Programme: IPA 2007
Partner country: Croatia
Area of Cooperation: Internal market and trade
Title of the Project: Implementing Croatian Competition and state aid policies
Twinning budget: ? 1,000.000
TWINNING PROJECT FICHE
1. Basic information
1.1 Programme: IPA 2007
1.2 Twinning Number: HR 07 IB FI 03
1.3 Title: Implementing Croatian Competition and state aid policies
1.4 Sector: Internal market, competition
1.5 Beneficiary country: Croatia
2.1. Overall objective(s):
Enhance the competition environment and state aid policy through continuous support to Croatian competition authorities and its partners on the basis of EC rules and best practices.
2.2 Project purpose:
Provide Croatian Competition Agency (CCA) and other stakeholders in competition and state aid systems with sufficient capacity for efficient implementation of competition and state aid policies.
2.3 Contribution to the Accession Partnership/ Stabilisation and Association Agreement/
National Programme for Integration of the Republic of Croatia into the EU (NPIEU)
Activities under this project will be follow-up to the results of the PHARE 2005 project. They will provide CCA and other stakeholders with sufficient capacity for efficient implementation of new competition regime established through the new Competition Act, as well as
implementation of state aid law and policy.
With a view to the future EU membership, this twinning project should have impact on the readiness of all relevant Croatian institutions to fully implement competition and state aid rules in accordance with the acquis. To that end, beside the CCA the project will reach out to the
Croatian Competition Agency, judiciary and sectoral regulators.
Firstly, through the new competition regime the Agency shall be empowered to impose fines to the undertakings breaching the Competition Act and for those who cooperate in cartel cases, immunity or reduction of fines will be possible. These competences, which are in place in all similar bodies in the EU countries, will be completely new for the Agency and the transfer of knowledge from a twinning agency will be of crucial importance in that respect. Secondly, according to the new Competition Act one court shall be responsible for deciding on the legality of Agency’s decisions and fines defined therein. Since the competition law is a relatively new area in which no court has been specialized so far, this project will be the first one to target a specialized court instead of many courts which in the end would not deal with competition cases, as it was the case in the previous projects.
And thirdly, the new Credit Institutions Act stipulates that the competence over competition
issues in banking sector shall be given to the CCA upon the accession to the EU. In that context this project will significantly contribute to the exchange of expertise in this area between the National Bank and the CCA and thus prepare the CCA for its future role upon the accession to the EU.
In the area of state aid, where the competence over state aid issues shall be passed to the European Commission upon Croatian accession to the EU, internships and cooperation between the EC and the CCA shall be further reinforced with the assistance of this project. The envisaged activities shall address the issue of insufficient capacity of the Agency for solving the most complex cases in the area of state aid, which has been repeated on several occasions in both Croatian and EU strategic documents.
3.1 Background and justification:
Pursuant to the obligations under the Stabilisation and Association Agreement (SAA) between the European Union and the Republic of Croatia from 13 December 2004, as well as membership obligations in the WTO, competition policy including antitrust and state aid is one of the priorities for the Government of the Republic of Croatia.
The application and enforcement of the Competition Act and State Aid Act is entrusted to the Croatian Competition Agency (CCA, the Agency). The Agency performs its tasks assigned to it by the acts and reports to the Croatian Parliament. Its activities are managed by the Competition Council and the President of the Council, who are appointed by the Parliament for a period of five years. The Council, which consists of five members, is the managing body of the Agency, while the President represents and speaks for the Agency and manages its activities. As of July 2008, the Agency employs 50 persons.
The European Partnership adopted along with the signature of the SAA highlights the following medium-term priorities: “Reinforce the antitrust and state aid authority and build up a credible
enforcement record. Substantially improve transparency in the field of state aid; develop training on competition law and policy at all levels of administration and judiciary.”
Furthermore, European Commission’s Progress Reports for 2005, 2006 and 2007 raise the need to further strengthen the capacity of CCA, which entails necessary legislative changes ensuring the fulfilment of SAA obligations in this area.
