Agreement between the Government of Canada and the Government of the United States of America on the application of positive comity principles to the enforcement of their competition laws

Scope and purposes of this agreement

1. This Agreement applies where the competition authorities of aParty satisfy the competition authorities of the other Party thatthere is reason to believe that the following circumstances arepresent:
   • (a) Anticompetitive activities are occurring in whole or insubstantial part in the territory of one of the Parties and areadversely affecting the important interests of the other Party; and
   • (b) The activities in question may be subject to penaltiesor other relief under the competition laws of the Party in whoseterritory the activities are occurring.
2. The purposes of this Agreement are to:
   • (a) Help ensure that trade and investment flows between theParties and competition and consumer welfare within the territoriesof the Parties are not impeded by anticompetitive activities forwhich the competition laws of one or both Parties can provide aremedy, and
   • (b) Establish cooperative procedures to achieve the mosteffective and efficient enforcement of competition law, whereby thecompetition authorities of each Party will normally avoidallocating enforcement resources to dealing with anticompetitiveactivities that occur principally in and are directed principallytowards the other Party's territory, where the competitionauthorities of the other Party are able and prepared to examine andtake effective sanctions under their law to deal with thoseactivities.

Definitions

As used in this Agreement:

1. "Adverse effects" and "adversely affected" mean harm causedby anticompetitive activities to:
   • (a) the ability of persons, either natural or legal, in theterritory of a Party to export to, invest in, or otherwise competein the territory of the other Party, or
   • (b) competition in a Party's domestic or import markets.
2. "Anticompetitive activities" means any conduct or transactionthat may be subject to penalties or other relief under thecompetition laws of a Party.
3. "Competition authorities" means:
   • (a) for Canada, the Commissioner of Competition (referredto as the Director of Investigation and Research in the 1995Agreement), and
   • (b) for the United States of America, the AntitrustDivision of the United States Department of Justice and the FederalTrade Commission.
4. "Competition law(s)" means:
   • (a) for Canada, the Competition Act, R.S.C. 1985, c. C-34, asamended, except sections 52 through 60, 74.01 through 74.19, 91through 103, and 108 through 124 of that Act, and
   • (b) for the United States of America, the Sherman Act (15 U.S.C. §§1-7), theClayton Act (15 U.S.C.§§12-27, except as it relates to investigations pursuantto Title II of the Hart-Scott-Rodino Antitrust Improvements Act of1976, 15 U.S.C. §18a),the Wilson Tariff Act (15 U.S.C.§§8-11), and the Federal Trade Commission Act (15 U.S.C. §§41-58, exceptas these sections relate to consumer protection functions),

   as well as such other laws as well as sor regulations as theParties shall jointly agree in writing to be a "competition law" forthe purposes of this Agreement.

5. "Enforcement activities" means any investigation orproceeding conducted by the competition authorities of a Party inrelation to its competition laws.
6. "Requested Party" means a Party in the territory of whichanticompetitive activities appear to be occurring.
7. "Requesting Party" means a Party that is adversely affectedby anticompetitive activities that appear to be occurring in whole orin substantial part in the territory of the other Party.

Positive comity

The competition authorities of a Requesting Party may requestthe competition authorities of a Requested Party to investigate and,if warranted, to remedy anticompetitive activities in accordance withthe Requested Party's competition laws. Such a request may be maderegardless of whether the activities also violate the RequestingParty's competition laws, and regardless of whether the competitionauthorities of the Requesting Party have commenced or contemplatetaking enforcement activities under their own competition laws.

