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 Slovenia of the other part, signed on 10 June 1996, with regard to the adoption of the rules for the implementation of Article 65 (1)(i), (1)(ii) and (2) of the Europe Agreement and for the implementation of Article 7 (1)(i), (1)(ii) and (2) of Protocol 2 on ECSC products to the Europe Agreement (presented by the Commission)

EXPLANATORY MEMORANDUM

Article 65 (3) of the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Slovenia, of the other part, signed on 10 June 1996, 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 Interim Agreement; in accordance with Article 132 of the Agreement (as amended by the Council and Commission Decision 1999/145/EC), the time-limit runs from 1 January 1997.

The proposed decision concerns the rules for the implementation of the competition provisions applicable to undertakings, i.e. Article 65 §1 (i) and (ii) in conjunction with Article 65 §2. These provisions are one of the basic points of the Europe Agreement between the European Communities and Slovenia. 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 implementing rules are essentially procedural type rules. They determine the respective competences of the European Commission on the EC side and of the Slovenian Competition Protection Office on the Slovenian side to deal with cases falling under the competition rules of the Europe Agreement. The rules further contain procedures for notification of cases to the other Party, consultation and comity, and the exchange of information. There is provision for a consultation procedure within the Association Council should disagreement arise between the two competition authorities. It is also confirmed that the principles embodied in the block exemption rules in force in the Community will apply.

According to Article 2 (1) of the Decision of the Council and the Commission of 21 December 1998 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 European Communities. Articles 83, 308, and 300 of the EC Treaty [1] as well as Articles 65 and 66 of the ECSC Treaty are the 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. As a result, it is desirable that the Council and the Commission should adopt the attached decision.

[1] Numbering of the Treaty of Amsterdam, entered into force on 1 May 1999.

It is therefore proposed that the Council approves the attached proposal for a Council and Commission decision.

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 Slovenia of the other part, signed on 10 June 1996, with regard to the adoption of the rules for the implementation of Article 65 (1)(i), (1)(ii) and (2) of the Europe Agreement and for the implementation of Article 7 (1)(i), (1)(ii) and (2) of Protocol 2 on ECSC products to the Europe Agreement

THE COUNCIL OF THE EUROPEAN UNION,

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community [2], and in particular Articles 83 and 308 in connection with Article 300 paragraph 2, second sentence and paragraph 3, first section,

[2] As amended by the Treaty of Amsterdam, entered into force on 1 May 1999.

Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Articles 65 and 66,

Having regard to the Decision of the Council and the Commission of 21 December 1998 on the conclusion of the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Slovenia, of the other part, and in particular Article 2 (1) thereof,

Having regard to the Opinion of the European Parliament,

(1) Whereas pursuant to Article 65(3) of the Europe Agreement the Association Council shall adopt the necessary rules for the implementation of paragraphs 1 and 2 of that Article within three years of the entry into force of the Agreement,

(2) Whereas Article 7 (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 paragraphs 1 and 2 of that Article,

HAVE DECIDED AS FOLLOWS:

The position to be adopted by the Community in the Association Council set up under the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Slovenia, of the other part, with regard to the rules for the implementation of Article 65(1) (i), (1) (ii) and (2) of the said Agreement, and to the rules for the implementation of Article 7 (1) (i), (1) (ii) and (2) of 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

The President The President

ANNEX

Draft Decision N ./99 of the Association Council between the European Communities and their Member States, of the one part, and the Republic of Slovenia, of the other part, of

adopting the necessary rules for the implementation of Article 65(1) (i), (1) (ii) and (2) of the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Slovenia, of the other part, and the rules for the implementation of Article 7 (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 their Member States, of the one part, and the Republic of Slovenia, of the other part, and in particular Article 65 (3) thereof,

Having regard to Protocol 2 on ECSC products to the aforementioned Europe Agreement, and in particular Article 7 (3) thereof,

Whereas pursuant to Article 65 (3) of the Europe Agreement the necessary rules for the implementation of Article 65 (1) and (2) thereof should be adopted by the Association Council within three years of the entry into force of the Agreement,

Whereas Article 7 (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 the necessary rules for the implementation of paragraphs 1 and 2 of that Article,

HAS DECIDED AS FOLLOWS:

Article 1

The necessary rules implementing Article 65(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 Republic of Slovenia, of the other part, and the rules implementing Article 7 (1) (i), (1) (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.