The National Programme for the Accession of the Republic of Croatia into the EU – 2008
(NPAEU) is the sixth annual programme of the Croatian Government, which contains activities to be undertaken on its way towards EU integration. The legislative obligation arising from the NPAEU 2008 for the CCA is the delivery of the amendments to the Competition Act in order to render the competition system more efficient and prepare it for the integration into the EU. The implementing measures defined for the CCA for this year refer to the area of state aid (dealing with issues such as shipbuilding and steel industries, as well as fiscal aid, together with the MELE and other stakeholders) and continuous strengthening of administrative capacities in both competition and state aid areas (with the assistance of the PHARE project).
EU accession negotiations in the chapter 8 of the acquis (“Competition”) have not yet been
opened. The main pending issue for opening the chapter is the situation in the Croatian shipbuilding. The precondition for opening chapter 8 is restructuring of the shipbuilding industry.
Benchmarks (steel industry, alignment of fiscal aid and transparency in the area of automotive parts and textile industries) have been fulfilled. The only remaining benchmark is in the area of
shipbuilding. Namely, the shipbuilding industry has to undergo privatization process, after which
the Agency will resume its temporarily terminated proceedings on the assessment of individual
restructuring plans of Croatian shipyards. The Croatian Government has made a proposal
regarding the restructuring of the Croatian shipyards which was sent to Brussels. At present the
Government is still awaiting the EC’s reply on the proposal.
This project is to build upon the results of the current PHARE 2005 project which comprises
both competencies of the Agency, competition and state aid. Twinning component is being
implemented since April 2007 with Germany as a twinning partner. In the competition part, main
emphasis is on the drafting of the amendments to the Competition Act, as well as new bylaws
which will be needed as implementing legislation arising from the changed Competition Act.
Training on the implementation of the new Act will be needed within IPA project. In the state
aid part of the project main activities are focused on on-the-job consultancy, primarily related to
the most complex cases which are dealing with the issues arising from the SAA obligations and
EU accession negotiation benchmarks. Further awareness raising is needed in this area, both on
central and regional levels.
After several separate projects in the fields of competition and state aid respectively, PHARE
project was the first one to encompass the Agency as a whole. The IPA project should build
upon its results and strengthen the capacity of the Agency, as well as other stakeholders in the
competition and state aid systems, implement new competition regime and state aid rules. The
project consists of twinning and service component which will be implemented in parallel. It is
envisaged that the Service component starts in September 2009.
With a view to the future EU membership, the twinning project should have an impact on the
readiness of all relevant Croatian institutions to fully implement competition and state aid rules
in accordance with the acquis. To that end, beside the CCA the project will reach out to the
judiciary and sectoral regulators.
3.2 Linked activities:
Project Project Title Beneficiary Start Date Allocation Main Results
End Date (EUR) CARDS Support to the CCA March 2003 650,000.00 Assistance in legal drafting,
Development of CCA and external staff 2001 December Competition Policy in trained, IT equipment 2005 Croatia in line with supplied
the EU Standards and
CARDS Support to the CCA March 2004 190,000.00 Basis created for the
Croatian State Aid subsequent twinning and 2002 November System - facility supply 2004
Support to the CCA June 2005 1,200,000.00 CCA and external capacity
Croatian State Aid raised, public awareness April 2007 raised, state aid control System – TW, SU
system set up and database
created CARDS Further strengthening CCA November 450,000.00 CCA and government staff
Project Project Title Beneficiary Start Date Allocation Main Results
End Date (EUR)
of the Croatian trained, public awareness 2003 2005
Competition Agency raised February and implementation 2007 of competition law
and policy – TA
CARDS Support to the CCA March 2007 190,000.00 CCA assisted in assessing
Process of individual restructuring facility December Restructuring the plans of Croatian shipyards 2007 Shipbuilding Industry
in Croatia - TA
CARDS Improving MELE Ongoing 1,500,000.00 To generally improve the
information to the since awareness of the business 2004
Croatian business September community in key legislative
community 2007 fields PHARE Strengthening of CCA Ongoing 1,900,000 Assistance in legal drafting,
capacity to manage since April training of CCA staff and 2005
and enforce the EU other stakeholders, on-the-2007
competition and state job consultancy
aid policies – TW,
PHARE Croatian Maritime Ministry of the December 200,000.00 To improve policy making
Sector: State Aid and Sea, Transport 2007 – June and policy implementation 2005
