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The Council of Competition is established in May 1st,
2004 as an independent public body mandated to ensure consistent
implementation of the Act on Competition passed in 2001. It is
located in Sarajevo and it has exclusive competence to decide on the
presence of prohibited competition activities in the market of
Bosnia and Herzegovina.
For the first time, this Act establishes the competition policy as
one of more important instrument and pillar in creation and
strengthening the single economic area /market in Bosnia and
Herzegovina.
The Act on Competition, passed in 2001, comprised the basic rules of
the competition within the meaning of Article 81 and 82 of the EC
Treaty, but it didn't apply to practices and resolutions of the
modern European legislation - acquis in this field. Therefore, a new
Act is passed ("Official Gazette BIH", No. 48/05) and it has been in
effect since 27th July, 2005. Compatibility of new Act on
Competition with stipulations and regulations of the European Union
legislation in the field of the market competition (i.e. Regulations
adopted in 2003 and 2004. - EC Council-No. 1/2003; 139/2004;
773/2004; 802/2004; etc.) ensures the effective and transparent
application of the law, simple procedures, reduced duration of the
proceedings and in general, reduced level of the state intervention
in this field.
Comparing to the previous Act, the new Act grants the motivated
penalty policy for undertakings (Leniency policy), effective
mechanism of market control and establishes the cooperation with
international Agencies in this field.
This Act shall apply to all forms of prevention, restriction and
distortion of the market competition on the whole territory of
Bosnia and Herzegovina or out of the territory of Bosnia and
Herzegovina having the substantial effect on the market of Bosnia
and Herzegovina. The special attention is directed towards the
agreements on dominant position and abuses of dominant position, and
on rules and procedures concerning the competition between
undertakings.
New Act on Competition ensures the increased and precisely defined
competences of the Council of Competition in carrying out the
administration and professional duties referred to the different
aspects of the market competition control (i.e. methods of carrying
on the proceedings, final decision making, penalty policy and
duration of the proceedings).
As some items and matters are defined in general by the Competition
Act, they are more closely defined by by-law acts: Decision on
Definition of a Relevant Market; Decision on Agreements of Minor
Importance; Decision on Block Exemption Granted to Certain
Categories of Vertical Agreements (between undertakings operating on
the different level of production or distribution); Decision on
Block Exemption Granted to Certain Categories of Horizontal
Agreements (between undertakings operating on the same level of
production and distribution chain) particularly those pertaining to
Research, Development and Specialization Agreements; Regulation on
Block Exemption Granted to Agreements on Transfer of Technology,
Licenses and Know-how; Decision on Block Exemption Granted to
Insurance Agreements; Decision on Distribution and Servicing the
Motor Vehicles; Decision on the Procedure for Granting Immunity from
Fines (Leniency Policy); Decision on the Definition of Dominant
Position; Decision on Administrative Payment Referred to Proceedings
Before the Council of Competition and Decision on Definition of the
Periodic Fine Payment.
The application of the above said by-law acts (all of them shall be
passed until March, 2006) shall provide compliance of the Bosnia and
Herzegovina legislation in this field with acquis and ensure the
predictable and transparent conducting of some procedures and
proceedings before the Council of Competition.
The Council of Competition consists of six (6) members and they are
appointed for a six-year term of office (until 2010) with the
possibility of one more reappointment. Three members of the Council
of Competition are appointed by the Council of Ministers of Bosnia
and Herzegovina, two members are appointed by the Government of
Federation of Bosnia and Herzegovina and one member is appointed by
the Government of Republic of Srpska. The Council of Ministers of
Bosnia and Herzegovina appoints a president of the Council of
Competition (one of the members of the Council) for one-year term
without the possibility of reappointment during the term of office
of the Council members. Members of the Council of Competition are
selected among recognized experts in the certain professional fields
and their status is equal to such of administrative judges. This
status is incompatible with any direct or indirect, permanent or
periodical duty, with the exception of academic activities.
Expert Unit is the basic organizational unit of the Council of
Competition and it performs administrative and professional
activities (conducts the proceedings, prepares the decision making
proposals, proposes by-law acts, and so on). The empowerment of this
Team shall advance the functioning of the Council of Competition. It
is of high priority in 2006 to employ more staff (lawyers and
economists) and to improve the knowledge and professionalism of all
staff.
Pursuant to the Act on Competition, the proceedings may be initiated
at the party's request/claim or ex-officio when the Council of
Competition finds that the practice concerned is likely to cause
considerable obstruction, restriction or distortion of competition.
When the proceeding is completed (duration of the proceedings
depends on the case concerned), the Council of Competition issues a
final decision on which the injured party to the proceedings may
file an appeal before the Court of Bosnia and Herzegovina.
The Council of Competition shall ensure by means of the continual
promotion Program ("Competition Advocacy") closer approach of the
various aspects of market competition to business associations and
other respective institutions for the purpose of the proper law
enforcement and increase the knowledge and awareness.
The State Aid is a part of the market competition policy of the
European Community. There is no legislation in this filed in Bosnia
and Herzegovina and the establishment of the State Aid is of a top
priority in future. Following the example of the European Union
system, the process of the draft legislative enactment has been
started in Bosnia and Herzegovina and it is technically supported by
experts of EU Project "Support for Competition and State Aid". The
Council of Competition and other national bodies/institutions of
Bosnia and Herzegovina have essential responsibility and mandate in
this field. The enactment of the Law in this field is expected until
the end of 2006.
The Council of Competition of Bosnia and Herzegovina has been a
member of the International Competition Network (ICN) since middle
of 2005. In this moment, the Council of Competition is going to sign
bilateral agreements and memorandums with the countries in the
region aimed to establish and improve the cooperation between the
countries.
The Council of Competition participates actively in negotiations on
Agreement on Stabilization and Association between Bosnia and
Herzegovina and the European Community.
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