BAKER MCKENZIE - International Agency and Distribution Handbook

International Agency & Distribution Handbook EMEA

International Agency and Distribution Handbook EMEA 2018

©2018 Baker & McKenzie LLP 2018 All rights reserved. This publication is protected by copyright. Apart from any fair dealing for the purposes of private study or research permitted under applicable copyright legislation, no part may be reproduced or transmitted by any process or means without the prior permission of Baker & McKenzie LLP. IMPORTANT DISCLAIMER. The material in this publication is of the nature of general comment only. It is not offered as advice on any particular matter and should not be taken as such. Baker & McKenzie LLP, the editors and the contributing authors disclaim all liability to any person in respect of the consequences of anything done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents of this publication. No person, whether a client of Baker & McKenzie LLP or otherwise, should act or refrain from acting on the basis of any statement contained in this publication without taking specific professional advice on the particular facts and circumstances in issue. Baker & McKenzie International is a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner or equivalent in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. International Agency and Distribution Handbook

Baker McKenzie | i Table of Contents Introduction ........................................................................................... 1 Contributors .......................................................................................... 5 EU Competition Law ........................................................................... 10 Compliance, Anti-Corruption and Export Controls ............................. 30 Austria ................................................................................................. 39 Belgium ............................................................................................... 53 Bulgaria ............................................................................................... 75 Cyprus ................................................................................................ 90 Czech Republic ................................................................................. 107

Austria ................................................................................................. 39 Belgium ............................................................................................... 53 Bulgaria ............................................................................................... 75 Cyprus ................................................................................................ 90 Czech Republic ................................................................................. 107 Denmark ........................................................................................... 117 Egypt ................................................................................................. 129 Estonia .............................................................................................. 144 Finland .............................................................................................. 159 France ............................................................................................... 174 Germany ........................................................................................... 193 Greece .............................................................................................. 211 Hungary ............................................................................................ 231 Ireland ............................................................................................... 246 Italy ................................................................................................... 263 Kazakhstan ....................................................................................... 300 Latvia ................................................................................................ 310 Lithuania ........................................................................................... 323 Luxembourg ...................................................................................... 338 Malta ................................................................................................. 351 Morocco ............................................................................................ 369 Netherlands ...................................................................................... 377

ii | Baker McKenzie Norway .............................................................................................. 390 Poland ............................................................................................... 401 Portugal ............................................................................................ 415 Romania ........................................................................................... 428 Russian Federation........................................................................... 440 Saudi Arabia ..................................................................................... 466 Slovakia ............................................................................................ 473 Slovenia ............................................................................................ 483 South Africa ...................................................................................... 497 Spain ................................................................................................. 519 Sweden ............................................................................................. 539 Switzerland ....................................................................................... 555 Turkey ............................................................................................... 572 Ukraine ............................................................................................. 588 United Arab Emirates........................................................................ 612 United Kingdom ................................................................................ 624 Baker McKenzie Offices Worldwide ................................................. 646 International Agency and Distribution Handbook

Baker McKenzie | 1 Introduction This is the 6th edition of the Agency and Distribution Handbook covering 39 countries in the EMEA region with chapters on each of the 28 European Union member states, two European Economic Area countries (Norway and Switzerland) and chapters from further afield, including countries such as Egypt, the Russian Federation, Saudi Arabia. To make for easier reading and comparison, each chapter follows the same structure and approach.