and capacity of Croatian Market Access 2008
Infrastructure; maritime administration
Provide the stakeholders in IPA Implementing CCA Envisaged 1,000,000.00 competition and state aid Croatian competition start date - 2007 systems with sufficient and state aid policies September capacity for efficient - TA 2009 implementation of
competition and state aid
1. The process of strengthening the CCA’s administrative capacity, especially the education of
staff in the area of competition, as well as other officials enforcing the relevant legislation was
already partly covered by CARDS 2001, “Support to the Development of Competition Policy in
Croatia in line with the EU Standards and Practice” (?650,000.00), the first EU technical
assistance project implemented in the CCA. The project’s three components (legal approximation, institutional capacity building and training, public and governmental awareness
raising) were implemented and in 2005 the project was continued through training seminars for
CCA staff and external stakeholders. Implementation was completed at the end of 2005.
Under the 2001 project CCA also benefited from the supply of IT equipment, including hardware
and creation of a new website. For the purpose of successful implementation of the supply CCA
employed an IT person to administer the IT system.
2. The implementation of the CARDS 2003 project ”Further strengthening of the Croatian
Competition Agency and implementation of competition law and policy” (? 450,000.00)
comprised two components. One referred to the implementation and enforcement of competition
legal framework within the government and private sector and the other to institutional and
administrative capacity building of the CCA. It continued to build upon the training component
of the CARDS 2001 project, proceeding with the training activities of the CCA staff as well as
with the training of external stakeholders (government and private sector representatives).
Implementation was completed in February 2007.
1. There was a short-term technical assistance project preparing the ground for the twinning
CARDS 2002 project in the area of state aid (?190,000.00), which was completed in November
2004. This project was the first project in the CCA in the field of state aid. The project carried
out the activities in the area of legal harmonisation, IT support system and training.
2. Twinning project CARDS 2002 was implemented from June 2005 until April 2007. It was
envisaged to use the results and outputs of the above mentioned project as a basis for achieving
its objectives. The consulting countries under the project were Germany and Slovenia. The
objective of the project was to provide support to the CCA regarding the commitments
undertaken pursuant to the Stabilization and Association Agreement. Given that, it was directed
- capacity building of the CCA (through legislative review and drafting; update of the
Training Needs Analysis and provision of training for CCA staff; internships; institutional
assessment; development of guidelines and notification requirements and advice on
- setting up the state aid control system (through categorisation and methodology; process of
alignment, amendment and elaboration of state aid schemes and annual reporting), - raising awareness and understanding state aid advocacy (through analysis of training needs
for external target groups in the government and training; implementation strategy for the
state aid objectives and support in practical state aid advocacy). 3. Separate subproject was state aid supply project (?400,000.00) aimed at the establishment of a
comprehensive state aid data base in Croatia (CROSADS - Croatian State Aid Database System).
The contracted local IT company procured the necessary hardware and developed software
application for the database in close cooperation with the CCA and ECD.
4. CARDS facility project (?190,000.00), implemented between March and December 2007
aimed at giving assistance to the CCA in assessing restructuring plans of Croatian shipyards, so
as to be able to fulfil a benchmark imposed by the EU for the opening of negotiation chapter on
5. The most recent project is PHARE 2005 project, where the main beneficiary was Ministry of
the Sea, Transport and Infrastructure and co-beneficiary was the CCA. It was implemented until
Current project PHARE 2005 comprises both competencies of the Agency, competition and state
aid. Twinning component is being implemented since April 2007 with Germany as a twinning
partner. In the competition part, main emphasis is on the drafting of the amendments to the
Competition Act, as well as new bylaws which will be needed as implementing legislation
arising from the changed Competition Act. Trainings are being held for the CCA staff, judiciary
(both at central and regional levels) and other stakeholders (business community, lawyers). In
the state aid part of the project main activities are focused on on-the-job consultancy, primarily
related to the most complex cases which are dealing with the issues arising from the SAA
obligations and EU accession negotiation benchmarks. In both competition and state aid there
have been two study visits to relevant German authorities. Implementation of the twinning is to
be completed in February 2009.
