THE COLLECTION OF REGULATIONS
OF THE COUNCIL OF COMPETITION OF
BOSNIA AND HERZEGOVINA
-unofficial translation-
The Collection of Regulations of the Council of Competition of Bosnia and Herzegovina
The title of a book
The Collection of Regulations of the Council of Competition of Bosnia and Herzegovina
-unofficial translation-
Publisher
The Council of Competition of Bosnia and Herzegovina
Radićeva 8/4, Sarajevo
www.bihkonk.gov.ba
Professional Editors
Members of the Council of Competition:
Gordan Raspudic
Dragisa Stankovic
Ibrica Lakisic
Sanja Bozic
Sena Hatibovic
Stjepo Pranjic
Editor
Dragana Lazetic
Tehnical Arrangement
Samir Bekto
Printed Copies
250
Internal Edition
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TABLE OF CONTENTS
Foreword by Mr. Raspudic ......................................................................................................5
The Council of Competition of Bosnia and Herzegovina ........................................................7
The Act on Competition.........................................................................................................11
Regulation on the Definition of a Relevant Market ...............................................................39
Regulation on Definition of a Dominant Position..................................................................47
Regulation on Agreements of Minor Importance...................................................................53
Regulation on Notification and Criteria for Assessment a Concentration of Undertakings...59
Regulation on the Procedure for Granting Immunity from Fines (Leniency Policy).............71
Regulation on Definition of the Periodic Fine Payment ........................................................79
Regulation on Block Exemptions Granted to Certain Categories of Horizontal Agreements
(between undertakings operating at the same level of production or distribution chain)
Relating Particularly to Research, Development and Specialization Agreements .................83
Regulation on Block Exemption Granted to Certain Categories of Vertical Agreements
(between undertakings operating at the difefrent levels of production or distribution) .........95
Regulation on Block Examption Granted to Insurance Agreements....................................105
Regulation on Block Exemption Granted to Agreements on Distribution and Servicing of
Motor Vehicles.....................................................................................................................117
Regulation on Block Exemption Granted to Certain Categories of Technology Transfer
Agreements (licence and know-how agreements)................................................................131
Regulation on the Amount of Administration Taxes Relating to the Practices Before the
Council of Competition........................................................................................................143
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FOREWORD
Dear,
Generally, the concept of the market competition in Bosnia and Herzegovina is absolutely a
new concept and therefore the Council of Competition permanently promotes it in public
(Competition Advocacy).
The Council of Competition, established in 2004, is an independent and autonomous body
with exclusive authority to decide on existence of prohibited competition activity in the
market of Bosnia and Herzegovina and it acts in protection and promotion of the market
competition.
On the basis of the Act on Competition, the Council of Competition has adopted twelve by-
laws published them during 2005/2006, and this Collection of Regulations provides an
insight into all adopted regulations.
Purpose of this Collection of Regulations is to inform the business community and relevant
authorities about the adopted regulations on market competition in Bosnia and Herzegovina,
including explanation of some terms used in a legislation and practice of the market
competition, in order to ensure consistent application of the regulations and to improve the
general knowledge in this field.
We hope that this shall ensure higher efficiency and transparency in application of the Act on
Competition and establish better cooperation with business community and relevant
authorities of Bosnia and Herzegovina.
This publication is available on our Internet page www.bihkonk.gov.ba
Gordan Raspudic
President of the Council of Competition
Sarajevo, February 2007
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THE COUNCIL OF COMPETITION OF BOSNIA AND HERZEGOVINA
The Council of Competition, established on 1st of May 2004, is an independent and
autonomous body headquartered in Sarajevo with exclusive competence to decide on
existence of the prohibited competing activities in the market of Bosnia and Herzegovina,
pursuant to the regulations of the Act on Competition.
The Council of Competition consists of six members and their status is equal to such of
administrative judges who are selected among recognized experts and they are appointed for
a six-year term of office with the possibility of one more reappointment. Three members of
the Council of Competition are appointed by the Council of Ministers of BH, two by the
Government of the Federation of BH and one by the Government of Republic of Srpska.
The Expert unit, which acts as a basic organizational unit, is established by the Rule Book on
Internal Organization and Systematization of the Council of Competition. The Expert unit
carries on the administration, expert and technical duties. There are Offices for Competition
in Mostar and Banja Luka which operates within the Expert unit as organizational units
placed outside of the seat of the Council of Competition.
The Act on Competition is based on the modern legislation and practice of the European
market competition. This Act is to the greatest extent harmonized with the rules and
regulations of the European Union in market competition field – Article 81 and 82 of the
Treaty Establishing the European Community, regulations adopted in 2003 and 2004 - acts
of the EC Council No. 172003, 139/2004, 773/2004, 802/2004 - which ensures more
efficiency and transparency in its implementation, reduces a duration of some phases of
proceedings and generally, reduces a level of the state intervention in this field.
The Act on Competition is being applied to all undertakings, to their activities aimed at and
resulted in prevention, restriction and distortion of the market competition in Bosnia and
Herzegovina including activities abroad it those activities affect the market of Bosnia and
Herzegovina.
The enforcement of the Act on Competition ensures the improvement of principals of the
free market competition and Council of Competition prevents by means of certain measures
and acts some undertakings to have unfair advantageous position comparing to others.
Considering the concept of the market competition policy, the implementation of the Act on
Competition shall be of benefit to end-users, primarily through better quality and reduced
prices of products/services in the market, which shall provide for long-term the prosperity of
citizens of Bosnia and Herzegovina.
The main task of the Council of Competition is to eliminate prohibited competitive activities
of undertakings in order to protect and maintain the market competition and set up equal and
transparent criteria for all undertakings and other entities in the market.
The main activities of the Council of Competition are:
• to prohibit conclusion of agreements which restrict the market competition (Article
4 of the Act on Competition);
• to eliminate the abuses of dominant position of undertakings (Article 9 of the Act
on Competition);
• to control acquisition, merger, taking over of undertakings (concentration) in the
relevant market (Article 12 of the Act on Competition);
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• to provide opinions and proposals on any aspect of competition, either ex-officio
and at the request of the state authority, undertakings or associations (Article 25 of
the Act on Competition);
• to make the market competition closer to the business community and to relevant
institutions through different forms of promotions (Competition Advocacy).
Initiation of the proceedings: The Council of Competition shall initiate proceedings if it finds
existence of any form of the prohibited competitive activity in order to determine
infringement of the Act. The Council of Competition shall initiate the proceedings upon
request submitted by:
• any legal or natural entity having a legal or economic interest;
• a chambers of commerce, associations of employers and entrepreneurs;
• a consumers associations;
• an executive authorities of Bosnia and Herzegovina.
Within the ordered time-period, the Council of Competition shall make a final decision
(Article 42 of the Act on Competition) which is to be delivered to undertakings concerned,
and published in Official Gazette of Bosnia and Herzegovina.
Fine: The Council of Competition, in a case of infringement of the Act on Competition, shall
impose a fine at 1-10% of the total annual income of the undertaking (Articles 48 and 49)
depending of the level of infringement of the Act. Also, the fine may be imposed at
15,000KM to 50,000KM to the responsible person of the undertaking.
The Council of Competition may impose to the parties to the proceedings the periodic
penalty payment (penalties) not exceeding 5% of the average daily income in the preceding
business year for each day of delay of the date set in the Regulation, in a case where they
failed to conform and implement the Ruling of the Council of Competition.
Additionally, the Council of Competition may consider reduction of a fine or grant immunity
from fine (leniency policy) for legal and/or natural entities if, in the course of the
proceedings, the entity willingly provides the decisive evidences important for finding an
infringement of the Act on Competition. This practice is applied to prohibited agreements
(cartels).
The market competition area is one of the important instruments and pillars which provide
establishment and reinforcement of the single economic market in Bosnia and Herzegovina
and the Council of Competition shall continue its activities to foster it.
THE ACT ON COMPETITION
“Official Gazette of BiH”, No. 48/05
The Council of Competition
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On the bases of the Article IV, paragraph (4), item a) of the Constitution of Bosnia and
Herzegovina, the Parliamentary Assembly of the Bosnia and Herzegovina, at the session of
the House of Peoples, held in June 29, 2005 and at the session of the House of
Representatives, held in June 29, 2005 has adopted
THE ACT ON COMPETITION
I GENERAL PROVISIONS
Article 1
Subject-matter and Scope
This Act regulates the rules, measures and procedures for the protection of market
competition, and regulates the power and duties of the Council of Competition entrusted with
the protection and promotion of market competition in Bosnia and Herzegovina.
Article 2
Application
(1) This Act shall apply to all legal and natural persons (hereinafter: undertakings) that,
directly or indirectly, participate in the trade of goods or services and that, through
their actions, prevent, restrict or distort market competition on the whole territory of
Bosnia and Herzegovina or its relevant part and, particularly to:
a) economic associations, enterprises, entrepreneurs, disregarding their form
of property, seat or permanent residence;
b) state and local self-government units directly or indirectly participating in
or decisive influence on the market;
c) other natural or legal persons such as associations, sports organizations,
institutions, cooperatives, intellectual property right holders etc. that
participate, indirectly or directly, permanently, temporary or single in the
market, disregarding their legal status, form of property, seat or permanent
residence.
(2) This Act shall also apply to any undertaking controlling another undertaking. A
controlled undertaking shall be deemed to be controlled if its management is
directly or indirectly, legally of factually, decisively impacted by another
undertaking, and especially if that controlling undertaking:
a) holds more than half of the shares capital or half of the shares;
b) may exercise more than half of the voting rights;
c) has the right to appoint more than half of the members of management
board or supervisory committee;
d) in any other way has the right to manage business operations of the
controlled economic subject.
(3) This Act shall also apply to all economic activities of the undertakings that have
their seat or permanent residence abroad, if their activities have substantial effect on
the market of Bosnia and Herzegovina or its relevant part.
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Article 3
Relevant Market
(1) Within the meaning of this Act, the relevant market is defined as a market of certain
products, which are the subject of the business operations preformed by the
undertakings in the specific geographic territory.
(2) A relevant product market comprises all products which consumers and/or users
consider mutually substitutable, under acceptable conditions, having in mind the
products′ characteristics, their quality, intended use, way of usage and the price and
sale conditions.
(3) Relevant geographic market comprises the whole territory or a significant part of
the territory of Bosnia and Herzegovina, where the undertakings operate in selling
and/or purchasing of a relevant product under equal or sufficiently homogeneous
conditions and which are significantly distinguished from the conditions of
competition in neighbouring geographic markets.
(4) As an exception to paragraph (3) of this Article, in specific cases, a relevant
geographic market may be defined on the international level.
(5) The Council of Competition shall prescribe by a by-law act detailed criteria and
procedures in defining the relevant market.
II PROHIBITED COMPETITION PRACTICES
Article 4
Agreements
(1) There shall be prohibited all agreements, contracts, single provision of agreements
or contracts, concerted practices, explicit and tacit agreements between the
undertakings, as well as decisions by associations of undertakings (hereinafter:
agreements) the object or effect of which is to prevent, restrict or distort market
competition in the relevant market, and in particular those which:
a) directly or indirectly fix purchase and selling prices or any other trading
conditions;
b) limit or control the production, markets, technical development or
investment;
c) share markets or sources of supply;
d) apply dissimilar conditions to equivalent transactions with other
undertakings, thereby placing them at a competitive disadvantage;
e) make the conclusion of contracts subject to acceptance by the other parties
of supplementary obligations which, by their nature or according to
commercial usage, have no connection with the subject of such contracts.
(2) Any agreements prohibited pursuant to paragraph (1) of this Article shall be null
and void.
(3) Agreements in terms of paragraph (1) of this Article shall not be prohibited if they
contribute to improving the production or distribution of goods and/or services
within Bosnia and Herzegovina or those which contribute the promotion of
technical or economic progress, while allowing consumers a fair share of the
resulting benefit, and which:
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a) impose only restrictions necessary to the achievement of these objectives;
b) shall not enable the elimination of competition in the substantial part of
products or services in question.
Article 5
Individual Exemptions
(1) The Council of Competition may, at the request of one or more of the parties to an
agreement take a decision granting individual exemption from the application of the
agreement prohibition referred to in Article 4, paragraph (1) of this Act, if that
particular agreement fulfils the conditions from Article 4, paragraph (3) of this Act.
(2) The Council of Competition shall decide upon the exemption from the application
of the agreement prohibition referred to in Article 4, paragraph (1) of this Act
within a four (4) months period.
(3) If the Council of Competition does not make such a decision within the stated time
period, the agreement in question is deemed to be exempted from the prohibition
laid down in Article 4, paragraph (1) of this Act.
(4) The Council of Competition may, ex officio or at a party’s request, re-examine the
already exempted agreement from paragraph (1) of this Article, when:
a) the decision is based on incomplete and incorrect data and information;
b) the material conditions and facts on the relevant market have been changed
substantially;
c) one of the parties in question acts contrary to its obligations defined by the
decision of the Council of Competition.
(5) If the Council of Competition finds out a violation pursuant to paragraph (4) of this
Article, its decision may be cancelled, annulated or amended.
Article 6
Content and Duration of an Individual Exemption
(1) An individual exemption by means of a decision may contain conditions and
prohibitions.
(2) An individual exemption has a limited period of time, which as a rule may not
exceed 5 (five) years.
(3) The time limit from paragraph (2) of this Article may, at a request of the parties to
the agreement, be additionally extended for no longer than 5 (five) years, if it can be
proved that the agreement continues to comply with the conditions set out in Article
4, paragraph (3) of this Act.
(4) The request for the extension of time limit of individual exception must be
submitted by the parties to the agreement to the Council of Competition at least in 4
(four) months before the expiry of the validity of the exemption.
(5) An individual exemption shall take effect from the day of the conclusion of the
agreement, or if it contains conditions and prohibitions, the exemption shall take
effect from the day on which the agreement is enacted or at least from the day on
which the conditions are fulfilled.
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Article 7
Block Exemptions
(1) The Council of Competition shall specify by decree the following block exemptions
for implementation of Article 4, paragraph (3) of this Act, in particular:
a) horizontal agreements, in particular the agreements on research and
development and specialization;
b) vertical agreements, in particular the agreements on exclusive distribution,
selective distribution, exclusive purchase and franchising;
c) agreements on transfer of technology, license and know how agreements;
d) agreements on distribution and servicing of motor vehicles;
e) insurance agreements.
(2) The Council of Competition shall more closely define the block exemptions from
paragraph (1) of this Article in by-laws, and in particular:
a) the restrictions or contractual provisions that such agreement may contain;
b) the contractual provisions that such agreement must contain;
c) their limit period and other conditions which must be fulfilled.
(3) Agreements fulfilling the conditions laid down in Article 4, paragraph (3) of this
Act do not need to be submitted to the Council of Competition for assessment in
respect of individual exemption pursuant to Article 5 of this Act.
(4) The Council of Competition may, ex officio or at the request of the third party,
initiate the proceedings to assess a particular agreement from paragraph (3) of this
Article, if it finds that the effects of such an agreement do not fulfil the conditions
laid down in Article 4, paragraph (3) of this Act.
Article 8
Minor Importance Agreements
(1) The provisions of Article 4, paragraph (1) of this Act shall not apply to minor
importance agreements.
(2) Agreements of minor importance are defined as agreements in which the parties to
the agreements and the controlled undertakings have an insignificant common
market share in the relevant market, under the condition that they do not contain
provisions that, in spite of the insignificant market share, lead to prevention,
restriction or distortion of competition.
(3) Minor importance agreements pursuant to this Act include the following:
a) if the total market share of the parties to an agreement in the relevant
market does not exceed 10 (ten) % in cases when the agreement is made
between the undertakings which are actual or potential competitors i.e.
when they operate on the same level of production or trade;
b) if the market share of the parties to an agreement in the relevant market
does not exceed 15 (fifteen) % in cases when the agreement is concluded
between the undertakings which are not competitors i.e. when they operate
on different levels of production or trade;
c) the agreements, where it is difficult to classify the agreement as either an
agreement between competitors or agreement between non-competitors
undertakings and where the threshold of 10 (ten) % share in the relevant
market shall apply.
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(4) The Council of Competition shall, in by-law act define more closely the conditions
and criteria which that minor importance agreements must comply.
Article 9
Dominant Position
(1) An undertaking has a dominant position in the relevant market of goods or services,
when due to its market power it can act in the relevant market considerably
independently of its actual or potential competitors, buyers, consumers or suppliers,
taking into account the market share of that undertaking in the relevant market,
market shares of its competitors in that market, as well as the legal and other
barriers to the entry of other undertakings in the market.
(2) An undertaking shall be presumed to be in a dominant position in the market of
goods or services, if it holds more than 40 (forty) % of the market share in the
relevant market of Bosnia and Herzegovina.
(3) More undertakings shall be presumed to be in a dominant position in the market of
goods or services, if the joint market share of two or more undertakings in the
relevant market of Bosnia and Herzegovina exceeds 60 (sixty) %.
(4) The Council of Competition shall, in a by-law act, define more closely a dominant
position category.
Article 10
Abuse of Dominant Position
(1) Any abuse of dominant position by one or more undertakings in the relevant market
shall be prohibited.
(2) The abuse of dominant position, in particular, relates to the following:
(a) direct or indirect imposition of unfair purchase or selling prices or other
trading conditions which restrict competition;
(b) limitation of production, markets or technical development to the prejudice
of consumers;
(c) application of dissimilar conditions to equivalent or similar transactions
with other parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of the contracts subject to acceptance by the other
party of supplementary obligations which, by their nature or according to
commercial usage, have not connection with subject of such contract.
Article 11
Decision on Abuse of a Dominant Position
(1) Pursuant to Articles 9 and 10 of this Act, the Council of Competition shall make a
decision which:
a) determine a dominant position and practices of the undertakings abusing
this dominant position and prevent, restrict or distort market competition,
as well as the duration of the abusive practices concerned;
b) forbids such abusive practices of the undertaking;
c) determine the terms and measures for the removal of adverse effects of
such practices;
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d) determines that the undertaking is to apply other appropriate measures and
the terms to ensuring competition among the undertakings in the relevant
market and deadlines for their implementation.
(2) The Council of Competition issues a decision from paragraph (1) of this Article
within a 4 (four) months period.
(3) If the Council of Competition does not issue such the decision within the time limit
stated in paragraph (2) of this Article and Article 41 of this Act, it shall be deemed
that there is no abuse of dominant position in the agreement in question.
(4) If the decision from paragraph (3) of this Article is not issued, upon a special
request of the undertakings, the Council of Competition shall, in accordance with
the procedure set by this Act, issue a decision stating that the agreement in question
does not abuse the dominant position
Article 12
Concentration
(1) Pursuant to this Act, a concentration shall be defined as:
a) Joining or merger of two or more previously independent undertakings or
parts of undertakings;
b) the acquisition of control or prevailing influence of one or more
undertakings over another undertaking, or over more undertakings or a part
of another undertaking, or the parts of another undertakings, in particular
by:
1) acquisition the majority of shares or share capital by means of purchase;
or
2) acquisition of the majority of voting rights; or
3) some other way, pursuant to the provisions of this Act which regulate
the establishment of economic subjects and their management.
c) the creation of a joint venture by two or more independent undertakings,
which operates on a long-term base as an independent undertaking.
(2) Acquiring control pursuant to paragraph (1) of this Article may be achieved by
holding rights, contracts or any other means by which one or more undertakings,
either solely or jointly, within the specific legal and factual circumstances, is
enabled the possibility to exercise predominant influence over one or more
undertakings.
(3) A concentration, pursuant to paragraph (1) of this Article, shall not be deemed to
arise when:
a) banks or other financial institutions or insurance companies, which, in their
ordinary activities of business, acquire shares on a temporary basis with a
view to resell them within 12 (twelve) months the latest, provided that they
within the above-mentioned time frame do not use shares for the purpose
of determining the competitive behaviour of that legal subject, i.e. do not
undertake the measures which distort, restrict or prohibit market
competition. The Council of Competition may, on party’s request, extend
the time limit if the aforesaid undertaking can prove that the transaction
concerned has not been reasonably possible within the period set;
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b) the control over an undertaking is acquired by an office-holder relating to
liquidation and insolvency practitioner, according to the laws on
bankruptcy and liquidation;
c) a joint venture is aimed to coordinate market activities between two or
more undertakings which remain independent; and therefore this joint
venture shall be assessed within the meaning of Article 4 of this Act.
Article 13
Prohibited Concentrations
There shall be prohibited the concentrations of undertakings that significantly impede
effective market competition, in the whole territory of Bosnia and Herzegovina or in a
relevant part of it, and particularly, that create a new or strengthen an existing dominant
position.
Article 14
Total Income for the Control of Concentration
(1) Pursuant to Article 12, paragraph (1) of this Act, the intended concentration is
obliged to be notified by parties to the concentration if the following conditions are
met:
a) the total income of all the undertakings-parties to the concentration, is
realized by the sale of goods and/or services in the global market amounts
to 100 (one hundred) million KM, according to balance sheet for the
financial year preceding concentration, and when at least one undertaking,
a party to the concentration, is registered in the territory of Bosnia and
Herzegovina (it acts in the domestic market of goods and/or services); or
b) the total income of each of at least 2 (two) parties to the concentration, is
realized by the sale of goods and/or services in the market of Bosnia and
Herzegovina amounts to at least 5 (five) million KM, according to balance
sheet for the financial year preceding the concentration, or if their common
share in the relevant market exceeds 40 (forty) %.
(2) The total income referred to in paragraph (1) of this Article shall not be calculated
taking into account the incomes of all the parties to the concentration realised in
their transactions.
(3) In case defined in Article 12, paragraph (1) of this Act, when the concentration
consists in association or merger of a part or parts of one or more undertakings,
irrespective whether or not those parts are constituted as legal entities, the
calculation of the income within the meaning of paragraph (1) of this Article, shall
include only the income deriving from the parts being the subject of the
concentration control.
(4) However, two or more transaction within the meaning of paragraph (3) of this
Article, conducted within two-year-period shall be considered to constitute one
concentration (more parts of an undertaking acquired successively) arising on the
date of the last transaction.
The Act on Competition
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Article 15
Total Income of Banks, Other Financial Institutions and the Insurance Companies
For the purpose of control of concentration in banks, other financial institutions and the
insurance companies, instead of the total turnover, the following shall be considered:
a) for legal persons which provide financial services, after deduction of the value
added and other taxes directly related to them, the sum of the following income
terms shall be used:
1) interest income and similar incomes;
2) income from securities:
2.1. income from shares and other variable yield securities whose profit is
changeable,
2.2. income from participating interests to undertakings;
2.3. income from shares in affiliated undertakings;
3) commissions receivable;
4) net profit on financial operations; and
5) other operating income.
b) for the insurance companies and the companies which perform re-insurance
activities, the value of gross premiums which shall comprise all amounts received
and receivable in respect of insurance contracts issued by or on behalf of the
insurance company, including also outgoing re-insurance premiums, and after
deduction of taxes and parafiscal contribution charged by reference to the amount of
individual premiums or the total volume of premiums.
Article 16
Notification of Concentration
(1) Any intended concentration, pursuant to Articles 12 and 14 of this Act, is obliged to
be notified by undertakings-parties to the concentration to the Council of
Competition within 8 (eight) days of the conclusion of the agreement, the
announcement of the public bid for shares or acquisition of controlling interest,
depending on what action takes place the first.
(2) A concentration in acquisition of control on the whole or parts of one or more
undertakings by another undertaking, shall be notified by the undertaking acquiring
control, and in all the other cases, the concentration shall be notified jointly.
(3) The Council of Competition may be published the data contained in the notification
on concentration in a daily newspaper and “Official Gazette of BiH”, containing
particularly the following:
a) names of the undertakings-parties to the concentration;
b) nature of the concentration; and
c) the economic sector within to which the concentration applies.
Article 17
Appraisal of Concentrations
In making the assessment of intended concentration, the Council of Competition shall
analyze the positive and negative effects, or whether that concentration creates or strengthens
dominant position which will result in the significant distortion of market competition, in
particular:
a) the structure of the relevant market;
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b) the effects of the concentration concerned on other actual and potential competitors;
c) the market position of parties in competition, their market shares, economic and
financial power;
d) alternatives available to suppliers and users;
e) economic, legal and other barriers to entry to the market;
f) level of internal and international competitiveness of the parties to concentration;
g) supply and demand trends for the relevant goods and/or services;
h) the trends of technical and economic progress;
i) consumer interests.
Article 18
Decision on Concentration
(1) When the Council of Competition finds that the implementation of the
concentration falls within the scope of Articles 12 and 14 of this Act, and raises
serious consequence in distortion of competition in the relevant market, it shall
make a decision on the initiation of proceedings.
(2) Following the completed proceedings, within the time limits laid down in Article 41
of this Act, the Council of Competition shall make one of the following decisions:
a) the concentration concerned is compatible;
b) the concentration concerned is incompatible;
c) the concentration concerned is conditionally compatible.
(3) By the decision from paragraph (2), item c) of this Article declaring a concentration
conditionally compatible, the Council of Competition shall impose the measures
and conditions and the time limits for the purpose of insuring their implementation.
(4) As a rule, the parties to the concentration of paragraph (2), item c) of this Article
may pursue the activities relating to the implementation of the concentration
concerned, as soon as the imposed measures, conditions and the time limits referred
to in paragraph (3) of this Article have been fulfilled, unless the Council of
Competition for a particularly legitimate reason decides otherwise.
(5) On the basis of information and documentation submitted with the notification on
intended concentration and the degree of probable infringement of competition rules
by such a concentration and the estimation that such a concentration does not have
negative effects, the Council of Competition may declare a decision within a 60
(sixty) days period.
(6) If the Council of Competition does not declare such a decision within the time
limits laid down in Article 41 of this Act, the concentration shall be deemed
compatible.
(7) Council of Competition may, ex officio or upon the request of a party, amend the
decision taken under paragraph (2) of this Article when the parties cannot fulfil
certain conditions imposed on them or if they infringe certain measures set forth in
the decision taken by the Council of Competition, owing to particular circumstances
which are not predicted or avoided and which are beyond their control.
(8) The implementation of concentration is not possible before the issuance of a
decision confirming the compatibility of the concentration concerned with rules laid
down in Articles 12 and 14 of this Act.
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(9) The provision of paragraph (8) of this Article shall not prevent the implementation
of public bid for shares which has been notified to the competent bodies, in
accordance with the legislation in force, as well as the activities related to the
acquisition of control over the undertakings which is regulated by other regulations.
Article 19
Measures Following the Implementation of Prohibited Concentration
(1) The Council of Competition shall, ex officio or upon the request of the third party
by means of a separate decision, propose all indispensable measures aimed to
restore free market competition in the relevant market and set the deadlines for their
implementation, in cases when:
a) the concentration concerned has been implemented contrary to the decision
of Council of Competition by which the concentration has been assessed as
incompatible with the means of Article 18, paragraph (2), item b) of this
Act;
b) the concentration concerned has been implemented without submittal of a
prior notification of concentration, and has as its effect the significant
impediment of market competition, pursuant to Article 13 of this Act.
