Bosnia and Herzegovina
Schoenherr is a leading full service law firm in Central and Eastern Europe. About 300 professionals service national and international clients from our offices in Austria, Belgium/EU, and throughout the entire CEE region. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of experienced lawyers and young talent. As one of the first international law firms to move into CEE, we have grown to be one of the largest firms in the region. Our offices and country desks provide comprehensive coverage of CEE, allowing us to offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to jurisdiction.Show more
Competition & Antitrust
The Bosnia and Herzegovina Competition Council will apply new tariffs as from November 2018. Among these, the most significant are the increased merger control clearance fees, which have doubled. The council took inspiration for the new tariffs from those of other regional competition authorities, including the Serbian and Montenegrin commissions.
The Competition Council recently took a stand regarding whether a situation in which a food retail company takes over a competitor's business premises and continues the same business activity in those premises constitutes a concentration. The council concluded that such situations should be notified as they are not considered concentrations according to the Competition Act.
The Competition Council of Bosnia and Herzegovina recently set out its objectives and priorities for 2018 in its 2018 Work Programme. One of the council's medium-term objectives is to make market regulation more efficient with the aim of strengthening competition protection. The council has also stressed its dedication to improving its expertise and administrative capacity.
The process for appointing new Competition Council members is now complete and operational. Specific and complex rules exist for the composition of the council and for it to pass decisions. Among other things, there must be two members representing each of the three constituent ethnic groups of Bosnia and Herzegovina (ie, two Serbs, two Bosnians and two Croatians).
The Competition Council's main activities in 2016 included issuing opinions and conducting proceedings pursuant to requests filed by undertakings or ex officio. A total of 50% of the cases filed were processed in 2016, while the remaining cases have been carried over to 2017. The council's total income from administrative fees in 2016 was KM234,574 (approximately €115,000), while collected fines reached KM624,492 (approximately €610,000).
The Competition Council aims to improve its quality system in order to comply with EU legislation and enhance competition law enforcement in Bosnia and Herzegovina. The council's recently published work programme outlines its objectives and priorities for 2017 and ensures its transparency for business and expert communities. The council has stressed that certain issues may arise in the implementation of the work programme, which may affect relevant tasks and activities.
In a decision that could have significant implications on future practice, the Competition Authority recently reviewed non-compete obligations between parties to a merger. The concentration was cleared unconditionally. However, the non-compete obligations were considered to be severe restrictions of competition and the authority refused individual exemptions.
The Competition Council recently fined the Brčko Health Insurance Fund KM16,000 for restricting competition in the medicines supply market and the Federal Ministry of Health KM29,000 for restricting competition in the market for medical examinations of persons before and during employment.
The Competition Council has published its 2013 annual report and 2014 programme. The number of cases reviewed was 62.5% higher in 2013 than in 2012. It is clear that the council is facing an increased workload as a result of the liberalisation of markets which are becoming attractive for foreign investments. During 2014 the council intends to increase cooperation with competition bodies around Europe.
The Competition Council recently fined Apatinska pivara for abuse of dominance. Proceedings were launched pursuant to the request filed by one of Apatinska pivara' distributors. Dejan Komerc claimed that Apatinska pivara violated competition rules by applying dissimilar conditions to equivalent transactions with different distributors. The council concluded that Apatinska pivara had abused its dominant position.
The Competition Council recently fined Coca-Cola and two other undertakings for breaching a notification deadline and implementing a transaction without obtaining council clearance. The parties jointly submitted the merger notification, but it was submitted with a two-year delay. The council finally cleared the concentration and found no negative effects on competition.
The Competition Authority recently fined the Republic of Srpska Health Insurance Fund for concluding restrictive agreements with 150 pharmacies. The authority took a stand that this kind of condition represents a supplementary obligation that has no connection whatsoever with the respective agreement and prevented free access to the market for pharmacies.
The Competition Authority recently fined the Composers' Association for an abuse of dominance. The authority found that it had abused its dominant position by imposing unfair prices, applying dissimilar conditions to equivalent agreements with different parties and imposing supplementary obligations with no connection to the subject of the collective agreement on the use of music works by way of broadcasting.