Supply component of the project was completed in November 2008. The lots comprised the
supply of hardware (IT equipment, IP telephony) and the creation of the document management
system for the whole of the Agency, which is compatible with the CROSADS system previously
created for the State Aid Sector of the Agency within the CARDS 2002 project.
Finally, also to be mentioned is CARDS 2004 project (within the Ministry of Economy, Labour
and Entrepreneurship) titled “Information to the Croatian Business Community”. The project
aims to strengthen the capacity for policy makers and business organisations to identify, analyse
and communicate future impact of key regulatory areas for business in Croatia. The project also
aims to generally improve the awareness of the business community in key legislative fields such
as: public procurement, environment, standards for agriculture and industrial products, consumer
protection, competition policy, state aid and intellectual property rights. The Agency is actively
involved in the project.
The results to be achieved by the project are as follows.
1. Capacity of CCA, judges and sectoral regulators strengthened
1.1. Improved capacity in handling anti-trust and state aid cases
(indicator: at least 30 members of CCA staff trained on anti-trust and state aid during 21
month of the implementation of activities; strong enforcement record on substantial anti-trust
and state aid cases)
1.2. Improved capacity of court system in handling competition cases
(at least 20 relevant judges trained on anti-trust during 21 month of the implementation of
activities; enforcement record of relevant court(s) strengthened through decisions on the
legality of CCA’s decisions and on the fine reviews)
1.3. Improved capacity of relevant institutions in handling competition cases in telecom and
(at least 20 staff of relevant institutions trained on handling anti-trust cases in telecom and
banking sectors during 21 month of the implementation of activities; quality decisions on
anti-trust cases in relevant sectors, in which the application of relevant competition rules is
It is expected that after 21 month of the implementation of activities relevant stakeholders (CCA,
judiciary and sectoral regulators) will be trained so as to achieve sufficient level of capacity for
efficient implementation of new competition regime and state aid law and policy.
Component 1 – Training of CCA
Result of this component is the improved capacity in handling anti-trust and state aid cases. This
result is to be achieved through the following activities:
1.1. Training of CCA staff in the institutions of European Communities and its Member
- one internship in European Commission with approximate duration of 3 months is
planned for 2 CCA representatives (one person in charge of competition and one
person in charge of state aid are foreseen to participate)
- up to four study trips (“shadowing”) with planned duration of 2 weeks each, for 4
CCA representatives in selected Member State's institutions are envisaged In this activity, twinning partner will during two years of the duration of the contract in
cooperation with the representatives of the European Commission organize an internship for
CCA representatives (one representative from state aid field and one representative from anti-
trust field are foreseen to participate). Selection of CCA representatives will be done by
DGCOMP, based on CVs proposed by the CCA. Preparatory activities should not consume more
than a month.
Similarly, planned 2-week study trips will we organized in cooperation with relevant agency
from an EU Member State for 1 CCA representative per study trip. These study trips will take
place twice in the first year of the project and twice in the second year, equally divided among
anti-trust and state aid staff.
1.2. On-the-job training at CCA in anti-trust and state aid
- consultancy on ongoing cases In this activity, on-the-job training will be delivered for CCA staff, in anti-trust and state aid
issues separately. This will include consulting case handlers, directors or Council members on
ongoing cases selected by CCA. Where possible, emphasis should be put on comparison with the
experience in similar cases in the twinning partner’s country. This consultancy shall be
summarized in written document in sufficient detail so as to allow the CCA to use it later on (e.g.
when deciding on a particular case in Council sessions). In order to facilitate this, draft materials,
decisions or similar documents, needed to get an insight into a particular case, shall be ensured
by the beneficiary institution.