(2) By a decision from paragraph (1) of this Article, the Council of Competition may,
in particular:
a) order for the shares or share capital acquired to be divested(transferred);
b) prohibit or restrict the realization of voting rights achieved by the shares or
share capital of the undertakings to the concentration, and end the joint
venture or any other form of control pursuant to Article 14 of this Act by
which a prohibited concentration has been put into effect.
III COMPETITION AUTORITY
Article 20
The Council of Competition
(1) The Council of Competition, as regards to this Act is an entity with a power to
implement the market competition protection.
(2) As a part of the Council of Competition, the Offices for Competition in Federation
of Bosnia and Herzegovina and Republic of Srpska act as the organizing units
outside the seat of the Council of Competition.
Article 21
Status of the Council of Competition
(1) The Council of Competition is an independent entity obliged to ensure consistent
implementation of this Act on the whole territory of Bosnia and Herzegovina and it
has the exclusive competence in making decisions on the presence of prohibited
competition activities in the market.
(2) The Council of Competition is a legal person and its seat is in Sarajevo.
(3) The funds for the duties and activities of competencies pursued by the Council of
Competition are provided from the Budget of institutions of Bosnia and
Herzegovina.
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Article 22
The Structure of the Council of Competition
(1) The Council of Competition consists of six members, and they are appointed for a
six-year term of office with the possibility of one more reappointment. The
members of the Council of Competition may not be relieved from the duty before
the term of office expired, except in cases set forth in Article 23 of this Act.
(2) Members of the Council of Competition shall be selected among recognized experts
in the certain professional fields and their status shall be equal to such of
administrative judges and incompatible with any direct or indirect, permanent or
periodical duty, with the exception of academic activities and the work in
professional and scientific bodies.
(3) The appointment of the members of the Council of Competition shall be as follows:
a) three members of the Council of Competition shall be appointed by
Council of Ministers of Bosnia and Herzegovina, with one member per
each of the three constituent nations;
b) two members shall be appointed by the Government of the Federation of
Bosnia and Herzegovina;
c) one member shall be appointed by the Government of the Republic of
Srpska.
(4) At the proposal of the Council of Competition, the Council of Ministers of Bosnia
and Herzegovina shall appoint one member as the President of the Council of
Competition for a one-year term without the possibility of reappointment during the
term of office of the member of the Council of Competition.
Article 23
Early Termination of the Term of Office
(1) The term of office of a member of the Council of Competition may terminate before
the end of the term only in the cases of:
a) death,
b) resignation,
c) revocation of the term at the proposal of the Council of Competition, for
the following reasons:
1) performance of an incompatible duty as set forth in Article 22,
paragraph (2) of this Act;
2) unexcused absence from three successive sessions of the Council of
Competition;
3) irresponsible, negligent or poor performance.
(2) In case of revocation of a member of the Council of Competition term of office
pursuant to the provisions of paragraph (1), item c) of this Article, the Council of
Competition shall make a decision without the vote of the member in question.
(3) In case of an early termination of the member of the Council of Competition term of
office, the bodies referred to in Article 22, paragraph (3) of this Act shall appoint
another member of the Council of Competition for the remaining term of office
period.
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Article 24
Functioning and Decision-making Methods of the Council of Competition
(1) Valid decisions of the Council of Competition shall be made only if minimum five
(5) members of the Council of Competition are present at the session.
(2) The Council of Competition takes decision with the consent of a majority of the
present members’ votes, whereby every decision must be voted upon by at least one
representative of each constituent nation. A member of the Council of Competition
may not abstain from voting.
(3) The President of the Council of Competition shall be authorized to:
a) manage the activities of the Council of Competition;
b) represent the Council of Competition;
c) convene and preside over the sessions of the Council of Competition, that
is to take place at least once a month;
d) draw up an agenda for every session which may be amended in a session at
the request of two members;
e) sign all decisions and other acts of the Council of Competition.
(4) The Council of Competition shall enact the Rule-book to define the working
methods, decision making process as well as the other issues related to the work of
the Council of Competition.
Article 25
Competence of the Council of Competition
(1) In the performance of its activities in accordance with this Act and the other
regulations which regulate the competition policy in Bosnia and Herzegovina, the
Council of Competition shall have the competence to:
a) make by-law acts based on the provisions of this Act and the other by-laws
necessary for its implementation;
b) regulate the definitions and calculation methods for specific activity areas,
such as banking, insurance, etc.;
c) regulate and provides interpretation of general and specific definitions of
the competition terms, as well as the calculation methods for the key
competition terms;
d) decide on requests for the initiation and conduct of proceedings;
e) make administrative acts to finalize a proceeding before the Council of
Competition;
f) provide opinions and recommendations on any aspect of competition,
either ex officio or at the request of the state authorities, undertakings or
associations;
g) make internal acts on the internal organization of the Council of
Competition, except for the Rule Book on the internal organization and
systematization which is being made with the consent of the Council of
Ministers of Bosnia and Herzegovina;
h) initiate the change and amendments to the Act on Competition;
i) propose to the Council of Ministers of Bosnia and Herzegovina the
decision on the amount of administrative taxes relating to the practices
before the Council of Competition.
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(2) In relation to the draft versions and the proposals of the act and the other regulations
in the areas which influence on the market competition and which are to be
submitted by the proposal makers, the Council of Competition shall provide opinion
on their consent to this Act.
(3) In the implementation of this Act and the other regulations in the field of
competition, the Council of Competition may establish the expert and advisory
bodies that may assist in the decision making process.
(4) The Council of Competition shall cooperate with international and national
organizations and institutions in the area of competition, and, on this basis, it may
provide and request all the data and information related to factual and legal issues,
also including confidential data. In relation to the exchange of confidential data,
legitimate business interests of the undertakings in question must be protected in
accordance with the regulations.
(5) The Council of Competition shall prepare the report on performance and the annual
report which is to be submitted to the Council of Ministers of Bosnia and
Herzegovina for approval. The Council of Competition shall publish the annual
report in public.
IV DECISION-MAKING PROCEDURE
Article 26
Application of Rules Regulating Proceedings
In the proceedings before the Council of Competition, unless regulated differently by this
Act, the Act on Administrative Procedure of Bosnia and Herzegovina (“Official Gazette
BIH”, No. 29/02) shall be applied.
Article 27
Initiation of the Proceedings
(1) The Council of Competition initiates proceedings pursuant to this Act, ex officio or
at a party's request.
(2) The Council of Competition shall initiate proceedings, ex officio if it finds that the
practice concerned is likely to cause considerable prevention, restriction or
distortion of competition.
(3) The request for initiation of the proceedings before the Council of Competition
may, in accordance with the provisions of this Act, be submitted by:
a) any legal and natural person having a legal or economic interest;
b) a chambers of commerce, associations of employers and entrepreneurs;
c) a consumer protection associations;
d) an executive power bodies in Bosnia and Herzegovina.
Article 28
Request for the Initiation of the Proceedings
(1) A request for initiation of the proceedings before the Council of Competition must
contain:
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a) the name of the seat of the legal person concerned, or the name and
surname and residence of the authorized natural person - the applicant;
b) relevant data by means of which it may be established against whom the
request is being made;
c) description of facts of the case, practice and circumstances which led to the
applicant’s request.
(2) Together with the request for initiation of the proceedings, the applicant may
enclose, in particular:
a) Relevant documents and other available evidence which prove the
allegations laid down in paragraph (1), item c) of this Article;
b) evaluation of the relevant market;
c) evaluation of the market share of the applicant and the market share of the
competitors in the relevant market;
d) court record certificate, work permit or the other relevant documents
proving the applicant’s registration ;
e) the annual report, financial reports and the other accounting documents of
the applicant for financial year the proceeding the submittal of the request.
(3) The day of the receipt of the request is the day on which the Council of Competition
receives the complete and adequate data referred to in paragraph (1) of this Article.
The Council of Competition shall, by delivering the confirmation in written form,
inform the applicant about the receipt of the complete and adequate request.
Article 29
Application for Individual Exemption of the Agreement
(1) Together with the application for individual exemption of the agreement, the
following documents are to be enclosed:
a) original or certified copy of the agreement, i.e. the certified translation of
an agreement, if the official text of the agreement is not written in the
official languages in use in Bosnia and Herzegovina;
b) court record certificate, work permit and the other relevant documents
proving the applicant’s registration;
c) the annual report, financial reports and the other accounting documents for
the financial year which proceeds the conclusion of the agreement
concerned(all of the parties to the agreement);
d) other relevant data which the Council of Competition shall deem
necessary.
(2) The following documents may be enclosed to the application for individual
exemption of the agreement:
a) evaluation of the relevant market;
b) evaluation of the market share of parties to the agreement and the market
share of their competitors in the market.
(3) The Council of Competition shall, by delivering the confirmation in written form,
inform the applicant about the receipt of the complete and adequate request.
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Article 30
Notification of Intended Concentration
(1) Together with the notification of the intended concentration, the documents to be
enclosed are:
a) the original or certified copy of the documents, proving the legal grounds
for the concentration; or certified translation, if the official text of the
agreement is not in the official languages in use in Bosnia and
Herzegovina,
b) annual financial reports for the parties to the concentration for the financial
year proceeding the concentration;
c) the other data regulated by the regulation on concentration.
(2) The notifying party shall obligatory state in the application whether she/he plans to
submit request for appraisal of concentration to some other body authorised to
assess concentration outside the territory of Bosnia and Herzegovina or whether the
notifying party has already submitted such a request, and deliver the decision of this
body if the decision thereof has already been rendered.
(3) The Council of Competition shall, by delivering the confirmation in written form,
inform the applicant about the receipt of the complete and adequate request.
Article 31
Amendment to the Request and Waiving the Request
(1) When the applicant requesting for the institution of the proceedings before the
Council of Competition does not enclose and submit all data pursuant to this Act,
the Council of Competition shall ask for additional relevant information from the
applicant.
(2) If the applicant fails to act in accordance with request of the Council of Competition
stated in the paragraph (1) of this Article, within eight (8) days, it shall be deemed
that the applicant has waived the request. In specific circumstances, in the case of
justifiable reason, at the party’s request, the Council of Competition may extend the
time limit for additional 15 (fifteen) days.
Article 32
Initiation of the Proceedings
(1) The Council of Competition shall make the resolution on instituting the proceedings
ex officio or upon the receipt of request pursuant to the provisions of this Act. The
resolution on institution of the proceedings shall contains in particular:
a) reference to the related case;
b) provisions of this Act pursuant to which the proceedings have been
instituted;
c) the request for submittal of the relevant documentation.
(2) The Council of Competition is obliged to made the resolution on instituting the
proceedings within 15 (fifteen) days upon the receipt of complete and orderly
request.
(3) The appeal against the resolution on instituting the proceedings is not allowed.
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Article 33
Response to a Request
(1) With the exception of the data which is considered to be a business secret pursuant
to Article 38 of this Act, the Council of Competition shall deliver copies of the
resolution on the institution of the proceedings and the request for the institution of
the proceedings referred to in Articles 27 and 28 of this Act, to the party against
which the procedure has been made and to the persons established to have the status
of a party in the proceedings.
(2) The response shall be provided within a time limit set by the Council of
Competition in each individual case, which may neither be shorter than 8 (eight)
days nor exceed 30 (thirty) days.
(3) Within the determined time limit, a party is obliged to supply the Council of
Competition with the required response and the other information and documents
relating to the request.
(4) Without prejudice to paragraphs (2) and (3) of this Article, in the case of justifiable
reasons, a party may make a request for the time limit to be extended for submitting
its response. The Council of Competition may approve the extension of the time
limit which may not exceed 30 (thirty) days.
(5) If a party does not act according to the request and the time limit set by the Council
of Competition, or if it declares that it is not able to act according to the request, the
Council of Competition shall take all necessary measures pursuant to Chapter V of
this Act whereas the facts and circumstances relevant to the proceedings shall be
established ex officio on the ground of the Council of Competition own findings,
data and documents available.
Article 34
Carry out a Proceedings
(1) After the resolution on instituting the proceedings is made, the Council of
Competition shall appoint a responsible member of the Council of Competition for
managing the proceedings and a responsible official for carrying out the
proceedings (hereinafter: an official).
(2) An official shall be obliged to follow the instructions of a responsible member of
the Council of Competition pursuant to paragraph (1) of this Article and to submit
regularly the information and the documents collected in the course of the
proceedings.
(3) Responsible member of the Council of Competition, an official and the other staff
who provide professional support in the course of the proceedings, perform official
duties on the basis of written authority or ordinance of the Council of Competition.
The ordinance shall contain, in particular, the subject and the purpose of the
proceedings and the fines provided for in case of the obstruction or in case of
intentional delivery of false, incorrect and misleading information.
(4) Responsible member of the Council of Competition, an official person and the other
staffs are obliged to show written authorization or ordinance, issued by the Council
of Competition, before they start with the carrying out of their official activities.
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Article 35
Collection of Data
(1) In the course of the proceedings, at the request of the Council of Competition, the
official person, parties and other legal and natural persons are obliged to:
a) submit all the required date such as written statements and documents,
disregarding the media they are announced in;
b) ensure direct access to all business premises, movable and immovable
property, business books, databases and other documents, without being
obstructed by business, state or technical secret;
c) submit all the necessary data from the other persons which could
contribute to solving and explaining certain issues on prevention,
limitation or distortion of market competition;
d) ensure the carrying out of all other duties considered necessary for the
purpose of stating all the relevant facts to the procedure.
(2) If there is a reasonable doubt that any of the parties to the proceeding or other
persons hold in possession documents or other instruments relevant to the
establishing of the substantive facts in the proceedings, and they do not want to
produce these documents for inspection, the competent court shall be requested to
issue a written warrant ordering the search of an apartment or premises and the
other persons as well as the seizure of items and documents in possession of the
parties or other persons.
(3) The request from paragraph (1) of this Article must contain the legal basis, subject
matter and purpose of the request, limitation period for implementation of the
request and the penalties for refusal to act according to this request which are
regulated by this Act.
Article 36
Burden of Proof
(1) In any request related to the application of the provisions on competition stated in
this Act, the burden of proof shall rest on the party which submits the request for
initiation of the proceedings.
(2) An undertaking or association of undertakings having the operating profit or
exempted by Article 4, paragraph (3) or Articles 5 and 7 of this Act, shall bear the
burden of proving.
Article 37
Rights of Access to Document
(1) Parties to the proceedings carrying out before the Council of Competition have the
right of access to case files.
(2) At a party's request, the Council of Competition shall make a copy of record or
single documents delivered by the other parties.
(3) Request for access to the documents stated in paragraph (1) of this Article shall be
submitted in written form to the Council of Competition. The Council of
Competition shall set the date for the inspection of documents within eight (8) days
period from the day when the request was received.
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(4) Without prejudice to paragraph (1) or (2) of this Article, the documents or draft of
the decisions of the Council of Competition, official statement and protocols from
the sessions of the Council of Competition, internal instructions and notes on the
case, as well as the other documents considered an official secret pursuant to Article
38 of this Act may neither be inspected nor photocopied.
Article 38
Professional/Official Secrecy
(1) The members of the Council of Competition, the official persons and the other staff
are obliged to keep official secret, irrespective of the way they come to know it, and
the obligation of the official secret shall also continue to be in effect after expiry of
their engagement with the Council of Competition.
(2) Pursuant to paragraph (1) of this Article, official secret is particularly considered to
be:
a) all which is defined to be an official secret by the Act or other regulations;
b) all which is defined, on the basis of the law and other documents to be an
official secret or business secret of parties in the procedure or other
persons;
c) all which is particularly defined by the parties in the procedure or other
persons as business secret;
(3) Without prejudice to paragraph (1) and (2) of this Article, data and documents
which have been made accessible to the general public in any way, or published to
be available to the general public pursuant to specific regulations, shall not be
considered an official secret.
Article 39
Oral Hearing
(1) It is obligatory to hold the oral hearing in all cases with parties of contrary interest.
The oral hearing is, as a rule, public.
(2) Without prejudice to the paragraph (1) of this Article, if the Council of Competition,
after it has received the written statement of the party against which it has started
the proceedings, decides that the facts of the case between the parties are beyond
dispute and that there are no other hindrances preventing the decision to be made,
and if it is in the public interest, the Council of Competition may make a decision
without calling for the oral hearing.
(3) An oral hearing is to be conducted in each case when it is deemed useful.
(4) If any of the summoned parties, or their attorneys, fails to appear at the first oral
hearing in the proceedings, as a rule, the oral hearing shall be postponed and a new
one shall be called.
(5) If any of the summoned parties in the proceedings, or the person authorized by the
parties, fails to appear at the following oral hearing convened in accordance with
the provisions of paragraph (4) of this Article, as a rule, the Council of Competition
shall not convene another oral hearing, but shall make its decision on the basis of its
findings, available data and documents.
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Article 40
Interim Measures
(1) The Council of Competition may decide on interim measures on the basis of the
preliminary determined infringements where it deems that particular activities of
restriction, prevention or distortion of competition, with the meaning of this Act,
represent a risk by creating a direct restraining influence on individual undertakings,
or on particular sectors of the economy or consumers′ interests.
(2) In its decision on interim measures referred to in paragraph (1) of this Article, the
Council of Competition shall suspend all activities, insist on meeting of particular
conditions or impose other measure reasonably necessary to eliminate prevention,
restriction or distortion of market competition. As a rule, the duration of the interim
measures may not exceed the period of 3 (three) months, but may be prolonged if
this proves to be necessary and reasonable.
Article 41
Time Limits Period
(1) The Council of Competition is obliged to issue a final decision within the time limit
of a 6 (six) months following the day when the resolution authorizing the institution
of the proceedings is adopted.
(2) The Council of Competition may extend the time limit for making the final decision
referred to in the paragraph (1) of this Article and Articles 5 and 11, for a
subsequent period of three (3) months in cases where it is necessary to carry out
additional expertise or analyses defining the state of facts and examination of
evidences, or where delicate economic branches or markets are concerned, about
which the Council of Competition is obliged to inform in written form the parties to
the proceedings.
Article 42
Administrative Acts
Within the meaning of Article 25 of this Act, the Council of Competition shall, in particular,
make decisions in which it:
a) assesses the compliance of the agreement with the provisions of this Act;
b) authorizes the exemption of an agreement pursuant to Article 5 of this Act;
c) determines the existence of abuse of a dominant position pursuant to Articles 10 and
11 of this Act;
d) estimates the compatibility of concentration pursuant to Article 18 of this Act;
e) orders interim measures pursuant to Article 40 of this Act;
f) determines particular measures to be taken in order to restore efficient competition
in cases of prohibited concentrations, pursuant to Article 18 of this Act;
g) makes other decisions and resolutions pursuant to the provisions of this Act.
Article 43
Final Decisions of the Council of Competition
(1) Upon the completion of the proceeding, a responsible member of the Council of
Competition shall submit to the Council of Competition a report on the
implemented proceeding together with the proposals to the decision.
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(2) At a session, the Council of Competition makes the final decision on whether an
infringement of this Act has been committed.
(3) The final decision referred to in paragraph (2) of this Article includes
recommendations and/or sanctions and other measures to the parties in proceedings.
(4) Before the final decision making, the Council of Competition may inform the
parties in written form on the content of the decision which shall be made.
(5) At the request of a party or ex officio, the Council of Competition may re-examine
its final decision in the following cases:
a) where there has been a material change in any of the facts on the basis of
which the decision was made and which significantly have influence on the
market competition;
b) where the parties concerned act contrary to the obligations determined by
the Council of Competition;
c) where the decision was based on incomplete, incorrect and misleading
information provided by the parties.
(6) The final decision of the Council of Competition shall be issued without prejudice
to potential criminal and/or civic responsibility as to which a decision is taken by
the competent courts.
(7) In favour of the assessment of the case in question, the Council of Competition may
apply the practice of the European Court of Justice and the decisions of the
European Commission.
Article 44
Publication of Decision
(1) Decision of the Council of Competition shall be delivered to the parties to the
proceedings and it shall be published in the Official Gazettes of Bosnia and
Herzegovina, in the official gazettes of the entities and Brčko District Bosnia and
Herzegovina.
(2) The decisions laid down in paragraph (1) of this Article shall contain the names of
the parties to the proceedings and the main decision content, including the set
penalties. The Council of Competition shall take account of the legitimate interests
of undertakings in relation to the protection of their business secrets.
Article 45
Implementation of Decisions
Decisions made by the Council of Competition are legally binding throughout the territory of
Bosnia and Herzegovina and effective following the day of their publication.
Article 46
Judicial Protection
(1) The decision of the Council of Competition is final.
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(2) The injured party to the proceedings may file an administrative dispute before the
Court of Bosnia and Herzegovina, within 30 (thirty) days from the date of receipt or
the publication of such decision.
Article 47
Enforced Execution of Decisions
(1) The Council of Competition may request the legal assistance from the competent
bodies as to the enforced execution of such decision if the parties to a proceeding
fail to implement or execute a decision.
(2) When requesting the assistance, the Council of Competition has to specify the type
of the measures required for such enforced execution.
(3) When implementing the enforced measures, the competent bodies are obliged to act
in conformity with the request of the Council of Competition and adhere to the
measures indicated in the request.
V PENALTY PROVISIONS
Article 48
Fines for Severe Infringements of this Act
(1) The undertakings or natural person, shall be fined at most 10 (ten) % of value of its
total annual income earned in the financial year preceding the year when the
infringement is committed, if it:
a) concludes a prohibited agreement or participate in any other way in an
agreement that caused prevention, restriction or distortion of the
competition in the sense of Article 4 of this Act;
b) abuses a dominant position as regulated in the provisions laid down in
Article 10 of this Act;
c) participates in the prohibited concentration of undertakings, pursuant to the
provisions of Article 13 of this Act;
d) fails to comply with the decisions made by the Council of Competition
pursuant to Article 42 of this Act.
(2) The responsible persons of the undertakings shall be fined pursuant to paragraph (1)
of this Article, an amount ranging from 15,000 KM to 50,000 KM.
Article 49
Fines for Other Infringements of this Act
(1) An undertaking shall be fined at most 1 (one) % of the value of its total annual
income earned in the preceding business year , if it:
a) acts contrary to the request, in sense of Articles 33 and 35 of this Act, by
delivering incorrect and misleading information or not providing the
necessary information within the set time limit ;
b) fails to notify on the proposed concentration pursuant to Article 16 of this
Act;
c) submits incorrect and misleading information in the process of
concentration appraisal, pursuant to Articles 16, 17 and 18 of this Act;
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d) fails to comply with the decision or resolution of the Council of
Competition pursuant to Article 42, paragraph (1), item g) of this Act or
fails to act according to the written order of the competent court.
(2) The responsible parties of the undertakings concerned shall be fined pursuant to
paragraph (1) of this Article, an amount ranging from 5,000 KM to 15,000 KM.
Article 50
Periodic Penalty Payment
(1) The Council of Competition may impose on the parties the periodic penalty
payments not exceeding 5 (five) % of the average daily income in the preceding
year.
(2) The forms of periodic penalty payment shall be more closely define in by-law act of
the Council of Competition.
Article 51
Fines for Persons not Parties to the Proceedings
The Council of Competition may impose fines on legal and /or natural persons that are not
parties to the proceedings, in case they fail to act upon the request or order of the Council of
Competition pursuant to Articles 33 and 35 of this Act, and in particular:
a) for legal persons, an amount ranging from 5,000 KM and 15,000 KM;
b) for responsible persons of the legal persons, an amount ranging from 1,500 KM to
3,000 KM;
c) for natural persons, an amount ranging from 1,500 KM and 3,000 KM.
Article 52
Fixing of the Amount of the Fine
In fixing the amount of the fine, the Council of Competition shall take into consideration
both the gravity and the duration of the infringement of this Act.
Article 53
Payment of Fines
(1) Fines pursuant to Articles 48 and 49 of this Act relate to the associations of
undertakings.
(2) When a fine is imposed on an association of undertakings, taking account of the
income of its members, and the association is not solvent, the association is obliged
to call for contributions from its members to cover the amount of the fine.
(3) When such contributions have not been made to the association within a time-limit
defined by the Council of Competition, any of the undertaking-member of the
association may be required to pay the fine.
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Article 54
Leniency Policy
(1) The Council of Competition may grant immunity from any fine or reduce of a fine
to an undertaking for the violation of the provisions of Article 4 of this Act, if, in
the course of proceedings, an undertaking willingly provides the decisive evidence
important for finding an infringement, or if it ends its involvement in the prohibited
activities at the time of submitting of evidences.
(2) If an undertaking realizes voluntary cooperation pursuant to paragraph (1) of this
Article, the Council of Competition may, fully or partially, grant the undertaking
immunity from any fine.
(3) Immunity from any fine or reduce of a fine pursuant to paragraphs (1) and (2) of
this Article shall be granted by the Council of Competitions on the condition when:
a) submitting of evidence happens at the time when the Council of
Competition has no information required for the institution of proceedings
ex officio;
b) an undertaking effectively cooperates to the Council of Competition during
the whole time of the proceedings;
c) at the time of submitting of evidence, an economic subject ends its
participation in an agreement, decision or concerted practice and does not
compel other economic subjects to participate therein.
(4) Further procedure of granting immunity from any fine or reduce of a fine shall be
more closely defined in the by-law act issued by the Council of Competition.
Article 55
Limitation Periods for the Imposition of Penalties
(1) The limitation period for the imposition of fines pursuant to Article 48 of this Act
shall begin to run after the expiry of a 5 (five) year period, while the limitation
period for the imposition of fines pursuant to Articles 49 and 50 of this Act shall
begin to run after the expiry of a 3 (three) year period.
(2) The limitation period shall also begin to run on the day on which the infringement is
committed. In the case of continuing or repeated infringements of the Act,
limitation time shall begin to run on the day on which the infringement ceases.
(3) Any action taken by the Council of Competition for the purpose of carrying out
investigation or proceedings in respect of an infringement shall interrupt the
limitation period for the imposition of fines or periodic penalty payments. The
limitation period shall be interrupted with effect from the date when at least one
undertaking or association of undertakings–parties to the infringement is notified on
the action. Actions which interrupt the running of the limitation period shall include
in particular the following:
a) written requests for information from the Council of Competition;
b) written authorizations to conduct proceedings issued to its official by the
Council of Competition;
c) the initiation of proceedings by the Council of Competition;
d) notification on resolution of the Council of Competition authorizing the
initiate of the proceedings.
The Act on Competition
34
(4) The interruption of the limitation period shall relate to all the undertakings which
have participated in the infringement.
(5) The limitation period concerned shall be restarted after any interruption. The
limitation period shall expire at the latest on the day when the double time elapse
without imposed a fine or a periodic penalty payment by the Council of
Competition.
Article 56
Limitation Period for the Enforcement of Penalties
(1) The limitation period for the enforcement of fines pursuant to Articles 48, 49 and 50
of this Act shall begin to run after the expiry of a 5 (five) year period.
(2) The limitation period shall begin to run on the day on which the decision becomes
final.
(3) The limitation period for the enforcement of penalties shall be interrupted:
a) by notification of a decision on adjustment of the original amount of the
fine or periodic penalty payment or rejection of the request for adjustment;
b) by any action of the Council of Competition designed to enforce payment
of the fine or periodic penalty payment.
