Canada-Chile Free Trade Agreement ¹

Chapter J
Competition Policy, Monopolies and State Enterprises

Article J-01: Competition Law ²

1. Each Party shall adopt or maintain measures to proscribe anti-competitive business conduct and take appropriate action with respect thereto, recognizing that such measures will enhance the fulfillment of the objectives of this Agreement. To this end the Parties shall consult from time to time about the effectiveness of measures undertaken by each Party.

2. Each Party recognizes the importance of cooperation and coordination among their authorities to further effective competition law enforcement in the free trade area. The Parties shall cooperate on issues of competition law enforcement policy, including mutual legal assistance, notification, consultation and exchange of information relating to the enforcement of competition laws and policies in the free trade area.

3. Neither Party may have recourse to dispute settlement under this Agreement for any matter arising under this Article.

Article J-02: Monopolies and State Enterprises ³

1. Nothing in this Agreement shall be construed to prevent a Party from designating a monopoly.

2. Where a Party intends to designate a monopoly and the designation may affect the interests of persons of the other Party, the Party shall:
   1. wherever possible, provide prior written notification to the other Party of the designation; and

   2. endeavor to introduce at the time of the designation such conditions on the operation of the monopoly as will minimize or eliminate any nullification or impairment of benefits in the sense of Annex N-04 (Nullification and Impairment).
3. Each Party shall ensure, through regulatory control, administrative supervision or the application of other measures, that any privately-owned monopoly that it designates and any government monopoly that it maintains or designates:
   1. acts in a manner that is not inconsistent with the Party's obligations under this Agreement wherever such a monopoly exercises any regulatory, administrative or other governmental authority that the Party has delegated to it in connection with the monopoly good or service, such as the power to grant import or export licences, approve commercial transactions or impose quotas, fees or other charges ⁴;

   2. except to comply with any terms of its designation that are not inconsistent with subparagraph (c) or (d), acts solely in accordance with commercial considerations in its purchase or sale of the monopoly good or service in the relevant market, including with regard to price, quality, availability, marketability, transportation and other terms and conditions of purchase or sale⁵;

   3. provides non-discriminatory treatment to investments of investors, to goods and to service providers of the other Party in its purchase or sale of the monopoly good or service in the relevant market; and

   4. does not use its monopoly position to engage, either directly or indirectly, including through its dealings with its parent, its subsidiary or other enterprise with common ownership, in anticompetitive practices in a non-monopolized market in its territory that adversely affect an investment of an investor of the other Party, including through the discriminatory provision of the monopoly good or service, cross-subsidization or predatory conduct.

4. Paragraph 3 does not apply to procurement by governmental agencies of goods or services for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods or the provision of services for commercial sale.

5. For purposes of this Article; means designate prior to the date of entry into force of this Agreement and existing on that date.

Article J-03: State Enterprises

1. Nothing in this Agreement shall be construed to prevent a Party from maintaining or establishing a state enterprise.

2. Each Party shall ensure, through regulatory control, administrative supervision or the application of other measures, that any state enterprise that it maintains or establishes acts in a manner that is not inconsistent with the Party's obligations under Chapter G (Investment) wherever such enterprise exercises any regulatory, administrative or other governmental authority that the Party has delegated to it, such as the power to expropriate, grant licences, approve commercial transactions or impose quotas, fees or other charges.

3. Each Party shall ensure that any state enterprise that it maintains or establishes accords non-discriminatory treatment in the sale of its goods or services to investments in the Party's territory of investors of the other Party.

Article J-04: Definitions

For purposes of this Chapter:

designate means to establish, designate or authorize, or to expand the scope of a monopoly to cover an additional good or service, after the date of entry into force of this Agreement;

discriminatory provision includes treating:

1. a parent, a subsidiary or other enterprise with common ownership more favourably than an unaffiliated enterprise, or
2. one class of enterprises more favourably than another, in like circumstances;

government monopoly means a monopoly that is owned, or controlled through ownership interests, by the national government of a Party or by another such monopoly;

in accordance with commercial considerations means consistent with normal business practices of privately-held enterprises in the relevant business or industry;

market means the geographic and commercial market for a good or service;

monopoly means an entity, including a consortium or government agency, that in any relevant market in the territory of a Party is designated as the sole provider or purchaser of a good or service, but does not include an entity that has been granted an exclusive intellectual property right solely by reason of such grant;

non-discriminatory treatment means the better of national treatment and most-favoured-nation treatment, as set out in the relevant provisions of this Agreement; and

state enterprise means, except as set out in Annex J-04, an enterprise owned, or controlled through ownership interests, by a Party.

