and gradually open the government procurement markets of the CEFTA parties; (iii) to contribute thereby to the harmonious development and expansion of world trade; (iv) to expand trade in goods and services and foster investment by means of fair, clear, stable and predictable rules; (v) to improve conditions further to promote investment, including foreign direct investment.

Similarly to SAAs, under CEFTA the following are incompatible with the proper functioning of the Agreement in so far as they may affect trade between the parties: (i)  all 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 in the territories of the parties as a whole or in a substantial part thereof; (ii) abuse by one or more undertakings of a dominant position in the territories of the parties as a whole or in a substantial part thereof. Any such practice is to be assessed on the basis of the principles of the competition rules applicable in the European Union, in particular Articles 101, 102 and 106 TFEU.

The parties to CEFTA Agreement are required to notify each other of relevant enforcement activities and exchange information. No party is required to disclose information that is confidential according to its domestic legislation. Upon request, competition authorities and/or other relevant authorities of the parties concerned shall enter into consultations in order to facilitate the removal of the anti-competitive practices. The party addressed should accord full consideration to that request. This co-ordination however does not prevent the parties from taking autonomous decisions.

Under CEFTA, any aid granted by a party or through state resources in any form whatsoever which distorts or threatens to distort competition by favouring certain goods shall, in so far as it may affect trade between the party concerned and other parties to this Agreement shall be considered incompatible with the proper functioning of this Agreement. Any such practice shall be assessed on the basis of the principles of the state aid rules applicable in the European Union, in particular from Article 107 TFEU.

Finally, under CEFTA Agreement, the parties are required to adjust any state monopolies of a commercial character or state-trading enterprises so as to ensure that, in accordance with WTO provisions, no discrimination exists between enterprises of the parties regarding the conditions under which products are marketed. The parties are required to inform the Joint Committee about the measures they adopt to implement this provision.