Global Competition Forum

The Council of Competition was established on May 1st 2004 as an independent public body mandated to ensure consistent implementation of the Act on Competition passed in 2001. It is located in Sarajevo and it has exclusive competence to decide on the presence of prohibited competition activities in the market of Bosnia and Herzegovina.

For the first time, this Act establishes the competition policy as one of the most important instruments and pillars in creating and strengthening the single economic area /market in Bosnia and Herzegovina.

The Act on Competition, passed in 2001, comprised the basic rules of the competition within the meaning of Article 81 and 82 of the EC Treaty, but it didn't apply to practices and resolutions of the modern European legislation - acquis in this field. Therefore, a new Act was passed ("Official Gazette BIH", No. 48/05) and it has been in effect since 27th July 2005. Compatibility of the new Act on Competition with stipulations and regulations of the European Union legislation in the field of the market competition (i.e. Regulations adopted in 2003 and 2004. - EC Council-No. 1/2003; 139/2004; 773/2004; 802/2004; etc.) ensures the effective and transparent application of the law, simple procedures, reduced duration of the proceedings and in general, reduced level of the state intervention in this field.

Compared to the previous Act, the new Act grants the motivated penalty policy for undertakings (Leniency policy), effective mechanism of market control and establishes the cooperation with international Agencies in this field.

This Act shall apply to all forms of prevention, restriction and distortion of the market competition on the whole territory of Bosnia and Herzegovina or out of the territory of Bosnia and Herzegovina having substantial effect on the market of Bosnia and Herzegovina. The special attention is directed towards the agreements on dominant position and abuses of dominant position, and on rules and procedures concerning the competition between undertakings.

The new Act on Competition ensures the increased and precisely defined competences of the Council of Competition in carrying out the administration and professional duties referred to in the different aspects of the market competition control (i.e. methods of carrying on the proceedings, final decision making, penalty policy and duration of the proceedings).

As some items and matters are defined in general by the Competition Act, they are more closely defined by by-law acts: Decision on Definition of a Relevant Market; Decision on Agreements of Minor Importance; Decision on Block Exemption Granted to Certain Categories of Vertical Agreements (between undertakings operating on the different level of production or distribution); Decision on Block Exemption Granted to Certain Categories of Horizontal Agreements (between undertakings operating on the same level of production and distribution chain) particularly those pertaining to Research, Development and Specialization Agreements; Regulation on Block Exemption Granted to Agreements on Transfer of Technology, Licenses and Know-how; Decision on Block Exemption Granted to Insurance Agreements; Decision on Distribution and Servicing the Motor Vehicles; Decision on the Procedure for Granting Immunity from Fines (Leniency Policy); Decision on the Definition of Dominant Position; Decision on Administrative Payment Referred to Proceedings Before the Council of Competition and Decision on Definition of the Periodic Fine Payment.

The application of the above said by-law acts (all of them shall be passed until March, 2006) shall provide compliance of the Bosnia and Herzegovina legislation in this field with acquis and ensure the predictable and transparent conducting of some procedures and proceedings before the Council of Competition.

The Council of Competition consists of six (6) members and they are appointed for a six-year term of office (until 2010) with the possibility of one more reappointment. Three members of the Council of Competition are appointed by the Council of Ministers of Bosnia and Herzegovina, two members are appointed by the Government of Federation of Bosnia and Herzegovina and one member is appointed by the Government of Republic of Srpska. The Council of Ministers of Bosnia and Herzegovina appoints a president of the Council of Competition (one of the members of the Council) for one-year term without the possibility of reappointment during the term of office of the Council members. Members of the Council of Competition are selected among recognized experts in the certain professional fields and their status is equal to that of administrative judges. This status is incompatible with any direct or indirect, permanent or periodical duty, with the exception of academic activities.

Expert Unit is the basic organizational unit of the Council of Competition and it performs administrative and professional activities (conducts the proceedings, prepares the decision making proposals, proposes by-law acts, and so on). The empowerment of this Team shall advance the functioning of the Council of Competition. It is of high priority in 2006 to employ more staff (lawyers and economists) and to improve the knowledge and professionalism of all staff.

Pursuant to the Act on Competition, the proceedings may be initiated at the party's request/claim or ex-officio when the Council of Competition finds that the practice concerned is likely to cause considerable obstruction, restriction or distortion of competition.

When the proceeding is completed (duration of the proceedings depends on the case concerned), the Council of Competition issues a final decision on which the injured party to the proceedings may file an appeal before the Court of Bosnia and Herzegovina.

The Council of Competition shall ensure by means of the continual promotion Program ("Competition Advocacy") closer approach of the various aspects of market competition to business associations and other respective institutions for the purpose of the proper law enforcement and increase the knowledge and awareness.

The State Aid is a part of the market competition policy of the European Community. There is no legislation in this filed in Bosnia and Herzegovina and the establishment of the State Aid is of a top priority in future. Following the example of the European Union system, the process of the draft legislative enactment has been started in Bosnia and Herzegovina and it is technically supported by experts of EU Project "Support for Competition and State Aid". The Council of Competition and other national bodies/institutions of Bosnia and Herzegovina have essential responsibility and mandate in this field. The enactment of the Law in this field is expected until the end of 2006.

The Council of Competition of Bosnia and Herzegovina has been a member of the International Competition Network (ICN) since middle of 2005. In this moment, the Council of Competition is going to sign bilateral agreements and memorandums with the countries in the region aimed to establish and improve the cooperation between the countries.

The Council of Competition participates actively in negotiations on Agreement on Stabilization and Association between Bosnia and Herzegovina and the European Community.

(Source: Council of Competition of Bosnia and Herzegovina)