Annex J-04: Country-Specific Definition of State Enterprises

For purposes of Article J-03(3), with respect to Canada,; means a Crown corporation within the meaning of the Financial Administration Act (Canada), a Crown corporation within the meaning of any comparable provincial law or equivalent entity that is incorporated under other applicable provincial law.

Treaty on Free Trade of the Group of Three Between the Republic of Colombia, The United Mexican States and the Republic of Venezuela⁶

Chapter XVI: Policy Regarding State Enterprises

Article 16-01: Definitions

For the purposes of this Chapter:

designation means the establishment, authorization, or expansion of the scope of a government monopoly to include an additional good or service, after the date of entry into force of this Agreement;

enterprise means any entity constituted or organized under applicable law, whether or not for profit, including any corporation, trust, partnership, sole proprietorship, joint venture, or other association, with the exception of State enterprises;

State enterprise means an enterprise owned, or controlled through ownership interests, by a Party;

market means the geographic and commercial market for a good or service;

monopoly means an entity, including a government consortium or agency that has been designated in any relevant market in the territory of one of the parties as the sole provider or buyer of a good or service. This does not include an entity with exclusive intellectual property rights derived only from that grant.

government monopoly means a monopoly owned by a Party or another government monopoly, or under its control by virtue of ownership of part of its equity.

in accordance with commercial considerations means consistent with normal business practices of the private enterprises in the relevant industry;

non-discriminatory treatment means the better of national treatment and most-favored-nation treatment, as set out in the relevant provisions of this Agreement.

Article 16-02: Monopolies and State Enterprises

1. Each Party shall ensure that its State enterprises accord non-discriminatory treatment in its territory to the natural or legal persons of the other Parties in the sale of goods and the provision of services for similar commercial transactions.

2. Each Party undertakes to ensure that its government monopolies and its State enterprises:
   1. act solely in accordance with commercial considerations in the purchase or sale of the monopoly good or service in the relevant market in the territory of that Party, including with regard to price, quality, availability, marketability, transportation, and other terms and conditions of purchase or sale; and
   2. do not use their monopoly position in their territory to engage in anti-competitive practices in a non-monopolized market that could adversely affect persons of the other Party.
3. Paragraph 2 shall not apply to procurement by government monopolies or State enterprises of goods or services for governmental purposes, and:
   1. not with a view to commercial resale;
   2. not with a view to use in the production of goods for commercial sale; or
   3. not with a view to use in the provision of services for commercial sale.

4. With regard to the sales price of a good or service, paragraph 2(a) shall apply only to the sale by government monopolies and State enterprises of:
   1. goods or services to persons engaged in the production of industrial goods;
   2. services to persons engaged in commercial resale; or
   3. services to enterprises that produce industrial goods.

5. The provisions of paragraph 2(a) shall not apply to those activities of a government monopoly that are carried out in compliance with the terms of its designation and with the principles established in paragraphs 1 and 2(b).

Article 16-03: Committees

Within three months of the entry into force of this Agreement, the Commission shall establish the following committees:

1. a Committee on Competition, composed of representatives of each Party, which shall submit reports and recommendations to the Commission on further work on relevant issues concerning the relationship between competition laws and policies and trade in the free-trade area; and
2. a Committee which, with a view to detecting practices by State enterprises that could be discriminatory or inconsistent with the provisions of this Chapter, will draft reports and recommendations with regard to such practices.

