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THE RESOLUTION OF THE COMPETITION COUNCIL WILL BENEFIT VEHICLE IMPORTERS

02 07 2009

Having assessed the findings of the completed investigation the Competition Council passed the Resolution whereby it recognised that Item 20.1.2 of the "Methods for the customs assessment of imported used vehicles" approved by Order No. 1B-1198 of 29 December 2004 of the Director General of the Customs Department under the Ministry of Finance of the Republic of Lithuania infringes the requirements of Article 4 of the Law on Competition. By establishing in Item 20.1.2 of the Methods that the statement on the inspection of hidden defects of damaged vehicles must be executed only by authorised representatives of the respective vehicle brand manufacturers the Customs Department privileged such undertakings in respect of other undertakings providing identical services. The Customs Department was obligated within one month to amend Item 20.1.2 of the "Methods for the customs assessment of imported used vehicles” to bring into line with the provisions of the Law on Competition.

The Competition Council conducted the investigation having received from the Association of the importers and sellers of motor vehicles from the USA an application to assess the order established by Item 20.1.2 of the Methods.  According to the order for the purpose of assessment of the costs for the restoration of the damaged vehicle (repair) to eliminate the defects of the vehicle that cannot be pictured or identified in the course of a visual (physical) inspection the required expenses are estimated only provided an inspection statement is issued by an authorised representative of the respective manufacturer in Lithuania.

The visually unseen defects that cannot be pictured or detected in the course of a visual inspection may appear during road accidents or caused by water, fire or other natural calamities.  For that reason the visually unseen defects are identified in the special vehicle repair centres or service station (where a specifically comprehensive and precise detection of defects is required a vehicle is delivered to special laboratories).  Besides, the detection of such defects requires special equipment, computer programmes and highly qualified specialists.

Having considered the information collected in the course of the investigation and the explanations from the Customs Department concerning the reasons for the appearance of Item 20.1.2 of the Methods (in response to previous fraud attempts) the Competition Council concluded that the provisions of the Methods contradicting Article 4 of the Law on Competition must be amended to ensure that other undertakings operating technical facilities necessary to identify the unseen defects are not prevented from a possibility to provide their services and compete with the authorised representatives of the manufactures of respective vehicle brands in Lithuania, provided such undertakings assume the full responsibility for the truthfulness and completeness of the statements they will issue

The investigation established that authorised representatives of the manufacturers of specific vehicle brands are not the only undertakings able to render the services of detection of hidden defects and the issue of inspection statements.  The results of the survey conducted showed that currently there are at least 7 undertakings that are not only able to render the respective services, but actually are currently providing the services identical in nature. The Customs Department had granted the exclusive rights to authorised representatives of respective vehicle brand manufacturers to provide the services and issue of related statements.  Granting of exclusive rights to selected undertakings violates the rights of other undertakings to fairly compete in the market and creates different competition conditions in the relevant market.

The Competition Council was notified that the Customs Department had already drawn up the amendments of the Methods to the effect that the service of the visual identification of hidden defects will be provided not only by authorised representatives of the respective vehicle brand manufacturers, but also by those vehicle service stations that operate legitimate defect identification facilities.

Competition Council Spokesperson