Article 2

The Decision shall be published in the Official Journal of the European Communities and in Uradni List Republike Slovenije.

Article 3

This Decision shall enter into force on the day of its adoption.

Done at Brussels on,

For the Association Council

The President (s)

IMPLEMENTING RULES FOR THE APPLICATION OF THE COMPETITION PROVISIONS APPLICABLE TO UNDERTAKINGS PROVIDED FOR IN ARTICLE 65 (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 REPUBLIC OF SLOVENIA, OF THE OTHER PART, AND IN ARTICLE 7 (1) (i), (1) (ii) and (2) OF PROTOCOL 2 ON ECSC PRODUCTS TO THAT AGREEMENT

Article 1

General Principle

1.1. 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 a dominant position in the territories of the Community or of Slovenia as a whole or in a substantial part thereof, which may affect trade between the Community and Slovenia, shall be settled according to the principles contained in Article 65 (1) and (2) of the Europe Agreement.

1.2. For this purpose, these cases are dealt with by the Commission of the European Communities (DG IV) on the Community side and the Slovenian Competition Protection Office (CPO) on the Slovenian side.

1.3. The competences of the EC Commission and the CPO to deal with these cases shall flow from the existing rules of the respective legislation of the Community and Slovenia, including where these rules are applied to undertakings located outside the respective territory.

1.4. 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 Treaty establishing the European Coal and Steel Community, including the competition-related secondary legislation, for the EC Commission, and the Law on the Protection of Competition for the CPO.

ECONOMIC ACTIVITIES UNDER THE EC TREATY

Article 2

Competence of both competition authorities

Cases under Article 65 of the Europe Agreement which may affect both the Community and the Slovenian market and which may fall under the competence of both competition authorities shall be dealt with by the EC Commission and the CPO, 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 down 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 anti-competitive 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 particular 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 CPO considers that anti-competitive 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 anti-competitive 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 anti-competitive 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 is found 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

4.1. Whenever the competition authority of a Party becomes aware of the fact that a case, falling also 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.

4.2. 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 65 (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

6.1. In the application of Article 65 of the Europe Agreement as provided for in Articles 2 and 3 of these implementing rules, the competition authorities shall ensure that the principles contained in the block exemption regulations in force in the Community shall be appliedin full. The CPO shall be informed of any procedure related to the adoption, abolition or modification of block exemptions by the Community.

6.2. Where such block exemption regulations encounter serious objections on the Slovenian 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.

6.3. The same principles shall apply regarding other significant changes in the Community or Slovenian competition policies.

Article 7

Merger control

With regard to mergers which fall within Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings [3], and which have a significant impact on the Slovenian economy, the CPO 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' competition laws.

[3] OJ L 395, 30.12.1989, p.1, as last amended by Regulation (EC) No 1310/97 (OJ L 180, 9.7.1997).

Article 8

Activities of minor importance

8.1. Anti-competitive activities whose effects on trade between the Parties or on competition are negligible do not fall under Article 65 (1) of the Europe Agreement and therefore are not to be treated under the Articles 2 to 6 the present implementing rules.

8.2. Negligible effects within the meaning of paragraph 8 (1) are generally presumed to exist when

- the aggregate annual turnover of the participating undertakings does not exceed ? 200 million, 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 Slovenian 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 explicitly mentioned in these implementing rules, an exchange of views shall take place in the Association Council at the request of one Party within three months following the request.

9.2. Following this exchange of views, or after expiry of the period referred to in paragraph 9.1, the Association Council may make appropriate recommendations for the settlement of these cases, without prejudice to Article 65 (6) of the Europe Agreement. In these recommendations, the Association Council may take into account any failure of the requested authority to give its point of view to the requesting authority within the period referred to in Article 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 CPO 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 Community and Slovenia 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 65 (6) of the Europe Agreement, and the rights of individual Member States of the European Communities 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 6 and 8 to 10 above shall 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 Commission and the CPO will provide for practical arrangements for mutual assistance or any other appropriate solution concerning in particular the question of translations.