The European Parliament adopted a resolution based on the own-initiative report drafted by Rodi KRATSA-TSAGAROPOULOU (EPP-ED, EL) on the Commission’s paper on applying competition rules to maritime transport. (Please see the summary of 11/10/2005.)

General: T he purpose of the review of Regulation 4056/86/EEC should be to preserve, and promote the expansion of, a viable and competitive European shipping sector within the framework of the Lisbon Strategy in conjunction with transport policy strategy. It is vital to do so especially in view of the fact that new maritime powers have emerged, namely China, South Korea, and Taiwan. Parliament called upon the Commission carefully to consider the consequences of a possible alternative system for the entire marine transport sector, namely members and non-members of liner conferences and their competitors (independent bodies) their customers (shippers) and the final consumers. The conclusions of a recent study do not provide a solid basis for abolishing the block exemption for maritime conferences. The Commission must take this into consideration in the framework of its new proposal. If the Regulation is amended, the Commission should bear in mind existing operating regimes in other countries (USA, Australia, Japan and Canada), since any misalignment of the European system might create destabilising socio-economic effects worldwide and lead to protectionist measures.

Parliament emphasised the likelihood of adverse consequences in the event of a general overhaul of the system, not so much for large merchant shipping lines, but rather for small and medium-sized ones, and stated that there is no evidence that the abolition of liner conferences will bring about a fall in prices.

Liner conferences: Parliament s upported the Commission's intention to review - rather than repeal - Regulation 4056/86/EEC with a view to ensuring compatibility with the rules of competition, chiefly by excluding the possibility of a direct fixing of freight prices and by authorising the fixing by the conferences of a reference price or a price index under an alternative system, in accordance with the case law of the European Court of Justice. The review will ensure that surcharges and associated costs are calculated transparently and after dialogue with shippers. Parliament stressed that any such review must safeguard the stability of freight rates, the high quality of services and sound competition for all enterprises, whatever their size.

Any new regulation might be made to come into force for a limited period of five years after the expiry of which an assessment would be carried out. Whichever alternative solution is chosen, a transitional period should be envisaged to enable all operators (carriers, shippers and other industry players) to adapt to the new regulatory framework.

The Commission is asked to hold discussions with the other contracting parties before proposing amendment or repeal of Regulation 4056/86/EEC, so as to find the most appropriate method of adaptation for Member States (those than still have bilateral commitments under the Code of Conduct) to the possible new legal status, with a view to avoiding any adverse consequences.

International tramp vessel and cabotage services: T he tramp sector remains overwhelmingly deregulated and operates on the basis of the rules of fair competition. Parliament supported the Commission proposal for these services to be brought within the scope of the Regulation. The cabotage services sector has already been deregulated pursuant to Regulation 3577/92/EEC. Given that these services are carried out between ports in one and the same Member State , intra-Community trade between the Member States is not affected and consequently there is no need or legal obligation for this sector to be brought within the scope of Regulation 1/2003/EC.

Purely technical agreements: Parliament c alled upon the Commission not to continue with the proposal to abolish the arrangements contained in Article 2 of the Regulation governing the legality of technical agreements, since it believed that retaining a purely legal framework governing technical agreements will contribute to legal certainty and a better orientation for service providers.

Conflict of laws: Finally, the Commission is asked not to continue with the proposal to repeal Article 9 of Regulation 4056/86/EEC which provides for negotiations to be held in the event of a conflict between Community law and the law of third countries, especially in view of the Commission's intention to revise competition law relating to maritime transport.

The committee adopted the own-initiative report drawn up by Rodi KRATSA-TSAGAROPOULOU (EPP-ED, EL) in response to the Commission's White Paper on the review of the 1986 regulation applying the EC competition rules to maritime transport. It stressed that the purpose of this review must be "to preserve, and promote the expansion of, a viable and competitive European shipping sector within the framework of the Lisbon strategy". This was particularly crucial in view of the fact that new maritime powers had emerged, namely, China , South Korea and Taiwan .

The Commission was urged to complete the announced impact study into repealing the block exemption and, should there be any negative impact, to take it into consideration in its new proposal and discuss it with the sectors concerned, as well as with Parliament and Council. In the event of any amendment of the 1986 regulation, the Commission should bear in mind existing legal and operating regimes in other countries (USA, Australia, Japan and Canada), since any misalignment of the European system in relation to those regimes might have destabilising socio-economic effects worldwide and lead to protectionist measures. The committee emphasised "the likelihood of adverse consequences" in the event of a general overhaul of the system, particularly for small and medium-sized merchant shipping lines, and added that there was no evidence that the abolition of conferences would bring about a fall in prices.

With regard to liner conferences, MEPs were concerned that any review of the regulation must be done in such a way as to ensure compliance with competition rules and safeguard the stability of freight rates, the high quality of services and sound competition for all enterprises, whatever their size. They also suggested that any new regulation might be made to come into force for a limited period of 5 years, at the end of which an assessment should be carried out. Moreover, on the basis of undertakings under the Code of Conduct for Liner Conferences, the Commission should hold discussions with the other contracting parties before proposing to amend or repeal the 1986 regulation.

As regards international tramp vessel and cabotage services, the report pointed out that the tramp sector remained overwhelmingly deregulated and that the cabotage services sector had already been deregulated.

