Communication
The aim of the protection of market competition is primarily to create benefits for consumers and equal conditions for all entrepreneurs on the market, who, acting in accordance with the existing rules and competing on the market with the quality, price and innovation of their products and services, contribute to the overall development of the economy.
Reaction of the Croatian Competition Agency to the article “Lex Mitsubishi: CCA affirms that the Central Customs Administration challenges competition” published in Nacional
The Croatian Competition Agency responses to the article “Lex Mitsubishi: CCA affirms that the Central Customs Administration challenges competition” published in Nacional weekly on 20 October 2015 based on the expert opinion adopted by the CCA on the Ordinance on vehicle excise duty (Official Gazette, 52/13, 90/13, 140/13, 116/14, 152/14 and 31/15) based on the writing received from the undertaking LMG Autokuća d.o.o. stating that Article 5 paragraph 12 of the above mentioned Ordinance contravenes with competition rules.
The article published in Nacional does not quote the text of the opinion but adds voluntary interpretations. This significantly changes the original text and the purpose and the tone of the CCA opinion.
On page 2 the last paragraph of the article published in Nacional quotes:
“A layman’s reading of the Ordinance leads to an impression that the Customs Administration is entitled to prohibit the bidder in a public tender to bid with a lower price of the motor vehicle than the one defined in its official catalogue and that it would consider it as inaccurate calculation of the excise duty. This means that, for example, if a car costs 100,000 Kuna, and the bidder in the public tender does not bid with 10 million, already based on the volume rebate it bids with the price of 9 million. The Customs Administration may find that the bidder did not calculate the excise duty correctly and select a higher offer where the motor vehicles in a public tender appear without such a rebate. At the same time, in the last sentence, the piece of legislation is defined as retroactive, which is prohibited by the Croatian Constitution, besides exceptional cases”.
The above quote had not been used by the CCA in no part of the original opinion. Thus, it cannot be used as such, especially not in the form of a quote. The CCA insists that its opinion had been issued exclusively within the meaning of competition rules. Any taking of the parts or excerpts of this text out of the context and free interpretation by a journalist or editor of the paper leads not only to inaccuracy and incorrectness but also causes misinterpretations and misleading judgement of the readers and the wider public.
In its opinion the CCA indicated that it would be desirable to avoid the term “definition of the recommended price”. Namely, this is a technical term taken from both competition and customs rules, and as such used by both authorities – the competition authority and the customs administration within their scope of activity do no mean the same, which could lead to misunderstanding of the recipients.
Namely, exclusively in the sense of competition rules, any direct restriction of the buyer’s ability to determine its sale price, without prejudice to the possibility of the supplier to impose a maximum sale price or recommend a sale price, that would serve as a reference point for the buyer for establishing the final sale price, provided that they do not amount to a fixed or minimum sale price as a result of pressure from, or incentives offered by, any of the parties, constitutes a hard core restriction.
Therefore, in spite of the fact that the wording of Article 5 paragraph 12 of the Ordinance clearly indicates that where the Customs Administration exclusively based on its powers “defines the recommended price”, it is actually the price that is used as a basis for calculation of the tax base, and not the price that would be imposed by Customs Administration on the seller, in other words, the price that this seller would be obliged to charge in the future, the CCA states that in its non-binding opinion it merely suggested, where possible, against the use of the term “recommended price”.
This would avoid any possible misinterpretations or misunderstandings by the recipients of the term “recommended price” that bears another meaning in the sense of competition rules.
The integral text of the CCA opinion was published on 28 September 2015 on its website:
https://www.aztn.hr/ea/ea/ea/ea/wp-content/uploads/2015/10/034-082015-01154.pdf