Cartels Comparative Guide

• Published date: 21 April 2022
• Subject Matter: Anti-trust/Competition Law, Cartels, Monopolies
• Law Firm: Odvjetnicki ured Ljubic
• Author: Odvjetnicki Ured Ljubic

1 Legal and enforcement framework

1.1 Which legislative and regulatory provisions apply to cartels in your jurisdiction?

A single regulation for the entire Bosnia and Herzegovina concerning cartel conduct is the BiH Law on Competition. This Law applies to all entities directly engaged in the production, sale of goods and provision of services throughout the entire territory of Bosnia and Herzegovina.

1.2 Do any special regimes apply to cartels in specific sectors?

There are additional specific regulations for specific sectors (such as trade or banking sector) that further strengthen the arrangement of business relationships within the cartel.

1.3 Which authorities are responsible for enforcing the cartel legislation?

Above all, it is the Competiton Council which is an autonomous and independent authority with the status of a legal entity established in Sarajevo. The Council, inter alia, monitors and supervises the agreements and arrangements between the economic entities that may affect the relevant market. In addition to the Council, significant authorisations are also provided by the ministries, such as the Federal Ministry of Trade within which the sectors have been formed. Those sectors supervise the implementation of all laws, regulations and any other provisions in the area of trade.

In the area of insurance and insurance companies, the FBiH Insurance Supervisory Agency and the Republika Srpska Insurance Agency play an important regulatory and control role. Their role, as non-profit and independent institutions, is to preserve the safety and stability of the insurance market in accordance with the principles of effectiveness, impartiality, public and transparency.

In the banking sector, the supervision role is exercised by the FBiH Banking Agency and the Republika Srpska Banking Agency.

1.4 How active are the enforcement authorities in investigating and taking action against cartels in your jurisdiction? What are the statistics regarding past and ongoing cartel investigations? What key decisions have the enforcement authorities adopted most recently?

If companies through joint action distort or restrict market competition, the BiH Council of Competition will initiate proceedings at the request of a party or ex officio. Request for initiation of proceedings before the Council of Competition may be submitted by: any legal or natural person having a legal or economic interest, chambers of commerce, associations of employers and entrepreneurs, consumer associations as well as executive power bodies in Bosnia and Herzegovina. It may be said that the Council of Competition is quite active in the investigation of cartel conduct when the party's request for an action is submitted. Current decisions and statistics on both initiated and completed proceedings are regularly published on the official Council website.

2 Definitions and scope of application

2.1 How is a 'cartel' defined in the cartel legislation?

Legislation of Bosnia and Herzegovina does not expressly define the term "cartel". However, the term implies a group of several market participants who negotiate and conclude agreements with each other in order to increase profits and market domination. Registration of associations of several economic operators to protect and promote their interests is permitted. However, unfair and disloyal treatment aimed at the "destruction" of any other market participants is strictly forbidden.

In the context of the term cartel, Article 4 of the BiH Law on Competition stipulates that prohibited are the agreements, contracts, certain provisions of agreements or contracts, joint actions, explicit and tacit agreements of economic entities, as well as decisions and other acts of economic entities aiming at and resulting in prevention, restriction or distortion of market competition in the relevant market and which relate to the following: the fixing of selling and purchase prices or any other trade conditions, limit and control on production, markets, technical development or investment, share of markets or sources of supply, application of dissimilar conditions to equivalent transactions with other economic entities thereby placing them at a competitive disadvantage, conclusion of contracts subject to acceptance by the other parties of additional obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2.2 What specific offences are defined in the cartel legislation?

Common offences mean the conclusion of agreements and arrangements between economic entities, which prevent, restrict or distort market competition in the relevant market. This refers in particular to the joint determination of purchase and sale prices, limitation and control of production, technical development or investment, market segmentation, etc. Such agreements shall be null and void if they aim to achieve the above effects. Misuse of a dominant position of several economic entities on the relevant market has been defined as offence too.

2.3 Is liability under the cartel legislation civil, criminal or both?

First of all, it is a civil responsibility. If the Council of Competition finds a violation of the Law, it may prohibit any further conduct of the economic entity, set the deadlines and measures for the elimination of consequences and it may impose fines.

The decision of the Council of Competition is final and a dissatisfied party to the proceeding may initiate an administrative dispute before the Court of Bosnia and Herzegovina within 30 days of the receipt of the decision, that is, from the date of publication of such decision.

2.4 Can both individuals and companies be prosecuted under the cartel legislation?

It is possible to punish both natural and legal persons at the same time. It is provided that an economic entity...