Deferral or suspension of investigations in reliance on enforcement activity by the requested party

1. The competition authorities of the Parties may agree that thecompetition authorities of the Requesting Party will defer or suspendpending or contemplated enforcement activities during the pendency ofenforcement activities of the Requested Party.
2. The competition authorities of a Requesting Party will normally defer or suspend their own enforcement activities in favor of enforcement activities by the competition authorities of theRequested Party when the following conditions are satisfied:
   • (a) The anticompetitive activities at issue:
     • (i) do not have a direct, substantial and reasonablyforeseeable impact on consumers in the Requesting Party'sterritory, or
     • (ii) where the anticompetitive activities do have such animpact on the Requesting Party's consumers, they occurprincipally in and are directed principally towards the otherParty's territory;
   • (b) The adverse effects on the important interests of theRequesting Party can be and are likely to be fully and adequatelyinvestigated and, as appropriate, eliminated or adequately remediedpursuant to the laws, procedures and available remedies of theRequested Party. The Parties recognize that it may be appropriateto pursue separate enforcement activities where anticompetitiveactivities affecting both territories justify the imposition ofpenalties within both jurisdictions; and
   • (c) The competition authorities of the Requested Partyagree that in conducting their own enforcement activities, theywill:
     • (i) devote adequate resources to investigate theanticompetitive activities and, where appropriate, promptlypursue adequate enforcement activities;
     • (ii) use their best efforts to pursue all reasonablyavailable sources of information, including such sources ofinformation as may be suggested by the competition authorities ofthe Requesting Party;
     • (iii) inform the competition authorities of theRequesting Party at reasonable intervals which normally shall notexceed six weeks, or on request, of the status of theirenforcement activities and intentions, and where appropriateprovide to the competition authorities of the Requesting Partyrelevant confidential information. The use and disclosure of suchinformation shall be governed by Article V;
     • (iv) promptly notify the competition authorities of theRequesting Party of any change in their intentions with respectto investigation or enforcement;
     • (v) use their best efforts to complete theirinvestigation and to obtain a remedy or initiate proceedingswithin a specified period to which the competition authorities ofthe Parties shall agree, which shall be as short a period as isreasonably feasible. The competition authorities of the Partiesshall agree on such time period within three months of the timeat which a request under Article III of this agreement is made;
     • (vi) fully inform the competition authorities of theRequesting Party of the results of their investigation, and takeinto account the views of the competition authorities of theRequesting Party, prior to any settlement, initiation ofproceedings, adoption of remedies, or termination of theinvestigation; and
     • (vii) comply with any reasonable request that may be madeby the competition authorities of the Requesting Party.

   When the above conditions are satisfied, a Requesting Partywhich chooses not to defer or suspend its enforcement activitiesshall inform the competition authorities of the Requested Party ofits reasons.

1. The competition authorities of the Requesting Party may deferor suspend their own enforcement activities if fewer than all of theconditions set out in paragraph 2 are satisfied.
2. Nothing in this Agreement precludes the competitionauthorities of a Requesting Party that choose to defer or suspendindependent enforcement activities from later initiating orre-instituting such activities. In such circumstances, thecompetition authorities of the Requesting Party will promptly informthe competition authorities of the Requested Party of theirintentions and reasons. If the competition authorities of theRequested Party continue with their own investigation, thecompetition authorities of the two Parties shall considercoordination of their respective investigations under the criteriaand procedures of Article IV of the 1995 Agreement.

Confidentiality and use of information

Where pursuant to this Agreement the competition authorities ofone Party provide information to the competition authorities of theother Party for the purpose of implementing this Agreement, thatinformation shall be used by the latter competition authorities onlyfor that purpose. However, the competition authorities that providedthe information may consent to another use, on condition that whereconfidential information has been provided pursuant to Article IV.2(c) (iii) on the basis of the consent of the source concerned, thatsource also agrees to the other use. Disclosure of such informationshall be governed by the provisions of Article X of the 1995Agreement.

Relationship to the 1995 agreement

This Agreement shall supplement and be interpreted consistentlywith the 1995 Agreement, which remains fully in force.

Existing law

Nothing in this Agreement shall be interpreted in a mannerinconsistent with the existing laws, or as requiring any change in thelaws, of the Parties or of their respective Provinces or States.

Entry into force and termination

1. This Agreement shall enter into force upon signature.
2. This Agreement shall remain in force until 60 days after thedate on which either Party notifies the other Party in writing thatit wishes to terminate the Agreement.

In Witness Whereof, the undersigned, being dulyauthorized, have signed this Agreement.

Done in duplicate at, on this day of 2004, in theEnglish and French languages, each text being equally authentic.

For the Government of of Canada____________________________

For the Government of the United States of America____________________________