(4) After any interruption of the limitation period, the time shall be restarted.
(5) The limitation period for the enforcement of penalties shall be suspended for as long
as:
a) the time to pay is allowed;
b) the enforcement of payment is suspended pursuant to a decision of the
competent court.
VI TRANSITIONAL AND FINAL PROVISIONS
Article 57
Transitional Period
(1) Offices for Competition and Consumer Protection (hereinafter: OCCP) established
on the basis of the Act on Competition (Official Gazette BIH, No 30/01) shall
perform the tasks of the Office for Competition established by this Act, until 31st
December 2005.
(2) As of January 1st 2006, the competencies of the Offices for Competition and
Consumer Protection (OCCP) within the scope of consumer protection shall start to
be exercised within the Council of Competition, pursuant to Article 20 of this Act.
(3) As of January 1st 2006, the competencies of the Offices for Competition and
Consumer Protection (OCCP) within the scope of consumer protection shall start to
be exercised by the respective bodies established by the regulations on consumer
protection.
(4) As of January 1st 2006, the Council of Competition shall take over the employees of
the Offices for Competition and Consumer Protection (OCCP) who are carrying out
duties within the scope of competition, pursuant to the Law on Civil Service in the
institutions of Bosnia and Herzegovina (Official Gazette BIH, No 19/02, 35/03,
The Council of Competition
35
4/04, 17/04, 26/04 and 37/04), as well as the equipment and the other means
pertaining to them.
(5) The status of the employees of the Offices for Competition and Consumer
Protection (OCCP) who are carrying out the duties within the scope of consumer
protection shall be defined by the regulations regulating the duties within the scope
of the consumer protection.
(6) The number of employees in the Offices for Competition and Consumer Protection
(OCCP), who are carrying out the duties within the scope of competition until 31st
December 2005, may not be increased without the consent of the Council of
Competition.
Article 58
Enactment of By-laws
The Council of Competition shall adopt the regulations and other by-law acts related to the
implementation of the provisions of this Act within six (6) months starting from the entry
into force of this Act.
Article 59
Previously Initiated Proceedings
The proceedings initiated before the Council of Competition pursuant to the provisions of the
Act on Competition (“Official Gazette BIH”, No 30/01) and not completed until the day of
entry into force of this Act, shall be continued pursuant to the provisions of this Act.
Article 60
Income from Taxes and Fines
Taxes and fines imposed under the decisions of the Council of Competition represent the
income of the Budget of Bosnia and Herzegovina institutions.
Article 61
Announcement
The Act on Competition (“Official Gazette BIH”, No 30/01) shall cease to be in effect on the
first day of application of this Act, except the provisions related to the competencies of the
Offices for Competition and Consumer Protection which are to be applied until 31st
December 2005.
Article 62
Entry into Force
This Act shall enter into force on the eighth day after the publication in the “Official Gazette
Bosnia and Herzegovina” and shall also be published in the official gazettes of the Entities
and Brčko District of Bosnia and Herzegovina.
Chairman Chairman
of the House of Representatives of the House of Peoples
of BIH Parliamentary Assembly of BIH Parliamentary Assembly
Sefik Dzaferovic Goran Milojevic
REGULATION ON THE DEFINITION OF
A RELEVANT MARKET
“Official Gazette of BiH”, No. 18/06
The Council of Competition
39
Pursuant to Article 25, paragraph (1), item a) and Article 3, paragraph (5) of the Act on
Competition (“Official Gazette of BiH”, No. 48/05), the Competition Council, in its 22nd
session held on 24 January 2006, has adopted
REGULATION ON THE DEFINITION OF A RELEVANT MARKET
I GENERAL PROVISIONS
Article 1
Subject Matter
This Regulation shall determine the method, criteria and the procedures for defining the
relevant market, pursuant to Article 3 of the Act on Competition (hereinafter: the Act), as the
basis for the calculation of market shares of undertakings in the market, for the purpose of
enforcing the Act.
Article 2
Relevant Market
(1) A relevant market is defined as a market of certain products which are the subject of
business operations, performed by the undertakings in a defined geographic
territory.
(2) A relevant market shall be defined separately for each case concerned.
Article 3
Definition of a Product
According to this Regulation, the term “product”, in broader sense, comprises products
and/or services, intellectual property rights, technological and other forms (hereinafter: a
product) that become available at a market.
II RELEVANT PRODUCT MARKET AND RELEVANT GEOGRAPHIC MARKET
Article 4
Relevant Product Market
A relevant product market comprises all products which consumers and/or users consider
mutually interchangeable, under acceptable conditions, having in mind the product’s main
characteristics, quality, general use, method of use, conditions for sale and prices.
Article 5
Relevant Geographic Market
(1) The relevant geographic market comprises the whole or a significant part of the
territory of Bosnia and Herzegovina, in which the undertakings are involved in the
sales and/or purchase of relevant product under equal or sufficiently homogeneous
conditions and which can be distinguished from neighbouring geographic markets
because the conditions of competition are appreciably different in those areas.
(2) As an exception from paragraph (1) of this Article, in special cases, a relevant
geographic market may be defined at the international level.
Regulation on the Definition of a Relevant Market
40
(3) Geographic areas, in which the conditions of the market competition are extremely
different, shall not be taken into consideration in defining the relevant geographic
market.
Article 6
Criteria for Definition of a Relevant Market
(1) For the purpose of the relevant market definition, the following criteria are to be
particularly taken into account:
a) demand substitutability for the particular product,
b) supply substitutability for the particular product,
c) existence of potential market competitions, and
d) barriers to entry into the relevant market.
III CRITERIA FOR ASSESSMENT OF DEMAND SUBSTITUTION
Article 7
Criteria for Assessment of Demand Substitution
(1) The assessment of demand substitutability of specific product shall refer to the
determination of products which are viewed by customers as mutually
interchangeable, pursuant to Article 4 of this Regulation.
(2) To determine whether demand substitutability for the specific product exists the
time period that suppliers need to adjust to normal supplying the market with a
substitute product shall be taken into account.
(3) The prevailing market price of the particular product shall be taken into account in
the process of the relevant market assessment, except in case when the prevailing
market price is determined in absence of effective competition.
In case when a market price is determined in absence of another competitive
product, it shall be taken into account the fact whether the price has already been
increased due to lack of competition.
(4) In assessment of the demand substitutability of certain product, the consumers
(buyers) who are not able, despite of the change in the price of relevant product, to
accept the substitute product (substitute) shall be taken into consideration.
Article 8
Substitutable Product (Substitute)
(1) Substitute product is a product which, due to its characteristics, price, intended use
and customers′ (buyers′) habits, may substitute another (relevant) product and
therefore satisfy the equivalent needs of a consumer (buyer).
(2) The substitutability of the certain product (substitute) can be foreseen logically
when a significant number of consumers (buyers) of the relevant product switch to
another product, or another supplier of the equal (similar) product, in response to a
hypothetically small, in the range from 5% to 10%, but permanent price increase of
the relevant product.
The Council of Competition
41
(3) The assessment that one product is viewed as a substitute product (substitute) is
taken from the consumer’s/ buyer’s point of view.
(4) Information given by real or potential buyers (consumers) or other relevant
institutions may be considered within assessment of the possible substitutability of
the certain product.
(5) Information about specific product substitutability may be, particularly, required
from interested market participants, their actual and potential competitors, and
business associations in the relevant market, institutions for consumer protection
and other institutions.
IV SUPPLY SUBSTITUTABILITY
Article 9
Supply Substitutability for the Specific Product
Supply substitutability for a specific product means the ability of the producer (distributor)
to, in a case of increase in price of the relevant market, switch to production or distribution of
a substitute product in a short time, without incurring significant additional costs or risks.
Article 10
Assessment of the Potential Competition
(1) To estimate the existence of potential market competition, it is necessary to
determine its level and conditions in the relevant market under which the new
market participants, that is the undertakings may enter into the relevant market.
(2) The existence of potential competition pursuant to paragraph (1) of this Article,
shall be determined on the basis of foreseeable changes of the existing market
conditions, particularly taking into account the following criteria:
a) structure of relevant market;
b) behaviour of existing participants in a relevant market and influence on
other actual and potential market participants;
c) economic and financial powers of the market participants and their ability
to choose suppliers and users;
d) economic, legal and other barriers to entry into the relevant market;
e) trends in the market in respect of supply, demand, economic and technical
development of a relevant product;
f) the market share indicators among market participants (national and
international);
g) analysis of price changes and price discrepancies at national and
international level.
(3) In special cases, some other objectives for entry into the relevant market (e.g.
humanitarian goals and similar) may be considered.
Article 11
Barriers to Entry into the Relevant Market
(1) Barriers to entry into the relevant market (relevant product market, relevant
geographic market) comprise all obstacles which limit and restrict free access to the
market to potential market participants (undertakings).
Regulation on the Definition of a Relevant Market
42
(2) Barriers to entry into the relevant market are in particular:
a) legal barriers, law regulations, by-law acts and administrative regulations
(e.g. duty and other import taxes, quantitative and value restrictions, policy
on taxes and prices, state monopoly, technical regulations, norms and
standards, and likewise);
b) economic barriers, especially:
1) structural barriers (initial capital, capital investments, patents, know-
how, economy of scale, transportation costs, product differentiation,
supply and demand level, and similar barriers);
2) strategic barriers for access to a relevant market created by the existing
participants, whose behaviour and activities preclude and prevent the
other potential market participants to enter to the relevant market.
Article 12
Definition of Relevant Market in Specific Cases
(1) A relevant product market may be defined for a specific product or a group of
products, depending on the structure of the relevant market, customers' habits and
needs of the specific analysis.
(2) In order to define a relevant market pursuant to paragraph (1) of this Article, the
markets of complementary products may be analyzed, especially when the price
rising of any of the product (secondary product, that is a secondary market), which
is the constituent of the complementary product, directly affects the price rising of
the relevant product (primary product, that is a primary market).
Article 13
Definition of Relevant Geographic Market in Specific Cases
In reference to Article 5, paragraph (2) of this Regulation, the relevant geographic market
shall be defined particularly as it follows:
a) when one product is being bought by particular group of buyers (consumers) or
undertakings with their residence or seat in Bosnia and Herzegovina from natural or
legal persons or their associations or undertakings with their residence or seat
outside the territory of Bosnia and Herzegovina (e.g. when, due to the transportation
costs, the relevant products in the final borders of the market determined in the
Article 5, paragraph (1) of this Regulation, are not mutually interchangeable),
and/or
b) when undertakings from Bosnia and Herzegovina sell the products to buyers,
natural or legal persons or their associations with their residence or seat outside the
territory of Bosnia and Herzegovina (e.g. when undertakings from Bosnia and
Herzegovina express interest in international public bids).
Article 14
Market Share
(1) The market share for the undertakings operating in a particular relevant market shall
be calculated on the basis of the market share of production and/or sales of the
relevant product in the relevant market within a determined period of time.
The Council of Competition
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The market share is a corresponding size standard of each individual undertaking in
the relevant market.
(2) The market share under paragraph (1) of this Article, shall be calculated on the basis
of total value and production and/or sales volume (expressed in the total amount of
corresponding units and value measures) of relevant product.
Additional calculation criteria shall be the utilization of data on production
capacities of an individual undertaking in comparison with total capacities utilized
in production of a relevant product.
(3) Other indicators (quantity and market value of natural resources reserves possessed
or controlled by undertaking) are used for determination of market share of the
participants or undertaking in the market.
(4) The time period referred to in paragraph (1) of this Article, is determined on annual
basis or, according to needs, it may be determined for a shorter or a longer time
period (monthly, quarterly) depending on the products and on data that is to be
collected.
(5) The total time limit for collection of the market share data, in a sense of this Article,
may not exceed 5 (five) years.
(6) The selection of methods and criteria for determination of a market share for each
case concerned depends on the availability, accuracy and reliability of existing data.
Article 15
Calculation of Market Shares
(1) For the purpose of calculating the market shares, all available data and
documentation shall be used, and in particular: data and information supplied by
undertakings-parties to the proceedings and others, different associations,
employers' associations, agencies for statistics, the Central Bank of Bosnia and
Herzegovina, banking agencies, respective ministries and other state administration
authorities, regulatory bodies, independent institutions involved in market
researches, local and regional self-government units and data collected by the
Competition Council.
(2) When it appears to be necessary, the data may be collected through the responses to
surveys done among customers and/or undertakings.
Article 16
Total Annual Income
(1) The total annual income of an undertaking shall be calculated on the basis of sales
of products as presented in the final account in the last completed year.
(2) The total annual income shall not include turnover realized within specific
undertaking or within the group of undertakings under the joint control.
(3) The calculation of total annual income accomplished by sales of a relevant product
in a geographic market includes the undertakings that directly or indirectly, legally
or factually, have decisive influence on management, particularly if they:
Regulation on the Definition of a Relevant Market
44
a) posses more than half of shares in shares capital or stocks;
b) can exercise more than half of voting rights;
c) have the right to appoint more than half of total number of members of
managers and members of directors and supervisors board;
d) have, in any other way, the right to manage business operations of
controlled undertaking.
(4) For the purpose of determination of total income in banks, other financial
institutions and insurance companies, instead of total annual income the following
parameters shall be taken into account:
a) as for the legal persons that provide financial services, after the deduction
of direct taxes related to them, the following sum of incomes shall be
added up:
1) interest income and similar income;
2) securities income;
3) claims for commission;
4) net profit generated from financial operations;
5) other income generated from business operations.
b) as for insurance and re-insurance companies, the value of gross premiums
that includes amounts paid and outstanding amounts related to insurance
contracts concluded by or on behalf of the insurance companies, including
re-insurance premiums, after deduction of taxes and parafiscal levies that
are collected on the basis of individual premiums or in comparison with
total amount of premiums.
Article 17
Additional Data
The Competition Council may use EC Regulations, EU legislation and European Court case
law for the purpose of defining a relevant market in specific cases.
Article 18
Termination of the Previous Regulation
On the day when this Regulation enters into force, the Regulation on the definition of a
relevant market (“Official Gazette of BiH”, No. 01/05) terminates.
Article 19
Publication and Entry into Force
This Regulation shall enter into force on the eighth day following its publication in the
Official Gazette of Bosnia and Herzegovina and shall be published in official gazettes of
Entities and Brčko District of Bosnia and Herzegovina.
C.C. No. 01-01-26-101-I/06 President
Sarajevo, 24 January 2006 Sena Hatibovic
REGULATION ON THE DEFINITION OF A
DOMINANT POSITION
“Official Gazette of BiH”, No. 18/00
The Council of Competition
47
Pursuant to Article 25, paragraph (1), item i) and Article 9 of the Act on Competition
(“Official Gazette of BiH”, No. 48/05), the Council of Competition in its 23rd session, held
on 14 February 2006, has adopted
REGULATION ON THE DEFINITION OF A DOMINANT POSITION
I GENERAL PROVISIONS
Article 1
Subject Matter
This Regulation defines the categories, conditions and principles of determination of a
dominant position of undertakings, and criteria on abuse of a dominant position in the
relevant market of products and services of Bosnia and Herzegovina, within the meaning of
Articles 9 and 10 of the Act on Competition.
Article 2
Dominant Position of Undertakings
(1) An undertaking is in dominant position where it is, due to its market power, able to
behave and operate in the relevant market of products and services sufficiently
independently of actual or potential competitors, buyers, consumers or suppliers,
whereby efficient competition in the market is restricted and impeded.
(2) An undertaking is in dominant position in the relevant market of products and
services where it faces no competition or insignificant existing competition.
II ASSESSMENT OF THE MARKET POWER AND DOMINANT POSITION
Article 3
Assessment of the Market Power
(1) An undertaking is not dominant in the relevant market of products and services if its
market power is not significant.
(2) Significant market power of an undertaking in the relevant market shall be
determined relating to the existing or potential competitors, and particularly
considering the following criteria:
a) the market share (sale and purchase volume in the relevant market of
products and services; financial standing or production capacities);
b) structure of the relevant market and economic relation with competitors;
c) ability to keep prices above the competitive level (to limit production and
quality);
d) access to supply resources (assets) and distribution channels;
e) levels of vertical integration in the relevant market;
f) economic regulators, investment barriers for potential undertakings to
enter/exit the relevant market;
g) technological advantages, patents, intellectual and industrial property
rights and other similar rights.
Regulation on the Definition of a Dominant Position
48
Article 4
Abuses of dominant position
(1) As a rule a dominant position of an undertaking in the relevant market is not
prohibited.
(2) Any abuse of dominant position in the relevant market shall be prohibited in terms
of undertakings` operations having as their object and result the exclusion of
competitors from the market or “closing” the market to potential competitors, and
restriction and distortion of the effective market competition.
(3) Abuse of a dominant position in the relevant market within the meaning of
paragraphs (1) and (2) of this Article exists solely in a case where an undertaking
initiates unilateral decisive operations.
(4) Two and more undertakings may be dominant (collective dominance) in the
relevant market (ex. structural connections, joint policy).
III ASSESSMENT OF A DOMINANT POSITION AND MARKET SHARE
Article 5
Assessment of a Dominant Position
(1) Dominant position of an undertaking, on a case-by-case basis, may be determined
on the whole market of Bosnia and Herzegovina or on its significant part.
(2) The determination of a dominant position referred to in paragraph (1) of this
Article, shall include also the following :
a) definition of the relevant market (and supply and demand terms of
products and services, and substitutes in that market);
b) the market share of undertakings operating in the relevant market
(considering all changes within the particular period of time)
Article 6
Market Share of an Undertaking
(1) It assumes that an undertaking is dominant in the relevant market of products and
services where it holds a market share exceeding forty per cent (40%).
(2) An undertaking may be dominant if it holds a market share less than forty per cent
(40%) if other indicators (ex. bad position and small market share of the existing
competitors, serious barriers to enter the relevant market to other undertakings)
prove its dominant position.
Article 7
Market Share of two or more Undertakings
It assumes that two (2) or more undertakings may be dominant in the relevant market of
products and services if their market share jointly accounts more than sixty per cent (60%).
The Council of Competition
49
Article 8
Market Share of four or more Undertakings
It assumes that four (4) or more undertakings may be dominant in the relevant market of
products and services if their market share jointly accounts more than eighty per cent (80%).
IV ABUSE OF DOMINANT POSITION
Article 9
Abuse of Dominant Position
For the purpose of determination of abuse of a dominant position by one or more
undertakings (collective dominance) besides the criteria set out in Article 10 of the Act on
Competition, the following shall be also taken into consideration:
a) price discrimination (different prices) of the certain product or service in the
different relative geographic markets;
b) permanent supply and sale of products and services to buyers at law prices which
diverting the buyers to purchase similar products or services from competing
supplier (“loyal”-targeted sale discounts or secret discounts);
c) fixing a price of the product or service below the production costs with the view to
eliminate the competitors;
d) unjustifiable cancellation or reducing of the production or sale of products or
services having negative consequences for consumers;
e) the limitation of production and market as result of exclusively made contracts
(special rebates, discounts, financial accounts);
f) forcing the consumers to purchase additional product or service together with the
marketed product or service;
g) the undertakings ability to determine operating terms of supply and demand in the
relevant market, providing to it unjustifiable increase of profit;
h) refuse the access of other undertakings, by providing them a reasonable financial
fee charging, to facilities, equipment, relocated network or other infrastructure
facilitates, possessed or used by the dominant undertaking in a case when other
undertakings are not able, due to legal or other reasons, to operate in the same
market (where the dominant undertaking operates) without possibility to use the
same capacities/equipment and in a case when the dominant undertaking does not
prove that the common use is not practicable due to operative, technical or other
reasons or that such a use may not be asked from them.
V FINAL PROVISIONS
Article 10
Application of European Regulations and Practice
The Council of Competition may use EC decisions, EU legislation and European Court case
law for the purpose of determination of a dominant position in specific cases.
Regulation on the Definition of a Dominant Position
50
Article 11
Notification
This Regulation shall enter into force on the eighth day following its publication in the
Official Gazette of Bosnia and Herzegovina and shall be published in official gazettes of
Entities and Brčko District of Bosnia and Herzegovina.
C.C. No. 01-01-26-102-I/06 President
Sarajevo, 14 February 2006 Sena Hatibovic
REGULATION ON AGREEMENTS OF MINOR
IMPORTANCE
“Official Gazette of BiH”, No. 86/05
The Council of Competition
53
Pursuant to Article 8, paragraph (3) and Article 25, paragraph (1), item (a) of the Act on
Competition (“Official Gazette of BiH”, No. 48/05), the Competition Council, in its 18th
session held on 4 October 2005, has adopted
REGULATION ON AGREEMENTS OF MINOR IMPORTANCE
Article 1
Subject Matter of the Regulation
This Regulation shall define the agreements of minor importance as permitted forms of
cooperation between undertakings, whose effects have insignificant influence on the
infringements of the Act on Competition (hereinafter: the Act), the conditions that
agreements of minor importance must fulfil and restrictions that such agreements may not
contain.
Article 2
Definition of Agreements of Minor Importance
An agreement shall be deemed to be an agreement of minor importance where the joint
market share of parties to the agreement and their controlled undertakings in the relevant
market concerned is insignificant, provided that such agreement has no provisions which, in
spite of insignificant market share, prevent, restrict or distort competition.
Article 3
Insignificant Market Share
Pursuant to Article 2 of this Regulation, an insignificant market share shall be considered to
be:
a) the aggregate market share of the parties to the agreement and their controlled
undertakings does not exceed ten per cent (10%) on any of the relevant markets
affected by the agreement, where the agreement is concluded between undertakings
which are actual or potential market competitors on any of those relevant markets
(hereinafter: competing undertakings),
b) the market share of each of the parties to the agreement or their controlled
undertakings does not exceed fifteen per cent (15%) on the relevant market affected
by the agreement, where the agreement is concluded between undertakings which
are not actual or potential competitors on any of those relevant markets (hereinafter:
non-competing undertakings),
c) the market share of any of the parties to the agreement or their controlled
undertakings that does not exceed ten per cent (10%) on the relevant market
affected by the agreement, in cases where it is not possible to determine whether the
agreement is concluded between competing undertakings or between non-
competing undertakings.
Article 4
Market Share Relating to Parallel Network of Agreements
In cases where competition on the relevant market is restricted or infringed by the
cumulative effect of agreements on the sale of products or services (hereinafter: products)
concluded between different suppliers or distributors, that is to say, in the cases where
parallel networks of agreements have similar effects on the market, the insignificant market
Regulation on Agreements of Minor Importance
54
share of each of the parties to the agreement or their controlled undertakings, as defined by
Article 3 of this Regulation, shall be deemed a market share of up to five per cent (5%), for
agreements concluded between competing undertakings and for agreements concluded
between non-competing undertakings.
If the relevant market is covered by parallel network of agreements which market share is
less than thirty per cent (30%), it means that a cumulative effect of a parallel network of
agreements does not restrict or distort market competition.
Article 5
Permitted Increase of Market Share
It shall be assumed that agreements do not prevent, restrict or distort market competition, if
the market shares of the parties to the agreement and their associated undertakings, as
defined by Articles 3 and 4 of this Regulation do not exceed by more than two per cent (2%)
during two successive calendar years.
Article 6
Hard Core Restrictions
Although having the insignificant market share pursuant to Articles 3 and 4 of this
Regulation, the agreements between parties to the agreement and their connected
undertakings which have as their object the prevention, restriction or distortion of market
competition pursuant to Articles 7 and 8 of this Regulation shall not be deemed to be the
agreements of minor importance.
Article 7
Hard Core Restrictions in the Agreements between Competitors
(Horizontal Agreements)
Hard core restrictions of the market competition in agreements concluded between
competing undertakings which may not be defined as agreements of minor importance
though fulfilling the conditions set out in Articles 2 and 3, paragraph (1), item a) of this
Regulation, are considered as restrictions which directly or indirectly, solely or in
combination with other undertakings controlled by the parties to the agreement have as their
object:
a) the fixing of prices when selling the products to third parties;
b) the limitation of production or sales;
c) the allocation of markets or customers.
Article 8
Hard Core Restrictions in the Agreements between Non-Competitors
(Vertical Agreements)
Hard core restrictions of the market competition in agreements concluded between non-
competing undertakings which may not be defined as agreements of minor importance,
though fulfilling the conditions pursuant to Articles 2 and 3, paragraph (1), items b) and c)
hereof, are considered as restrictions which directly or indirectly, solely or in combination
with other undertakings controlled by the parties to the agreement have as their object:
a) the restriction of the buyer's ability to determine its sale price, irrespective of the
supplier’s ability to impose a maximum sale price or recommend a sale price,
provided that the prices are not amount to a fixed or minimum sale price that are a
result of pressure from, or incentives offered by any of the parties to the agreement;
The Council of Competition
55
b) the restriction of the territory into which, or the customers to whom the buyer may
sell the contract products, except for the following cases:
- active sales into the exclusively allocated territory or to an exclusively
allocated customer group reserved to the supplier, that is to say, which are
allocated by the supplier to another buyer, provided that such a restriction
does not disable further sales by indirect buyer;
- sales to end users by a buyer operating at the wholesale level of trade;
- sales of products imposed to unauthorized distributors by the members of a
selective distribution system;
- the buyer’s ability to sell components, supplied for the purposes of
implementation, to other customers who would use them to produce the
same type of products as those produced by the supplier.
c) the restriction of active or passive sales to end-users by members of a selective
distribution system operating at the retail level of trade, not excluding the possibility
of prohibiting a member of the distribution system from operating through
unauthorized undertaking;
d) the restriction of cross-supplies of products between distributors within a selective
distribution system, including the distributions between distributors operating at
different levels of trade;
e) the restriction agreed between a supplier of components and a buyer who
implements those components, which limits the supplier’s ability to sell the
components as spare parts to end-users or to repairers or other service providers not
entrusted by the buyer with the repair or servicing of its products.
Article 9
Active and Passive Sales
(1) Active sales pursuant to Article 8 of this Regulation means sales made by active
searching or accessing to particular customers group inside another distributor's
exclusive territory, conclusion of individual agreements or taking measures to
present the products to those customers, and establishing, branches, warehouse or
organizing of distribution networks and advertising in another distributor's exclusive
territory. Active access includes visits, direct and electronic mail, advertising in the
media or other promotions in media specifically targeted at that customers group or
customers in another distributor’s exclusive territory.
(2) Passive sales pursuant to Article 8 of this Regulation mean response to requests of
individual customers, including the delivery of products to such customers, to the
extent that such responding must not be the result of active sales operations. Passive
sales in general advertising or promotion in the media or on the internet that reaches
customers in other distributors' exclusive territories or customers groups, as a result
of the technological development and easy access, and therefore it is deemed to be a
reasonable method of approaching the customers or groups of customers.
Article 10
Compliance of Concluded Agreement with this Regulation
All agreements with insignificant market share as defined by the provisions of this
Regulation, which have been concluded before this Regulation enters into force, must be
Regulation on Agreements of Minor Importance
56
brought in compliance with this Regulation within the time period of six (6) months as of the
day of its entry into force.