including countries such as Egypt, the Russian Federation, Saudi Arabia. To make for easier reading and comparison, each chapter follows the same structure and approach. The 1986 EU Agency Directive (Council Directive 86/653/EEC) has applied for a number of years and has been implemented by all the EU member states. The directive has created a common body of protection for agents, although variations still exist as the directive is a minimum harmonisation instrument and, at the time the directive was introduced, many member states had existing laws that were comparable with, and in some cases more protective than, the provisions of the directive and these were largely preserved. For example, the directive includes certain protections for an agent dealing with the sale or purchase of goods, but many member states extend their rules to also protect agents dealing with the sale or purchase of services. One important principle currently applicable to international agency agreements, derived from the Ingmar1 EU Court of Justice judgment of 9 November 2000, refers to the choice of non-EU governing law. In particular, the principle sets out that a choice of non-EU governing law will not entitle a principal to evade liabilities under the directive, notably those entitling the agent to compensation or an indemnity payment on termination. In other words, the directive will guarantee certain mandatory rights to commercial agents in the EU, although the principal is established in a non-EU member country and a term of the agreement expressly stipulates that the contract is to be governed by the law of that non-EU country.

1 Ingmar GB Ltd v. Eaton Leonard Technologies Inc Case C-381/98.

2 | Baker McKenzie A more recent case, the EU Court of Justice judgment in Unamar2 of 17 October 2013, concerned the effectiveness of the choice of EU law in an agency agreement. In this case, the agent and principal were established in different EU member states, which had both implemented the Agency Directive. The agreement between the

in an agency agreement. In this case, the agent and principal were established in different EU member states, which had both implemented the Agency Directive. The agreement between the parties used the governing law of the member state where the principal was established. Subsequently, the agent argued that it was entitled to the protection provided by the “mandatory rules” of the agency law of the EU member state where the agent operated. The court held that where both member states have implemented the directive, it will be for the court of the forum to establish if the laws protecting agents in that country are “mandatory rules” and supersede the choice of law in an agreement. As for the position of distributors, apart from Belgium, no country in the European Union has equivalent specific legislation protecting distributors. However, there has been an increasing trend in some EU member states where courts have started to establish protections for distributors that are influenced by and analogous to those set out in the Agency Directive. The EU Competition Law chapter of this handbook gives the reader an overview of EU competition law in general and describes rules under the Verticals Regulation. There are no separate sections on national competition law in each country chapter, but the reader should be aware that each country will also have its own national laws on competition, which will apply alongside the EU competition law regime. We have included a chapter on Compliance, Anti-Corruption and Export Controls dealing with some of the key issues that agency and distribution arrangements can raise in areas such as anti-bribery and corruption, export controls and trade sanctions.

2 United Antwerp Maritime Agencies (Unamar) NV v. Navigation Maritime Bulgare Case C-184/12. International Agency and Distribution Handbook

Baker McKenzie | 3 The contributions to this 6th edition of the handbook have been prepared by members of Baker McKenzie’s International Commercial & Trade Practice Group and by experts in correspondent law firms. Special thanks go to those correspondent law firms in Bulgaria, Cyprus, Denmark, Estonia, Finland, Greece, Ireland, Latvia, Lithuania,

& Trade Practice Group and by experts in correspondent law firms. Special thanks go to those correspondent law firms in Bulgaria, Cyprus, Denmark, Estonia, Finland, Greece, Ireland, Latvia, Lithuania, Malta, Norway, Portugal, Romania and Slovenia. The summaries in this publication are intended as a general guide only, and specific advice should be sought in individual cases. For assistance and questions, the authors of each chapter would be pleased to assist and can be contacted directly. Their contact details are set out in the Contributors section. Ulf Wauschkuhn Member of the Global International Commercial & Trade Practice Group and Europe Middle East and Africa Head, Partner at Baker McKenzie, Munich Unless otherwise stated, the law is stated as of 1 March 2018.

International Agency and Distribution Handbook

Baker McKenzie | 5 Contributors Austria Marc Lager marc.lager@bakermckenzie.com Michael Schreiner michael.schreiner @bakermckenzie.com Belgium Arne Gutermann arne.gutermann @bakermckenzie.com Geert Bovy geert.bovy@bakermckenzie.com Bulgaria Nikolai Gouginski Djingov, Gouginski, Kyutchukov & Velichkov nikolai.gouginski@dgkv.com Vladislav Antonov Djingov, Gouginski, Kyutchukov & Velichkov vladislav.antonov @dgkv.com Cyprus David Stokes Elias Neocleous & Co LLC. david.stokes@neocleous.com Czech Republic Martin Lazar martin.lazar@bakermckenzie.com Alexandr Cesar alexandr.cesar @bakermckenzie.com Denmark Jesper Rothe Bech-Bruun jr@bechbruun.com Egypt Mohamed Elfar

