1. The Parties recognise the importance of the approximation of Croatia's existing legislation to that of the Community. Croatia shall endeavour to ensure that its existing laws and future legislation will be gradually made compatible with the Community acquis.
2. This approximation will start on the date of signing of the Agreement, and will gradually extend to all the elements of the Community acquis referred to in this Agreement by the end of the period defined in Article 5 of this Agreement. In particular, at an early stage, it will focus on fundamental elements of the Internal Market acquis as well as on other trade-related areas, on the basis of a programme to be agreed between the Commission of the European Communities and Croatia. Croatia will also define, in agreement with the Commission of the European Communities, the modalities for the monitoring of the implementation of approximation of legislation and law enforcement actions to be taken.
Competition and other economic provisions
1. The following are incompatible with the proper functioning of the Agreement, in so far as they may affect trade between the Community and Croatia:
(i)
all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;
(ii)
abuse by one or more undertakings of a dominant position in the territories of the Community or of Croatia as a whole or in a substantial part thereof;
(iii)
any State aid which distorts or threatens to distort competition by favouring certain undertakings or certain products.
2. Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the competition rules applicable in the Community, in particular from Articles 81, 82, 86 and 87 of the Treaty establishing the European Community and interpretative instruments adopted by the Community institutions.
3. The Parties shall ensure that an operationally independent public body is entrusted with the powers necessary for the full application of paragraph 1(i) and (ii) of this Article, regarding private and public undertakings and undertakings to which special rights have been granted.
4. Croatia shall establish an operationally independent authority which is entrusted with the powers necessary for the full application of paragraph 1(iii) of this Article within one year from the date of entry into force of this Agreement. This authority shall have, inter alia, the powers to authorise State aid schemes and individual aid grants in conformity with paragraph 2 of this Article, as well as the powers to order the recovery of State aid that has been unlawfully granted.
5. Each Party shall ensure transparency in the area of State aid, inter alia by providing to the other Party a regular annual report, or equivalent, following the methodology and the presentation of the Community survey on State aid. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.
6. Croatia shall establish a comprehensive inventory of aid schemes instituted before the establishment of the authority referred to in paragraph 4 and shall align such aid schemes with the criteria referred to in paragraph 2 within a period of no more than four years from the entry into force of this Agreement.
7.
(a)
For the purposes of applying the provisions of paragraph 1(iii), the Parties recognise that during the first four years after the entry into force of this Agreement, any public aid granted by Croatia shall be assessed taking into account the fact that Croatia shall be regarded as an area identical to those areas of the Community described in Article 87(3)(a) of the Treaty establishing the European Community.
(b)
Within three years form the entry into force of this Agreement, Croatia shall submit to the Commission of the European Communities its GDP per capita figures harmonised at NUTS II level. The authority referred to in paragraph 4 and the Commission of the European Communities shall then jointly evaluate the eligibility of the regions of Croatia as well as the maximum aid intensities in relation thereto in order to draw up the regional aid map on the basis of the relevant Community guidelines.
8. With regard to products referred to in Chapters II of Title IV:
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paragraph 1 (iii) shall not apply;
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any practices contrary to paragraph 1(i) shall be assessed according to the criteria established by the Community on the basis of Articles 36 and 37 of the Treaty establishing the European Community and specific Community instruments adopted on this basis.
9. If one of the Parties considers that a particular practice is incompatible with the terms of paragraph 1 of this Article, it may take appropriate measures after consultation within the Stabilisation and Association Council or after thirty working days following referral for such consultation.
Nothing in this Article shall prejudice or affect in any way the taking, by either Party, of antidumping or countervailing measures in accordance with the relevant Articles of GATT 1994 and WTO Agreement on Subsidies and Countervailing Measures or related internal legislation.
Intellectual, industrial and commercial property
1. Pursuant to the provisions of this Article and Annex VIII, the Parties confirm the importance that they attach to ensure adequate and effective protection and enforcement of intellectual, industrial and commercial property rights.
2. Croatia shall take the necessary measures in order to guarantee no later than three years after entry into force of this Agreement a level of protection of intellectual, industrial and commercial property rights similar to that existing in the Community, including effective means of enforcing such rights.
3. The Stabilisation and Association Council may decide to oblige Croatia to accede to specific multilateral Conventions in this area.
4. If problems in the area of intellectual, industrial and commercial property affecting trading conditions occur, they shall be referred urgently to the Stabilisation and Association Council, at the request of either Party, with a view to reaching mutually satisfactory solutions.
Public contracts
1. The Parties consider the opening-up of the award of public contracts on the basis of non-discrimination and reciprocity, in particular in the WTO context, to be a desirable objective.
2. Croatian companies, whether established or not in the Community, shall be granted access to contract award procedures in the Community pursuant to Community procurement rules under treatment no less favourable than that accorded to Community companies as from the entry into force of this Agreement.
The above provisions will also apply to contracts in the utilities sector once the government of Croatia has adopted the legislation introducing the Community rules in this area. The Community shall examine periodically whether Croatia has indeed introduced such legislation.
Community companies not established in Croatia shall be granted access to contract award procedures in Croatia pursuant to the Law on Public Procurement under treatment no less favourable than that accorded to Croatian companies at the latest three years after the entry into force of this Agreement. Community companies established in Croatia under the provisions of Chapter II of Title V shall have upon entry into force of this Agreement access to contract award procedures under treatment no less favourable than that accorded to Croatian companies.
The Stabilisation and Association Council shall periodically examine the possibility for Croatia to introduce access to award procedures in Croatia for all Community companies.
3. As regards establishment, operations, supply of services between the Community and Croatia, and also employment and movement of labour linked to the fulfilment of public contracts, the provisions of Articles 45 to 68 are applicable.
Standardisation, Metrology, Accreditation and Conformity Assessment
1. Croatia shall take the necessary measures in order to gradually achieve conformity with Community technical regulations and European standardisation, metrology, accreditation and conformity assessment procedures.
2. To this end, the Parties shall start at an early stage to:
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promote the use of Community technical regulations and European standards, tests and conformity assessment procedures;
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conclude, where appropriate, European Conformity Assessment Protocols;
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foster the development of the quality infrastructure: standardisation, metrology, accreditation and conformity assessment;
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promote the participation of Croatia in the work of specialised European organisations, in particular CEN, CENELEC, ETSI, EA, WELMEC, EUROMET.
Consumer protection
The Parties will cooperate in order to align the standards of consumer protection in Croatia on those of the Community. Effective consumer protection is necessary in order to ensure that the market economy functions properly, and this protection will depend on the development of an administrative infrastructure in order to ensure market surveillance and law enforcement in this field.
To that end, and in view of their common interests, the Parties will encourage and ensure:
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the harmonisation of legislation and the alignment of consumer protection in Croatia on that in force in the Community;
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a policy of active consumer protection including the increase of information and development of independent organisations;
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effective legal protection for consumers in order to improve the quality of consumer goods and maintain appropriate safety standards.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
