Electronic copy available at: http://ssrn.com/abstract=1844302 1 Enforcement of competition rules in Croatia – challenges and the way forward Dr. Jasminka Pecotić Kaufman 1 Paper presented at a pre-conference workshop (CFI Regional Conference on Business Environment Reform in South East Europe: “Growth and Competitiveness: Weathering the Crisis and Looking Ahead”, Tirana, November 17, 2009) 1. Introduction The intention of this paper is to present selected issues which relate to the application of competition rules in Croatia, in particular in light of the quasi-direct application of EC competition rules prior to membership of Croatia in the EU. After twelve years of experience in enforcement of competition rules we see an established system in terms of legislative and institutional framework. However there is still some of room for improvement both in terms of legislative change and in terms of a more effective and aggressive enforcement by the competent authorities. Main characteristics of the way competition rules are applied in Croatia will be presented, and some challenges for the future will be identified. 2. Stabilisation and Association Agreement and the application of EC competition rules Enforcement of competition rules in Croatia started in 1997 when the Competition Agency 2 was first established pursuant to the Competition Act of 1995. 3 Although the first Competition Act (1995) was already drafted under the influence of EC and US competition law, it was the Stabilisation and Association Agreement (hereinafter: SAA) signed between Croatia and EU in 2001 that introduced a formal obligation for Croatia to harmonize its domestic legislation with the acquis (Article 69 SAA). 4 The process of rapprochement to the EU was no doubt an incentive to harmonise further and in 2003 a new Competition Act was adopted. 5 Apart from Article 69 SAA which provided for harmonisation of domestic legislation, the SAA contained another important provision that allowed for EC competition rules to be applied by the competition authority in Croatia with a quasi-direct effect: pursuant to Article 70 SAA in cases relating to restrictive agreements and abuse of dominant position (as well as state aid), and if there is an effect on trade between Croatia and Community, criteria arising from the application of Community competition rules must be applied. This meant that Articles 81 and 82, as well as secondary legislation, but also case-law and soft law had to be taken into account in such cases. 6 Unlike Europe Agreements, which also contained a similar provision, no implementing rules had to be adopted to this effect. 1 Senior Teaching and Research Assistant, Department of Law, Faculty of Economics and Business–University of Zagreb, jpecotic@efzg.hr , www.efzg.hr/jpecotic . 2 www.aztn.hr . 3 Official Gazette (Narodne novine) 48/95, 52/97, 89/98. 4 Act on ratification of the Stabilisation and Association Agreement between the Republic of Croatia, of the one part, and the European Communities and their Member States, of the other part (Zakon o potvrđivanju Sporazuma o stabilizaciji i pridruživanju između Republike Hrvatske i Europskih zajednica i njihovih država članica), Official Gazette – International Agreements (Narodne novine-Međunarodni ugovori), 14/2001. 5 Official Gazette (Narodne novine) 122/2003. 6 Article 70 (2) SAA provides for application of “criteria arising from the application of the competition rules applicable in the Community, in particular from Articles 81, 82, 86 and 87 of the Treaty establishing the European Community and interpretative instruments adopted by the Community institutions”.