alexandr.cesar @bakermckenzie.com Denmark Jesper Rothe Bech-Bruun jr@bechbruun.com Egypt Mohamed Elfar mohamed.elfar @bakermckenzie.com Mohamad Talaat mohamad.talaat @bakermckenzie.com Estonia Kaupo Lepasepp Advokaadiburoo Sorainen AS kaupo.lepasepp@sorainen.ee Mihkel Miidla Advokaadiburoo Sorainen AS mihkel.miidla@sorainen.ee Finland Åsa Krook Borenius & Kemppinen Ltd asa.krook@borenius.com France Alex Dowding alex.dowding @bakermckenzie.com

6 | Baker McKenzie Germany Katharina Spenner katharina.spenner @bakermckenzie.com Ulf Wauschkuhn ulf.wauschkuhn @bakermckenzie.com Greece Nicholas Gregoriades Ballas, Pelecanos & Associates nicholas.gregoriades@balpel.gr Panayiotes Yiannakis Ballas, Pelecanos & Associates panayiotes.yiannakis@balpel.gr Gregory M. Pelecanos Ballas, Pelecanos & Associates gregory.pelecanos@balpel.gr Hungary Benedek Kovacs benedek.kovacs @bakermckenzie.com Zoltan Barakonyi zoltan.barakonyi @bakermckenzie.com Ireland John Gallen Gallenalliance Solicitors jgallen@gallenalliance.com Italy Andrea Cicala andrea.cicala @bakermckenzie.com Gaetano Iorio Fiorelli

jgallen@gallenalliance.com Italy Andrea Cicala andrea.cicala @bakermckenzie.com Gaetano Iorio Fiorelli gaetano.iorio.fiorelli @bakermckenzie.com Uberto Percivalle uberto.percivalle @bakermckenzie.com Alessia Raimondo alessia.raimondo @bakermckenzie.com Kazakhstan Nurgul Abdreyeva nurgul.abdreyeva @bakermckenzie.com Curtis Masters curtis.masters @bakermckenzie.com Latvia Martins Gailis Ellex Klavins martins.gailis@ellex.lv Līga Merwin Ellex Klavins liga.merwin@ellex.lv Pauls Ančs Ellex Klavins pauls.ancs@ellex.lv International Agency and Distribution Handbook

Baker McKenzie | 7 Lithuania Marius Matonis TGS Baltic marius.matonis@tgsbaltic.com Aurimas Pauliukevicius TGS Baltic aurimas.pauliukevicius @tgsbaltic.com Erika Zigute TGS Baltic erika.zigute@tgsbaltic.com Luxembourg Amaury-Maxence Bagot amaury-maxence.bagot @bakermckenzie.com Laurent Fessmann laurent.fessmann @bakermckenzie.com Malta Dr. Pio Valletta Farrugia, Gatt & Falzon pmvalletta@fgflegal.com Morocco Rania Chawad rania.chawad @bakermckenzie.com Netherlands Frederik Harms frederik.harms bakermckenzie.com Norway

rania.chawad @bakermckenzie.com Netherlands Frederik Harms frederik.harms bakermckenzie.com Norway Stein Ove Solberg Arntzen de Besche sos@adeb.no Magnus Høegh Krohn Viddal Arntzen de Besche mvi@adeb.no Poland Weronika Achramowicz weronika.achramowicz @bakermckenzie.com Portugal César Bessa Monteiro Abreu Advogados bessa.monteiro @abreuadvogados.com César Bessa Monteiro, jr Abreu Advogados cesar.bmonteiro @abreuadvogados.com Ricardo Henriques Abreu Advogados ricardo.henriques @abreuadvogados.com Romania Răzvan Pele Musat & Asociatii razvan.pele@musat.ro Paul George Buta Musat & Asociatii paul.buta@musat.ro