Article 11
Entry into Force
This Regulation shall enter into force on the eighth day following the day of publication in
the Official Gazette of Bosnia and Herzegovina and shall be published in Official Gazettes of
Entities and Brčko District of Bosnia and Herzegovina.
C.C. No. 01-01-26-506/05 President
Sarajevo, 04 October 2005 Sena Hatibovic
REGULATION ON NOTIFICATION AND
CRITERIA FOR ASSESSMENT A
CONCENTRATION OF UNDERTAKINGS
“Official Gazette of BiH”, No. 95/06
The Council of Competition
59
Pursuant to Article 25, paragraph (1), item a) of the Act on Competition (“Official Gazette of
BiH”, No. 48/05), the Council of Competition in its 34th session held on 12 October 2006 has
adopted
REGULATION ON NOTIFICATION AND CRITERIA FOR ASSESSMENT A
CONCENTRATION OF UNDERTAKINGS
I GENERAL PROVISIONS
Article 1
Subject Matter
This Regulation shall stipulate the applicants obliged to submit a prior notification of
concentration of undertakings, the method of submission, the contents and form of the
notification, the documentation and data which are to be enclosed to the notification, the
form and contents of the announcement on acquisition of shares or share capital of the
undertakings and the assessment criteria of the compatibility of concentrations of
undertakings in the proceedings carried out by the Council of Competition within the
meaning of the provisions stipulated by the Act on Competition (hereinafter: the Act).
II SUBMISSION OF NOTIFICATION
Article 2
Notifying Party
(1) The notification is to be submitted, in a case when the conditions laid down in
Article 14 of the Act are fulfilled, by the following party:
a) the acquiring undertaking participating in the merger or joint undertakings
participating in the merger;
b) the one or more undertakings (acquirer) acquiring a control or decisive
influence on one or more undertakings, or on more another undertaking or
on a part of another undertaking or on parts of another undertakings;
c) acquirer of the majority of shares or share capital or voting rights, or any
other way within the meaning of the provisions stipulated by the law;
d) all the participants in the joint venture on a long-term basis or a participant
in the joint venture appointed by the other participants as their joint
representative in a case of creation of a joint venture on long-term basis
(joint venture);
e) the bidder, in a case of acquiring a control or decisive influence on the
basis of a public bid (particularly in the case of acquisition of the majority
of shares or share capital or voting rights).
(2) In cases not covered by paragraph (1) of this Article the obligation to notify shall
fall on all parties to the concentration submitting a joint notification or on their
commonly appointed party to the concentration.
Article 3
Time Limit for Notification
The undertakings-parties to the concentration are obliged to notify the intended concentration
to the Council of Competition in compliance with the provisions of this Regulation within
the time limit not longer than 8 (eight) days of the conclusion of the agreement, the
Regulation on Notification and Criteria for Assessment a Concentration of Undertakings
60
announcement of a public bid or acquisition of controlling interest, depending on what action
takes place the firs, pursuant Article 16, paragraph (1) of the Act t.
III THE FORM OF NOTIFICATION
Article 4
How to Notify-Form and Way
(1) The notification, submitted in writing on an A4-sheet of paper, shall be
accompanied by both by electronic version of the notification and the supporting
documentation.
(2) The notifying party shall notify in the following way:
a) all required data as stated in Articles 8 and 9 of this Regulation shall be
written on a separate sheet of paper, providing for the possibility of adding
as many sheets as necessary for a comprehensive and complete
presentation;
b) the ordinal number and exact name of each data, according to the sequence
provided for in Articles 8 and 9 of this Regulation, shall be entered clearly
on the top of the page;
c) after the ordinal number and the name of the data, the following shall be
entered:
- the data, i.e. a comprehensive and complete description of the
circumstances relating to the concentration in question;
- a statement that the data is failed to be relevant for the assessment of
the intended concentration, indicating the reasons thereof;
- in the case laid down in Article 14, paragraph (2) of this Regulation,
state when and where the data were required, and name the reasons if
they were not available, indicating where the missing data may be
obtained by the Council of Competition.
d) following the text referring to particular information, the notifying party
shall state documentation, evidence, analyses, diagrams and other
documents proving the listed statements, which are to be supplied in the
supplement to the notification;
e) as the case may be, the notifying party shall supply other information and
descriptions, which it finds may be of assistance to the Council of
Competition in the assessment procedure;
f) at the end of the notification “Supporting documentation” shall be clearly
listed on a separate sheet of paper, followed by the list of all supporting
evidence, analyses and diagram enclosed.
Article 5
Burden of Proof
The notifying party shall be obliged to collect and submit all relevant data, documentation
and evidences necessary for the assessment of the notified concentration within the meaning
of the provisions of the Act and this Regulation.
Article 6
Language of the Notification and Number of Copies
(1) The notification, supporting and other documentation shall be submitted in one of
the official languages of Bosnia and Herzegovina and in one copy.
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61
(2) If the original notification, the supporting documentation and other documentation
are submitted in a foreign language, the notifying party is obliged to submit the
certified translation in one of the official languages in use in Bosnia and
Herzegovina, enclosed to the original copy or a certified photocopy of the original
document.
(3) The Council of Competition may, in particular cases, request for the original
notification and its supporting documentation to be submitted accompanied by any
number of photocopies of whole notification and all supporting documentation that
do not to be certified.
Article 7
Accuracy of Data and Official Secret
(1) The data stated in the notification must be true and complete.
(2) The notifying party is obliged to clearly point out any data in the notification,
supporting documentation and other evidences where the provisions on the business
secrecy under Article 51, paragraph (2) of the Act shall apply.
(3) The data in the notification which are not pointed out in the way described in
paragraph (2) of this Article and all data which are pointed out in the notification as
business secret and confidential in a sense of paragraph (2) of this Article but for
which the Council of Competition has established that they had been previously
published and accessible to the general public shall not be considered a business
secret.
IV CONTENTS OF THE NOTIFICATION
Article 8
Obligatory Contents of Notification
The notification must contain the following data:
a) the name (or undertaking), address and business activity of the notifying party;
b) the name (or undertaking), address and business activity of all parties to the
concentration;
c) the name and authority of the agent or representative who represents the notifying
party in submitting the notification;
d) the name, address, telephone and fax number and e-mail address of the contact
person appointed by the notifying party for the contacts and cooperation with the
Council of Competition, if this person is different from the notifying person;
e) the detailed description of the legal form of the concentration;
f) the legal basis for the concentration (the name of the document, class number, the
name or company of the parties engaged in the legal transaction in question, the
place and date of the legal transaction) such as for example:
- merger contract/agreement
Regulation on Notification and Criteria for Assessment a Concentration of Undertakings
62
- merger contract/agreement or the corresponding decisions of the relevant
bodies of the undertakings;
- the contract/agreement by means of which the shares or share capital is
acquired;
- the contract/agreement on management;
- the contract/agreement on the profit transfer;
- decisions on amendments on the statute, decision (or contract) on
foundation of the undertaking or any other act that gives the decisive
influence to any of the parties;
- the contract/agreement on the lease of property which gives the decisive
influence to any party;
- the takeover public bid;
- the contract/agreement on the joint- venture.
g) the annual financial report for the year preceding the concentration (balance sheet,
profit/loss account, cash-flow statement, statement on changes of shareholder’s
equality, accounting policies and notes to the annual accounts, for the insurance
companies the value of total premiums paid) as well as other reports giving an
insight into the financial state of the parities to the concentration;
h) the total annual income (operational revenues, financial revenues, extraordinary
revenues) of the parties to the concentration after the deduction of the value added
tax, other taxes directly relating to the turnover and discounts, within the meaning
of Articles 14 and 15 of the Act, calculated separately for each party to the
concentration:
- worldwide level,
- in the market of Bosnia and Herzegovina;
i) the definition of the relevant market in which the parties to the concentration and
the controlled undertakings or the controlling undertakings operate, as well as the
estimates of their market shares, before and after the implementation of the
concentration;
j) the list and estimates of the market shares of the main competitors of the parties to
the concentration in the relevant market;
k) the structure of shareholders and/or share in the undertaking over which the control
or decisive influence is acquired, before and after the implementation of the
concentration (expressed in percentage);
l) the list of other undertakings in the relevant market in which the parties to the
concentration solely or jointly hold 10% or more of the share capital, or 10% or
more voting rights, accompanied by a brief description of the prevailing business
activity of the undertakings in question (connected associations);
m) the list of all undertakings in the relevant market in which the members of the
management or the supervisory board of the parties to the concentration are at the
same time the members of the management or the supervisory board, accompanied
by the brief description of the prevailing business activity of the undertakings in
question;
n) the record containing the other authorities competent for assessment of
concentrations outside of the territory of Bosnia and Herzegovina which have been
The Council of Competition
63
submitted the request for assessment of the concentration concerned or to which the
notification is intended to be submitted;
o) the detailed description of the distribution and retail network structure of the
products and/or services in the relevant market, accompanied by the separate
description of the distribution and retail network used by the parties to the
concentration (own, contractual and alike);
p) the description of the realized or intended research and development investments of
the parties to the concentration (the form and the nature of the investment or
research, their influence on the production and distribution of the products and/or
services in the relevant market, the amount of the investments in question realized
or planned and alike);
r) the description of the legitimate and economic reasons of the concentration;
s) the detailed description and argumentation of the resulting benefits for the
consumers directly derived from the implementation of concentration, particularly:
- decrease in prices of products and/or services,
- increase in quality of products and/or services,
- innovative features introduced,
- increase in the selection and the range of products and/or services for
consumers;
t) the signature of the authorized person responsible for the accuracy and authenticity
of the information in the notification;
u) the place and date of the submission of the notification.
Article 9
Other Data in the Notification
(1) Apart from the obligatory contents of the notification laid down under Article 8 of
this Regulation, the Council of Competition may request the submission of other
data which is considered relevant in the assessment of the concentration and in
particular:
a) the number of employees in the undertakings – parties to the concentration
and the number of employees in all undertakings members of the concern,
the members of which take part in the concentration;
b) the list of five main suppliers and/or five main buyers of each party to the
concentration, including the supply value;
c) the figures on sales value and sales volume calculated in convertible
marks, that is the number of units or other measure, realized in the sale of
products and/or services by the parties to the concentration in the relevant
market;
(2) All submitted data laid down under paragraph (1) of this Article are to relate to the
year preceding that of the concentration.
Regulation on Notification and Criteria for Assessment a Concentration of Undertakings
64
Article 10
Obligatory Supporting Documentation
The notifying party is obliged to provide accompanied to the notification a copy of the
original document or certified photocopy of particular documents/identifications and other
written evidences, and particularly:
a) the excerpt from the court register or other register supplying the evidence on the
name, address and the business activity of the notifying party;
b) the excerpt from the court register or other register supplying the evidence on the
name, address and the business activity of all parties to the concentration;
c) a valid authorization if the notification is submitted by the authorized person;
d) a copy of the original or certified photocopy of the legal basis for the concentration
laid down under Article 8 of this Regulation, enclosed to the certified translation in
one of the official languages in use in Bosnia and Herzegovina, in case when the
original document is in foreign language;
e) principal annual financial reports of the parties to the concentration for the financial
year preceding the year of implementation of the concentration, consisting of the
data on the total income of all the parties to the concentration realized in the sales of
products and/or services after deduction of the value added tax, other taxes directly
relating to the turnover and rebate:
- worldwide level;
- in the market of Bosnia and Herzegovina.
f) all available analyses and studies, presentations or other reports prepared for any
member of the management, supervisory board or the chairman and/or members of
the shareholders` meeting, dealing with estimation and analysis of the concentration
from the viewpoint on the market position, market conditions and the existence of
any actual and potential competitors in the relevant market;
g) the graphic presentation (diagram) of the organizational structure of the parties to
the concentration and connected associations, where it can be seen
- the relations between the parties to the concentration and connected associations;
- the shares hold by the controlling companies in the share capital of the controlled
companies, that is the shares hold by the daughter companies within the group or
concern (expressed as percentages);
h) the report of the management giving the legal and economic explanation for the
concentration;
i) the decision of the authorities competent for assessment of concentration outside the
territory of Bosnia and Herzegovina (when it has been already made) or to note on
obligatory whether it has already submitted or shall submit the request for
assessment of the concentration;
j) the receipt on the paid administration taxes (Regulation on Amount of
Administration Taxes relating to the Practices before the Council of Competition -
“Official Gazette of BiH”, No.30/06).
The Council of Competition
65
Article 11
Other Supporting Documentation
Beside the supporting documentation stated under Article 10 of this Regulation, the Council
of Competition may request the submission of other supplements containing the information
which it considers relevant in the assessment of the notified concentration, particularly such
as:
a) principal annual financial reports for the parties to the concentration in the period of
three subsequent years preceding the year when the concentration is being
implemented, accompanied by the data on the total income of all the parties to the
concentration realized by the sales of products and/or services after the deduction of
the value added tax, other taxes directly relating to the turnover and rebates:
- worldwide level;
- in the market of Bosnia and Herzegovina.
b) the production and /or sale value and production and /or sales volume, calculated in
convertible marks, i.e. the number of units or other measures, realized in the sales of
products and/or services by the parties to the concentration in the relevant market in
the period of three subsequent years proceeding the year when the concentration is
implemented.
V SEPARATE PROVISIONS STIPULATING THE ACQUISITION OF STOCKS OR
SHARES IN THE BANKS, INSURANCE COMPANIES AND OTHER FINANCIAL
INSTITUTIONS
Article 12
Form and Contents of the Notice
(1) The banks, insurance companies and other financial institutions, referring to the
cases under Article 12, paragraph (3) of the Act, are obliged to notify in writing of
the acquisition of the stocks or shares in other undertakings acquired in the normal
course of business of those institutions, including the securities transaction and
brokerage services for their own account or for the account of third parties
(hereinafter: the notifying party).
(2) The notice in writing shall consist of the following data, in particular:
a) the company and address of the notifying party;
b) the company, address and business activity, or the name and address of the
person for the account of which the notifying party has acquired the stocks
or shares;
c) the company name, address and business activity of the undertakings
whose stocks or shares the notifying party has acquired;
d) the structure of stocks or the structure of the business shares of the
undertakings whose shares or business shares the notifying party has
acquired (after the acquisition concerned);
e) the time limit foreseen by the notifying party to resell the acquired stocks
or shares.
(3) The notice shall be accompanied by:
a) the statement of the notifying parties confirming that they shall hold the
acquired stocks or shares on a temporary basis with the view of reselling
them;
Regulation on Notification and Criteria for Assessment a Concentration of Undertakings
66
b) the statement of the notifying party confirming that it shall not use the
acquired stocks or shares in any way that could make it possible to
influence the competitive behaviour of the undertaking, the stocks or
business shares of which it has acquired;
c) the statement of the notifying party confirming that it shall exercise the
voting rights for the sole purpose of sale of the whole undertaking, the
stocks or business shares of which it has acquired, or the sale of the part of
the undertaking in question (in the case it exercises the voting rights);
d) the statement of the notifying party confirming that it shall neither exercise
the rights originating from the acquired stocks or shares in any way that
could prevent, restrict or distort the competition, nor undertake any
operation with this objective.
Article 13
Extension of Period
(1) The request for extension of the period set out in Article 12, paragraph (3), item a)
of the Act shall be submitted by the notifying party at least fifteen (15) days before
the period indicated in the notice expired (Article 12, paragraph (2), item e) of this
Regulation).
(2) The request shall be submitted in writing and it shall contain:
a) the reason why the transaction of stocks or share capital has not been
possible within the period set;
b) the period for which the period set should be extended for transaction in
question to be carried out, which cannot be extended for more than six (6)
months.
(3) The Council of Competition shall pass a separate resolution as response to the
request for extension of the period.
VI EXAMINATION OF THE NOTIFICATION
Article 14
Examination of the Completeness of the Notification
(1) Upon receiving the notification the Council of Competition shall make sure whether
the notification has been submitted by the authorized person, whether it contains all
original data and supporting documentation as regulated, certified photocopies and
certified translations in one of the official languages of Bosnia and Herzegovina.
(2) In the case that the notifying party for a justifiable reasons and despite the efforts
involved, fails to collect certain data or documents which have been stipulated by
the provisions to constitute the obligatory contents of the notification, it shall be
stated so in the appropriate part of the notification, stating:
a) who from and when the notifying party tried to collect the data concerned;
b) the reasons why the relevant data were not collected;
c) where the Council of Competition should collect the missing data.
(3) In the case described under paragraph (2) of this Article, the Council of
Competition may request from the notifying party to supply in writing its own
analysis and estimations of the conditions and situation relating to the missing data.
The Council of Competition
67
(4) The notification of concentration consisting of the data laid down under Article 8 of
this Regulation and the supporting documentation as stipulated under Article 10 of
this Regulation shall be considered a complete notification.
Article 15
Receipt for the Notification
(1) The Council of Competition, when establishes the completeness of the notification,
shall issue a receipt within the meaning of Article 30, paragraph (3) of the Act.
(2) The receipt under paragraph (1) of this Article shall particularly contain:
a) register number and the date of the issuance of the receipt;
b) the name (company) or name of the notifying party, that is the authorized
person;
c) the name (company) or names of the parties to the concentration;
d) the date of submission of the notification to the Council of Competition;
e) the instruction, within the meaning of Article 18, paragraph (8) of the Act,
that the concentration may not be implemented as long as the Council of
Competition takes its final decision declaring the concentration compatible
in the sense of Articles 12 and 14 of the Act;
f) the notice informing that the time limits start pursuant to Articles 18 and
41 of the Act;
g) the signature of the president of the Council of Competition.
VII THE CRITERIA FOR ASSESSMENT OF CONCENTRATION
Article 16
Criteria for the Assessment of Concentration
In the course of the assessment of the intended concentration, the Council of Competition
shall primarily analyze the positive and negative effects, that is to say whether the
concentration concerned creates or strengthens a dominant position which will result in the
significant prevention, restriction and distortion of the market competition.
VIII DECISION ON CONCENTRATION
Article 17
Decision on Concentration
In the case when the Council of Competition does not pass a Resolution on initiation of the
assessment procedure within sixty (60) days starting from the date of the receipt issuance,
within the meaning of Article 18, paragraph (5) of the Act, the concentration shall be deemed
compatible.
Article 18
Decision on the Request
In the case when a decision on the Notification of intended concentration is not issued within
the time limits laid down in Article 18, paragraph (5) and Article 41 of the Act, the Council
of Competition shall upon the request of the notifying party issue a decision declaring the
concentration concerned compatible.
Regulation on Notification and Criteria for Assessment a Concentration of Undertakings
68
IX FINAL PROVISIONS
Article 19
Scope of the Application
This Regulation shall apply to all concentrations defined in Article 12 of the Act.
Article 20
Entry into Force
This Regulation shall enter into force on the day of adoption, and it shall be published in the
“Official Gazette of BiH” and in official gazettes of Entities and Brcko District of Bosnia
and Herzegovina.
C.C. No.: 01-01-50-858-I/06 President
Sarajevo, 12 October 2006 Gordan Raspudic
REGULATION ON THE PROCEDURE FOR
GRANTING IMMUNITY FROM FINES
(LENIENCY POLICY)
“Official Gazette of BiH”, No. 15/06
The Council of Competition
71
Pursuant to Article 25 paragraph (1) item a) and Article 54 paragraph (4) of the Act on
Competition (Official Gazette of BH, No 48/05), the Council of Competition, in its 22nd
session, held on 24 January 2006 has adopted
REGULATION ON THE PROCEDURE FOR GRANTING IMMUNITY FROM
FINES (LENIENCY POLICY)
Article 1
(1) This Regulation shall define the procedure and conditions for granting immunity
from fines or reducing the fines in cases when an undertaking participates in an
agreement from Article 4 paragraph (1) of the Act on Competition (hereinafter: the
Act).
(2) This Regulation is applied to undertakings defined by Article 2 of the Act which
cooperate voluntarily with the Council of Competition and provide it with evidences
necessary for making a decision on infringement of the provisions defined in Article
4 paragraph (1) of the Act.
I IMMUNITY FROM FINES
Article 2
The Council of Competition shall grant to an undertaking immunity from fines which may be
otherwise imposed to the undertaking, provided that the undertaking submits evidences,
unknown to the Council of Competition at the moment of submission, relating to an
agreement defined by Article 4 paragraph (1) of the Act, which would enable issuing a
specific resolution authorizing an initiation of proceeding.
Article 3
(1) An undertaking , an applicant for immunity from fines must fulfil the following
conditions at the moment of submission of application to the Council of
Competition:
a) to end all its activities related to the agreement that violates competition;
b) the undertaking must not inform other parties to the agreement concerned
on its application;
c) the undertaking must cooperate fully, on a continuous basis and
expeditiously throughout the proceedings and provide the evidences and
information in its possession or under its control, including all forms of
information which prove the existence of infringement of Article 4
paragraph (1) of the Act.
(2) Any oral, written or electronic communication with the Council of Competition
shall be considered as the application for immunity from fines.
Article 4
(1) If the first undertaking, the applicant for granting immunity from fines, in the same
case, fails to meet the requirements as defined within Article 3 of this Regulation,
the next subsequent applicant for immunity from fines which fulfils the conditions
from Articles 2 and 3 of this Regulation shall be taken into consideration in the
leniency procedure.
Regulation on the Procedure for Granting Immunity from Fines (Leniency Policy)
72
(2) The Council of Competition shall not take into consideration the application for
immunity from fines of another applicant, in the same case, until it makes a
decision on the application for immunity from fines submitted by the first applicant.
II THE PROCEDURE FOR GRANTING IMMUNITY FROM FINES
Article 5
An undertaking as an applicant for immunity from fines must provide the Council of
Competition with the facts in draft form of the case concerned. In the initial stage, an
undertaking may use general information in order to protect its anonymity.
Article 6
If, during the initial contact, the Council of Competition decides that conditions defined by
Articles 2 and 3 of this Regulation are failed to be met, the undertaking interested to obtain
the immunity from fines, will be informed that immunity is not available.
Article 7
A joint application for immunity from fines submitted by two or more undertakings shall not
be taken into consideration.
Article 8
If the Council of Competition decides that an undertaking seeking to obtain immunity from
fines meets the conditions from Article 5 of this Regulation and if that undertaking is willing
to continue the cooperation delivering compulsorily a full description of the illegal activities,
as appropriate, the Council of Competition shall, on the basis of findings in the said
description, grant the undertaking conditional immunity from fines in its relevant decision.
Article 9
(1) Upon receiving a decision on granted conditional immunity from fines, an
undertaking is obliged to provide the Council of Competition with all evidences in
its possession.
(2) The Council of Competition may not use the evidence from paragraph (1) of this
Article against the undertaking that is the applicant for immunity from fines.
Article 10
(1) In case that the Council of Competition does not make a decision on granting
conditional immunity from fines, the undertaking that is applicant may withdraw all
evidences disclosed for the purpose of its immunity application or request that the
application for immunity from fines may be considered as a request for reduction of
a fine.
(2) The Council of Competition may not use information received in the proceedings
for immunity from fines if the undertaking withdraws such information in
accordance with paragraph (1) of this Article.
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73
Article 11
The Council of Competition may abolish a conditional immunity from fines imposed to an
undertaking which is applicant for immunity from fines, if:
a) that undertaking does not cooperate fully, on continuous basis and expeditiously;
b) that undertaking did not disclose all infringements of the Act relating to the case in
which it was involved;
c) that undertaking does not provide full and true evidences and information in its
possession or under its control.
Article 12
If upon completion of the proceedings, the undertaking meets all conditions defined in
Article 3 of this Regulation, the Council of Competition shall grant it immunity from fines in
the final decision.
III REDUCTION OF A FINE
Article 13
An undertaking which does not meet the conditions for immunity from fines as defined in
Chapter I of this Regulation, can apply for reduction of a fine, which otherwise may be
imposed.
Article 14
In order to ensure that the application for reduction of fines shall be taken in consideration,
an undertaking is obliged to:
a) provide the Council of Competition with information that supports the evidences
already in possession of the Council of Competition regarding the character or
completeness of the evidences; and
b) terminate all further participation in illegal activities that are under investigation,
according the conditions set by the Council of Competition.
Article 15
Among others, in its final decision, the Council of Competition shall determine:
a) whether the evidence provided by an undertaking, at the time of submission,
significantly contributes to the establishment of infringement of the Act on
Competition;
b) the level of reduction of a fine for an undertaking, in proportion to the fine which
may be otherwise imposed at the end of the proceedings, as follows:
1) a reduction of a fine of 30-50% will be granted to the first undertaking
which meets the conditions defined in Article 13 of this Regulation;
2) a reduction of a fine of 20-30% will be granted to the second undertaking
which meets the conditions defined by Article 13 of this Regulation;
3) a reduction of a fine up to 20% will be granted to any other subsequent
undertaking which meets the conditions defined by Article 13 of this
Regulation.
Regulation on the Procedure for Granting Immunity from Fines (Leniency Policy)
74
Article 16
In order to determine the level of reduction of a fine, as defined by Article 14, item b) of this
Regulation, the Council of Competition shall take into account the following facts:
a) the time when the evidences were provided and added value of those evidences; and
b) the level and continuity of cooperation provided by the undertaking during the
proceedings and after the submission of evidences.
IV THE PROCEDURE FOR REDUCTION OF A FINE
Article 17
The Council of Competition shall give to the undertaking a receipt on submission of
evidences, confirming the date and time of submission of each relevant evidence.
Article 18
The Council of Competition will not consider any request for a reduction of a fine if a
conditional decision on granting immunity from fines has already been granted to an
applicant, as defined by Article 8 of this Regulation, in relation to the same alleged
infringement of the Act.
Article 19
The Council of Competition shall, in a case when it comes to the preliminary conclusion that
the evidences submitted by the undertaking meet the conditions from Article 14, paragraph
(1), item a) of this Regulation, inform the undertaking in writing of its intention to include
the undertaking in procedure for reduction of a fine with a specified category as defined in
Article 14, paragraph (1), item b) of this Regulation.
Article 20
The Council of Competition will determine the final reduction category as defined in Article
14, paragraph (1), item b) of this Regulation for each undertaking-an applicant for a
reduction of a fine upon completion of proceedings and before making final decision from
Article 43 of the Act.
V FINAL PROVISIONS
Article 21
(1) In its final decision, the Council of Competition shall state every kind of
cooperation provided by an undertaking during the proceedings so as to explain the
grounds for granting the immunity from or reduction of a fine to that undertaking.
(2) This part of the final decision shall not be published due to the infringement of the
Act.
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Article 22
(1) Any written statement and information made or delivered on the basis of this
Regulation will be included in the file of the Council of Competition.
(2) Statements and information under paragraph (1) of this Article will not be revealed
to the undertakings that are under investigation due to the infringement of the Act.
Article 23
The provisions of this Regulation shall be applied also to the responsible persons in the
undertakings under Article 48, paragraph (2) of the Act.
Article 24
This Regulation enters into force 8 days after its publication in the “Official Gazette of BiH”,
and it shall be published in official gazettes of the Entities and Brcko District of Bosnia and
Herzegovina.