The Competition Authority recently approved a concentration on the Bosnian dairy product market by means of an acquisition of control by Besnier SA, France over Ljubljanske mlekarne dd, Slovenia. Both participants in the concentration are present on the Bosnian market through their subsidiaries. The authority also imposed a fine on Besnier for filing the notification after the statutory time limit.
The Competition Council of Bosnia and Herzegovina recently fined a number of Bosnian banks for abuse of their dominant market position. The abuse occurred when the banks entered into restrictive exclusivity clauses in agreements with Western Union Network (France) SAS. The banks were fined over €1.2 million in total.
The Competition Council has found that some provisions of the draft Law on Transport by Taxi breach the Competition Act. The council held that the provisions limited competition by imposing different conditions on identical transactions, thus putting some taxi drivers in a less favourable position.
The Competition Council recently held that a government decision setting out a list of essential medication necessary for healthcare covered by mandatory health insurance prevents, limits and distorts competition in the medication market. The government was ordered to ensure that there is no limitation on the number and origin of medications included on the list.
The Competition Council of Bosnia and Herzegovina found that agreements concluded between the Ministry of Education, Science and Youth of the Canton of Sarajevo and the municipalities of Vogosca, Ilijas, Ilidza, Novo Sarajevo, Stari Grad, Novi Grad, Trnovo and Hadzici, relating to subsidised student transport services, were in breach of competition rules. As a result, the council imposed a fine of €13,000 on the ministry.
After the European Union signed the Stabilisation and Association Agreement with Bosnia and Herzegovina , the Competition Authority demonstrated good faith by declaring the harmonisation of national legislation with the EU competition regime as one of its goals. However, the 2011 Progress Report concluded that "overall, preparations in the area of competition remain at an early stage."
The Competition Council has rendered a decision in which it found that one of the incumbent telecommunications operators in Bosnia and Herzegovina did not enter into a restrictive agreement, as had been alleged in a competitor's request to initiate investigative proceedings.
In May 2011 the Competition Council approved a joint venture between Naftegazojava Innovacionnaja Korporacija and Naftna industrija Srbije. Although it approved the transaction, the council also fined both Naftegazojava Innovacionnaja Korporacija and Naftna industrija Srbije KM70,000 (appoximately €35,000) for breaching the suspension obligation.
The Competition Council recently fined Optima about €100,000 – representing 0.79% of its annual revenue for the year preceding the concentration – for implementing an acquisition of petrol stations without first obtaining clearance. On appeal, the council confirmed its decision to fine Optima, despite the fact that the acquisition was ultimately cleared.
The Annual Report of the Competition Council summarises the current state of competition rules in Bosnia and Herzegovina and outlines the developments that occurred in the previous year. At institutional level, the capacity of the council has been strengthened: several new positions have been established and new officers admitted. Thus, additional experts on competition and legal matters have been hired, as has an internal translator.
The Competition Council has completed its investigation into Komunalno Brcko, a public company set up by the district of Brcko, following a joint complaint by several providers of communal utility services. It had been alleged that Komunalno Brcko entered into restrictive agreements with the district, notwithstanding public procurement procedures and other relevant legislative and administrative regulations.
The Competition Authority has enacted secondary legislation based on the Competition Law. The Leniency Regulation explains the terms on which a party to a restrictive agreement may obtain a full exemption or reduced fine. The authority has also issued regulations on merger control, although its interpretation of the two merger thresholds - local and worldwide - arguably deviates from the rule set out in the law.
The Competition Council has cleared the acquisition by the Optima Group of eight petrol stations located in Bosnia and Herzegovina. However, the council imposed a €100,000 fine on Optima for breaching the Competition Act by failing to notify the transaction to the council within the statutory 15-day deadline and implementing the transaction irrespective of the suspension obligation.
Amendments to the Competition Act have been adopted, in particular in relation to merger control rules. The amendments stipulate new merger notification thresholds, extend the notification deadline and reinforce the suspension clause with a fine for closing a transaction prior to obtaining formal clearance of up to 10% of the total annual turnover of the undertaking in question.