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12958 European Communities - Agreement on the Application of Positive Comity Principles in the Enforcement of their Competition Laws


   
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TREATIES AND OTHER INTERNATIONAL ACTS SERIES 12958

 

 

TRADE AND COMMERCE

Competition Laws

 

 

 

 

Agreement Between the
UNITED STATES OF AMERICA
and the EUROPEAN COMMUNITIES

 


Signed at Brussels and Washington
June 3 and 4, 1998

 

 

 

 

 

NOTE BY THE DEPARTMENT OF STATE

Pursuant to Public Law 89—497, approved July 8, 1966
(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued
under the authority of the Secretary of State shall be competent
evidence . . . of the treaties, international agreements other than
treaties, and proclamations by the President of such treaties and
international agreements other than treaties, as the case may be,
therein contained, in all the courts of law and equity and of maritime
jurisdiction, and in all the tribunals and public offices of the
United States, and of the several States, without any further proof
or authentication thereof.”

 

EUROPEAN COMMUNITIES

Trade and Commerce: Competition Laws

Agreement signed at Brussels and Washington June 3 and 4, 1998;
Entered into force June 4, 1998.

AGREEMENT
BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
AND THE EUROPEAN COMMUNITIES
ON THE APPLICATION OF POSITIVE COMITY PRINCIPLES
IN THE ENFORCEMENT OF THEIR COMPETITION LAWS
USA/CE/en 1
THE GOVERNMENT OF THE UNITED STATES OF AMERICA of the one part, and THE
EUROPEAN COMMUNITY AND THE EUROPEAN COAL AND STEEL COMMUNITY of the
other part (hereinafter "the European Communities"):
Having regard to the 23 September 1991 Agreement between the Government of the
United States of America and the European Communities Regarding the Application of
Their Competition Laws, and the exchange of interpretative letters dated 31 May and
31 July 1995 in relation to that Agreement (together hereinafter "the 1991 Agreement");
Recognizing that the 1991 Agreement has contributed to coordination, cooperation, and
avoidance of conflicts in competition law enforcement;
Noting in particular Article V of the 1991 Agreement, commonly referred to as the
"Positive Comity" Article, which calls for cooperation regarding anticompetitive activities
occurring in the territory of one Party that adversely affect the interests of the other Party;
Believing that further elaboration of the principles of positive comity and of the
implementation of those principles would enhance the 1991 Agreement's effectiveness in
relation to such conduct;
and
Noting that nothing in this Agreement or its implementation shall be construed as
prejudicing either Party's position on issues of competition law jurisdiction in the
international context,
USA/CE/en 2
HAVE AGREED AS FOLLOWS:
ARTICLE I
Scope and purpose of this Agreement
1. This Agreement applies where a Party satisfies the other that there is reason to
believe that the following circumstances are present:
(a) anticompetitive activities are occurring in whole or in substantial part in the territory
of one of the Parties and are adversely affecting the interests of the other Party; and
(b) the activities in question are impermissible under the competition laws of the Party in
the territory of which the activities are occurring.
2. The purposes of this Agreement are to:
(a) help ensure that trade and investment flows between the Parties and competition
and consumer welfare within the territories of the Parties are not impeded by
anticompetitive activities for which the competition laws of one or both Parties can
provide a remedy, and
USA/CE/en 3
(b) establish cooperative procedures to achieve the most effective and efficient
enforcement of competition law, whereby the competition authorities of each Party
will normally avoid allocating enforcement resources to dealing with anticompetitive
activities that occur principally in and are directed principally towards the other
Party's territory, where the competition authorities of the other Party are able and
prepared to examine and take effective sanctions under their law to deal with those
activities.
ARTICLE II
Definitions
As used in this Agreement:
1. "Adverse effects" and "adversely affected" mean harm caused by anticompetitive
activities to:
(a) the ability of firms in the territory of a Party to export to, invest in, or otherwise
compete in the territory of the other Party, or
(b) competition in a Party's domestic or import markets.
2. "Requesting Party" means a Party that is adversely affected by anticompetitive
activities occurring in whole or in substantial part in the territory of the other Party.
USA/CE/en 4
3. "Requested Party" means a Party in the territory of which such anticompetitive
activities appear to be occurring.
4. "Competition law(s)" means
(a) for the European Communities, Articles 85, 86, and 89 of the Treaty establishing the
European Community (EC), Articles 65 and 66(7) of the Treaty establishing the
European Coal and Steel Community (ECSC), and their implementing instruments, to
the exclusion of Council Regulation (EEC) No 4064/89 on the control of
concentrations between undertakings, and
(b) for the United States of America, the Sherman Act (15 U.S.C. §§1-7), the Clayton
Act (1 5 U.S.C. § § 1 2-27, except as it relates to investigations pursuant to Title II of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 1 8a), the
Wilson Tariff Act (15 U.S.C. § §8-1 1), and the Federal Trade Commission Act
(15 U.S.C. §§41-58, except as these sections relate to consumer protection
functions),
as well as such other laws or regulations as the Parties shall jointly agree in writing to be a
"competition law" for the purposes of this Agreement.
5. "Competition authorities" means:
(a) for the European Communities, the Commission of the European Communities, as to
its responsibilities pursuant to the competition laws of the European Communities,
and
USA/CE/en 5
(b) for the United States, the Antitrust Division of the United States Department of
Justice and the Federal Trade Commission.
6. "Enforcement activities" means any application of competition law by way of
investigation or proceeding conducted by the competition authorities of a Party.
7. "Anticompetitive activities" means any conduct or transaction that is impermissible
under the competition laws of a Party.
ARTICLE III
Positive Comity
The competition authorities of a Requesting Party may request the competition authorities
of a Requested Party to investigate and, if warranted, to remedy anticompetitive activities