CC No. 01-01-26-090-I/06 President
Sarajevo, 17 February 2006 Sena Hatibovic
REGULATION ON THE DEFINITION OF THE
PERIODIC FINE PAYMENT
“Official Gazette of BiH”, No. 31/06
The Council of Competition
79
Pursuant to Article 50 paragraph (2) and Article 25 paragraph (1) item a) of the Act on
Competition (“Official Gazette of BiH”, No. 48/05) the Council of Competition on its 24th
session, held on 23 February 2006, has adopted
REGULATION ON THE DEFINITION OF THE PERIODIC FINE PAYMENT
I GENERAL PROVISIONS
Article 1
Subject Matter
This Regulation defines the periodic penalty payment that may be imposed on the
undertakings by the Council of Competition.
II AMOUNT OF PERIODICAL PENALTY AND THE WAY OF IMPOSITION THE
PENALTY
Article 2
Amount of Periodical Penalty
The Council of Competition may adopt a Regulation to force undertakings to pay periodic
fines (penalties) not exceeding 5% of the average daily aggregate income in the preceding
business year, for each day of delay the date set in the Regulation, in a case of non-
fulfillment with or failure to carry out a Regulation of the Council of Competition, in order to
force them to:
a) end infringements of stipulations referred to in Article 4 of the Act on Competition,
in accordance with the Regulation adopted pursuant to the Article 11 of the Act,
b) comply with a Regulation on defined temporary measures adopted pursuant to the
Article 40 of the Act on Competition,
c) comply with the obligations imposed by the Regulation adopted pursuant to the
Article 11 and Article 18 of the Act on Competition,
d) submit complete and correct information requested by the Council of Competition
pursuant to the Article 35 of the Act on competition,
e) fulfill procedural requirements of the Council of Competition, adopted pursuant to
the Article 33 and 35 of the Act on Competition.
Article 3
The Way of Imposition the Penalty
In fixing the amount of periodical penalty payments on undertakings, the Council of
Competition will take into consideration the gravity of the infringement, the duration of the
infringement, mitigating and aggravating circumstances of the undertakings, influences of all
undertakings on the infringement, in a case when more undertakings are involved in the
infringement.
Regulation on the Definition of the Periodic Fine Payment
80
III FINAL PROVISIONS
Article 4
Entry into Force
This Regulation shall enter into force on the eighth day after its publication in the “Official
Gazette Bosnia and Herzegovina” and shall also be published in the official gazettes of the
Entities and Brčko District of Bosnia and Herzegovina.
C.C. number 01-01-26-231-I/06 President
Sarajevo, 29 March 2006 Sena Hatibovic
REGULATION ON BLOCK EXEMPTIONS
GRANTED TO CERTAIN CATEGORIES OF
HORIZONTAL AGREEMENTS (BETWEEN
UNDERTAKINGS OPERATING AT THE SAME
LEVEL OF PRODUCTION OR DISTRIBUTION
CHAIN) RELATING PARTICULARLY TO
RESEARCH, DEVELOPMENT AND
SPECIALIZATION AGREEMENTS
“Official Gazette of BiH”, No. 15/06
The Council of Competition
83
Pursuant to Article 7, paragraph (1), item a) and Article 25, paragraph (1), item a) of the Act
on Competition (“Official Gazette of BiH”, No. 48/05), the Council of Competition in its
20th session, held in 27 December 2005, has adopted
REGULATION ON BLOCK EXEMPTIONS GRANTED TO CERTAIN
CATEGORIES OF HORIZONTAL AGREEMENTS (BETWEEN UNDERTAKINGS
OPERATING AT THE SAME LEVEL OF PRODUCTION OR DISTRIBUTION
CHAIN) RELATING PARTICULARLY TO RESEARCH, DEVELOPMENT AND
SPECIALIZATION AGREEMENTS
I GENERAL PROVISIONS
Article 1
Subject Matter of the Regulation
This Regulaton shall stipulate the conditions for block exemptions granted to certain
categoties of horizontal agreements, i.e. agreements between undertakings which operate on
the same level of production or distribution chain (hereinafter: horizontal agreements)
relating particularly to research, development and specialization agreements, set out the
restrictions and conditions which such agreements may not contain, and other conditions
which must be fulfilled in order to satisfy the conditions for exemption from application of
the provisions on prohibited agreements set out in Article 4 of the Act on Competition
(hereinafter: the Act).
Article 2
Applicability of the Block Exemptions
(1) Block exemption shall apply to horizontal agreements entered into between two or
more indepedent undertakings which for the purpose of the agreement operate at
the same level of production or distribution chain, and particularly to:
a) research and development agreements;
b) specialization agreements.
(2) Research and development agreements from paragraph (1), item a) of this Article
are horizontal agreements entered into between two or more indepedent
undertakings which relate to the conditions under which those undertakings pursue:
a) joint research and development of products or processes and joint
exploitation of the results of those researches and developments; or
b) joint exploitation of the results of research and development of products or
processes jointly carried out pursuant to a prior agreement between the
same undertakings; or
c) joint research and development of products or processes which excludes
joint exploitation of the results of those researches and developments.
(3) The block exemption granted to research and development agreements provided for
in paragraph (1), item a) of this Article shall also apply to provisions contained in
those agreements which do not constitute the primary object of such agreements,
but are directly related to and necessary for their implementation, such as an
obligation not to carry out, independently or together with third parties, research
and development in the field to which the agreement relates or in a closely
connected field during the execution of the agreement.
Regulation on Horizontal Agreements
84
(4) Specialization agreements from paragraph (1), item b) of this Article are horizontal
agreements entered into between two or more independent undertakings which sets
the conditions under which those undertakings specialize in the production of
products, and such agreements shall be considered:
a) unilateral specialization agreements, by virtue of which one party to the
agreement agrees to cease production of certain products or to refrain from
producing those products and to purchase them from a competing
undertaking, while the competing undertaking agrees to produce and
deliver those products; or
b) mutual (reciprocal) specialization agreements, by virtue of which two or
more parties to the agreement on a reciprocal basis agree to cease or refrain
from producing certain but different products and to purchase these
products from the other parties to the agreement, who deliver those
products; or
c) joint production agreements, by virtue of which two or more parties to the
agreement agree to produce certain products jointly.
(5) The block exemption granted to specialization agreements provided for in
paragraph (1), item b) of this Article shall also apply to provisions contained in
those agreements, which do not constitute the primary object of such agreements,
but are directly related to and necessary for their implementation, such as provisions
concerning the assignment or use of intelectual property rights.
(6) Intellectual property rights within the meaning of paragraph (5) of this Article
include industrial property rights, copyright and neighbouring rigts.
(7) Participating undertakings under paragraphs (1) and (2) of this Article are
undertakings that are parties to the agreement and undertakings that are connected
to them.
(8) Competing undertakng under paragraph (4), item a) of this Article means an
undertaking that is active at the same relevant market as an acual competitor or a
potential competitor, that is to say an undertaking that would, on eralistic grounds,
undertake the necesary additional investments or other necessary switching cost
structure so that it could enter the relevant market in response to a small but
permanent incerease in prices.
Article 3
Inapplicability of Block Exemptions
According to the stipulations of this Regulation, the block exemption shall not apply to:
a) Horizontal agreements which do not fulfill the cumulative conditions laid down
under Article 4, paragraph (3) of the Act and which are not brought into compliance
with this Regulation;
b) Horizontal agreements which fall within the scope of any other regulation pursuant
to the provisions under Article 7 of the Act.
The Council of Competition
85
II CONDITIONS THAT AGREEMENT MUST CONTAIN AND OTHER
CONDITIONS WHICH MUST BE MET
Article 4
Conditions that Research and Development Agreements Must Contain
(1) The block exemption for research and development agreements provided for in
Article 2, paragraph (1), item a) of this Regulation shall apply if the following
conditions are met:
a) All participants must have access to the results of the joint research and
development for the purpose of further research or exploitation of results.
Exceptionally, research institutes, academic bodies or undertakings which
supply research and development as a commercial service without
normally being active in the exploitation of results may agree to confine
their use of the results for the purpose of further research.
b) Each party must be free independently to exploit the results of the joint
research and development and any pre-existing know-how necessary for
the purpose of such exploitation, when a research and development
agreement ensure only joint research and development. Such right to
exploitation may be limited to one or more technical fields of application,
where the parties are not competing undertakings at the time the research
and development agreement is concluded.
c) Any joint exploitation must relate to results which are protected by
intellectual property rights or constitute know-how, which substantially
contribute to technical or economic progress, and those results must be
decisive for the manufacture of the contract products or the application of
the contract processes.
d) Undertakings charged with manufacture by way of specialization in
production must fulfill orders for supplies from all parties to the
agreement, except when the research and development agreements at the
same time provide for the joint distribution.
(2) Within the meaning of paragraph (1), item b) of this Article, research and
development means the acquisition of know-how relating to products or processes
and the carry out of theoretical analysis, systematic studies or experimentations,
including experimental production, technical testing of products or processes, and
the establishment of the necessary facilities and the acquisition of intellectual
property right for the results.
(3) Within the meaning of paragraph (1), item c) of this Article, exploitation of results
means the production or distribution of the contract products or the application of
the contract processes or the assignment or licensing of intellectual property rights
or the transfer of know-how required for such manufacture of the contract products
or application of contract processes.
(4) Within the meaning of paragraphs (2) and (3) of this Article, research and
development or exploitation of the research and development are carried out jointly
where the work involved is carried out by a joint team, organization or undertaking,
or jointly entrusted to a third party, or allocated between the parties to the
agreement by way of specialization in research, development, production or
distribution.
Regulation on Horizontal Agreements
86
(5) Within the meaning of paragraph (1), items b) and c), and paragraphs (3) and (4) of
this Article, know-how means a package of non-patented practical information,
resulting from experience and testing, which is secret, substantial and identified. In
this context, “secret” means that the know-how as a body or in the precise
configuration and assembly of its components is not generally known or easily
accessible. “Substantial” means that the know-how includes data and information
which are indispensable for the manufacture of the contract products or the
application of the contract processes. “Identified” means that the know-how must be
described in a sufficiently comprehensive manner so as to make it possible to verify
that it fulfills the criteria of secrecy and substantiality.
(6) Within the meaning of paragraph 1), item c) of this Article, contract product means
a product which is the subject of the agreement arising out of the joint research and
development or manufactured or provided applying the contract processes.
(7) Within the meaning of paragraph (1), item c) and paragraph (6) of this Article,
contract process means a technology or process arising out of the joint research and
development.
Article 5
Duration of Block Exemption and Market Share for Research and
Development Agreements
(1) When the participating undertakings are not competing undertakings, the block
exemptions for research and development agreements provided for in Article 2,
paragraph (2) of this Regulation shall apply for the duration of the research and
development. When the results are jointly exploited, the exemption shall continue to
apply for seven years from the time the contract products are first put on the
relevant market.
(2) When two or more of the participating undertakings are competing undertakings,
the block exemption for research and development agreements shall apply for the
period referred to in paragraph (1) of this Article, if, at the time when the research
and development agreement is entered into, the combined market share of the
participating undertakings does not exceed twenty five per cent (25%) of the
relevant market for the products capable of being improved or that are substitutes
for the contract products.
(3) After the period referred to in paragraph (2) of this Article is ended, the block
exemption shall continue to apply as long as the combined market share of the
participating undertakings does not exceed 25% of the relevant market for the
contract products.
(4) If the market share referred to in paragraph (2) of this Article is, on the moment of
signing the agreement, not more than 25% but subsequently rises above this level
without exceeding 30% the block exemption shall continue to apply for a period of
two consecutive calendar years following the year in which 25% of the market share
is first exceeded.
(5) If the market share referred to in paragraph (2) of this Article, on the moment of
signing the agreement, not more than 25% but subsequently rises above 30% the
block exemption shall continue to apply for one calendar year following the year in
which the level 30% of the market share is first exceeded.
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87
The benefit of block exemption within the meaning of paragraphs (4) and (5) of this Article
may not be combined so as to exceed a period of two years.
Article 6
Calculation of the Market Share for Research and Development Agreements
(1) Within the meaning of Article 6 of this Regulation, the market share of the
participating undertakings to research and development agreements shall be
calculated on the basis of the sales value of the contract products and their
substitutes in the market. If the sales value data of the contract products and their
substitutes in the market are not available, estimates based on other reliable market
information, including the sales volume of the contract products and their
substitutes in the relevant market may be used to establish the market share of the
undertaking concerned.
(2) The market share under paragraph (1) of this Article shall be calculated on the basis
of data relating to calendar year preceding the conclusion of the agreement.
(3) The market share under paragraph (1) of this Article shall be increased by the
market share of the undertakings connected to the parties to the agreement realized
as provided for under paragraphs (1) and (2) of this Article.
Article 7
Conditions that Specialization Agreements Must Contain
(1) The block exemption for specialization agreements provided for in Article 2,
paragraph (4) of this Regulation shall apply when:
a) the parties to the agreement accept an exclusive purchase and/or exclusive
supply obligation in the context of an unilateral or reciprocal specialization
agreement or a joint production agreement; or
b) the parties to the agreement do not sell independently the products which
are the object of the specialization agreement but they take part in joint
distribution or agree to appoint a third party to be distributor on an
exclusive or non-exclusive basis in the context of a joint production
agreement provided that the third party is not a competing undertaking.
(2) Within the meaning of paragraph (1) of this Article production means the
manufacture of goods or the provision of services and includes production by way
of cooperatives-subcontractors.
(3) Within the meaning of paragraph (1) of this Article exclusive distribution obligation
means an obligation to supply exclusively the contract products relating to
specialization agreement to the parties to the agreement, i.e. such obligation
excludes the possibility of supplying its competing undertaking.
(4) Within the meaning of paragraph (1) of this Article exclusive purchase obligation
means an obligation to purchase the products to which the specialization agreements
relate only from the party to the agreement which agrees to supply those products.
Regulation on Horizontal Agreements
88
Article 8
Market Share for Specialization Agreements
(1) The block exemption for specialization agreements provided for in Article 2,
paragraph (4) of this Regulation, shall apply on condition that the combined market
share of the participating undertakings does not exceed 20% on the relevant market.
(2) If the market share of the participating undertakings is, on the moment of signing
the agreement, not more than 20% but subsequently rises above that level without
exceeding 25%, the block exemption shall continue to apply for a period of two
consecutive calendar years following the year in which 20% of the market share is
first exceeded.
(3) If the market share of the participating undertakings is, on the moment of signing
the agreement, not more than 20% but subsequently rises above 25%, the block
exemption shall continue to apply for one calendar year following the year in which
the level of 25% market share is first exceeded.
(4) The benefit of block exemption within the meaning of paragraphs (2) and (3) of this
Article may not be combined so as to exceed a period of two calendar years.
Article 9
Calculation of the Market Share for Specialization Agreements
(1) Within the meaning of the Article 8 of this Regulation the market share of the
participating undertakings to specialization agreements shall be calculated on the
basis of the sales value of the contract products and their substitutes. If the sales
value data of the contract products and their substitutes in the market are not
available, estimates based on other reliable market information, including market
sales volumes of the contract products and their substitutes in the relevant market
may be used to establish the market share of the undertakings concerned.
(2) The market share under paragraph (1) of this Article shall be calculated on the basis
of data relating to the calendar year preceding the signing of the agreement.
(3) The market share under paragraph (1) of this Article shall be increased by the
market share of the undertakings connected to the parties to the agreement realized
as provided for under paragraphs (1) and (2) of this Article.
III RESTRICTIONS OR CONDITIONS WHICH AGREEMENTS MAY NOT
CONTAIN
Article 10
Hard Core Restrictions within Research and Development Agreements
(1) The block exemption shall not apply to research and development agreements
which, directly or indirectly, in isolation or in combination with other factors under
the control of the parties to the agreement, have as their object:
a) the restriction of the freedom of the participating undertakings to carry out
research and development independently or in cooperation with third
parties in a field not connected with the field to which the research and
development relates or in the cognate field;
The Council of Competition
89
b) the prohibition to deny the validity of intellectual property rights which are
relevant to the research and development when the research and
development is completed or the validity of intellectual property rights
which protect the results of the research and development, when the
research and development agreement expired, without prejudice to the
possibility to provide for the termination of the research and development
agreement in the case when one of the party to the agreement denies the
validity of such intellectual property rights;
c) limitation of the manufacture or sale;
d) fixing prices when selling the contract product to third parties;
e) the restriction of the customers to whom the participating undertakings
may sell the contract products, when the period of seven years ends,
starting from the time the contract products are first put on the market;
f) the prohibition to make passive sale of the contract products in territories
reserved for other parties to the agreement;
g) the prohibition to put the contract products on the market or to pursue an
active sales policy of those products in territories reserved for other parties,
when the period seven years ends, starting from the time the contract
products are first put on the market;
h) setting the conditions under which the third parties shall not be granted the
licenses to manufacture the contract products or to apply the contract
processes, if the exploitation of the result of the joint research and
development by at least one of the party to the agreement is not provided
for or does not take place;
i) setting the conditions under which the demand from users or sellers in their
respective territories shall be refused, if they sell the contract products in
other territories; or
j) setting of conditions under which it is difficult for the users or sellers to
obtain the contract products from other sellers and in particular, to exercise
intellectual property rights, or taking measures so as to prevent users or
sellers from obtaining, or from putting on the market, the products which
have been lawfully put on the market by another party to the agreement or
within its consent.
(2) Within the meaning of paragraph (1) of this Article, the following provisions
contained in research and development agreements shall not be considered as
prohibited competition restrictions:
a) setting of production targets in a case when the exploitation of the results
includes the joint production of the contract products;
b) setting of sales targets and fixing of prices charged to immediate customers
when the exploitation of the results includes the joint distribution of the
contract products.
(3) Passive sales within the meaning of paragraph (1), item f) of this Article shall mean
sales in response to requests from individual customers in other parties´ exclusive
territories, including delivery of products to such customers, but such responding
must not be the result of active sales operations. Passive sales means also the
general advertising or promotion in the media or on the Internet that reaches
customers in other parties´ exclusive territories and customers in the respective
territories, which is a result of the development in the technology and easy access,
and therefore it is considered to be a reasonable method of approaching these
customers.
Regulation on Horizontal Agreements
90
(4) Active sales within the meaning of paragraph (1), item g) of this Article mean sales
made by actively searching for or approaching individual customers or particular
customers group inside another parties´ exclusive territory, conclusion of individual
agreements, taking measures of general presentation of products to those customers,
establishing branches, warehouse or organizing of distribution networks and
promotions in that territory. Active approach includes visits, direct and electronic
mail to customers, advertisement in the media or other promotions, specifically
targeted at those customers or customer group in the other parties´ exclusive
territory.
Article 11
Hard Core Restrictions with Specialization Agreements
(1) The block exemption shall not apply to specialization agreements which, directly or
indirectly, in isolation or in combination with other factors under the control of the
parties to the agreement, have restrictions with the aim of:
a) fixing prices when selling the products to third parties;
b) limitation of manufacture or sales; or
c) allocation of markets or customers.
(2) Within the meaning of paragraph (1) of this Article the following provisions
contained in specialization agreements shall not be considered as prohibited
competition restrictions:
a) Provisions on the agreed amount of products in the context of unilateral or
reciprocal specialization agreements or setting of the capacity and
production volume of joint production (joint venture) in the context of a
joint production agreement; and
b) The setting of sales targets and the fixing of prices that a production joint
venture charges to its immediate customers in the context of Article 7,
paragraph (1), item b) of this Regulation..
IV WITHDRAWAL OF BLOCK EXEMPTIONS AND INDIVIDUAL EXEMPTION
Article 12
Conditions for Withdrawal of Block Exemptions
(1) Pursuant to Article 7, paragraph (4) of the Act the Council of Competition may ex-
officio initiate the proceedings for assessment of compatibility of a particular
agreement under Article 2 of this Regulation with the provisions laid down in
Article 4, paragraph (3) of the Act and this Regulation, if such agreements have
effects in the relevant market which do not fulfill the conditions for block
exemption.
(2) Within the meaning of paragraph (1) of this Article the Council of Competition may
initiate the proceedings for assessment of a research and development agreement, in
particular when:
a) the existence of the research and development agreement substantially
restricts the scope for third parties to carry out research and development
on the particular field because of the limited research capacity available
elsewhere;
b) the existence of the research and development agreement, because of the
particular structure of supply, research substantially restricts the access of
third parties to the market for contract products;
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c) without objectively valid reason, the parties to the agreement do not exploit
the results of the joint research and development;
d) the contract products are not subject to effective market competition from
identical products or products considered by users as substitutes in view of
their characteristics, price, intended use and customs of the customers;
e) the existence of the research and development agreement can prevent,
restrict or distort the effective market competition in research and
development on a particular market.
(3) Within the meaning of paragraph (1) of this Article the Council of Competition may
initiate the proceedings for assessment of specialization agreements, in particular
when:
a) the agreement is not yielding significant results in terms of rationalization
or the consumers are not receiving a fair share of the resulting benefits, or
b) the products which are the subject of the specialization are not subject to
the effective market competition in relation to identical products or
products considered by users to be substitutes in a view of their
characteristics, price, intended use and customs of the customers.
(4) If the Council of Competition, in the course of the assessment procedure on
compliance of an agreement with the provisions of the Act and this Regulation,
proves that there are no grounds for the applicability of block exemption, it shall by
means of a decision withdraw the application of block exemption granted to a
particular agreement.
Article 13
Individual Exemption
Pursuant to Article 5 of the Act the undertakings-parties to the horizontal agreement may
submit to the Council of Competition a request for individual exemption, if the agreement
concerned does not fall under applicability of block exemption within the meaning of this
Regulation, or if it, by its nature, does not fall under any other regulation within he meaning
of Article 3, item b) of this Regulation.
Article 14
Non-compulsory Notification
The parties to the horizontal agreement that satisfy the conditions of block exemption laid
down in this Regulation, within the meaning of Article 7,paragraph (3) of the Act, are not
obliged to submitted such agreements to the Council of Competition for assessment with
respect to individual exemption.
V TRANSITIONAL AND FINAL PROVISIONS
Article 15
(1) Horizontal agreements, under Article 2 of this Regulation, concluded before this
Regulation enters into force, must be brought in compliance with the provisions of
this Regulation by December 31, 2006.
(2) As regards the horizontal agreements, concluded before this Regulation enter into
force, on condition that they are brought in compliance with the provisions of this
Regulation within the time period set out under paragraph (1) of this Article, the
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92
market share, excluding Article 6, paragraph (2) and Article 9, paragraph (2) of this
Regulation, shall be calculated on the basis of the market sales data relating to the
calendar year preceding the year this Regulation enters into force.
Article 16
Entry into Force
This Regulation shall enter into force on the eight day of its publication in the “Official
Gazette of Bosnia and Herzegovina”, and it will be published in official gazettes of Entities
and Brčko District.
C.C., Number: 01-01-26-627/05 President
Sarajevo, 30 December 2005 Sena Hatibovic
REGULATION ON BLOCK EXEMPTION
GRANTED TO CERTAIN CATEGORIES OF
VERTICAL AGREEMENTS (BETWEEN
UNDERTAKINGS OPERATING AT THE
DIFFERENT LEVELS OF PRODUCTION OR
DISTRIBUTION)
“Official Gazette of BiH”, No. 18/06
The Council of Competition
95
Pursuant to Article 25, paragraph (1), item a) and Article 7, paragraph (2) of the Act on
Competition (“Official Gazette of BiH”, No. 48/05), the Council of Competition on its 22nd
session held on 24 January 2006 has adopted
REGULATION ON BLOCK EXEMPTION GRANTED TO CERTAIN
CATEGORIES OF VERTICAL AGREEMENTS (BETWEEN UNDERTAKINGS
OPERATING AT THE DIFFERENT LEVELS OF PRODUCTION OR
DISTRIBUTION)
I GENERAL PROVISIONS
Article 1
Subject Matter of the Regulation
This Regulation shall stipulate the conditions for block exemption granted to certain
categories of agreements between undertakings which operate аt the different levels of
production or distribution (hereinafter: vertical agreements), restrictions or conditions which
may be and must be contained herein and other conditions in a line with the provisions of
Article 7 of the Act on Competition (hereinafter: the Act).
Article 2
Definition
Vertical agreements include those agreements or a joint venture between two or more
undertakings which operate at the different levels of production and distribution chain,
relating to the conditions under which the undertakings may purchase, sell or resell particular
products or services.
II VERTICAL AGREEMENTS FOR BLOCK EXEMPTION
Article 3 Vertical Agreements for Block Exemption
Block exemption shall apply to vertical agreements laid down in Article 7, paragraph (1),
item b) of the Act, and particularly to:
a) Exclusive distribution agreements - where the supplier undertakes to limit the sale
of contract products and/or services to only one selected distributor in a particular
territory or to particular group of customers which is exclusively allocated to that
distributor.
b) Selective distribution agreements - where the supplier undertakes to sell the contract
products, either directly or indirectly, only to distributors selected on the basis of
transparent, specified criteria and where the distributors undertake not to sell such
products to unauthorized distributors.
c) Exclusive purchase agreements - where the buyer undertakes to purchase the
contract products only from one particular supplier.
d) Exclusive supply agreements - where the supplier undertakes to sell the contract
products, either directly or indirectly, only to one buyer in the territory of the
Bosnia and Herzegovina for the purpose of a specific use or for resale.
Regulation on Vertical Agreements
96
e) Franchise means agreements - where one undertaking (franchisor) provides the
other party (franchisee), in return for a direct or indirect finance reimbursement,
with the right to use the franchise, i.e. the package of intellectual or industrial
property rights for manufacture and/or sale purposes of particular products or
provision of services. Intellectual or industrial property rights package relates to a
trade name and trade mark or signs, know-how, models, designs, copyright,
technology knowledge or patents which shall be used for further sale of contract
products or services to end users.
Franchise agreements are not applied on industrial (technology) franchise
agreements relating to manufacture of products or technological process in the
manufacture of such products.
f) Agreements containing provisions which relate to the assignment of intellectual
property rights to the buyer or exercise of those rights by the buyer, provided that
those provisions do not constitute the primary object of such agreements and that
they are directly related to the use, sale or resale of contract products or services by
the buyer or its customers.
Article 4
Applicability of the Block Exemptions
Block exemption shall apply to vertical agreements laid down in Article 3 of this Regulation
if they satisfy all requirements laid down in Article 4, paragraph (3) of the Act.
Article 5
Total Annual Income
The block exemption, within the meaning of Articles 3 and 4 of this Regulation shall apply
to vertical agreements entered into between an association of undertakings and its members,
or between such association and its suppliers, exclusively if all members of such association
are practicing retail sale and if no individual member of such association together with its
connected undertakings has a total annual income exceeding 4,000,000 KM.
Article 6
Vertical Agreements between Competing Undertakings
(1) The Block exemption, within the meaning of Articles 3 and 4 of this Regulation,
shall not apply to vertical agreements entered into between mutually competing
undertakings.
(2) The block exemption, within the meaning of paragraph (1) of this Article, shall
apply to vertical agreements entered into between mutually competing undertakings
which do not grant equivalent rights and obligations to each of the parties (non-
reciprocal vertical agreements), and if :
a) The buyer does not have a total annual income exceeding 4,000,000KM; or
b) The supplier is at the same time a manufacturer and a distributor of
products, while the buyer is a distributor of contract products and does not
manufacture the competing (contract) products; or
c) The supplier is a provider of services at several levels of trade, while the
buyer does not provide competing services at the level of trade where it
purchases the contract services.
