Cyprus

1) REFERENCES

Commission Opinion [COM(1993) 313 final - Not published in the Official Journal]Commission Report [COM(1998) 710 final - Not published in the Official Journal]Commission Report [COM(1999) 502 final - Not published in the Official Journal]Commission Report [COM(2000) 702 final - Not published in the Official Journal]Commission Report [COM(2001) 700 final - SEC(2001) 1745 - Not published in the Official Journal]Commission Report [COM(2002) 700 final - SEC(2002) 1401 - Not published in the Official Journal]Commission Report [COM(2003) 675 final - SEC(2003) 1202 - Not published in the Official Journal]Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]

2) SUMMARY

In its Opinion of July 1993, the Commission took the view that the Cypriot legislation that entered into force in 1990 was similar to the legislation of the European Community, although it did not have sufficient information at its disposal to assess whether the Cypriot legislation was being implemented effectively.

The Report of November 1998 found the anti-trust legislation in force to be generally compatible with Community law, but it stated that more work was needed on enforcement and in the area of state aid.

In its Report of October 1999, the Commission concluded that considerable progress had been achieved in anti-trust legislation with the adoption of the merger control law. However, Cyprus should have continued to make further efforts with regard to state aid, firms with special rights and state monopolies.

The November 2000 Report recorded satisfactory progress in antitrust legislation but criticised the inertia with regard to state aid.

The November 2001 Report states that progress has been made in both antitrust law - especially as a result of the increased powers of the Competition Protection Commission with regard to investigations and the imposition of penalties - and in State aid following the entry into force of a new law on the control of pubic aid.

The October 2002 Report found that Cyprus had made further progress in this area.

The November 2003 Report states that Cypriot competition policy is meeting the commitments arising from the accession negotiations. However, in the case of the legislation governing existing monopolies, Cyprus still has to achieve full alignment with the acquis.

The Treaty of Accession was signed on 16 April 2003 and accession took place on 1 May 2004.

COMMUNITY ACQUIS

The competition rules of the European Community derive from Article 3(g) of the EC Treaty, which provides that the activities of the Community are to include "a system ensuring that competition in the internal market is not distorted". The main areas of application are agreements between undertakings, abuses of dominant positions and State aid, dealt with under Articles 81, 82 and 87 (ex-Articles 85, 86 and 92) of the EC Treaty.

Cyprus is therefore called upon to apply progressively the provisions of the Merger Control Regulations (4064/89) and Articles 31 (ex-Article 37) and 86 (ex-Article 90) concerning monopolies and special rights of the EC Treaty.

EVALUATION

The new antitrust legislation, which has been in force since 1989, started the process of aligning antitrust legislation with the Community acquis. In order to complete the work, further legislative efforts are needed, in particular with regard to secondary legislation.

At administrative level, in April 2002 Cyprus submitted an "Action plan for strengthening the administrative capacity of the Commission for the Protection of Competition", designed to further strengthen the structure of the CPC.

As regards state aid, the overall assessment is positive. The Public Aid Control Law of 2001 contains the main principles of state aid control. Only the legislation on monopolies remains to be aligned fully with the acquis. The Office of the Commissioner for Public Aid is functioning well. In addition, the reform of the tax system is in place: as of January 2003 all fiscal aid will be subject to state aid control.

Negotiations on this chapter have been provisionally closed. Cyprus now needs to ensure that it continues to update its alignment as the acquis in this area evolves.

Last updated: 08.03.2004