The Regional Comprehensive Economic Partnership (“RCEP”) Agreement was signed on 15 November 2020 between ASEAN Member States, Australia, China, Japan, Korea, and New Zealand. The RCEP is intended to replace and update existing ASEAN Plus One free trade agreements and provides coverage on a number of issues including trade in goods, trade in services, movement of natural persons, intellectual property, electronic commerce, small and medium enterprises, and competition among others. RCEP will enter into force 60 days after the date on which at least six ASEAN Member Parties and three Parties who are not ASEAN Member States have deposited their instrument of ratification, acceptance, or approval with the Depositary for all Parties that have made such deposits.
In this alert, we focus on the RCEP provisions relevant to competition which are set out in Chapter 13 and its related Annexes. Article 13.2 provides that each Party must implement the Chapter in accordance with the Chapter’s objectives which are to promote competition in markets and enhance economic efficiency and consumer welfare through a) the adoption and maintenance of laws and regulations to proscribe anti-competitive activities, and b) regional cooperation on the development and implementation of competition laws and regulations (“CLR”) among the Parties. In this context, the Parties recognize their respective sovereign rights and the significant differences among themselves in terms of capacity and level of development with respect to competition law and policy.
Substantive obligations, which are subject to the relevant Annexes (described below), of the Parties are set out in Article 13.3 as follows:
- To adopt or maintain, and enforce, CLR;
- To establish or maintain CLR implementing authorities;
- To ensure independent decision making by such authorities;
- To apply and enforce its CLR in a manner that does not discriminate based on nationality;
- To apply its CLR to all entities engaged in commercial activities, regardless of ownership with any exclusion or exemption to be transparent and based on public policy or public interest;
- To make its CLR and any relevant guidelines publicly available with the exception of any internal operating procedures;
- To make the grounds for any final decision, remedy/sanction and any appeal under its CLR public, subject to:
- its laws and regulations;
- its need to safeguard confidential information;
- its need to safeguard information on grounds of public policy or public interest; and
- any redactions on the basis of a.-c. above;
- To ensure that before a sanction or remedy under its CLR is imposed, the subject of such sanction or remedy is provided reasons (in writing if possible) for the relevant allegations and a fair opportunity to be heard and to present evidence;
- To make the grounds for any final decision, sanction or remedy and any appeal under its CLR available to the subject of such sanction or remedy except in relation to a jury verdict in a criminal trial;
- To ensure that anyone subject to a sanction or remedy under its CLR has access to an independent review of, or appeal against, such sanction or remedy; and
- To recognize the importance of timeliness in the handling of competition cases.
In Article 13.4, the Parties recognize the importance of cooperation among their respective competition authorities, subject to the relevant Annexes, and list potential means of cooperation including:
- notification to another Party of enforcement activities that may substantially affect the important interests of such Party, as promptly as reasonably possible;
- upon request, discussions to address any matter relating to competition enforcement that substantially affects the important interest of the requesting Party;
- upon request, exchange of information to foster understanding or to facilitate effective enforcement; and
- upon request, coordination in enforcement actions in relation to the same or related anti-competitive activities.
The Annexes noted in relation to Articles 13.3 and 13.4 above essentially provide for a 3 year (in the case of Brunei, Lao, and Myanmar) or 5 year (with respect to Cambodia) period from the date RCEP comes into force to comply with the obligations of Articles 13.3 and 13.4 if the relevant Party has not done so by such date.
In Article 13.5, the RCEP explicitly provides that Chapter 13 does not require sharing of any confidential information that is contrary to that Party’s laws, regulations, and important interests and provides a process for requesting confidential information from another Party and restrictions on the use of any disclosed confidential information.
In Article 13.6, the Parties note their common interest in working together on technical cooperation activities including:
- sharing of relevant experiences and non-confidential information on the development and implementation of competition law and policy;
- exchange of consultants and experts;
- exchange of competition officials for training purposes;
- participation of competition officials in advocacy programmes; and
- other activities as agreed by the Parties.
The importance of consumer protection law to the objectives of Chapter 13 is recognized in Article 13.7 which also requires Parties to adopt or maintain laws or regulations to proscribe misleading practices or false or misleading descriptions. The importance of improving access and awareness of consumer redress mechanisms and the potential for cooperation among the Parties on consumer protection issues is also stated in Article 13.7.
Finally, Article 13 provides for consultations between Parties to address specific matters arising from Chapter 13 and excludes access to the general RCEP dispute settlement mechanisms for any matter arising under this Chapter.
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The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
Regional Competition Counsel