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III RESTRICTIONS AND CONDITIONS THAT VERTICAL AGREEMENTS MAY
NOT CONTAIN
Article 7
Restrictions that Vertical Agreements May Not Contain
The block exemption shall not apply to vertical agreements which, directly or indirectly, in
isolation or in combination with other factors under the control of the parties to the
agreement, have as their object:
a) The restriction of the buyer’s ability to determine freely its sale price of products
and services, without prejudice to the possibility of the supplier imposing a
maximum sale price or recommending a sale price, provided that they do not
amount to a fixed or minimum sale price as a result of pressure from or incentive
offered by any of the parties to agreement;
b) The restriction of the territory into which or of the group of customers (consumers)
to whom the buyer may sell the contract products or services, with the exemption
of:
1) when the buyer’s active sales is restricted into the exclusive territory or to
an exclusive customers group reserved to the supplier or allocated by the
supplier to another buyer, where such restriction is not used to limit the
sales allowed to the buyer’s client (indirect buyers);
2) when the buyer operating at the wholesale level of trade is restricted in
selling (active and passive sales) the products to end-users;
3) when the members of a selective distribution system are restricted in
selling (active and passive sales) the products to unauthorized distributors
in the markets where such systems operate;
4) the restrictions of the buyer’s right to sell (active or passive sales) spare
parts (components), supplied for the purposes of incorporation into new
product, to end-users (competing suppliers) who use them to manufacture
the same type of products as those produced by the supplier.
c) The restriction of active or passive sale to end-users, members of a selective
distribution system operating at the retail level of trade, without prejudice to the
possibility of prohibiting a member of that selective distribution system from
operating out of an authorized place of business;
d) The restriction of cross-supplies between distributors within a selective distribution
system, and between distributors operating at a different levels of trade;
e) The restrictions agreed between a supplier of components and a buyer of those
components who incorporates them in new product, which limits the supplier to sell
the components as spare parts to end-users or to repairers or other service providers
not entrusted by the buyer with the repair or servicing its products.
Article 8
Active and Passive Sales
(1) Active sale within the meaning of Article 7 of this Regulation, shall mean sale made
by active access to buyers (customers) or exclusive customer group inside another
distributor’s exclusive territory, conclusion of individual agreements and taking
measures for general presentation of products to that customers, the establishment
of branches, warehouses or distribution networks and advertising in another
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98
distributor’s exclusive territory, visits, direct mail and by internet, advertisements in
media and other promotions specifically targeted at that customers group or
customers in another distributor’s exclusive territory.
(2) Passive sale within the meaning of Article 7 of this Regulation shall mean sale in
response to requirements from individual buyers (customers), including delivery of
products or services to such customers (consumers), to the extent that such
responding is not the result of active sales operations. General advertising or
promotion in the media or on the Internet which reaches customers or a group of
customers outside of another distributor’s exclusive territories and which is
considered to be, as a result of the development in the technology, a reasonable
method of access to the customers or group of customers outside of such territories
is a passive sale.
Article 9
Conditions that Vertical Agreement May Not Contain
The block exemption shall not apply to any of the following obligations contained in vertical
agreements:
a) Any direct or indirect non-compete obligation, the duration of which is unlimited or
exceeds a period of five years. Non-compete obligation which is tacitly renewable
and its duration exceeds a period of five years is deemed to be concluded for an
indefinite period;
b) Any direct or indirect obligation causing the buyer, after termination of the
agreement, not to manufacture, purchase, sell or resell products or services, unless
such obligation :
1) relates to products or services which compete with the contract products or
services (substitutes); and
2) is limited to the premises and location from which the buyer has operated
during the contract period; and
3) is indispensable to protect know-how transferred by supplier to the buyer,
and
4) provided that the duration of non-compete obligation is limited to a period
of one year after termination of the agreement and without prejudice to the
possibility of imposing a restriction which is unlimited in time and relates
on the use, transfer or disclosure of know-how, provided that the know-
how is not accessible publicly, i.e. is not announced.
c) Any direct or indirect obligation causing the members of a selective distribution
system not to distribute (resell) competitive trade marks of products of the particular
suppliers (competitors).
IV NON-COMPETE OBLIGATIONS AND KNOW-HOW
Article 10
Non-Compete Obligations and Know-how
(1) The non-compete obligation, within the meaning of Article 9, paragraph a) of this
Regulation, shall mean any direct or indirect obligation causing the buyer not to
manufacture, sell or resell the substitute products which compete with the contract
products, or any direct or indirect obligation on the buyer to purchase from supplier
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or from another undertaking designated by the supplier more than eighty per cent
(80%) of the buyer’s total purchases of the contract products or services and their
substitutes on the relevant market, calculated on the basis of the value of its
purchases in the preceding financial year.
(2) Pursuant to Article 9, paragraph a) of this Regulation the non-compete obligation,
the duration of which is five years, shall not be considered as a prohibited vertical
restriction where the contract products or services are sold by the buyer within the
premises or location owned by the supplier or leased by the supplier from the third
parties non connected with the buyer, provided that the duration of non-compete
obligation does not exceed the period of occupancy of the supplier’s premises or
location.
(3) Know-how within the meaning of Article 9, paragraph b) of this Regulation means
a package of non-patented, technical information, resulting from experience and
testing by the supplier, and which is :
a) Secret - means that the know-how package as a body, or in a precise
configuration and assembly of its components, is not generally known or
easily accessible;
b) Substantial - means that the know-how includes information which are
indispensable to the buyer for the use, sale or resale of the contract
products, and especially for the presentation of the products while selling
them, methods of influencing users, technically skilled staff and finance
management;
c) Identified - means that the know-how must be presented in a sufficiently
comprehensive manner, as to make it possible to verify whether it satisfies
the criteria of secrecy and significance.
V MARKET SHARE AND TOTAL INCOME
Article 11
Market Share
(1) The block exemption shall apply to the agreements laid down in Articles 3 and 4 of
this Regulation, provided that the market share of the supplier does not exceed
thirty per cent (30 %) of the relevant market on which it sells the contract products
and/or services.
(2) Where vertical agreements contain, exclusive supply obligations, the block
exemption provided for in Articles 3 and 4 of this Regulation, shall apply on
condition that the market share of the buyer does not exceed thirty per cent (30%) of
the relevant market on which it purchases the contract products or services.
Article 12
Calculation of the Market Share
(1) The market share on the relevant market, defined in Article 11 of this Regulation,
shall be calculated on the basis of the market sales value of the contract products or
services and other products and services offered for sale by the supplier, which are
regarded as interchangeable by the buyers, by reasons of the products’
characteristics, price and use.
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(2) If the market share value data of an undertaking are not available, the estimations
based on other reliable information, applying the market purchase value or the
estimations of that value, may be used to establish the buyer’s market share in the
relevant market where the contract products or services are purchased; this shall not
apply if the undertaking had no activity on the relevant market in the financial year
preceding the conclusion of the agreement.
(3) For the purpose of calculation of the market share laid down in Article 11 of this
Regulation, the following rules are applied:
a) the market share is calculated on the basis of the data relating to the
preceding calendar year;
b) the market share includes all products granted to integrated distributors for
the purpose of the sale;
c) if the market share of the undertakings is not more than thirty per cent
(30%) on the moment of the agreement conclusion, but subsequently rises
above that level without exceeding thirty five per cent (35%), the
exemption shall continue to apply for a period of two consecutive calendar
years following the year in which the thirty per cent (30%) of the market
share was first exceeded;
d) if the market, on the moment of the agreement conclusion, is not more than
thirty per cent (30%) but subsequently rises above thirty five per cent
(35%), the exemption shall continue to apply for one calendar year
following the year in which the level of thirty five per cent (35%) was first
exceeded.
e) the benefits of block exemption within the meaning of items (c) and (d) of
this Article may not be combined so as to exceed a period of two calendar
years.
Article 13
Calculation of Total Annual Income
(1) For the purpose of calculating total annual income within the meaning of Articles 5
and 6 of this Regulation, the income achieved by the relevant undertaking - a party
to the vertical agreement by selling the products and/or services during the financial
year preceding the conclusion of the agreement and the income achieved by its
connected undertakings shall be added together.
(2) For the purpose of calculating total annual income laid down in paragraph (1) of
this Article, no total annual income shall be taken of dealings between the relevant
undertaking-parties to the vertical agreement and undertakings connected to them,
or of dealings between connected undertakings.
(3) The total annual income calculated pursuant to paragraphs (1) and (2) of this Article
does not include the custom duties value, value added and excise duty taxes and
rebates.
(4) The block exemption provided for in this Regulation shall remain applicable where,
for a period of two consecutive financial years, the total annual income is exceeded
no more than ten per cent (10%).
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Article 14
Other Criteria for Granted Block Exemption
In the assessment of vertical agreements relating to the conditions which must be satisfied
for block exemption, apart from the conditions provided for under Article 4, paragraph (3) of
the Act and this Regulation, the following criteria is to be taken into account
a) The relative market structure relating to supply and purchase side;
b) The existence of parallel networks of vertical agreements;
c) The market position of competing undertakings on the relevant market;
VI NOTIFICATION OF AGREEMENTS FOR THE INDIVIDUAL EXEMPTION
AND CONDITIONS
Article 15
Individual Exemption
(1) Vertical agreement, which satisfies the conditions for block exemption laid down in
this Regulation, within the meaning of Article 7, paragraph (3) of the Act, need not
to be submitted to the Council of Competition for assessment in respect of
individual exemption, laid down in Article 5 of the Act.
(2) A request for individual exemption of the vertical agreement may be submitted,
pursuant to Article 5 of the Act, if the agreement concerned does not fall under
applicability of block exemption within the meaning of this Regulation.
Article 16
Conditions for Withdrawal of Block Exemptions
(1) Pursuant to Article 7, paragraph (4) of the Act, the Council of Competition may, ex-
officio, initiate the proceedings to assess the compatibility of a particular agreement
as laid down in Article 3 of this Regulation, if the effects of such agreement
(individually or due to their cumulative effects) with other similar agreements in the
relevant market, do not fulfill the conditions for block exemption, laid down in
Article 4, paragraph (3) of the Act, and particularly where:
a) access to the relevant market or competition therein is significantly
restricted by the cumulative effect of the parallel networks of vertical
agreements (of similar vertical restrains) formed by the competitive
suppliers or customers who cover together more than fifty per cent (50%)
of the relevant market
b) considering the exclusive supply or distribution, the buyer have no
alternative sources of supply of the contract products or services in the
relevant market;
(2) If the assessment results on compliance of the agreement with the provisions of the
Act and this Regulation prove that there are no grounds for the applicability of the
block exemption, the Council of Competition shall by means of a decision withdraw
the application of block exemption to individual or more vertical agreements.
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Article 17
Inapplicability of Block Exemptions
This Regulation shall not apply to vertical agreements a matter and content of which fall
under competence of other regulations on block exemptions pursuant to Article 7 of the Act.
VII TRANSITIONAL AND FINAL PROVISIONS
Article 18
Transitional Provisions
(1) Vertical agreements of this Regulation which have been concluded before this
Regulation enters into force must be brought in compliance with the provisions of
this Regulation until 31st December 2006.
(2) The market share and total annual income resulting from the vertical agreement
from paragraph (1) of this Article shall be calculated in line with the provisions of
this Regulation.
Article 19
Entry into Force
This Regulation shall enter into force on the eight day following the day of publication in the
“Official Gazette of BiH” and it shall be published in official gazettes of Entities and Brčko
District of Bosnia and Herzegovina.
C.C. Number: 01-01-26-103-I /06 President
Sarajevo, 24 January 2006 Sena Hatibovic
REGULATION ON BLOCK EXEMPTION GRANTED TO
INSURANCE AGREEMENTS
“Official Gazette of BiH”, No. 15/06
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Pursuant to Article 7, paragraph (1), item e) and Article 25, paragraph (1), item a) of the Act
on Competition (“Official Gazette BiH”, No. 48/05), the Council of Competition in its 20th
session held on 27 December 2005, has adopted
REGULATION ON BLOCK EXEMPTION GRANTED TO INSURANCE
AGREEMENTS
I GENERAL PROVISIONS
Article 1
Subject Matter
This Regulation shall stipulate the conditions for block exemption granted to insurance
agreements, set out conditions which such agreements must contain, the restrictions or
conditions which such agreements may not contain, and other conditions which must be
fulfilled in order to meet the conditions for block exemptions from application of the
provisions on prohibited agreements set out pursuant to Article 4 of the Act on Competition
(hereinafter: Act).
Article 2
Applicability of the Block Exemptions
(1) Block exemption shall apply to insurance agreements laid down in Article 7,
paragraph (1), item e) of the Act, entered into between two or more insurance
undertakings within the insurance business, with respect to:
a) the joint establishment and distribution of calculations of the average cover
costs of a specified risk in the past (hereinafter: calculations), the joint
establishment and distribution of mortality tables, and tables showing the
frequency of illness, accident and invalidity within the insurance sector
involving an element of capitalization (hereinafter: tables);
b) the joint carrying out of studies on the probable impact of general external
circumstances on which the participating undertakings have no influence,
relating to the frequency or number of future claims for reimbursement of
a given risk or risk category or on the profitability of different types of
investment (hereinafter: studies), that is, the distribution of the results of
such studies;
c) the joint establishment and distribution of non-binding standard policy
conditions for direct insurance (hereinafter: standard policy conditions);
d) the joint establishment and distribution of non-biding insurance types or
models illustrating the profit which is to be realized from an insurance
policy involving an element of capitalization (hereinafter: models);
e) the setting-up and operation of groups of insurance undertakings
(hereinafter: coinsurance groups) or groups of insurance undertakings and
reinsurance undertakings (hereinafter: co-reinsurance groups) for the joint
coverage of a specific category of risks in the form of joint co-insurance
and co-reinsurance;
f) the establishment, recognition and distribution of technical specifications,
rules or codes of practice concerning those types of security devices for
which there are no technical specifications in the relevant market,
classification systems, rules, procedures or codes of practice and the
assessment and approval procedures on compliance of security devices
with such specifications, rules or codes of practice (hereinafter: assessment
on compliance of the security devices);
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g) the establishment, recognition and distribution of technical specifications,
rules and codes of practice for the installation and maintenance of security
devices, and the assessment and approval of the undertakings installing or
maintaining the security device which are already brought into compliance
with technical specifications, rules or codes of practice (hereinafter:
assessment and approval of undertakings);
(2) Standard policy conditions under paragraph (1), item c) of this Article refers to any
clauses contained in model or reference insurance policies prepared jointly by
insurers or by bodies or associations of insurers.
(3) Co-insurance groups under paragraph (1), item e) of this Article means groups of
insurers which agree to underwrite in the name and for the account of all the
participants the insurance of a specified risk category; or entrust the underwriting
and management of the insurance of a specified risk categories in their name and on
their behalf to one of the insurer, to a joint broker or to a joint body set up for this
purpose.
(4) Co-reinsurance groups under paragraph (1), item e) of this Article means groups of
insurers, one or more reinsures have possibility of participating, established for the
purpose of the mutually reinsurance of all or a part of their liabilities in respect of a
specified risk category; and in some cases, the acceptance in the name and on behalf
of all the participants the re-insurance of the same category of risks.
(5) Security devices under paragraph (1), items f) and g) of this Regulation means all
components and equipment designed for loss prevention and reduction, and systems
formed from such elements.
(6) Participating parties to the agreement means undertakings under paragraph (1) of
this Article and their respective connected undertakings.
Article 3
Inapplicability of Block Exemptions
According to the provisions of this Regulation block exemptions shall not apply to:
a) insurance agreements which do not fulfill cumulative conditions laid down in
Article 4, paragraph (3) of the Act and which have not been brought into
compliance with this Regulation,
b) insurance agreements the subject matter of which falls within the scope of another
regulation pursuant to the provisions under Article 7 of the Act.
II CONDITIONS THAT AGREEMENT MUST CONTAIN AND OTHER
CONDITIONS FOR APPLICABILITY OF BLOCK EXEMPTIONS
Article 4
Joint Calculations, Tables and Studies
(1) The block exemption provided for in Article 2, paragraph (1), item a) of this
Regulation shall apply on condition that the calculations and/or tables:
a) are based on the numerical data collected, spread over the risk-years
selected as an observation period, which relate to identical or comparable
risks in sufficient number for statistical data processing for the period of
time concerned. Statistical processing contains a data on the number of
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claims for reimbursement during the said period, the number of individual
risks insured in each risk-year of the chosen observation period, the data on
the total amounts paid or payable in respect of claims for reimbursement
arisen during the said period, the data on the total amount of capital
insured for each risk-year during the chosen observation period and other
relevant data;
b) include as detailed a breakdown of the available statistics to the extent of
actuarially possibility;
c) do not include in any way elements for potential contingency costs, income
deriving from reserves, administrative or commercial costs or fiscal or
para-fiscal contributions, and take into account neither revenue from
investments nor anticipated profits.
(2) The block exemptions provided for in Article 2, paragraph (1), items a) and b) of
this Regulation shall apply on condition that calculations, tables or study results:
a) do not identify the insurer or any insured parties;
b) when complied and distributed, include non-binding statement;
c) are made available on reasonable and non-discriminatory terms, to any
insurer which requires them, and to insurers which are not active on that
relevant market.
Article 5
Standard Policy Conditions and Models
(1) The block exemption provided for in Article 2, paragraph (1), item c) of this
Regulation shall apply on condition that the standard policy condition:
a) are established and distributed with an explicit statement that they are non-
binding and that their use is not in any way recommended
b) expressly arrange that participating parties to the agreement are free to
offer different policy conditions to their customers; and
c) are available to any interested party and can be obtained upon request.
(2) The block exemption provided for in Article 2, paragraph (1), item d) of this
Regulation shall apply on condition that the non-binding models are established and
distributed only by way of guidance.
Article 6
Other Conditions for Exemption
(1) The block exemptions provided for in Article 2, paragraph (1), item e) of this
Regulation shall apply on condition that:
a) each party to the agreement has the right to withdraw from the co-
insurance and/or co-reinsurance group, within the period of notice of not
more than one year starting from a day of the submission of the statement
of withdrawal, without incurring any sanction;
b) the rules of the co-insurance and/or co-reinsurance group, in whole or in
part, do not oblige any member of the co-insurance group and/or co-
reinsurance group to insure or re-insure any risk of the type covered by the
group;
c) the rules of the co-insurance and/or co-reinsurance group do not restrict the
activity of the group or its members to the insurance or reinsurance of risks
located in any particular part of the relevant market;
d) the agreement does not limit production and sales;
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108
e) the agreement does not allocate the markets or customers;
f) the members of a co-reinsurance group do not agree on the gross insurance
premiums which they charge in direct insurance; and
g) no member of the co-insurance and/or co-reinsurance group, or
undertaking which exercises a determining influence on the policy of the
group, is also a member of, and/or exercises a determining influence on the
policy of another co-insurance and/or co-reinsurance group active on the
same relevant market.
(2) Gross insurance premium under paragraph (1), item f) of this Article and Article 11,
paragraph (1), item a) of this Regulation means the price which is charged to the
purchaser of an insurance policy.
Article 7
Security Devices
The block exemptions provided for in Article 2, paragraph (1), items f) and g) of this
Regulation shall apply on condition that:
a) the technical specifications and procedures for the assessment of compliance of the
security devices are precise, technically justified and in proportion to the
performance effects which are to be attained by the security device concerned;
b) the rules for the evaluation and approval of installation undertakings and/or
maintenance undertakings are objective, relate to their technical and professional
competence and are applied in a non-discriminatory manner;
c) such technical specifications and rules are established and distributed with an
expressly given statement that insurers are free to accept to insure, on whatever
terms and conditions they wish, other security devices which do not comply with
these technical specifications or rules;
d) such specifications and rules are established and distributed with an expressly given
statement that insurers are free to accept to insure, on whatever terms and
conditions they wish, other undertakings installing and maintaining the security
devices which do not comply with these technical specifications or rules;
e) such technical specification and rules are provided upon request to any interested
person;
f) any list of security devices and list of undertakings installing and maintaining those
security devices, which is compliant with technical specifications includes a
classification of security devices and undertakings based on the level of achieved
results;
g) a request for an assessment of compliance of security devices or assessment and
approval of undertakings may be submitted at any time by any applicant;
h) the evaluation of conformity under item g) of this paragraph does not impose on the
applicant any expenses that are disproportionate to the costs of the approval
procedure;
i) the security devices under undertakings installing and maintaining those security
devices which satisfy the criteria on compliance assessment and criteria on
assessment and approval of undertakings, get the in a non-discriminatory manner
within a period of six months of the date of application, except where technical
considerations justify a reasonable additional period;
j) the fact of compliance or approval under item i) of this paragraph is certified in
written;
k) the grounds for a refusal to issue the certificate of compliance and approval under
item i) of this paragraph are given in writing by attached copies of the records of the
tests and controls that have been carried out;
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l) the grounds for a refusal to take into account a request for assessment under item i)
of this paragraph are provided in writing; and
m) the technical specifications and rules are applied by the bodies accredited to norms.
Article 8
Joint Coverage of Certain Types of Risks, Market Share and
Duration of Block Exemption
(1) The block exemption granting to insurance agreements provided for in Article 2,
paragraph (1), item e) of this Regulation shall apply to new co-insurance and co-
reinsurance groups which are created after the date this Regulation enters into force
in order to cover new risks for a period of three years from the date of the first
establishment of the groups, regardless of the market share of those groups.
(2) The block exemptions provided for in Article 2, paragraph (1), item e) of this
Regulation shall apply to co-insurance and co-reinsurance groups which do not fall
within the scope of paragraph (1) of this Article, as long as the present Regulation
remains in force, on condition that the insurance policies underwritten within the
grouping arrangement by the participating undertakings or on their behalf do not, in
any of the markets concerned, represent:
a) in the case of co-insurance, more than 20% of share in the relevant market;
b) in the case of co-reinsurance, more than 25% of share in the relevant
market;
(3) If the total market share of the co-insurance group referred to in paragraph (2), item
a) of this Article is initially not more than 20% but subsequently rises above this
level without exceeding 22%, the block exemption shall continue to apply for a
period of two consecutive calendar years following the year in which 20% total
market share of the co-insurance group was first exceeded.
(4) If the total market share of the co-insurance group referred to in the paragraph (2),
item a) of this Article is initially not more than 20% but subsequently rises above
22%, the block exemptions shall continue to apply for one calendar year following
the year in which the level of 22% total market share of the co-insurance group was
first exceeded.
(5) The benefit of paragraphs (3) and (4) of this Article may not be combined so as to
exceed a period of block exemption of two calendar years.
(6) If the total market share of the co-reinsurance group referred to in paragraph (2),
item b) of this Article is initially not more than 25% but subsequently rises above
this level without exceeding 27%, the block exemption shall continue to apply for a
period of two consecutive calendar years following the year in which the 25% total
market share of the co-reinsurance group was first exceeded.
(7) If the total market share of the co-reinsurance group referred to in paragraph (2),
item b) of this Article is initially not more than 25% but subsequently rises above
27%, the block exemptions shall continue to apply for one calendar year following
the year in which the level of 27% total market share of the co- reinsurance group
was first exceeded.
(8) The benefit of the paragraph (6) and (7) of this Article may not be combined so as
to exceed a period of block exemption of two calendar years.
Regulation on Block Exemption Granted to Insurance Agreements
110
(9) “New risk” under paragraph (1) of this Article means risks which did not exist
before, and for which insurance cover requires a new underwritten insurance policy.
An amendment, improvement or replacement of an existing insurance policy may
not be considered new risks.
Article 9
Calculation of Market Share
(1) The market share of the participating undertakings provided for in Article 8,
paragraph (2) of this Regulation shall be calculated on the basis of the gross
premium income of the insurance policies; if the gross premium income data are not
available, estimates based on other reliable market information, including insurance
cover provided or insured risk value, may be used to establish the market share of
the undertakings concerned.
(2) The market share under paragraph (1) of this Article shall be calculated on the basis
of data relating to the calendar year preceding the conclusion of the agreement.
(3) The market share under paragraph (1) of this Article shall be increased by the
market shares of undertakings connected to the participating parties to the
agreement realized as provided for in paragraphs (1) and (2) of this Article.
III RESTRICTIONS AND CONDITIONS WHICH AGREEMENTS MAY NOT
CONTAIN
Article 10
Specific Conditions which Agreements may not Contain
The block exemption provided for in Article 2 of this Regulation shall not apply where
participating undertakings agree, impose or oblige other undertakings not to use calculations
or tables that differ from those established pursuant to Article 2, paragraph (1), item a) of this
Regulation, or not to deviate from the results of the studies referred to in Article 2, paragraph
(1), item b) of this Regulation.
Article 11
Hardcore Restrictions
(1) The block exemption provided for in Article 2, paragraph (1), item c) of this
Regulation shall not apply where the standard policy conditions in insurance contain
clauses which:
a) contain any indication of the level of the gross insurance premiums;
b) indicate the amount of the cover or the part which the policyholder must
pay himself;
c) impose comprehensive cover including risks to which a significant number
of policyholders are not simultaneously exposed;
d) allow the insurer to maintain the policy in force in the event that it cancels
part of the cover, or increase the cover premium without the risk or the
scope of the cover being changed, that is, if the insurer alters the policy
conditions without the express consent of the policyholders, exceptionally,
if it relates to indexation clauses;
e) allow the insurer to modify the term of the policy without the consent of
the policyholder;
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f) impose on the policyholder in the non-life insurance sector a contract
period of more than three years;
g) impose a renewal period of more than one year where the policy is
automatically renewed;
h) require the policyholder to agree to the reinstatement of the policy which
has been suspended on account of the disappearance of the insured risk, if
the policyholder is once again exposed to a risk of the same nature;
i) require the policyholder to obtain cover from the same insurer for different
risks;
j) require the policyholder, in the event of disposal of the object of insurance,
to make the acquirer obliged by means of agreement to take over the
insurance policy;
k) exclude or limit the cover of a risk if the policyholder uses security devices
or services of undertakings installing or maintaining those security devices,
which are not approved in accordance with the relevant specifications
agreed by an association or associations of insurers in the relevant market.
(2) The block exemption provided for in Article 2, paragraph (1), item c) of this
Regulation shall not apply to the participating undertakings which agree amon
themselves, or agree to oblige other undertakings not to apply conditions other than
standard policy conditions established pursuant to an agreement between the
participating undertakings.
(3) The block exemption provided for in Article 2, paragraph (1), item c) of this
Regulation shall not apply to agreements which exclude the coverage of certain risk
categories because of the characteristics attributes of the policyholder, without
prejudice to the insurer to establish specific insurance conditions for particular
social or occupational categories of the population.
(4) The block exemption provided for in Article 2, paragraph (1), item d) of this
Regulation, shall not apply where the models include only specified interest rates or
contain figures indicating administrative costs. There is the possibility left to the
insurer to calculate in the models the amounts resulting of the legally imposed
obligations.
