Explanatory Memorandum to COM(2012)244 - Signing of an Agreement with Switzerland concerning cooperation on the application of competition laws - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2012)244 - Signing of an Agreement with Switzerland concerning cooperation on the application of competition laws. |
|---|---|
| source | COM(2012)244  |
| date | 01-06-2012 |
The European Union has concluded bilateral cooperation agreements in order to structure and facilitate the cooperation between the Commission and foreign competition authorities. There are four such agreements, with the US i (1991), Canada i (1999), Japan i (2003) and South Korea (2009) i. All these agreements are so-called 'first generation' agreements; they contain various instruments of cooperation in the area of competition policy but exclude the exchange of evidence. These agreements can be regarded as successful. Their main benefit is that they put case related cooperation and the policy dialogue into a structured framework and thereby contribute to a more efficient competition law enforcement.
However, these existing cooperation agreements expressly exclude the exchange of protected or confidential information. This means in practice that no information obtained through the formal investigative process can be shared with the other authority without the specific consent ("waivers") of the company that provided the information. The absence of any possibility to exchange confidential or protected information under a 'first generation' cooperation agreement is regarded as the major deficiency of this type of agreements, especially in cartel investigations.[5]
The EU and Switzerland are two very important economic partners, whose economies are deeply integrated. As a result, many anticompetitive practices have cross border effects on trade between the EU and Switzerland. Many cases dealt with by the Commission concern practices which involve Swiss firms and/or affect the Swiss market. Similarly, there is clear evidence showing that certain anticompetitive practices taking place in Switzerland, and especially cartels, also affect the EU markets. The Swiss Competition Commission and the Commission have already cooperated in a certain number of cases outside the framework of a formal agreement. As in the case of 'first generation' agreements, this cooperation is significantly limited by the fact that they cannot exchange confidential information.
This agreement between the EU and the Swiss Confederation concerning cooperation on the application of their competition laws addresses this limitation by allowing the Commission and the Swiss Competition Commission to exchange confidential information. Like the 'first generation' agreements concluded so far, this agreement will help to structure cooperation and a policy dialogue on competition matters with the Swiss authorities. By including the possibility to exchange, subject to specific conditions, confidential information between the competition agencies of both Parties, the Agreement will also enable the Commission to benefit from the results of information gathered by the Swiss Competition Commission.
The implementation of this agreement will be facilitated by the already existing convergence between the two competition enforcement systems. EU and Swiss substantive rules are very similar, which means that the Commission and the Swiss authority are more likely to investigate the same practices and to have information that is relevant to the other party's investigation. They also have similar investigative powers. As a result, the type and scope of information that they may collect and share is equivalent. Both enforcement systems foresee comparable sanctions: they impose administrative sanctions on undertakings only and individuals can neither be prosecuted nor be fined. Furthermore, both systems recognise similar procedural rights of the parties and the rights of legal privilege and non self-incrimination.
On 26 November 2011, the Council authorised the Commission to negotiate this agreement with the Swiss Confederation. After ten rounds of negotiations, the negotiations were completed on 7 December 2011. The agreement addresses all the elements of the Council negotiation directives.
First, this agreement contains the provisions that are found in the cooperation agreements that have been concluded so far with the US, Canada, Japan and Korea. It contains provisions on the notification of enforcement activities which significantly affect the important interest of the other party; provisions organising the practical cooperation between the Commission and the Swiss Competition Commission and provisions on negative and positive comity.
Secondly, the agreement regulates the discussion and transmission of information between the Commission and the Swiss Competition Commission. It authorises the Commission and the Swiss Competition to discuss information obtained by investigative process. Furthermore, both authorities may under certain conditions transmit information already in their possession and obtained by investigative process to the other authority. They can only do so when they investigate the same or related conduct or transaction. The agreement provides that they cannot discuss or transmit information which was received under their respective leniency or settlement procedures, without the prior express agreement of the source. Nor can they exchange information if using such information would be prohibited under the procedural rights and privileges guaranteed under their respective laws. The decision to transmit information is always in the discretion of the transmitting authority; there is no obligation to do so.
In line with the negotiation directives, the agreement lays down rules regarding the use of the information thus discussed or transmitted. The information obtained by investigative process which is discussed or transmitted under the agreement can only be used by the receiving authority for the enforcement of its competition rules to the same or related conduct or transaction, and for the purpose of the relevant request, when applicable. In addition, no information discussed or transmitted shall be used to impose any type of sanctions, whether custodial or not, on natural persons.
The agreement also contains provisions on the protection of the information discussed or transmitted: The Commission and the Swiss Competition Commission must keep this information confidential under their own rules. On this point, the Commission is satisfied that the Swiss rules on confidentiality are comparable to the EU ones and therefore that business secrets and other confidential information that it may transmit to the Swiss Competition Commission will enjoy an adequate level of protection. When implementing this agreement, both authorities shall also ensure the protection of personal data, under their respective laws on personal data. The Swiss rules can be considered to be equivalent; the Commission has taken a decision concluding that Switzerland generally provides an adequate level of protection for personal data transferred from the EU.[6]
Finally, the agreement allows the disclosure of information transmitted under the agreement in certain limited circumstances, such as for the procedure of access to file, for court procedures, and to national competition authorities and the EFTA Surveillance Authority, when disclosure of important documents to these agencies is required for the adoption of a Commission decision.