8 | Baker McKenzie Russian Federation Alexander Monin alexander.monin @bakermckenzie.com Dmitry Yeremin dmitry.yeremin @bakermckenzie.com Saudi Arabia Christiana.O’Connell-Schizas christiana.o’connell-schizas @bakermckenzie.com George Sayen george.sayen @bakermckenzie.com Slovakia Alexandr César alexandr.cesar @bakermckenzie.com Martin Lazar martin.lazar@bakermckenzie.com Slovenia Aleksandra Jemc Jadek & Pensa sasa.jemc@jadek-pensa.si South Africa Ashlin Perumall ashlin.perumall

Aleksandra Jemc Jadek & Pensa sasa.jemc@jadek-pensa.si South Africa Ashlin Perumall ashlin.perumall @bakermckenzie.com Darryl Bernstein darryl.bernstein @bakermckenzie.com Spain Valeria Enrich valeria.enrich @bakermckenzie.com Ester Navas esther.navas @bakermckenzie.com Cecilia Pastor cecilia.pastor @bakermckenzie.com Sweden Mattias Hedwall mattias.hedwall @bakermckenzie.com Switzerland Anne-Catherine Hahn anne-catherine.hahn @bakermckenzie.com Urs Zenhäusern urs.zenhausern @bakermckenzie.com Turkey Aybuke Gundel Esin Attorney Partnership A Baker & McKenzie Member Firm aybuke.gundel@esin.av.tr International Agency and Distribution Handbook

Baker McKenzie | 9 Can Sozer Esin Attorney Partnership A Baker & McKenzie Member Firm can.sozer@esin.av.tr Ukraine Oleksiy Stolyarenko oleksiy.stolyarenko @bakermckenzie.com United Arab Emirates Laya Aoun Hani laya.aoun@bakermckenzie.com United Kingdom Doris Myles doris.myles@bakermckenzie.com Farin Harrison farin.harrison @bakermckenzie.com Dimitris Mourkas dimitris.mourkas @bakermckenzie.com Sunny Mann sunny.mann @bakermckenzie.com

10 | Baker McKenzie EU Competition Law

1. EU Competition Law Policy EU competition law policy has two main objectives: (i) to protect and

10 | Baker McKenzie EU Competition Law

1. EU Competition Law Policy EU competition law policy has two main objectives: (i) to protect and develop effective competition in the common market, and (ii) to achieve a single European market by abolishing all national barriers to intra-Community trade (ie, allowing the free flow of goods and services throughout the market). It therefore prohibits anti-competitive arrangements and abusive conduct by dominant players which threaten the effective working of a market economy and re-erect barriers to trade between Member States. For example, an agreement between a manufacturer and distributor reinforces national divisions in trade between Member States if the manufacturer entirely prohibits the distributor from supplying customers outside the distributor’s territory.

Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) prohibits agreements that appreciably restrict trade between the Member States and Article 102 TFEU prohibits the abuse of a dominant market position by an enterprise. These provisions are the main legislative framework of European competition policy and regulate distribution and agency relationships in Europe.

2. Distribution Agreements 2.1 Article 101 TFEU Article 101 TFEU generally prohibits all agreements between companies which may affect trade between countries within the European Economic Area (“EEA”), and which have as their object or effect the restriction, prevention or distortion of competition within the EEA. This prohibition applies to horizontal agreements (ie, agreements between competitors, for example cartels) as well as vertical agreements (ie, agreements between enterprises acting at different levels of the distribution or production chain, for example a distribution agreement between a manufacturer and a distributor). International Agency and Distribution Handbook

