Croatia will join the European Union on July 1 2013. On accession, in cases which affect trade between the EU member states and Croatia, the Competition Agency will directly apply the trade-related provisions of the acquis communautaire (the EU body of law) – particularly Articles 101 and 102 of the Treaty on the Functioning of the European Union – between Croatia and other EU member states. Presently, these provisions are applied indirectly, as an interpretative mechanism.

Except in cases of a purely national nature, infringements of the Competition Act (OG 79/2009) will fall under the jurisdiction of both the European Commission and the Competition Agency. However, even in cases of a purely national character, the agency has without exception applied criteria developed in the EU courts via the available interpretative mechanisms of Croatia's internal legal regime.(1) Consequently, the situation in Croatia (at least for those which were skilled in exploiting such procedural mechanisms) was atypical in terms of legal certainty for all undertakings in the market, as the internal legal regime has always mirrored the EU competition regime. This conclusion is supported not only by numerous agency decisions, but also by several Administrative Court decisions.(2)

Certain jurisdictional peculiarities arise from national administrative proceedings rules. In order to remove obstacles for the efficient application of competition rules after accession, the Competition Act will be amended in the coming months. The changes should eliminate several ambiguities (eg, the procedure for the issuance of warrants for dawn raids), but the majority of the changes will address the legislative basis of cooperation with the EU institutions.

On becoming an EU member state, Croatia will fall within the scope of EU merger control. If certain criteria are met, the agency will be deprived of jurisdiction, which will relieve it of a substantial part of its workload. Consequently, parties to a transaction will no longer have to await further merger control clearance in order to meet all conditions before closing.

The agency will need additional capacity to strengthen its cooperation with the European Commission and in order to conform with the obligations imposed on EU member states by Regulation 1/2003/EC (on implementing competition rules).

On accession, aside from the general provisions which determine close cooperation with regard to the application of EU competition rules (including reporting duties when investigating antitrust proceedings or before taking certain decisions), the agency will have the option to use evidence gathered by the European Commission.

The European Commission has investigative powers over the entire European Union, which will thus be extended to Croatia when it becomes a member state. The commission will be empowered to act within its competence towards undertakings in the Croatian territory. The agency will exclusively prosecute, in accordance with the Competition Act, only those cases in which violation of the competition rules is of 'local' significance.

It remains unclear what will happen on accession day with regard to cases pending before the agency which have already been initiated by the European Commission or other national competition authorities. Under the existing competition law regime, the agency may face difficulties if it simply decides such cases, as it will simultaneously be bound by any final decisions of the European Commission or the EU courts, if such decisions affect subject-matter jurisdiction. Therefore, the amendments to the Competition Act are expected to prescribe a transitory period, as well as the possible allocation of cases in accordance with the commission notice(3) on cooperation within the European Competition Network.

For further information on this topic please contact Gabriele Wahl Cesarec at Petres & Cvirn by telephone (+385 1 4813 244), fax (+385 1 4813 073) or email (g.wahlcesarec@pc-lawfirm.com).

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Endnotes

(1) For example, the agency's decision against the Association of Craftsmen and 17 bread producers active in Osijek-Baranja County, July 26 2012, no UP/I 030-02/11-01/039.

(2) For example, the court's decision against 16 driving schools from the City of Rijeka, October 24 2012, no US-10674/2009-4.

(3) 2004, C-101.