LEGRANT Law Company defended the right of business to unimpeded transshipment from ship to ship in Odessa Sea Port

May 30, 2019 · News

Basing on application of the Law Company LEGRANT, Odessa regional territorial office of the Antimonopoly Committee of Ukraine recognized as illegal the charge of fee for the organization of cargo transshipment under the scheme "ship-to-ship" in the Odessa Sea Port.

In accordance with the decision of the Administrative College of the regional territorial office of the Antimonopoly Committee of Ukraine, the violator of the Law of Ukraine “On Protection of Economic Competition” - SE "Ukrainian Sea Ports Authority" (USPA) - shall pay an administrative fine in the amount of 68 000 UAH. This amount is the maximum amount of the fine that the AMCU's regional territorial office is entitled to impose. In addition, the decision of the College obliged the state enterprise to stop the practice of double tariffication.

The essence of the violation was that USPA imposed free tariff services on its clients, which actually have been already paid by them as a part of port charges and other services as per state regulated tariffs. In this case, the functions of the state enterprise are limited to the issues of ensuring safe navigation, maneuvering and mooring of vessels. And for this purpose shipowners pay to the Administration the port fees, fees for regulation of ship traffic and pilotage in case of cargo transshipment under the "ship-to-ship" scheme.

However, USPA demanded from clients to pay a separate fee for the "organization" of transshipment under this scheme, despite the fact that the Administration by itself did not carry out the cargo transshipment and did not provide any floating cranes or any other means to perform these works. And, as it is noted in the conclusions of the College, when carrying out loading and unloading works under the scheme of "ship-to-ship", companies receive competitive advantages (saving time and money) only due to their own efforts, but not because of active participation of the state monopoly. The possibility to organize loading in the port more economically cannot by itself serve as a basis for additional tariffication of this operation.

Legrant Company appealed to the Odessa regional territorial office of the Antimonopoly Committee of Ukraine in the interests of its clients with a request to investigate and prevent abuse of monopoly position by the Administration. After a detailed investigation of the circumstances of the case, the Administrative College confirmed the fact of USPA's violation of the antimonopoly legislation.

"We are very glad that the Antimonopoly Committee decided to stop the groundless double tariffication of services in ports. Abusing committed by USPA resulted additional logistics costs for the business and thus reduced the competitiveness of Ukrainian export in the global markets. I am sure that this victory will be the next step on the way to creating new transparent rules of the game in the maritime area and international trade", - said Tatiana Titarenko, the Managing Partner of Legrant.

The case was supported by LEGRANT’s senior lawyer Liudmila Sizonenko under the general supervision of the managing partner Tatyana Titarenko.