(5) The block exemption provided for in Article 2, paragraph (1), item d) of this
Regulation shall not apply to the participating undertakings which agree among
themselves, or oblige other undertakings not to apply calculation models illustrating
the benefits of an insurance policy other than the models established pursuant in the
agreement between the participating undertakings.
IV WITHDRAWL OF BLOCK EXEMPTION AND INDIVIDUAL EXEMPTION
Article 12
Conditions for Withdrawal of Block Exemptions
(1) Pursuant to Article 7, paragraph (4) of the Act, the Council of Competition may ex-
officious initiate the proceedings to assess the compatibility of a particular insurance
agreement or group of insurance agreements stipulated in Article 2 of this
Regulation with stipulations of Article 4, paragraph (3) of the Act and this
Regulation, if the effects of such agreements individually or due to their cumulative
effect with other similar agreements in the relevant market, do not fulfill the
conditions for block exemption.
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112
(2) Within the meaning of paragraph (1) of this Article, the Council of Competition
may initiate the assessment of insurance agreements in particular where:
a) studies to which the exemption stipulated in Article 2, paragraph (1), item
b) of this Regulation applies are based on unjustifiable hypotheses;
b) standard policy conditions to which the exemption stipulated in Article 2,
paragraph (1), item c) of this Regulation applies contain clauses which
create, to the detriment of the policyholder, a significant imbalance
between the rights and obligations arising from the contract;
c) the setting-up or operation of a co-insurance group and/or co-reinsurance
group to which the block exemption stipulated in Article 2, paragraph (1),
item e) of this Regulation applies results in the sharing of the relevant
market through the conditions governing admission, the definition of the
risks to be covered, the agreements on sharing the risk out or on
assignment of the risk to another co-reinsurer, and by any other means,.
(3) If the results of the assessment of an agreement on the compliance with the
provisions of the Act and this Regulation prove that there are no grounds for the
applicability of block exemption, the Council of Competition shall by means of a
decision withdraw the benefit granted by block exemption to the agreement
concerned.
Article 13
Individual Exemption
Pursuant to Article 5 of the Act the participating undertakings may submit to the Council of
Competition a request for individual exemption, if the agreement concerned does not fall
under the applicability of block exemption within the meaning of Article 3 of this
Regulation.
Article 14
Non-compulsory Notification
The participating undertakings which satisfy the conditions for block exemptions laid down
in this Regulation, within the meaning of the Article 7, paragraph (3) of the Act, do not need
to submit such agreements to the Council of Competition for assessment in respect of
individual exemption.
V TRANSITIONAL AND FINAL PROVISIONS
Article 15
(1) Insurance agreements under Article 2 of this Regulation which have been concluded
before this Regulation enters into force, must be brought in compliance with the
provisions of this Regulation by December 31, 2006.
(2) As regards insurance agreements which have been concluded before this Regulation
enters into force, under the condition that they have been brought in compliance
with the provisions of this Regulation within the period set out under paragraph (1)
of this Article, the market share, by way of an exception of Article 9, paragraph (2)
of this Regulation, shall be calculated on the basis of the data relating to the
calendar year preceding the year when this Regulation enters into force.
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Article 16
Entry into Force
This Regulation shall enter into force on the eight day of its publication in the Official
Gazettes of Entities and Brcko District of Bosnia and Herzegovina.
C.C. Number: 01-01-26-629/05 President
Sarajevo, 30 December, 2005 Sena Hatibovic
REGULATION ON BLOCK EXEMPTION
GRANTED TO AGREEMENTS ON DISTRIBUTION
AND SERVICING OF MOTOR VEHICLES
“Official Gazette of BiH”, No. 16/06
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Pursuant to Article 7, paragraph (1), item d) and Article 25, paragraph (1) item a) of the
Competition Act (“Official Gazette of BiH”, No. 48/05), the Council of Competition in its
22nd session held on 24 January 2006, has adopted
REGULATION ON BLOCK EXEMPTION GRANTED TO AGREEMENTS ON
DISTRIBUTION AND SERVICING OF MOTOR VEHICLES
I GENERAL PROVISIONS
Article 1
Subject Matter of the Regulation
This Regulation shall stipulate the conditions for block exemption granted to agreements on
distribution and servicing of motor vehicles, set out the conditions which such agreements
must contain, the restrictions or conditions which such agreements may not contain, and
other conditions which must be fulfilled in order to meet the conditions for block
exemption from application of the provisions on prohibited agreements pursuant to
Article 4 of the Act on Competition (hereinafter: the Act).
Article 2
Applicability of Block Exemption
(1) Block exemption shall apply to the agreements referred to in Article 7,
paragraph (1) item d) of the Act, concluded between two or more undertakings
each of which, for the purpose of the agreement, operate at the different level of
production or distribution (hereinafter: vertical agreements) where they relate to
the conditions under which the contracting parties may purchase, sell or resell new
motor vehicles, spare parts for motor vehicles or provide repair and maintenance
services for such vehicles, and particularly to the agreements which:
a) apply a qualitative, quantitative or mixed qualitative-quantitative selective
distribution system as a form of distribution and servicing of motor
vehicles;
b) apply the exclusive distribution or exclusive supply as a form of
distribution and servicing of motor vehicles;
c) contain provisions which relate to the assignment to the buyer or
giving the right to use to the buyer the intellectual property rights,
provided that such provisions do not constitute the main object of such
agreements and that they are directly connected to the use, sale and/or
resale of contract products by the buyer or its buyers.
(2) Exceptionally, the block exemption shall apply under the conditions set forth in
Article 6 of this Regulation and to the particular vertical agreements entered into
between association of undertakings and their members, as well as between such
association and their suppliers, in other words, to particular vertical agreements
entered into between competing undertakings.
(3) Motor vehicles referred to in paragraph (1) of this Article means:
a) Self-propelled vehicles intended for use on public roads and having tree
or more road wheels;
b) passenger cars intended for the carriage of passengers and comprising
no more than eight seats in addition to the driver's seat;
c) light commercial vehicles intended for the transport of goods or
passengers with a maximum mass not exceeding 3.5 tones; if a certain
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Motor Vehicles
118
light commercial vehicle is also sold in a version with a maximum
mass above 3.5 tones, all versions of that vehicle are considered to be
light commercial vehicles.
(4) Selective distribution system referred to in paragraph (1), item a) of this
Article means a distribution system established on the basis of the agreement on
distribution and servicing of motor vehicles where the supplier undertakes to
sell the contract products and services, either directly or indirectly, only to
distributors or repairers selected on the basis of specified criteria and where
these distributors or repairers undertake not to sell such products or services
to unauthorized distributors or independent repairers, without prejudice to the
ability to sell spare parts to independent repairers or the obligation to provide
independent operators with all technical information, diagnostic equipment, tools
and training required for the repair and maintenance of motor vehicles or for the
implementation of environmental protection measures.
(5) Qualitative selective distribution system, as referred to in paragraph (1), item
a) of this Article, means a system where the supplier determines criteria for the
selection of distributors or repairers which are only qualitative in nature, are
required by the nature of the contract products or services concerned, are
determined uniformly for all distributors or repairers wishing to join the
distribution system, are not applied in a discriminatory manner, and do not directly
limit the number of distributors or repairers in the relevant market.
(6) Quantitative selective distribution system, as referred to in paragraph (1), item
a) of this Article, means a system where the supplier determines criteria for the
selection of distributors or repairers which directly limit their number in the
relevant market.
(7) Exclusive distribution agreements as a form of distribution and servicing of
the motor vehicles referred to in paragraph (1), item b) of this Article, means
vertical agreements where the supplier undertakes to sell the contract products
only to one distributor selected in a particular location or to exclusively allocated
customers groups which have been allocated exclusively to that distributor.
(8) Exclusive supply agreements as a form of distribution and servicing of motor
vehicles referred to in paragraph (1), item b) of this Article, means a vertical
agreement where the supplier directly or indirectly undertakes to sell the contract
products only to one buyer inside the market of Bosnia and Herzegovina for the
purpose of a specific use or for resale.
(9) It is not allowed to combine, at the same market, application of a selective
distribution system referred to in paragraph (1), item a) and paragraphs (3), (4)
and (5) of this Article, with the exclusive distribution or exclusive supply form
referred to in paragraph (1), item b) and paragraphs (6) and (7) of this Article, by
means of the agreement on distribution and servicing of motor vehicles.
Article 3
Non-applicability of Block Exemption
Under the provisions of this Regulation, the following agreements may not be exempted from
prohibition of block exemption:
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a) vertical agreements which fail to fulfill the cumulative criteria stipulated by the
provisions of Article 4, paragraph (3) of the Act and which are not in compliance
with this Regulation;
b) vertical agreements which, according to their subject, fall into the category of
some other regulation, pursuant to the provisions of Article 7 of the Act.
II CONDITIONS THE AGREEMENTS MUST CONTAIN
Article 4
Market Share
(1) Block exemption for vertical agreements shall apply on condition that the
supplier's market share on the relevant market on which it sells new motor
vehicles, spare parts for motor vehicles or provides repair and maintenance services
does not exceed thirty percent (30%).
(2) Block exemption for vertical agreements establishing quantitative selective
distribution system for sale of new motor vehicles shall apply on condition that
the market share on the relevant market does not exceed forty percent (40%).
(3) However, the market share value shall not apply to block exemption for
vertical agreements establishing qualitative selective distribution system referred
to in paragraphs (1) and (2) of this Article.
(4) In the case of vertical agreements containing exclusive supply obligation, the
block exemption shall apply on condition that the market share held by the buyer
does not exceed thirty percent (30%) in the relevant market where it purchases
the contract products or services.
Article 5
Market Share Calculation
(1) The market share in the relevant market, within the meaning of Article 4 of
this Regulation, shall be calculated:
a) for the distribution of new motor vehicles, on the basis of the sale
volume of the contract products sold by the supplier and other products
which are regarded as interchangeable or substitutable (hereinafter:
substitute products);
b) for the distribution of spare parts, on the basis of the income realized by
the supplier from the sale of contract products and other products which
are regarded as their substitute products;
c) for the provision of repair and maintenance services, on the basis of the
turnover realized by the members of the supplier's distribution network
from the provision of contract services together with other services which
are regarded as substitute services;
(2) The market share referred to in paragraph (1) of this Article shall be
increased by the income achieved by the connected undertakings realized in
the market of contract products and their substitutes.
(3) Mutual trade in contract products and their substitutes between the supplier
referred to in paragraph (1) of this Article and the connected undertakings
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Motor Vehicles
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referred to in paragraph (2) of this Article, as well as the mutual trade in such
contract products and their substitutes between the connected undertakings, shall
not be taken into account in the market share calculation.
(4) The income, calculated in accordance with paragraphs (1), (2) and (3) of this
Article, shall be reduced by the amount of customs duties, the value added tax, and
other taxes directly relating to the turnover and rebates in the financial year
preceding the conclusion of the agreement.
(5) The market share held by the buyer in the relevant market where it
purchases the contract products which does not exceed thirty per cent (30%), and
stipulated as a condition for the application of block exemption in the case of
agreement containing exclusive supply obligations, within the meaning of
Article 5, paragraph (4) of this Regulation, shall be calculated applying the
criteria referred to in paragraphs (1) to (4) of this Article, taking into account
the value of its purchases or the estimates thereof.
(6) If the income amount figures, required for the calculations of the market share
of the undertakings are not available, other available information, including the
sale volume data of the products may be used, unless the undertaking performed
no activity in the relevant market in the financial year preceding the year of the
conclusion of the agreement.
(7) If the market share of the undertakings, on the moment of the agreement
conclusion, is not more than thirty per cent (30%) or forty per cent (40%), when
the agreement establishes the quantitative selective distribution system for the
sale of new motor vehicles, but subsequently rises above that level
without exceeding thirty five per cent (35%) or forty five per cent (45%)
respectively, the exemption shall continue to apply for a period of two
consecutive calendar years following the year in which the market share of
thirty per cent (30%) or forty per cent (40%) respectively was first exceeded.
(8) If the market share of the undertakings, on the moment of the
agreement conclusion, is not more than thirty per cent (30%) or forty per cent (40%),
when the agreement establishes the quantitative selective distribution system for
the sale of new motor vehicles, but subsequently rises above thirty five per cent
(35%) or forty five per cent (45%) respectively, the exemption shall continue
to apply for one calendar year following the year in which the market share of
thirty five per cent (35%), or forty five per cent (45%) respectively was first
exceeded.
(9) The benefit of paragraphs (7) and (8) may not be combined so as to
exceed the exemption period of two calendar years.
Article 6
Total Annual Income for Certain Categories of Vertical Agreements
(1) Block exemption shall also apply to vertical agreements entered into between an
interest association of undertakings and their members, or between such
associations and their suppliers:
a) if all members of such associations are distributors of motor vehicles
or spare parts for motor vehicles or repairers;
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b) if no individual member of such associations, together with their
connected undertakings have a total annual income exceeding
4,000,000.00 KM.
(2) Block exemption shall also apply to vertical agreements entered into between
competing undertakings, on condition that the agreement does not guarantee of
equal rights and obligations to each of the parties:
a) if the supplier is at the same time a manufacturer and distributor of the
products, while the buyer is a distributor but does not manufacture the
substitute products; and/or
b) if the supplier is a provider of services at several levels of trade, while
the buyer does not provide substitute services at the trade level where it
purchases the contract services; and/or
c) if the buyer has a total annual income not exceeding 4,000,000.00 KM
Article 7
Calculation of Total Annual Income
(1) Within the meaning of Article 6 of this Regulation, the total annual income shall
include the total annual income achieved by the undertaking during the financial
year preceding the conclusion of the agreement and the income achieved by all its
connected undertakings added together.
(2) For the purposes of calculating the total annual income, referred to under
paragraph (1) of this Article, no account shall be taken of dealings achieved by
the sales of product between the undertakings concerned and their connected
undertakings and between the connected undertakings.
(3) The total annual income calculated pursuant to the provisions of paragraphs
(1) and (2) of this Article, shall reduced by an amount of customs duties, the
value added tax, and other taxes directly relating to the turnover and rebates.
(4) Block exemption for agreements referred to in Article 6 of this Regulation,
shall remain applicable even if during the period of two consecutive financial
years the total annual income is exceeded by no more than ten per cent (10%).
Article 8
Duration and Application of Block Exemptions
(1) Block exemption shall apply on condition that the vertical agreement
concluded by the supplier of new motor vehicles with a distributor or authorized
repairer provides:
a) that the agreement is concluded for a period of at least five years, and each
party to the agreement undertakes to give the other party at least six
months' prior notice of its intention not to renew the agreement; or
b) that the agreement is concluded for an indefinite period, in this case the
period of notice for regular termination of the agreement has to be at least
two years for both parties to the agreement.
(2) The period of notice for regular termination of the vertical agreement in line with
paragraph (1), item b) of this Article may be reduced to at least one year where:
a) the supplier is obliged by law or by special agreement to pay
appropriate compensation on termination of the agreement, or
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Motor Vehicles
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b) the supplier terminates the agreement where it is necessary to re-organize
the whole or a substantial part of the network.
(3) Block exemption shall apply on condition that the vertical agreement
concluded with a distributor or repairer provides that a supplier who wishes to give
notice of termination of an agreement must give such notice in writing and
must include detailed and objective reasons for the termination, in order to
prevent a supplier from ending a vertical agreement with a distributor or
repairer because of practices which may not be restricted under this Regulation.
(4) Block exemption shall apply on condition that the vertical agreement provides
for each of the parties to the agreement the right to refer disputes resulting
from the agreement.
(5) Block exemption shall apply on condition that vertical agreement concluded with a
distributor or repairer provides that the supplier agrees to the transfer of the rights
and obligations resulting from the vertical agreement to another distributor or
repairer within the distribution system.
III RESTRICTIONS OF COMPETITION
Article 9
Hardcore Restrictions Concerning the Sale of New Motor Vehicles, Spare Parts
and Repair and Maintenance Services
(1) Block exemption shall not apply to vertical agreements on the sale of new motor
vehicles, spare parts and repair and maintenance services, which directly or
indirectly, in isolation or in combination with other factors under the control of the
parties to the agreement, contain vertical restraints which have as their object:
a) the restriction of the distributor's or repairer's ability to determine its
sale price, without prejudice to the supplier's ability to impose a
maximum sale price or to recommend a sale price, provided that this
does not amount to a fixed of minimum sale price as a result of pressure
from, or incentives offered by, any of the parties to the agreement;
b) the restriction of the territory into which, or of the particular
customers to whom, the distributor or repairer may sell the contract
products; the exemption shall apply to:
1) active sales into the exclusive territory or to an exclusive customer
group reserved to the supplier or allocated exclusively for sale by the
supplier to another distributor or repairer, where such restrictions
do not allow the sales by the customers of those distributors or
repairers;
2) the sales to end users by a distributor operating on the wholesale level
of trade;
3) the sales of new motor vehicles and spare parts to unauthorised
distributors by the members of a selective distribution system in
markets where selective distribution is applied;
4) the sales of products supplied by the buyer from the supplier as spare
parts for the purposes of incorporation in a new product, to end-
users who would use those spare parts to manufacture the same type of
products (substitutes) as those produced by the supplier.
c) the restriction of cross-supplies between distributors or repairers within a
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selective distribution system, including restrictions of cross-supplies
between distributors or repairers operating at different levels of trade;
d) the restriction of active or passive sales of new passenger cars or light
commercial vehicles, spare parts for any motor vehicles or repair and
maintenance services for motor vehicles to end users by members of a
selective distribution system operating at the retail level of trade in the
markets where selective distribution is used;
e) the restriction of active or passive sales of new vehicles other than
passenger cars or light commercial vehicles to end users by members of
a selective distribution system operating at the retail level of trade in the
markets where selective distribution is used, without prejudice to a
prohibition on a member of a selective distribution system from operating
out of an unauthorised place of business.
(2) Active sales within the meaning of paragraph (1) of this Article shall mean
sales made by actively searching for or approaching customers or particular group
of customers inside another distributor's exclusive territory, the conclusion of
individual agreements and taking measures of general presentation of products to
the relevant customers, establishment of branches, warehouse or organization of
distribution networks and advertising in another distributor's exclusive territory.
Active approach includes visits, direct and electronic mail, advertisements in the
media or other promotions specifically targeted at that customer group or
customers in another distributor's territory.
(3) Passive sales within the meaning of paragraph (1) of this Article shall mean
sales in response to requests from individual customers, including delivery of
products to such customers, to the extent that such responding is not the result of
active sales operations. Passive sales includes the sales generated by general
advertising or promotion in the media or on the Internet that reaches customers in
other distributors' exclusive territories or customer groups, which is the result of
development in technology and easily access, and therefore it considered to be a
reasonable method of approaching the customers or groups of customers.
Article 10
Hardcore Restrictions Concerning the Sale of New Motor Vehicles
(1) Block exemption shall not apply to vertical agreements on the sale of new motor
vehicles, which directly or indirectly, in isolation or in combination with other
factors under the control of the parties to the agreement, contain vertical restraints
which have as their object:
a) the restriction of the distributor's ability to sell any new motor vehicle
which corresponds to a model within its contract range set forth by the
agreement;
b) the restriction of the distributor's ability to subcontract the provision of
repair and maintenance services to other authorized repairers, without
prejudice to the supplier's ability to require the distributor to give end
users the name and address of the authorized repairer in question before
the conclusion of the sales contract.
(2) Contract range of products determined in the agreement, within the meaning of
paragraph (1), item a) of this Article, means any of the different models of motor
vehicles available for purchase by the distributor from the supplier.
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Motor Vehicles
124
(3) A motor vehicle which corresponds to a model within the contract range of
products, within the meaning of paragraph (1) of this Article, means a vehicle
which is the subject of a distribution agreement with another undertaking within
the distribution system set up by the manufacturer or with his consent and which is:
a) manufactured or assembled in volume by the manufacturer, and
b) identical as to body style, drive-line, chassis, and type of motor to a
vehicle within the contract range.
(4) Authorized repairer within the meaning of paragraph (1) of this Article means a
provider of repair and maintenance services for motor vehicles not operating
within the distribution system set up by a supplier of motor vehicles for which it
provides the repair or maintenance services.
Article 11
Hardcore Restrictions Concerning the Sale of Spare Parts and of Repair and
Maintenance Services
(1) Block exemption shall not apply to vertical agreements on the sale of spare parts
and of repair and maintenance services which directly or indirectly, in
isolation or in combination with other factors under the control of the parties to the
agreement, contain vertical restraints which have as their object:
a) the restriction of the authorized repairer's ability to limit its activities to
the provision of repair and maintenance services and the distribution of
spare parts;
b) the restriction of the sales of spare parts for motor vehicles by
members of selective distribution system to independent repairers
which use these parts for the repair and maintenance of motor vehicles;
c) the restriction agreed between a supplier of original spare parts or spare
parts of matching quality, repair tools or diagnostic or other equipment
and a manufacturer of motor vehicles, which limits the supplier's rights
to sell these products to authorized or independent distributors or to
authorized or independent repairers or end users;
d) the restriction of a distributor's or authorized repairer's ability to obtain
original spare parts or spare parts of matching quality from a third
undertaking of its choice and to use them for the repair or maintenance
of motor vehicles, without prejudice to the ability of a supplier of new
motor vehicles to require the use of original spare parts supplied by it
for repairs carried out under warranty, free servicing and vehicle recall
work;
e) the restriction agreed between a manufacturer of motor vehicles which
uses components for the initial assembly of motor vehicles and the
supplier of such components which limits the latter's ability to place its
trade mark or logo effectively and in an easily visible manner on the
components supplied or on spare parts.
(2) Independent repairer within the meaning of paragraph (1), items b) and c) of
this Article means a provider of repair and maintenance services for motor
vehicles not operating within the distribution system set up by the supplier of
the motor vehicles for which it provides repair or maintenance. An authorized
repairer within the distribution system of a given supplier is deemed to be an
independent distributor for the purposes of this Regulation to the extent
that it provides repair or maintenance services for motor vehicles in respect of
which it is not a member of the respective supplier's distribution system.
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(3) Spare parts referred to in paragraph (1), item b) of this Article means parts which
are to be installed in or upon a motor vehicle so as to replace components of
that vehicle, including products such as lubricants which are necessary for the
use of a motor vehicle, with the exception of fuel.
(4) Spare parts of matching quality referred to in paragraph (1) item c) of this Article
means spare parts made by any undertaking which can certify at any moment that
the parts in question match the quality of the components which are or were used
for the assembly of the motor vehicles in question.
(5) Original spare parts within the meaning of paragraph (1), item c) of this Article
means spare parts which are of the same quality as the components used for the
assembly of a motor vehicle and which are manufactured according to the
specifications and production standards provided by the vehicle
manufacturer for the production of components or spare parts for the motor
vehicle in question. This includes spare parts which are manufactured on the
same production line as these components. It is presumed, unless the contrary
is proven, that parts constitute original spare parts if the part manufacturer
certifies that the parts mach the quality of the components used for the assembly
of the vehicle in question and have been manufactured according to the
specifications and production standards of the vehicle manufacturer.
Article 12
Other Hardcore Restrictions of Market Competition
(1) Block exemption shall not apply where the supplier of motor vehicles refuses to
give independent undertakings access to any technical information, diagnostic and
other equipment, tools, including any relevant software or training required for the
repair and maintenance of these motor vehicles or for the implementation of
environmental protection measures.
(2) Independent undertakings referred to in paragraph (1) of this Article shall
mean undertakings which are directly or indirectly involved in the repair and
maintenance services of motor vehicles, in particular independent repairers,
manufacturers of repair equipment or tools, independent distributors of spare
parts, publishers of technical information, automobile clubs, roadside
assistance operators, operators offering inspection and testing services and
operators offering training for repairers.
Article 13
Specific Conditions Agreements May Not Contain
(1) Block exemption shall not apply to vertical agreements relating to the sale of new
motor vehicles, of spare parts and repair and maintenance services containing any of
the following restraints:
a) any direct or indirect compete obligation;
b) any direct or indirect obligation limiting the right to an authorized
repairer to provide repair and maintenance services for vehicles from
competing suppliers;
c) any direct or indirect obligation causing the members of a distribution
system not to sell motor vehicles or spare parts of particular competing
suppliers or not to provide repair and maintenance services for motor
Regulation on Block Exemption Granted to Agreements on Distribution and Servicing of
Motor Vehicles
126
vehicles of particular competing suppliers;
d) any direct or indirect obligation causing the distributor or authorized
repairer, after termination of the agreement, not to manufacture, purchase,
sell or resell motor vehicles or not to provide repair or maintenance
services.
(2) With the exemption of paragraph (1), item a) of this Article, a compete
obligation shall not be deemed a prohibited vertical restraint where the distributor
sells motor vehicles from other suppliers in separate areas of the showroom in order
to avoid confusion. An obligation imposed on the distributor to have brand-
specific sales personnel for different brands of motor vehicles shall
constitute a prohibited vertical restraint, unless the distributor decides to have
brand-specific sales personnel and the supplier pays all the additional costs
involved.
(3) A compete obligation within the meaning of paragraph (1), item e) and
paragraph (2) of this Article, means any direct or indirect obligation causing the
buyer not to manufacture, sell or resell substitute products which compete with the
contract products, or any direct or indirect obligation on the buyer to purchase
from the supplier or from another undertaking designated by the supplier more
than thirty per cent (30%) of the buyer's total purchases. That is to be calculated
on the basis of the value of its purchases in products and substitutes in the
relevant market in the preceding financial year.
(4) Block exemption shall not apply to vertical agreements relating to the sale of
spare parts and repair and maintenance services containing restraints as to the place
of business where the system of selective distribution applies.
IV OTHER CONDITIONS FOR APPLICABILITY OF BLOCK EXEMPTION
Article 14
Other Criteria for Block Exemption
(1) In the assessment of vertical agreement, relating to the conditions the agreements
must satisfy in order to be granted block exemption, pursuant to the conditions
provided for under Article 4, paragraph (3) of the Act, and under Articles 4 to 8 of
this Regulation, following criteria is also to be taken into account, and in
particular:
a) the relevant market structure on the supply and demand side;
b) the market position of competing undertakings and the extent to which
the parties to the agreement and other suppliers of the substitute
products face competition in the relevant market;
c) the nature of vertical contractual obligations containing restrictions of the
inter-brand or intra-brand market competition;
d) the existence of parallel networks of vertical agreements.
(2) Vertical agreements within the meaning of paragraph (1), item c) of this Article,
shall be deemed compatible or prohibited depending on the economic and legal
analysis of the conditions on the relevant market where those agreements have
particular influences, or depending on relation between positive and negative
effects.
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V WITHDRAWAL OF BLOCK EXEMPTION AND INDIVIDUAL EXEMPTION
Article 15
Conditions for Withdrawal of Block Exemption
(1) Pursuant to Article 7, paragraph (1), item d) of the Act the Council of
Competition may, ex officio, initiate the proceedings to assess the compatibility of
a particular agreement or group of agreements, if such agreements individually or
due to their cumulative effect with other similar agreements in the relevant market,
do not fulfill the conditions for block exemption, and particularly:
a) where the access to the relevant market or competition therein is
significantly restricted by the cumulative effect of vertical agreements
containing similar vertical restraints;
b) where competition is restricted on a market where one supplier is not
exposed to effective market competition from other suppliers;
c) where prices or conditions of supply for contract products or
corresponding products differ substantially between relevant
geographic markets;
d) where discriminatory prices or sales conditions are applied within a
relevant market.