Unofficial translation

Andean Group⁷

Decision 285: Norms for the Prevention or Correction of Distortions in Competition Caused by Practices that Restrict Free Competition

The Commission of the Cartagena Agreement,

HAVING SEEN: Chapter VIII of the Cartagena Agreement, Decisions 230, 258 and 281 and Proposal 226/Rev.1 of the Board.

CONSIDERING:

That the Commission approved Decision 230, that contains the norms to prevent or correct practices that could distort competition;

That the Commission, as set out in Decision 258 and as proposed by the Board, will review the norms on commercial competition;

That the Comission, as set out in Decision 281, will establish, no later than 31 March 1991, as proposed by the Board, will review the norms on commercial competition established in Decision 230;

That to obtain the objectives of the integration process it is convenient to perfect the subregional norms on competition, in order to build efficient mechanisms that would allow prevention and correction of distortions arising from business behavior that restricts, impedes, or undermines competition.

That due to its origin and scope it is necessary to distinguish between the practices considered under this Decision and those practices related to dumping and subsidies, and export restrictions;

DECIDES:

I. Scope of Application

Article 1.- The purpose of the norms considered in this Decision is to prevent or correct distortions of competition arising from practices that restrict free competition.

Article 2.- Member Countries or companies that have legitimate interest may ask the Board for authorization or mandate to apply measures to prevent or correct imminent damages or damages to production or exports, resulting from practices in the subregion that restrict free competition, or practices of a company that carries on economic activity in a Member Country.

Practices in the subregion means practices of companies that engage in economic activity in one or more Member Countries. Intervention of a Member Country means a practice linking companies that carry out economic activity in one or more Member Countries and companies located outside the subregion.

This decision does not include practices undertaken by one or more companies located in a single Member Country that do not have effect in the subregion. These cases are subject to the respective domestic legislation.

For the purposes of this decision, imminent damage includes appreciable delay in starting production.

Article 3.- Practices which restrict free competition are those agreements, parallel actions, or joint practices among companies that produce or could produce the effect of restricting, impeding, or undermining competition.

The agreements mentioned in the preceding paragraph shall include horizontal or vertical ones entered into between parties linked to the companies.

For the purposes of this Decision, abusive exploitation of a dominant position in the market by one or more companies shall also be considered an anticompetitive practice.

A dominant position by one or more companies exists when they can act independently without regard for competitors, buyers, or providers, due to factors such as a significant participation by the companies in the respective markets, the characteristics of supply and demand of the products, the technological development of he products involved, the access of competitors to sources of funding and supplies, as well as distribution networks.

Article 4.- Agreements, parallel actions, or joint practices can consist of:

1. improper manipulation or direct or indirect fixing of prices or other market terms, in a discriminatory manner with regard to those prevalent in normal commercial transactions;

2. limitation or control of production, distribution, technical development, or investment. Also, limits or prohibitions on exports, imports, or competition;

3. allocation of the market or supply sources, particularly measures designed to disrupt the normal supply of raw materials;

4. the application in commercial relations of discriminatory conditions for similar services that place some competitors at a disadvantage with regard to others;

5. the making of contracts contingent upon supplementary conditions that by their nature or in accordance with usual business custom have no relation to the purpose of the contracts; and

6. other actions with similar effects.

Article 5.- Abuse of a dominant market position means:

1. improper manipulation or direct or indirect fixing of prices or other market terms, in a discriminatory manner with regard to those prevalent in normal commercial transactions;

2. limitation or control of production, distribution, technical development, or investment. Also, limits or prohibitions on exports, imports, or competition;

3. unjustified refusal to satisfy demands for the purchase of products, among others, the withholding of inputs from companies in competition for the market of the final product;

4. the application in commercial relations of discriminatory conditions for similar services that place some competitors at a disadvantage with regard to others;

5. the making of contracts contingent upon supplementary conditions that by their nature or in accordance with usual business custom have no relation to the purpose of the contracts; and

6. other actions with similar effects.

II. Procedures

Article 6.- Requests can be presented by:

1. the Member Countries through their respective liaison organs; and

2. the company or companies that have legitimate interest, to the extent permitted by domestic legislation.

The request shall include the following information: