Cooperation between Bangladesh Japanese Competition Commission

Globalisation will continue to task to enforce competition law internationally. Observers have noted that cross-border anti-competitive activities are on the rise. There are public interest considerations that are widespread and there are potential benefits involved regarding wider use and international cooperation across the globe.

Cooperation on competition can take place between States, between regional groupings/ organizations and States, and between regional organizations. Bilateral co-operation has developed into an important tool by which competition authorities engage, among themselves, in a variety of enforcement and enforcement-related activities. At the present context the bilateral co-operation in the field of competition law may be formal - on the basis of a competition-specific bilateral co-operation agreement or memoranda of understanding or informal - without the conclusion of an agreement.

The Bangladeshi Competition Commission and Japanese Fair-Trade Commission has agreed to sign a mutual co-operation agreement. This is the first such agreement for BCC and 2nd generation competition agreement for Japan as they have already singed a few such agreements.

The cross-border incidence of anti-competitive activities in globalized market is now very common and developing countries competition authorities are not equipped with resources and information and usually informed of a specific anti-competitive activity such as cartel through the enforcement reports of other competition authorities and through the media. The authorities need to undertake preliminary investigations to assess to cross border anti-competitive activities have impact in their own markets. To facilitate such assessments, cooperation with competition authorities from developed countries to obtain more information would be a source of valuable inputs.

The cooperation agreement between countries is in the common interest to cooperate in the detection of anticompetitive practices and the enforcement of their competition laws, and to share information that will facilitate the effective application of those laws and promote better understanding of each other's competition enforcement policies and activities, to the extent compatible with their respective laws and important interests, and within their reasonably available resources. Any cross border anti-competitive acts may increase the price and create barriers in entry of local manufacturers etc.

Cooperation agreement among the countries facilitates the common interest to work together on technical assistance initiatives related to competition law enforcement and policy. Subject to the competition authorities' reasonably available resources, these initiatives may include such forms of technical cooperation as the competition authorities decide are appropriate for purposes of this Agreement.

In many instances, international firms involved in a cartel have no physical presence in developing countries. Many Multinational Enterprises form cartel siting in their own country for the market in the developing countries. This makes it more difficult for competition authorities to investigate a cartel even within a regional economic area since they lack conventional investigation tools, such as the possibility of conducting dawn raids and interrogations or presenting requests for written statements. The situation is more challenging for newly established authorities in developing countries. Cooperation with jurisdictions investigating the same cartel therefore becomes indispensable for an effective enforcement against cartels at the global level. If the competition authorities that have sufficient resources, experience and tools may still face challenges in receiving cooperation from the firms involved in anti-competitive practices due to the size of the economy concerned.

For example, in Colombia, at the initial stage of the investigation of an automobile parts cartel whereby several Japanese firms had fixed the price of automobile parts in multiple jurisdictions, the competition authority notified the relevant firms of the initiation of the investigation by e-mail, as most did not have offices or representatives in Colombia yet did not receive any reply from the firms. There are no guarantees that cooperation by foreign firms will be forthcoming, even in circumstances that may appear evident, given that there are territorial limitations.

Co-operation between jurisdictions is needed to: (1) ensure efficient and effective enforcement of competition laws, and avoid unnecessary inconsistencies and duplication of effort; (2) develop and maintain trust and transparency between jurisdictions; (3) support and facilitate efficient and effective international business compliance with competition laws; and (4) improve and develop the techniques, tools and frameworks needed for effective international competition enforcement.

The Agreement will provide a framework for co-ordination on competition enforcement activities. It will enhance co-operation in the fight against breaches of competition law, for instance through regular contacts between the two authorities to discuss policy issues and enforcement efforts and priorities. Information can be exchanged when both authorities investigate the same or a related conduct or transaction and the receiving authority can use the evidence only for the enforcement of its competition rules.

Competition authorities help each other track down and prevent violations of anti-competition laws, for example, when a case in a certain industry has been investigated in one country. Competition authorities in the other countries could then learn from that case, such as about the industry’s characteristics and what rules apply, but also about how businesses ignore those rules, and how regulators in other countries operate. They also work together if anti-competitive problems occur in multiple countries at
the same time.

Under such agreement, each competition authority in a position to notify the other competition authority of its own enforcement activities that the notifying competition authority considers may affect the important interests of the other competition authorities. The competition authorities can extend cooperation consistent with the laws and regulations of each country. They can work together with available resources, exchange information. The competition authorities can work together in the field of technical cooperation activities. The competition authorities, when investigate competition matters that are related to each other, would consider coordination of their
enforcement activities.

The benefits of regional agreements on competition are determined by the modalities of cooperation provided in various statues. For example, in many formal cooperation agreements such as economic partnership agreements and free trade agreements, although the signatory parties agree to coordinate enforcement activities, the coordination clauses require only the coordination of enforcement to be considered, and actual coordination between competition authorities may not be achieved.  Regional economic communities that do not have competition rules in place take a more cautious approach to avoid repeating the experiences of authorities that have enacted regional competition rules but have limited enforcement. Bangladesh is in process of having comprehensive economic co-operation partnership agreement soon with India and must include a due competition clause in the agreement.

The developed country Japan has stated that most of its cooperation efforts are through many agreements, memorandums of understanding and administrative agreements to conduct joint enforcement activities with many competition authorities, both in developed and developing countries. Our prime minister is going the visit Japan at the end of November 2022 and hope that the already agreed cooperation agreement between Bangladesh Competition Commission and Japanese Fair-Trade Commission be signed in presence of two Prime Ministers. Bangladesh will be mostly benefited from such an agreement.

The writer is Non-Government Adviser, Bangladesh Competition Commission and CEO, Bangla Chemical. He can be contacted at shah@banglachemical.com