Among the report's recommendations, the Commission was urged not to continue with the proposal to abolish the arrangements in the 1986 regulation on the legality of technical agreements, on the grounds that retaining a purely legal framework governing such agreements would contribute to legal certainty and better guidance for service providers. Lastly, the committee called on the Commission not to continue with the proposal to abolish the article in the regulation providing for negotiations to be held in the event of a conflict between Community law and the law of third countries, especially in view of the Commission's intention to revise competition law in respect of maritime transport.

The purpose of this White Paper is to present the way forward in the maritime transport competition area. In particular, the paper analyses whether to maintain, modify or repeal the currently applicable provisions of Regulation 4056/86.

The main issue of the review is the present block exemption for certain restrictive practices by liner conferences, in particular price fixing and supply regulation.

However, the review also covers some other provisions contained in Regulation 4056/86, that is the exclusion of certain maritime services (cabotage (that is national maritime services) and tramp (non-scheduled) services) from the competition implementing rules, a provision for technical agreements and a provision on conflict.

In the 18 years since the adoption of Regulation 4056/86, the liner shipping market has changed. In particular, the role of carriers offering liner shipping services outside a conference (independent operators) on most routes to and from the EU has become more important. Furthermore, operational forms of co-operation between carriers (not involving price fixing), such as consortia and alliances have increased. What is more, there has been a substantial growth of individual confidential contracting between carriers and shippers, such as individual service contracts. These developments raise the question whether a block exemption for price fixing and capacity regulation by liner conferences is still justified under Article 81(3) of the Treaty.

It has been agreed with the Member States that the review is a three step process, consisting of: 1) fact finding, 2) a Commission paper and 3) a proposal for legislation. The review process started in March 2003, with the publication of a consultation paper.

In total, 36 submissions were received, from providers of liner shipping services (carriers), transport users (shippers and freight forwarders), Member States, consumer associations and others.

Following a public hearing that took place in December 2003, the Commission’s Competition DG has set out the outcome of the consultation process and its preliminary analysis in a discussion paper which served as a basis for a discussion with the Member States in May 2004.

In light of the conclusions reached by the Commission, the following proposals emerge in this White Paper:

- To consider repealing the currently applicable substantive provisions of Regulation 4056/86, in particular the block exemption for liner conferences and the exception for technical agreements.

- To examine what type of instrument would be needed to replace Regulation 4056/86 and make an appropriate proposal in that regard, taking into account also the competitive position of the EU liner shipping industry in a global context.

- To carefully examine the ELAA proposal as set out in this paper in light of the comments received from interested third parties, as well as any other proposal that might be made by the industry or other interested parties.

- To propose a change to Regulation 1/2003, as to remove the current exclusion of tramp and cabotage services from its scope.

- To carefully examine whether there are reasons to maintain a conflict of laws provision.

The Member States , all other institutions and interested parties are invited to submit comments on this White Paper within two months from publication (i.e. 13/10/2004).

The purpose of this White Paper is to present the way forward in the maritime transport competition area. In particular, the paper analyses whether to maintain, modify or repeal the currently applicable provisions of Regulation 4056/86.

The main issue of the review is the present block exemption for certain restrictive practices by liner conferences, in particular price fixing and supply regulation.

However, the review also covers some other provisions contained in Regulation 4056/86, that is the exclusion of certain maritime services (cabotage (that is national maritime services) and tramp (non-scheduled) services) from the competition implementing rules, a provision for technical agreements and a provision on conflict.

In the 18 years since the adoption of Regulation 4056/86, the liner shipping market has changed. In particular, the role of carriers offering liner shipping services outside a conference (independent operators) on most routes to and from the EU has become more important. Furthermore, operational forms of co-operation between carriers (not involving price fixing), such as consortia and alliances have increased. What is more, there has been a substantial growth of individual confidential contracting between carriers and shippers, such as individual service contracts. These developments raise the question whether a block exemption for price fixing and capacity regulation by liner conferences is still justified under Article 81(3) of the Treaty.

It has been agreed with the Member States that the review is a three step process, consisting of: 1) fact finding, 2) a Commission paper and 3) a proposal for legislation. The review process started in March 2003, with the publication of a consultation paper.

In total, 36 submissions were received, from providers of liner shipping services (carriers), transport users (shippers and freight forwarders), Member States, consumer associations and others.

Following a public hearing that took place in December 2003, the Commission’s Competition DG has set out the outcome of the consultation process and its preliminary analysis in a discussion paper which served as a basis for a discussion with the Member States in May 2004.

In light of the conclusions reached by the Commission, the following proposals emerge in this White Paper:

- To consider repealing the currently applicable substantive provisions of Regulation 4056/86, in particular the block exemption for liner conferences and the exception for technical agreements.

- To examine what type of instrument would be needed to replace Regulation 4056/86 and make an appropriate proposal in that regard, taking into account also the competitive position of the EU liner shipping industry in a global context.

- To carefully examine the ELAA proposal as set out in this paper in light of the comments received from interested third parties, as well as any other proposal that might be made by the industry or other interested parties.

- To propose a change to Regulation 1/2003, as to remove the current exclusion of tramp and cabotage services from its scope.

- To carefully examine whether there are reasons to maintain a conflict of laws provision.

The Member States , all other institutions and interested parties are invited to submit comments on this White Paper within two months from publication (i.e. 13/10/2004).