Component 2 - Training of judges on anti-trust issues
Result of this component is the improved capacity of court system in handling competition cases.
This result is to be achieved through the following activity:
2.1. Holding of 12 seminars at Judicial Academy and 1 study trip to relevant EC institutions During one year of the duration of the contract 12 seminars on competition issues will be
delivered for judges, in cooperation with the Judicial Academy in Zagreb (project partner). It is
expected that various experts cover different topics, as an introduction to competition law. Upon
the completion of the course, selected judges will together with the representative of the
twinning partner visit relevant EC institutions.
Component 3 - Training of relevant institutions on anti-trust in telecom and banking sectors
Result of this component is the improved capacity of relevant institutions in handling competition cases in telecom and banking sectors. This result is to be achieved through the following activity:
3.1. Holding of 8 seminars in relevant institutions Here the twinning partner should ensure the participation of relevant experts who would cover
four seminars on each of the two sectors. By the time the project will be implemented, it is
expected that amendments to the telecom and credit-institutions laws will be brought, which
would ensure the unique application of the Competition Act in all the sectors, telecom and
banking being the only ones where this is not the case for the time being.
In order to measure the success of the project activities, for the target groups (judges and sectoral regulators) a survey will be carried out to measure the knowledge of anti-trust and state aid, at the beginning and at the end of activities.
Two visibility events will be organized in the course of the implementation of the project; Kick-off meeting at the start of the implementation and the Final meeting at the end of the
implementation of the project activities.
3.5 Means / Input from the MS Partner Administration:
3.5.1 Profile and tasks of the Project Leader
Profile of the Project Leader
Project leader shall be a senior official of the Member State responsible for managing the
? university degree in law, economics or business/management;
? 5 years of working experience in the area of Competition policies (anti trust or state aid) ? background in drafting and implementing strategies, policies and regulations; ? knowledge of EU project rules and procedures;
? fluent written and spoken English.
Task of the Project Leader
? Overall management and coordination of the project in cooperation with RTA, RTA
counterpart and Croatian Project Leader
? Coordination of MS experts’ work and availability
? Directing the implementation of the project in order to ensure that all planned activities and
tasks will be leading towards the achievement of the projects results and the overall objectives ? Monitoring project implementation and proposing/undertaking corrective management
actions if required;
? Supporting study visits
? Ensuring financial management, including budget monitoring and accounting
3.5.2 Profile and tasks of the Resident Twining Adviser
Profile of the Resident Twining Adviser
RTA shall be a senior official of the Member State, with the following profile:
? University degree in management, public/business administration, law or economics
? 5 years experience in the field of competition policy (anti trust)
? Sufficient understanding of the state aid policy field to be able to actively support
the achievements of the project results
? Experience in project management
? Excellent communication skills, with fluency in written and spoken English
language, including excellent report-writing English language
? Computer literate
? Previous experience with EU twinning projects on competition would be an
Tasks of the Resident Twining Adviser
? transfer of knowledge on the Competition and State Aid
? assisting in the on-the-job training through consultancy in the most complex cases in
competition and state aid areas ? day-to-day management of the project in cooperation with the BC PL and RTA counterpart;
? coordination of the work of STEs ? planning the project activities with the Agency’s PIU and holding regular meetings with the
PIU in order to discuss current activities and possible problems;
? supporting the short-term experts in preparation of training activities in all three components,
as well as the internship and study visits;
? networking with institutions relevant in this project in Croatia (Judicial Academy and the
relevant court to be trained; The Croatian Post and Electronic Communications Agency
(HAKOM); Croatian National Bank; state aid providers) and abroad (relevant MS
institutions which will host the study trips, European Commission – DGCOMP);
Duration of the Resident Twinning Adviser secondment: 21 months
3.5.3 Profile and tasks of the short-term experts
Profile of the Short-term experts
? University-level degree in a relevant subject (law or economics) or equivalent work
? 5 years relevant work experience including competition, legal drafting, institutional
capacity building, public awareness matters