Baker McKenzie | 11 Examples of anti-competitive provisions which might be found in distribution agreements include retail price maintenance, customer restrictions, export bans, non-compete obligations, exclusive purchase obligations as well as minimum purchase obligations. However, following the principles of the Court of Justice of the

restrictions, export bans, non-compete obligations, exclusive purchase obligations as well as minimum purchase obligations. However, following the principles of the Court of Justice of the European Union, the European Commission (the “Commission”) acknowledges that Article 101(1) TFEU is not applicable where the impact of the agreement on competition or trade between Member States is not appreciable. In the Commission’s Notice on Agreements of Minor Importance of 25 June 2014 (“De Minimis Notice”) (OJ 2014/C 291/01), the Commission indicates the circumstances in which it considers that agreements do not constitute an appreciable restriction of competition with the help of market share thresholds. Consequently, vertical agreements where neither party holds a market share of more than 15%, are presumed by the Commission not to breach Article 101(1) TFEU, provided that they do not have as their object the prevention, restriction or restriction or distortion of competition within the internal market). 1 The Commission will not apply the safe harbor created by the market share threshold to agreements containing any of the restrictions that are defined or listed as hard core restrictions in any current or future Commission block exemption regulation, which are considered by the Commission to generally constitute restrictions by object. The De Minimis Notice is accompanied by a Commission Staff Working Paper to assist companies in assessing whether their agreements can benefit from the market share safe harbor of the De Minimis Notice. This document lists the restrictions of competition that are described as “by object” or “hard core” in the various Commission regulations, guidelines and notices. It also includes examples taken from case law and the Commission’ decisional practice. In addition, in 2004, the Commission issued Guidelines on the Effect on Trade Concept contained in Articles 101 and 102 of the Treaty,

1 The 2014 De Minimis Notice replaces an earlier version that was issued in 2001.

12 | Baker McKenzie (“Effects Notice”) (OJ C 2004 101/81). According to the Effects Notice,

12 | Baker McKenzie (“Effects Notice”) (OJ C 2004 101/81). According to the Effects Notice, the Commission presumes that a vertical agreement has no appreciable effect on trade between Member States if (i) the aggregate market share of the parties on any relevant market within the EU affected by the agreement does not exceed 5% and (ii) the aggregated EU turnover of the supplier in the products covered by the agreement does not exceed EUR 40 million. Where an agreement does breach Article 101(1) TFEU, without qualifying for an exemption under Article 101 (3) TFEU (see under Section 2.2. below), the anti-competitive restrictions contained in the agreement will be void and unenforceable according to Article 101(2) TFEU. This means that the restrictive provisions in the agreement are unenforceable in the national courts of the Member States. The extent to which it is possible to save the remaining provisions of the agreement depends on the applicable national law. In addition, infringements of Article 101(1) TFEU may result in the imposition of fines of up to 10% of a company’s worldwide group annual turnover and exposure to a private action for damages by those who consider that they have been harmed by the anti-competitive agreement. 2.2 Exemption from the prohibition of Article 101 TFEU The prohibition contained in Article 101(1) TFEU is not absolute. Any anti-competitive agreement that falls within the scope of Article 101(1) may benefit from an exemption under Article 101(3). An exemption under Article 101(3) TFEU will be available, if broadly speaking, the pro-competitive advantages of the agreement outweigh its anti-competitive effects (that is to say, if the agreement contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, provided this does not result in restrictions

to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, provided this does not result in restrictions which are not indispensable to the attainment of these objectives or afford the possibility of eliminating competition in respect of a substantial part of the products in question). International Agency and Distribution Handbook

