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Inventory of the Competition Policy Agreements, Treaties
and Other Arrangements Existing in the Western Hemisphere


Submitted by the OAS Trade Unit to the FTAA Working Group on Competition Policies

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:

  • the nature of the restrictive practices and the length of their duration;

  • the characteristics of the products or services involved in the practices;

  • the characteristics of the products affected;

  • the companies involved;

  • evidence that makes it possible to presume the existence of damage or imminent damage to production or exports from anticompetitive practices;

  • the type of measures requested.

    After receiving the complaint, the Board shall send it to the national liaison organs in the country where the companies involved in the investigation carry out their economic activity.

    Article 7.- The Board will not begin an investigation if the request is incomplete. In such a case, within ten working days after the presentation of the request, the Board should inform the complainant, giving details of the missing information.

    If the request is considered to be complete, within ten days after the presentation of the request, the Board shall issue a explanatory Resolution. Likewise, the complainant company or companies will be notified of said Resolution.

    Article 8.- In the course of the investigation, the Junta may request and collect evidence and information from the national agencies and, through them or directly, from the producers, exporters, importers, distributors or consumers who may have legitimate interest in the investigation. Likewise, they may submmit information or present allegations to the Junta.

    In the cases in which the Junta requests, collects or receives evidence and information directly, it shall communicate it to the respective national bodies.

    Article 9.- In use of the Junta authority to request and collect evidence, it may give confidential treatment to such an information in regard to the aspects requested by the provider once justified such a treatment on the basis of likely unfavorable consecuences.

    Likewise, internal documents elaborated by the Junta or the member countries shall enjoy confidential treatment in regard to the parts of such a nature.

    When pretending to provide confidential treatment to an evidence, the person soliciting it shall provide a brief of the information likely to be divulged or an explanation justifying the reason by which it is not possible to brief it. In the latter case, the Junta may not accept such a justification and disregard such an evidence.

    By the same token, and notwithstanding the request being justified, the Junta may not take the information into consideration if who provided it does not also provide a non-confidential brief of it, if possible.

    The interested parties in the investigation may request by writing the information provided or elaborated during the application of this Decision so long as they do not have confidential character.

    The present article does not restraint the dissemination of general information and, particularly, of the motives on which are based the Resolutions referring the present Decision, so long as they are requested in the course of a judicial proceeding. This dissemination shall not reveal commercial secrets of the parties with legitimate interest in the investigation.

    Article 10.- In the course of an investigation, the Junta may call ex-officio or at request of the interested parties meetings aimed at procuring a direct settlement whose commitments and findings shall be recorded in a minute.

    No interested party shall be bound to attend a meeting and his absent shall not be in detriment of his cause.

    The Junta shall issue a motivated resolution indicating the commitments reached and, if the investigation is suspended or proceeds at the interested partyís request.

    The firms or authorities of the country where the practice occurs, shall provide the relevant information to verify the fulfilment of the commitments reached. When the commitments do not fulfil or the information is not provided, the Junta shall proceeed the investigation.

    Article 11.- For the investigation, the Board has two months from the date of publication the Resolution referred in Article 7 of this Decision.

    In cases of exception, the period may be extended up to two months in which case the Junta shall notify it to the interested party.

    Article 12.- In its finding, the Board shall consider the relevant evidence with regard to:

    1. the anticompetitive practices;

    2. the damage or imminent damage; and

    3. the relation of cause and effect between the practices and the damage or imminent damage.

    Article 13.- The determination of the existence of damage or threat of damage and the relation of cause and effect involving the anticompetitive practices shall be based on the following elements, among others:

    1. the volume of trade in the products affected by the practices, particularly in order to determine whether its has changed significantly in absolute terms and in relation to the production and consumption in the affected member country;

    2. the prices of the products and services affected by the practices, particularly to determine if they differ substantially from the prices of similar products or services in the absence of the practices; and

    3. the effects on production or exports affected by the practices, according to the real or apparent trends of the pertinent economic factors, such as: production, domestic sales, exports, distribution, market share, utilization of installed capacity, employment, stocks, and benefits.

    Article 14.- At the conclusion of its investigation, within 10 working days of the time provided in Article 11, the Board shall issue a finding with explanation, setting forth its conclusions on the basis of available information.

    The resolution shall indicate the measures adopted, the deadline for their adoption, and their duration. When appropriate, it shall also indicate the conditions that determine the duration of the measures.

    Article 15.- Once the Junta verifies, at national authorities or parties interestedís request, that the causes that originated the Resolution referred in the above Article modified or ceased, it shall leave it partially or totally without effect, by modifying or abolishing it. For its decision, the Junta shall have two months.

    The Junta likewise may verify ex-officio the causes that originated the Resolution modified or ceased, by modifying or abolishing it.

    III. Measures

    Article 16.- The Board shall issue an injunction when it determines the existence of an anticompetitive practice that causes damage or imminent damage. It may also decide to apply measures tending to eliminate or alleviate the distortions that gave rise to the complaint. The Member Countries shall adopt the necessary measures to halt the practices.

    The corrective measures may consist of authorization for the countries in which the affected companies carry on their economic activity to apply preferential tariffs with regard to subregional tariff commitments, in cases of imports of products affected by the anticompetitive practice.

    Article 17.- When the damage or imminent damage is evident, the Board may, in the course of its investigation, make recommendations to cause the practice to cease.

    IV. Final Provisions

    Article 18.- This Decision supersedes Decision 230 in those provisions related to preventing or correcting distortions to competition as a result of restrictive practices of competition.

    Signed at Lima, Peru, on March 21, 1991.

    Continue on to Mercosur


    Notes:

    1.The Canada-Chile Free Trade Agreement was reached on November 14, 1996 and will enter into force in June, 1997.

    2. No investor may have recourse to investor-state arbitration under the Investment Chapter for any matter arising under this Article.

    3. Nothing in this Article shall be construed to prevent a monopoly from charging different prices in different geographic markets, where such differences are based on normal commercial considerations, such as taking account of supply and demand conditions in those markets.

    4. A "delegation" includes a legislative grant, and a government order, directive or other act transferring to the monopoly, or authorizing the exercise by the monopoly of, governmental authority.

    5. Differences in pricing between classes of customers, between affiliated and non-affiliated firms, and cross-subsidization are not in themselves inconsistent with the provision; rather, they are subject to this subparagraph when they are used as instruments of anticompetitive behavior by the monopoly firm.

    6. Treaty of Free Trade of the Group of Three between Mexico, Colombia and Venezuela (Group of Three or G-3) was signed on June 13, 1994 and made effective on January 1, 1995.

    7. The Andean Group was created by the Cartagena Agreement in May 26, 1969. The Andean Group member countries are Bolivia, Colombia, Ecuador, Peru and Venezuela. The fundamental provisions regarding competition policy are found in the Decision 285: Norms for Prevention or Correction of Distortions in Competition Caused by Practices that Restrict Free Competition of March 21, 1991.

 
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