Croatia adopts Revised Unfair Trading Practices Act 2021 fully harmonized with EU Directive 2019/633

For the purpose of bringing its legal framework in the area of unfair trading practices in business-to-business relations in the agricultural and food supply chain into compliance with the Directive (EU) 2019/633 of the European Parliament and of the Council of 17 April 2019 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain, and taking into account some necessary fine tuning of the existing Croatian Act on the prohibition of unfair trading practices in the business-to-business food supply chain (UTPs Act) OG 117/17, Croatia adopted the Act on the Amendments to the Act on the prohibition of unfair trading practices in the business-to-business food supply chain (Revised UTPs Act 2021), OG 52/2021, 14 May 2021.

The Revised UTPs Act 2021 enters into force on 1 September 2021 and shall become fully applicable on 1 March 2022, providing the addressed actors the 6-month transitory period.

Croatia adopted its first UTPs Act as early as in 2017, whose full application started on 1 April 2018, and that had been to a large extent already brought into compliance with the Directive (EU) 2019/633 of the European Parliament and of the Council of 17 April 2019 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain OJ L 111/59. The newly adopted Revised Unfair Trading Practices Act 2021 now ensures a common approach with respect to the application of the rules set out in EU Directive.

In comparison with the existing UTPs Act the Revised UTPs Act 2021 brings about a number of terminological adjustments but also introduces a series of novelties based on the experience gained from the three-year application of this piece of legislation in Croatia.

Thus, the Revised UTPs Act 2021 introduces a wider scope of agricultural and food products found in business transactions between suppliers and buyers that are subject to these revised rules. Second, it introduces the notion of a “buyer” and re-defines the notion of “strong bargaining power”, which considerable extends the pool of addressed actors – entities that are subject to these rules. Third, it introduces a new power of the Croatian Competition Agency to carry out unannounced on-site inspections within the framework of its investigations, in accordance with national rules and procedures. Next, it lists a number of new unfair trading practices and extends the now existing list of 33 unfair trading practices to 43, where 25 thereof are absolutely prohibited. In addition, it regulates the cooperation between enforcement authorities – the national enforcement authority, the Commission and the Member States enforcement authorities.

It must also be noted that the Revised UTPs Act 2021 by lowering the threshold of the total annual turnover of the buyer extends the scope of application to more actors active in the market. Concretely, within the meaning of the Revised UTPs Act 2021 superior bargaining position will be held by any buyer with total annual turnover exceeding HRK 15 million realized in the Republic of Croatia, but where the buyer has connected companies, the threshold will be increased by adding the total annual turnover of its connected companies worldwide. At the same time, the sanctions that the Croatian Competition Agency imposes for minor or negligible infringements of the rules concerned, can be reduced taking into account the gravity, scope, duration and the consequences of the infringement for the suppler and the public interest.

Finally, where the complainant so requests, the Croatian Competition Agency shall take the necessary measures for the appropriate protection of the identity of the complainant and for the appropriate protection of any other information in respect of which the complainant considers that the disclosure of such information would be harmful to the interests of the complainant or suppliers.