in accordance with the Requested Party's competition laws. Such a request may be made
regardless of whether the activities also violate the Requesting Party's competition laws,
and regardless of whether the competition authorities of the Requesting Party have
commenced or contemplate taking enforcement activities under their own competition
laws.
USA/CE/en 6
ARTICLE IV
Deferral or Suspension of Investigations in Reliance
On Enforcement Activity by the Requested Party
1. The competition authorities of the Parties may agree that the competition authorities
of the Requesting Party will defer or suspend pending or contemplated enforcement
activities during the pendency of enforcement activities of the Requested Party.
2. The competition authorities of a Requesting Party will normally defer or suspend their
own enforcement activities in favour of enforcement activities by the competition
authorities of the Requested Party when the following conditions are satisfied:
(a) The anticompetitive activities at issue:
(i) do not have a direct, substantial and reasonably foreseeable impact on
consumers in the Requesting Party's territory, or
(ii) where the anticompetitive activities do have such an impact on the Requesting
Party's consumers, they occur principally in and are directed principally towards
the other Party's territory;
(b) The adverse effects on the interests of the Requesting Party can be and are likely to
be fully and adequately investigated and, as appropriate, eliminated or adequately
remedied pursuant to the laws, procedures, and available remedies of the Requested
Party. The Parties recognize that it may be appropriate to pursue separate
enforcement activities where anticompetitive activities affecting both territories
justify the imposition of penalties within both jurisdictions; and
USA/CE/en 7
(c) The competition authorities of the Requested Party agree that in conducting their
own enforcement activities, they will:
(i) devote adequate resources to investigate the anticompetitive activities and,
where appropriate, promptly pursue adequate enforcement activities;
(ii) use their best efforts to pursue all reasonably available sources of information,
including such sources of information as may be suggested by the competition
authorities of the Requesting Party;
(iii) inform the competition authorities of the Requesting Party, on request or at
reasonable intervals, of the status of their enforcement activities and intentions,
and where appropriate provide to the competition authorities of the Requesting
Party relevant confidential information if consent has been obtained from the
source concerned. The use and disclosure of such information shall be
governed by Article V;
(iv) promptly notify the competition authorities of the Requesting Party of any
change in their intentions with respect to investigation or enforcement;
(v) use their best efforts to complete their investigation and to obtain a remedy or
initiate proceedings within six months, or such other time as agreed to by the
competition authorities of the Parties, of the deferral or suspension of
enforcement activities by the competition authorities of the Requesting Party;
USA/CE/en 8
(vi) fully inform the competition authorities of the Requesting Party of the results of
their investigation, and take into account the views of the competition
authorities of the Requesting Party, prior to any settlement, initiation of
proceedings, adoption of remedies, or termination of the investigation; and
(vii) comply with any reasonable request that may be made by the competition
authorities of the Requesting Party.
When the above conditions are satisfied, a Requesting Party which chooses not to defer or
suspend its enforcement activities shall inform the competition authorities of the
Requested Party of its reasons.
3. The competition authorities of the Requesting Party may defer or suspend their own
enforcement activities if fewer than all of the conditions set out in paragraph 2
are satisfied.
4. Nothing in this Agreement precludes the competition authorities of a Requesting Party
that choose to defer or suspend independent enforcement activities from later initiating or
reinstituting such activities. In such circumstances, the competition authorities of the
Requesting Party will promptly inform the competition authorities of the Requested Party
of their intentions and reasons. If the competition authorities of the Requested Party
continue with their own investigation, the competition authorities of the two Parties shall,
where appropriate, coordinate their respective investigations under the criteria and
procedures of Article IV of the 1991 Agreement.
USA/CE/en 9
ARTICLE V
Confidentiality and Use of Information
Where pursuant to this Agreement the competition authorities of one Party provide
information to the competition authorities of the other Party for the purpose of
implementing this Agreement, that information shall be used by the latter competition
authorities only for that purpose. However, the competition authorities that provided the
information may consent to another use, on condition that where confidential information
has been provided pursuant to Article IV.2 (c)(iii) on the basis of the consent of the source
concerned, that source also agrees to the other use. Disclosure of such information shall
be governed by the provisions of Article VIII of the 1991 Agreement and the exchange of
interpretative letters dated 31 May and 31 July 1995.
ARTICLE VI
Relationship to the 1991 Agreement
This Agreement shall supplement and be interpreted consistently with the
1991 Agreement, which remains fully in force.
ARTICLE VII
Existing Law
Nothing in this Agreement shall be interpreted in a manner inconsistent with the existing
laws, or as requiring any change in the laws, of the United States of America or the
European Communities or of their respective states or Member States.
USA/CE/en 10
ARTICLE VIII
Entry Into Force and Termination
1. This Agreement shall enter into force upon signature.
2. This Agreement shall remain in force until 60 days after the date on which either
Party notifies the other Party in writing that it wishes to terminate the Agreement.
IN WITNESS WHEREOF, the undersigned, being duly authorized, have signed this
Agreement.
DONE at Washington and Brussels, in duplicate, in the English language.
For the Government of the United States of America
Date: June 4, 1998
Date: June 4, 1998
For the European Community and for the European Coal and Steel Community
Date: June 3, 1998
Date: June 4, 1998
USA/CE/en 11



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