Baker McKenzie | 13 There are two types of exemption: (i) an exemption following an individual self assessment and (ii) a block exemption. 2.2.1 Exemptions following an Individual Self Assessment Agreements containing appreciable anti-competitive restraints caught by Article 101(1) TFEU and not covered by a block exemption, may benefit from the general exemption of Article 101 (3) TFEU following an individual self assessment. European competition law is directly applicable at Member State level. Although the Commission retains the power to issue decisions and to stop infringements of EU competition law violations (including decisions of a declaratory nature finding that Article 101 TFEU does not apply), the enforcement of EU competition law will mainly be in the hands of national competition authorities and, ultimately, national courts. 2.2.2 Block Exemption Regulations and Guidelines The Commission has the power to issue block exemptions. These block exemptions set out the conditions under which restrictions in certain types of agreements will automatically be held to fall within the exemption of Article 101(3) TFEU. On 22 December 1999, the Commission adopted Regulation No. 2790/1999/EC on the application of Article 101(3) to categories of vertical agreements and concerted practices, which expired on May 31, 2010. On 20 April 2010, the Commission adopted its successor, the Commission Regulation 330/2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices (Official Journal L 142, 23.4.2010, p.1) (“Verticals Regulation”)

categories of vertical agreements and concerted practices (Official Journal L 142, 23.4.2010, p.1) (“Verticals Regulation”) Vertical agreements are agreements entered into between parties which operate at different levels of the production or distribution chain, for example a distribution agreement between a manufacturer and distributor. The Commission has also published “Guidelines on

14 | Baker McKenzie Vertical Restraints” which describe the Verticals Regulation and the approach taken towards vertical agreements not covered by the Verticals Regulation. The Verticals Regulation is explained in more detail in section 3.1 below. The Verticals Regulation declares that it does not apply to vertical agreements whose subject matter falls within the scope of any other block exemption regulation. With regard to agreements on repair and maintenance services for motor vehicles and spare parts for motor vehicles, such agreements are governed by the Verticals Regulation and Commission Regulation No. 461/2010 of May 27, 2010 on the application of Article 101(3) of the Treaty of the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector (“Motor Vehicle Aftermarket Regulation”). The Motor Vehicle Aftermarket Regulation applicable to vertical agreements relating to the aftermarket, ie, to agreements on the purchase or sale of spare parts for motor vehicles or repair and maintenance services for motor vehicles is described briefly in section 3.2.1 below. Please note that agreements concerning the distribution of new motor vehicles fall within the scope of the Verticals Regulation. The only way in which parties to a distribution agreement that contains anti-competitive restrictions that infringe Article 101(1) TFEU can be sure of avoiding the risks of unenforceability and fines is by assessing the agreement for an exemption. Given the time, effort and cost involved in conducting a self assessment under Art. 101 (3) TFEU, in practice, parties seek to mold their distribution agreements to fit within the Verticals Regulation (or the Motor Vehicle Aftermarket Regulation

involved in conducting a self assessment under Art. 101 (3) TFEU, in practice, parties seek to mold their distribution agreements to fit within the Verticals Regulation (or the Motor Vehicle Aftermarket Regulation if the agreement relates to the sale or purchase of spare parts for motor vehicles or repair and maintenance services for motor vehicles) to achieve maximum legal certainty. International Agency and Distribution Handbook

Baker McKenzie | 15

3. The Verticals Regulation And The Motor Vehicle Aftermarket Regulation 3.1 Outline of the Verticals Regime The Verticals Regulation is a single “umbrella” block exemption that allows companies entering into a vertical agreement to benefit from an exemption from the prohibition in Article 101(1) TFEU. It provides a safe harbor for most vertical agreements entered into by parties with a market share not exceeding 30%, except those containing hardcore restrictions.

Generally speaking, three types of distribution models can be distinguished: i. exclusive distribution refers to a distribution model in which a supplier agrees to sell its products only to one distributor for resale in a particular territory or only to a particular customer group. At the same time the distributor is usually limited in its active selling into other (exclusively allocated) territories. A supplier may also reserve certain territories or customer groups to itself. ii. selective distribution refers to a distribution model where the supplier undertakes to sell the contract goods or services, either directly or indirectly, only to distributors selected on the basis of specified criteria and where these distributors undertake not to sell such goods or services to unauthorized distributors within the territory reserved by the supplier to operate that system. The selection criteria are usually aimed at protecting the quality of the products or protecting brand image; iii. open distribution refers to a distribution