(2) If the Council of Competition proves that there are no grounds for the
applicability of block exemption, pursuant to the provisions of the Act and this
Regulation, it shall by means of a decision withdraw the benefit granted by block
exemption to a particular or a group of vertical agreements.
Article 16
Individual Exemption
Pursuant to Article 5 of the Act the undertakings - parties to the vertical agreement may
submit to the Council of Competition a request for individual exemption, if the agreement
concerned does not fall under applicability of block exemption within the meaning of this
Regulation, or if it, by its nature, is not covered by some other block exemption within the
meaning of Article 3, paragraph (1), item b) of this Regulation.
Article 17
Non-compulsory Notification
The parties to the vertical agreement that satisfy the conditions for block exemption laid
down in this Regulation, within the meaning of Article 7, paragraph (3) of the Act, do
not need to submit those agreements to the Council of Competition for assessment in
respect of individual exemption.
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VI TRANSITIONAL AND FINAL PROVISIONS
Article 18
Transitional Provisions
(1) Vertical agreements referred to in Article 2 of this Regulation, which have
been concluded before this Regulation enters into force, must be brought in
compliance with the provisions of this Regulation by 31st December, 2006.
(2) As regards vertical agreements which have been concluded before this
Regulation enters into force, under the condition that they have been
brought in compliance with the provisions of this Regulation within the time
period set out under paragraph (1) of this Article, the market share, without
prejudice to Article 5, paragraphs (2) and (4) of this Regulation, shall be calculated
on the basis of the income realized during the financial year preceding the year of
the entry into force of this Regulation.
(3) As regards vertical agreements which have been concluded before this
Regulation enters into force, under the condition that they have been
brought in compliance with the provisions of this Regulation within the time
period set out under paragraph (1) of this Article, for the purpose of calculating
the total annual income, without prejudice to Article 7, paragraphs (1) and (2)
of this Regulation, the total annual income in the financial year preceding the
year of the entry into force of this Regulation shall be taken into account.
Article 19
Entry into Force
This Regulation shall enter into force on the eighth day following the day of publication in
the “Official Gazette of BiH “and it shall be published in official gazettes of Entities and
Brcko District of Bosnia and Herzegovina.
C.C., No. 01-01-26-124-I/06 President
Sarajevo, 24 January 2006 Sena Hatibovic
REGULATION ON BLOCK EXEMPTION
GRANTED TO CERTAIN CATEGORIES OF
TECHNOLOGY TRANSFER AGREEMENTS
(LICENCE AND KNOW-HOW AGREEMENTS)
“Official Gazette of BiH”, No. 15/06
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131
Pursuant to Article 25, item a) and Article 7, paragraph (1), item c) of the Act on
Competition (“Official Gazette of BiH”, No. 48/05), the Council of Competition in its 20th
session held on 27 December 2005, has adopted
REGULATION ON BLOCK EXEMPTION GRANTED TO CERTAIN
CATEGORIES OF TECHNOLOGY TRANSFER AGREEMENTS
(LICENCE AND KNOW-HOW AGREEMENTS)
I GENERAL PROVISIONS
Article 1
Subject Matter of the Regulation
This Regulation shall stipulate the conditions for block exemptions granted to certain
categories of technology transfer agreements (licence agreements and know-how
agreements) set out conditions which such agreements must contain, the restrictions or
conditions which such agreements may not contain, and other conditions which must be
fulfilled in order to satisfy the conditions for block exemption from application of those
agreements from application of the provisions on prohibited agreements set out in the Act on
Competition (hereinafter: the Act).
Article 2
Applicability of the Block Exemption
(1) Block exemption shall apply to technology transfer agreements laid down in article
7, paragraph (1), item c) of the Act entered into between two undertakings
permitting the production of the contract products, including the agreements
permitting, besides the production, more than one level of trade.
(2) Within the meaning of paragraph (1) of this Article a technology transfer
agreement means a patent licensing agreement, licensing agreement on
technological knowledge and experience (know-how), a software copyright
licensing agreement or a combined patent licensing agreement, licensing
agreement on technological knowledge and experience (know-how) or software
copyright licensing agreement, including any such agreement containing provisions
which relate to the sale and purchase of products or which relate to the licensing of
other intellectual property rights and the assignment of intellectual property rights,
provided that those provisions do not constitute the primary object of those
agreement and that they are directly related to the production of the contract
products.
(3) Within the meaning of paragraph (1) of this Article the technology transfer
agreement means also an agreement on assignment of patents, licensing agreement
on technological knowledge and experience (know-how), software copyright or a
combination thereof in a case where the part of the risk associated with the
exploitation of the technology remains with the assignor, in particular where the
sum payable in consideration of the assignment of technology is dependent on the
income earned by the assignee in respect of products produced with the assigned
technology, the quantity of such products produced or the number of operations
carried out employing that technology.
(4) Within the meaning of paragraphs (1) and (2) of this Article licensing agreement on
technological knowledge and experience (hereinafter: know-how) means a package
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of non-patented practical information, resulting from experience and testing, which
is secret, substantial and identified. “Secret” means that the know-how package as
a body or in the precise configuration and assembly of its components is not
generally known or easily accessible. “Substantial” means that the know-how
includes data, or information which is indispensable and useful for production of
the contract products. “Identified” means that the know-how is to be described in a
sufficiently comprehensive manner so as to make it possible to verify that it fulfils
the criteria of secrecy and substantiality.
(5) Intellectual property rights within the meaning of paragraph (2) of this Article are
industrial property rights, know-how, copyrights and neighbouring rights.
(6) Within the meaning of paragraphs (2) and (3) of this Article patents means patents,
requests for consensual patents licensing, industrial designs, topographies of
semiconductor-products, supplementary protection certificates for medical
products or other products for which such supplementary protection certificates
may be obtained and plant breeder’s certificates.
(7) Contract product stipulated under paragraph (1) of this Article means product
produced with the licensed technology and/or product in which such technology
has been incorporated.
(8) Undertakings - parties to the agreement, that is to say a licensor and licensee under
paragraph (1) of this Article include also their connected undertakings.
Article 3
Inapplicability of Block Exemptions
As for block exemptions, the following agreements may not be excluded from prohibition,
according to the provisions of this Regulation:
a) technology transfer agreements which do not fulfil the cumulative conditions laid
down under Article 8 of the Act and which have not been brought into compliance
with this Regulation;
b) technology transfer agreements which fall within the scope of any other regulation
pursuant to the provisions of Article 7 of the Act.
II CONDITIONS THAT AGREEMENTS MUST CONTAIN AND OTHER
CONDITIONS FOR EXEMPTION
Article 4
Market Share
(1) Where the parties to the agreement are competing parties, the block exemption
provided for in Article 2 of this Regulation shall apply on condition that total
market share of the parties to the agreement does not exceed twenty per cent (20%)
on the defined relevant technology and product market.
(2) Where the parties to the agreement are not competing parties, the block exemption
provided for in Article 2 of this Regulation shall apply on condition that the market
share of each of the parties to the agreement does not exceed thirty per cent (30%)
on the defined relevant technology and product market.
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(3) For the purpose of paragraphs (1) and (2) of this Article, the market share of the
parties to the agreement on the relevant technology market is defined in terms of the
presence of the licensed technology on the relevant product market.
(4) Within the meaning of paragraph (1) of this Article, competing undertakings shall
be considered actual competitors on the relevant technology market if they compete
on the relevant technology market by assigning licences for substitute technologies
without infringing intellectual property rights of other undertakings.
(5) Within the meaning of paragraph (1) of this Article, undertakings shall be
considered actual competitors on the relevant product market which are both active
on the relevant product and geographic market on which the contract products are
sold without infringing each others` intellectual property rights.
(6) Within the meaning of paragraph (1) of this Article, potential competitors on the
relevant technology and relevant product market are undertakings which would, on
realistic grounds, undertake necessary additional investments or other necessary
switching costs so that they could timely enter, without infringing each others`
intellectual property rights, that relevant market in response to a small and
permanent increase in prices.
Article 5
Calculation of the Market Share
(1) Within the meaning of Article 4 of this Regulation, the market share of the parties
to technology transfer agreement shall be calculated on the basis of the market sales
value of the contract products and their substitutes. If the market sales value data
concerned is not available, estimates based on other reliable market information,
including market sales volumes of the contract products and their substitutes in the
relevant market may be used to establish the market share of the parties to the
agreement.
(2) The market share under paragraph (1) of this Article shall be calculated on the basis
of data relating to the calendar year preceding the conclusion of the agreement.
(3) The market share under paragraph (1) of this Article shall include the market share
of the respective connected undertakings realised as provided for under paragraphs
(1) and (2) of this Article.
(4) Within the meaning of paragraphs (1), (2) and (3) of this Article, the licensor’s
market share on the relevant technology market shall include the combined market
shares of its all licensees calculated on the basis of the sales value data of products
incorporating the licensed technology and this for each relevant market separately.
When the parties to the agreement are competitors on the relevant technology
market, sales value data of products incorporating the licensed technology includes
the sales value data of the products incorporating the licensee’s own technology. In
the case of new technologies being incorporated in new products which have not
been yet sold on the market, the market share of the parties to the agreement shall
be deemed zero on the technology relevant market until the sale of new products
starts.
(5) The market share of both parties to the agreement on the relevant product market,
within the meaning of paragraphs (1), (2) and (3) of this Article, shall not take into
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account the sale value of other licensees-not parties to the agreement in question.
The market share of the licensee on the relevant product market includes sale value
data of products incorporating the licensed technology and the sale value data of
their substitutes. If the licensor is also a supplier of products on the relevant product
market, then the licensor’s market share includes its market share on that market
calculated on the basis of the sale value data of products.
Article 6
Duration of Block Exemption
(1) The block exemption for technology transfer agreements under the conditions
provided for in Article 4, paragraphs (1), (2) and (3) of this Regulation shall apply
for as long as the intellectual property right in the licensed technology exists, that is
to say, until the intellectual property right expires, lapses or been declared invalid.
The block exemption for know-how agreements shall apply for as long as the know-
how remains secret, except in the event where the know-how becomes publicly
known as a result of action by licensee, in which case the block exemption shall
apply for the duration of the agreement.
(2) When the combined market share of the parties to the agreement which are
competing undertakings in the relevant market initially does not exceed twenty per
cent (20%) but subsequently rises above that level, the block exemption shall
continue to apply for a period of two consecutive calendar years following the year
in which the 20% of market share was first exceeded.
(3) When the market share of each of the parties to the agreement which are not
competing undertakings in the relevant market initially does not exceed thirty per
cent (30%), but subsequently rises above that level, the block exemption shall
continue to apply for period of two consecutive calendar years following the year in
which the 30% of market share of each of the parties to the agreement was first
exceeded.
III RESTRICTIONS OR CONDITIONS WHICH AGREEMENTS MAY NOT
CONTAIN
Article 7
Hard Core Restrictions within Agreements between Competing Undertakings
(1) Where the parties to the agreement are competing undertakings, the block
exemption shall not apply to agreements which, directly or indirectly, in isolation or
in combination with other factors under the control of the parties, have as their
object:
a) the restriction of the parties’ ability to determine the sale prices of product
when selling them to third parties;
b) the limitation of production, except the limitations on the production of
contract products, imposed on the licensee in non-reciprocal agreement or
imposed on only one of the licensees in the reciprocal agreement;
c) the allocation of markets or allocation of customers into groups, except the
obligation under paragraph (2) of this Article;
d) the restriction of the licensee’s right to exploit its own technology or the
restriction of the ability of any of the parties to the agreement to carry out
research and development, unless such restriction is indispensable to
prevent the disclosure of the licensed know-how to third parties.
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(2) The allocation of markets or allocation of customers into groups stipulated under
paragraph (1), item c) of this Article, shall not be considered a hard core restriction
of the market competition in the case of:
a) the obligation on the licensee to produce with the licensed technology only
within one or more technical fields of use or one or more product markets;
b) the obligation on the licensor and/or licensee, in non-reciprocal agreement,
not to produce with the licensed technology within one or more technical
fields of use or within one or more product markets or within one or more
exclusive territories reserved for the other party to the agreement;
c) the obligation on the licensor not to assign the licence for the said
technology to another licensee in a particular territory;
d) the restriction, in non-reciprocal agreement, of active and/or passive sales
by the licensee and/or the licensor into the exclusive territory or to the
exclusive customer group reserved for the other party to the agreement;
e) the restriction, in a non-reciprocal agreement, of active sales by the
licensee into the exclusive territory or to the exclusive customer group
allocated by the licensor to another licensee provided the latter was not a
competing undertaking of the licensor in the relevant market at the time of
achievement of its own licence;
f) the obligation on the licensee to produce the contract products only for its
own use provided that the licensee is not restricted in selling the contract
products actively and passively as spare parts for its own products;
g) the obligation on the licensee, in a non-reciprocal agreement, to produce
the contract products exclusively for a particular customer, where the
licence is assigned for the purpose of creating an alternative source of
supply for that customer.
(3) Within the meaning of paragraph (1), item b) of this Article, reciprocal agreement
means a technology transfer agreement which is based on reciprocity, where two
undertakings assign each other, in the same or separate contracts, a patent licence, a
know-how licence, a software copyright licence or a combined patent, know-how or
software copyright licence and where these licences relate to the substitute
technologies or can be used for production of substitute products.
(4) Within the meaning of paragraph (1), item b) and paragraph (2), items b), d), e) and
g) of this Article, non-reciprocal agreement means a technology transfer agreement
which is based on reciprocity, where one party assigns a technology licence to
another party, and agreement where two undertakings assign each other a patent
licence, a know-how licence, a software copyright licence or combined patent,
know-how or software copyright licence, provided that those licences do not relate
to substitute technologies and cannot be used for production of the substitute
products.
(5) Within the meaning of paragraph (2), items b), d) and e) of this Article, exclusively
allocated territory means a territory in which only one undertaking is approved to
produce the contract products with the licensed technology, without prejudice to the
possibility of allowing within that territory another licensee to produce the contract
product only for a particular customer where this second licence was assigned with
the intention of creating an alternative source of supply for that customer.
(6) Within the meaning of paragraph (2), items d), e) and g) of this Article, exclusively
allocated customer group means a group of customers to which only one
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undertaking is approved actively to sell actively the contract products produced
with the licensed technology.
Article 8
Hard Core Restrictions within Agreements between Non-competing Undertakings
(1) Where the undertakings-parties to the agreement are not competing undertakings,
the block exemption shall not apply to agreements which, directly or indirectly, in
isolation or in combination with other factors under the control of the parties, have
as their object:
a) the restriction of a party’s right to freely determine sale prices when selling
products to third parties, without prejudice to the possibility of imposing a
maximum sale price or recommending a sale price, provided that it does
not amount to a fixed or minimum sale price as a result of pressure from,
or incentives offered by, any of the parties to the agreement;
b) the restriction of the territory into which, or of the customers group to
whom, the licensee may passively sell the contract products, except the
obligations under paragraph (2) of this Article;
c) the restriction of active or passive sales to end-users by a licensee which is
a member of a selective distribution system and which operates at the retail
level, without prejudice to the possibility of prohibiting a licensee to
operate out of an unauthorised place of business.
(2) The restriction of the territory into which, or the customers to whom, the licensee
may passively sell the contract product referred to under paragraph (1), item b) of
this Article, shall not be considered a hard core restriction in the case of:
a) the restriction on the licensee making passive sales into an exclusive
allocated territory or to an exclusive allocated customer group reserved for
the licensor;
b) the restriction on the licensee making passive sales into an exclusive
allocated territory or to an exclusive allocated customer group assigned by
the licensor to another licensee during the first two (2) years, when the
latter licensee sells the contract products in that territory or to that
customer group;
c) the obligation on the licensee to produce the contract products only for its
own use provided that the licensee is not restricted in selling the contract
products actively and passively as spare parts for its own products;
d) the obligation on the licensee to produce the contract products exclusively
for a particular customer, where the licence was assigned for the purpose
of creating an alternative source of supply for that customer;
e) the restriction on licensee operating at the wholesale level of trade the
active or passive sales to end-users;
f) the restriction on the members of a selective distribution system the active
or passive sales to unauthorised distributors.
(3) Where the undertakings-parties to the agreement are not competing undertakings in
the relevant market at the time of the conclusion of the agreement but become
competing undertakings afterwards, the provisions of paragraphs (1) and (2) of this
Article shall apply to them for the full life of agreement unless the agreement is
amended in any significant part.
(4) Within the meaning of paragraph (1), item c) and paragraph (2), item f) of this
Article, selective distribution system means a distribution system where the licensor
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137
undertakes to assign the license on production of the contract products only to
licensee selected on the basis of specified criteria and where these licensees
undertake not to sell actively or passively the contract products to unauthorised
distributors.
(5) Within the meaning of paragraph (1), item c) and paragraph (2), items c), e) and f)
of this Article, active sales means sales made by actively searching for or
approaching to customers or customer groups inside another parties` exclusive
territory, initiation of conclusion of individual agreements and taking measures of
general presentation of products to those customers, establishment of branches,
warehouse or organization of distribution networks and advertising in that territory.
Active approach includes visits, direct and electronic mail, advertisements in the
media or other promotions specifically targeted at those customers or customer
group in the other parties` exclusive territory.
(6) Within the meaning of paragraph (1), items b) and c) and paragraph (2), items a),
b), c), e) and f) of this Article, passive sales means sales in response to requests
from individual customers in other parties` exclusive territories, including delivery
of products to such customers, to the extent that such responding is not the result of
active sales operations. Sales generated by general advertising or promotion in the
media or on the Internet that reaches customers in other parties` exclusive territories
or customers in the respective territories, as a result of the development in the
technology and easy access, are considered to be a reasonable method of
approaching those customers.
Article 9
Particular Obligations which Agreements may not Contain
(1) The block exemption shall not apply to any of the following obligations contained
in technology transfer agreements.
a) any direct or indirect obligation on the licensee to assign to the licensor or
to a third party designated by the licensor an exclusive licence in respect of
its own improvements to or its own new applications of the licensed
technology;
b) any direct or indirect obligation on licensee to assign, in whole or in part,
to the licensor or to a third party designated by the licensor, the rights in
respect of its own improvements to or its own new applications of the
licensed technology;
c) any direct or indirect obligation on the licensee not to challenge the
validity of intellectual property rights which the licensor holds in the
relevant market, without prejudice to the possibility of providing for
termination of the technology transfer agreement in the event that the
licensee challenges the validity of one or more of the licensed intellectual
property rights.
(2) Where undertakings-parties to the agreement are not competing undertakings in the
relevant market, the block exemption shall not apply to technology transfer
agreements containing any direct or indirect obligation limiting the licensee’s rights
to exploit its own technology or limiting the right of any of the parties to the
agreement to carry out research and development, unless such latter restriction is
indispensable to prevent the disclosure of the licensed know-how to third parties.
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(3) The improvement referred to under paragraph (1), items a) and b) of this Article
means an improvement that can be exploited without infringing the rights covered
in the licensed technology.
IV WITHDRAWL OF BLOCK EXEMPTION AND INDIVIDUAL EXEMPTIONS
Article 10
Conditions for Withdrawal of Block Exemptions
(1) Pursuant to Article 7, paragraph (4) of the Act, the Council of Competition may ex-
officio or at the request of a party initiate the proceedings for assessment of
compatibility of a particular agreement or agreements under Article 2 of this
Regulation with the provisions laid down in Article 4, paragraph (3) of the Act and
this Regulation, where the effects of such agreements, individually or in
combination with similar agreements in the relevant market do not fulfil the
conditions for block exemption.
(2) Within the meaning of paragraph (1) of this Article, the Council of Competition
may initiate the proceedings for assessment of a technology transfer agreement, in
particular where:
a) access of third parties` technologies to the relevant market is restricted by
the cumulative effect of parallel networks of similar restrictive agreements
prohibiting licensees from using third parties` technologies;
b) access of potential licensees to the relevant market is restricted by the
cumulative effects of parallel networks of similar restrictive agreements
prohibiting licensors from assessing the licence licensing to other
licensees;
c) without any objectively valid reason, the parties to the agreement do not
exploit the licensed technology.
(3) Where the results of the assessment of an agreement on the compliance with the
provisions of the Act and this Regulation prove that there are no grounds for the
applicability of block exemption the Council of Competition shall by means of a
decision withdraw the benefit granted by block exemption to this particular
agreement.
Article 11
Individual Exemption
Pursuant to Article 5 of the Act the undertakings-parties to the agreement may submit to the
Council of Competition a request for individual exemption, if the agreement concerned does
not fall under applicability of block exemption within the meaning of Article 3 of this
Regulation.
Article 12
Non-compulsory Notification
The undertakings-parties to the technology transfer agreement that satisfy the conditions for
block exemption laid down in this Regulation within the meaning of Article 7, paragraph (3)
of the Act, are not obliged to submitted those agreements to the Council of Competition for
assessment in respect of individual exemption.
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139
V TRANSITIONAL AND FINAL PROVISIONS
Article 13
(1) Technology transfer agreements under Article 2 of this Regulation, which have
been concluded before this Regulation enters into force, must be brought into
compliance with the provisions of this Regulation by 31st December 2006.
(2) As regards technology transfer agreements which have been concluded before this
Regulation enters into force, on condition that they have been brought in
compliance with the provisions of this Regulation set out under paragraph (1) of this
Regulation, the market share, with the exception of Article 5, paragraph (2) of this
Regulation, shall be calculated on the basis of the data relating market calendar year
preceding the year of the entry into force of this Regulation.
Article 14
Entry into Force
This Regulation shall enter into force on the eight day following the day of its publication in
the “Official Gazette of Bosnia and Herzegovina” and it shall be published in official
gazettes of Entities and Brcko District of Bosnia and Herzegovina.
CC. Number: 01-01-26-628/05 President
Sarajevo, 30 December 2005 Sena Hatibovic
REGULATION ON THE AMOUNT OF
ADMINISTRATION TAXES RELATING TO THE
PRACTICES BEFORE THE COUNCIL OF
COMPETITION
“Official Gazette of BiH”, No. 30/06
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Pursuant to Article 17 of the Law on the Council of Ministers of Bosnia and Herzegovina
(“Official Gazette of BiH”, No.30/03) and Article 25, paragraph (19), item i) of the Act on
Competition (“Official Gazette of BiH”, No. 48/05) on a proposal from the Council of
Competition, The Council of Ministers of Bosnia and Herzegovina in its 112th session held
on 16 March 2006, has adopted
REGULATION ON THE AMOUNT OF ADMINISTRATION TAXES RELATING
TO THE PRACTICES BEFORE THE COUNCIL OF COMPETITION
I GENERAL PROVISIONS
Article 1
Subject Matter
This Regulation shall stipulate the amount of administration taxes relating to the practices in
competence of the Council of Competition pursuant to the Act on Competition (hereinafter:
the Act).
II THE TARIFFS OF ADMINISTRATION TAXES
Article 2
Tariffs
Administration taxes set out in Article 1 of this Regulation shall be paid according to
following tariffs:
Tariff number 106
Type of a tax obligation Amount in KM
(1) For application where a party requests:
a) the expert opinion, recommendations and explanations in line
with Article 25, paragraph (1), items c) and f) of the Act;
250.00
b) an individual exemption from the agreement prohibition in line
with Article 5, paragraph (1) of the Act;
200.00
c) the extension of the time limit of an individual exemption in
line with Article 6, paragraph (4) of the Act;
200.00
d) the assessment of the block exemption of the agreement in line
with Article 7, paragraph (4) of the Act;
200.00
e) determination of abuse of a dominant position in line with
Article 11, of the Act;
1,000.00
f) determination of prohibited agreements in line with Article 4,
paragraph (2) of the Act;
1,000.00
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144
g) the extension of the duration time of the obligation to bank and
other financial institution or insurance associations to notify a
concentration in line with Article 12, paragraph (3), item a) of
the Act;
300.00
h) proposals in cases when the concentration has been
implemented contrary to the decision of the Council of
Competition or without submittal of a prior notification of
concentration in line with Article 19, paragraph (1), of the Act;
1,000.00
(2) The notification of intended concentration in line with Article
16, paragraph (1) of the Act
2,000.00
Tariff number 107
(1) For Decision which :
a) establishes an individual exemption from an agreement
prohibition in line with Article 5, paragraph (1) of the Act;
2,000.00
b) approves the extension of the time limit of an individual
exemption from an agreement prohibition in line with Article
6, paragraph (3) of the Act;
1,000.00
c) establishes the block exemptions from an agreement
prohibition in line with Article 7 of the Act;
2,000.00
d) declares the concentration compatible, incompatible or
conditionally compatible in line with Article 18 of the Act:
1) for concentration which shall be declared as
compatible before taking a conclusion on initiation of
the proceedings;
2,500.00
2) for concentration which shall be evaluated following a
conclusion on initiation of the proceedings.
25,000.00
e) approves the extension of the time limit of the obligation to the
bank and other financial institution or insurance associations to
notify a concentration in line with Article 12, paragraph (3),
item a) of the Act
2,500.00
(2) Annulment, amendment or cancellation of a decision:
a) on individual exemption from an agreement prohibition in line
with Article5, paragraph (5) of the Act
2,000.00
b) on evaluation of concentration when the parties are not able to
accomplish some of the conditions or infringe certain measures
set forth in the decision taken by Council of Competition due to
particular circumstances which could not be predicted and
avoided and which do not depend on the will of the parties in
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line with Article 18, paragraph (7) of the Act
2,500.00
Tariff number 108
For Resolution which states that :
a) a compromise is made between parties to the proceedings
1,000.00
b) the proceedings is ceased because the parties to the proceedings
have waived the request, in a case when a decision on initiation
of the proceedings is issued
500.00
c) a concentration notification is rejected due to unaccomplished
conditions regarding the aggregate annual income in line with
Article 14, paragraph (19) of the Act.
1,000.00
Article 3
Tax Obligations
(1) The tax is to be paid in a moment the obligation comes into being.
(2) Tax obligation comes into being:
a) by application, notification and other submissions, in a moment when it is
submitted;
b) by administration act made by Council of Competition, before it is
delivered to the party upon whose request the act is issued;
c) by other legal process, in a moment when a request for its realization is
submitted.
III FINAL PROVISIONS
Article 4
Application
The Law on Administration Taxes (“Official Gazette of BiH”, No. 16/02, 19/02, 43/04, and
8/06) is to be applied to other matters not regulated in this Regulation.
Article 5
Entry into Force
This Regulation shall enter into force on the eight day after the publication in the “Official
Gazette of Bosnia and Herzegovina”, and shall also be published in the official gazettes of
the Entities and Brčko District of Bosnia and Herzegovina.
C.C. No. 48/06 President
of the Council of Ministers of
Bosnia and Herzegovina
Sarajevo, 16 March 2006 Adnan Terzic