6 th Asian Competition Forum Annual Conference, Hong Kong, 6 th and 7 th December 2010

1. The EU Perspective on Capacity Building in Asia on Competition Law and its Enforcement: An Insider-Outsider’s View 6th Asian Competition Forum Annual Conference, Hong Kong, 6th and 7th December 2010 Dr Stanley Wong Member, Competiton Authority (Ireland) Director, Mergers Division and Monopolies Division

2. In the five decades of its existence, the European Union has acquired extensive experience in capacity building in competition law and policy. • The enforcement of EU competition laws, as embodied in Articles 101 to 109 of the Treaty on the Functioning of the European Union (TFEU), and promotion of the underlying competition policy are central to the creation of a single market. • From that perspective, the EU expends considerable resources in assisting countries who join or seek to join the EU in developing capacity in competition law and policy.

3. As with most advanced industrialised nations or jurisdictions, the European Union is active in providing assistance to developing and emerging countries in capacity building in competition law and policy. • In the past few years the EU’s efforts in Asia have been directed to China although some capacity building activities have been directed to India and to ASEAN. • Many Member States participate in the EU efforts and some Member States, notably, Germany and France, have capacity building programmes of their own in Asia.

4. The focal point for the EU’s contribution to capacity building in competition law and policy in China is the EU-China Trade Project or EUCTP (Support to China’s Integration into the World Trading System Project). • The EUCTP, a joint project of the European Union and the Chinese Government, is the second of three large-scale EU financed trade-related assistance projects since China joined the World Trade Organisation in 2001. • With a budget of about EUR 20 million, the EUCTP was implemented over almost six years, from 1 February 2004 to 31 December 2009.

5. The EUCTP consisted of six components. Competition policy was part of the component, “C6: Transparency, Cooperation and Policy Development”. • According the final evaluation report of the EUCTP, competition policy was clearly the most successful having regard to the evaluative criteria of relevance, efficiency, effectiveness, impact, sustainability and EU value-added. • The successor project to EUCTP is Support for China’s Sustainable Trade and Investment System (“EUCTP II”). It was recently launched and will be implemented over the next five years.

6. Competition policy under the EUCTP consisted mainly of the following activities: • assistance in drafting the Anti-Monopoly Law • training of officials including at the provincial level of the three Chinese competition authorities: Ministry of Commerce (MOFCOM), National Development and Reform Commission (NDRC) and State Administration for Industry & Commerce (SAIC) • much of the training of officials was undertaken through workshops and of note, the workshops were organised under the banner of “AML Week” which was held twice in 2009 • production and dissemination of Chinese translations of relevant EU legislation and key regulations and guidelines relating to competition policy

7. The planning for the EUCTP II is underway. • The competition policy area under EUCTP II can be expected to build on the successes of the competition policy activities under EUCTP. • It should, however, be more than repeating the activities of the EUCTP since the Anti-monopoly Law came into force on 1 August 2008 and the Chinese competition authorities are now enforcing the new law.

8. In my personal view, capacity building in competition policy is really about promoting the culture of competition. • From that perspective, capacity building must encompass the following components: • technical assistance to competition authorities; • technical assistance to the judiciary; • advocacy directed to government ministries and state bodies; • advocacy directed to business; • support for educational and research activities in universities • Most, if not, all of these components should be featured in EUCTP II.

9. Technical assistance to competition authorities typically begins with assistance in drafting competition laws and following adoption of such laws, focuses on their application. • The key challenges lie with the application of the laws • First, the challenge of integrating the enforcement of competition laws into the administrative and legal systems. • Second, competition laws do not consist of operational concepts and therefore, the effective application of such laws takes time as officials develop the requisite analytical skills as well as the ability to exercise good judgment • Third, the most effective type of training is through working on actual cases through secondments with established agencies or through training based on hypotheticals

10. Technical assistance to the judiciary involves • training on the principles of competition laws for which most judges of little prior familiarity; • making the judiciary aware of the challenges in judging competition cases having regard to the role given to the court with respect to such cases • Advocacy directed to government ministries and state bodies is motivated by the recognition that their actions may hinder the adoption of a culture of competition • much anti-competitive conduct by private enterprises is encouraged or permitted by government ministries or regulators • often anti-competitive conduct is engaged by state-owned enterprises

11. Advocacy directed to business to encourage compliance with the competition laws • making business aware of the consequences of the failure to comply with the competition laws • making business aware of the benefits to the marketplace from competition laws • recognising that there are never enough resources to take proceedings against all cases of anti-competitive conduct • Support for educational and research activities in universities • supporting the teaching of competition law and policy bring obvious benefits • supporting academic research ensures that there is reflection about competition law and its implementation

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