MONTENEGRO Trends and Developments Contributed by: Bisera Andrijasevic, BDK Advokati
of foreign entities against their local related enti - ties. The basis for this stance by the Agency, previously supported by the Higher Misdemean - our Court without any substantive analysis, is Article 4 of the Competition Act, which defines related entities and stipulates that they must be considered as a single undertaking for the pur - poses of Competition Act. However, the concept of a single undertaking cannot be applied to mis - demeanour fines without limitation. There is a view that, under Montenegrin law, it is not possi - ble to hold one person responsible for an offense committed by another person, whether the other person is a related entity or not. In order for there to be liability for another person’s misdemean - our, this specific liability would need to be pre - scribed by law, and liability for another person is not prescribed by either the Misdemeanour Act or the Competition Act (or any other law). It is clear from the Misdemeanour Act that a legal entity and the responsible person in the legal entity can be held responsible only for their own actions or failures to act. The Misdemeanours Act also prescribes that a foreign legal entity and a foreign responsible person are liable for a mis - demeanour in the same way as domestic enti - ties – from which it indirectly but clearly follows that the Misdemeanours Act does not prescribe the responsibility of a domestic legal entity for alleged misdemeanours of another entity on the basis that the other entity is based abroad, and, as such, is less accessible to the authorities in Montenegro. Even though the concept of a single undertak - ing in the Competition Act was based on the same concept from the EU law, undertakings in the EU may be fined for infringements of their related entities only in very specific cases. The European Court of Justice has established that a parent company may be held liable for a vio -
lation committed by a subsidiary based on the presumption that the wholly-owned subsidiary acted on instructions from the parent company. However, this presumption can be rebutted; therefore, if the parent company can demon - strate that the subsidiary acted independently in committing the violation, the European Com - mission may only penalise the parent company for the subsidiary’s infringement if it can prove that the parent company actually exercised deci - sive influence over the subsidiary at the time of the violation. Consequently, even a parent company with complete control over a subsidiary is not auto - matically liable for the subsidiary’s actions solely because it is the parent company. It follows that it is even less justifiable for an undertaking to be held responsible for the actions of their sister company over which they exercise no control, particularly when they derive no benefit from the sister company’s actions that constitute the violation. It remains to be seen whether the Higher Mis - demeanour Court will adopt a different stance in one of the next appeals in similar pending cases. This matter has so far not been challenged as the last available legal remedy before the Con - stitutional Court. Parallel Administrative and Misdemeanour Proceedings The Agency’s enforcement powers are cur - rently limited. While it can issue decisions on merger control, it lacks the authority to impose fines directly for non-compliance (the exception being when the fine is prescribed in a range – eg, periodic penalties or a late-filing fine – where the Agency can only impose the minim fine). In all other cases, it must initiate misdemeanour proceedings. These proceedings, governed by
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