Sept 2009

Featuring: Romania Commercial Economic Promotion  Office Newsletter Sept 2009

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Regulations Regarding Distribution and Commission Agents in the EU

Companies with distributors in the EU should be aware that there can be no territorial limits within the EU for distribution rights. In theory, companies can have several distributors within the EU focusing on different sub-markets , but they must all be allowed to sell anywhere within EU territory.

Distributors should not be confused with Agents, who are governed under their own EU regulations (Commercial Agents Regulations).

While many Canadian companies draft distribution and agent agreements with a clause stating that Canadian law applies, it is believed that this would not hold up in EU courts , and companies contravening the EU distribution regs have been fined in the past.

Canadian companies need to be aware of the law and should be urged to get appropriate legal counsel (both in Canada and in the EU market) when structuring or reviewing any distribution agreements.

Attached and below are links to further information.

Commercial Agents Directive:

Commercial Agents Directive Europe 2008

On EU territory Exclusive Rules :

http://www.fredlaw.com/articles/international/intl_0009_rew.html - New Distribution Rules in the EU: Boiling Down the New Block Exemption

http://www.mondaq.com/article.asp?articleid=9886 - similar article to above, slightly clearer. This suggests that some of the restrictions on "exclusive geographical distributors" have been relaxed, but this re-inforces the need for expert advice to avoid unwittingly contravening EU law.

Info on EU Competition Law, Focusing on the Information and Communication Technologies Sector (including the latest on the Microsoft case)

http://ec.europa.eu/competition/sectors/ICT/overview_en.html