Shipping Services [EU]
Market in Sea Transport
An EU regulation provides for freedom to supply services, competition and free access to the market in sea transport. A separate directive deals with the freedom to provide services in sea transport between states. EU nationals and non-EU companies registered in the EU and controlled by EU nationals have the right to carry passengers and goods by sea between any port in the EU and third country ports. National restrictions reserving rights to home registered ships must be phased out.
An EU regulation grants freedom to provide maritime transport services within a state for EU ship owners and EU registered ships owned by EU nationals. The ships must comply with the conditions for carrying out cabotage within that state.
Matters of manning are the responsibility of the state of registration or the state in which the cabotage service is performed. Depending on the nature of the particular service, states may make the right to provide transport services subject to public service obligations in the interest of maintaining adequate cabotage services between mainland and islands and between islands.
Regulation of Transport Services
EU regulations provide for the common EU rules on maritime transport organisation to facilitate the provision of transport services between member states. Regulations give nationals of EU states and non-EU shipping entities using EU registered ships and controlled by EU nationals the right to undertake passenger and goods carriage between any port in the EU and any port or offshore installation in another EU state or in a third country.
Rules which restrict such services to nationals or national registered ships were to be phased out in the 1980s. Similarly, bilateral agreements with third countries were to be adjusted or phased out.
Arrangements for cargo sharing in future bilateral agreements with third states are limited to those cases states whose shipping companies would not otherwise have an opportunity to trade to and from the third state.
The regulation provides a procedure for cases where EU shippers have no effective opportunity to trade to and from particular third-party states.
Competition Rules
Further regulation, part of the same measures, provides rules for the application of competition rules to the maritime transport sector. It does not apply to so-called tramp vessel services, which is the transport of goods without a regular timetable where freights are freely negotiated in accordance with the demand. The rules apply between EU ports.
Agreements with the sole objective of achieving technical improvements or co-operations are exempt, exempt subject to conditions. The exemptions do not apply in so far as they seek to
- coordinate timetables,
- determine the frequency of sailings,
- allocate sailing between members of a group of carriers who provide an international liner service between specified geographical limits
- agree to charge uniform or common freight rates and
- apply other agreed terms for the provision of liner services.
A further regulation in 2003 provides for competition law to be enforced by the Commission, and also on national competition authorities.
A further part of the same measures allows the EU to provide compensatory duties to protect owners of ships within the EU from unfair pricing on the part of non-EU shippers. It provides for a system of complaints, consultation, and investigation. Ultimately compensatory duties may be imposed on foreign ship owners if it is shown that the unfair pricing has caused injury and the intervention is necessary in the interests of the EU.
The last regulation in this package provides for where action by a third state or its agents restricts free access to the transport of liner cargoes, boat cargoes or other cargoes by EU shippers or ships registered in the EU. Coordinated action may be taken following a request by a state to the Commission. This may include diplomatic representations and countermeasures in relation to the shipping companies concerned.
Freedom to provide services within the EU (ocean trade)
The aim of this Regulation is to eliminate restrictions on the freedom to provide maritime transport services within the European Union (EU).
Council Regulation (EEC) No 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage).
Scope
This law ensures that, within a given EU country, shipping companies or nationals based in other EU countries have the right to offer maritime transport services (known as maritime cabotage) provided they comply with all the conditions for carrying out cabotage within that country. Shipping companies based in countries outside the EU, but controlled by EU nationals, may also offer such services.
The regulation defines ‘maritime transport services within an EU country (maritime cabotage)’, ‘Community shipowners’, ‘public service contract’, ‘public service obligations’, and ‘serious disturbance of the internal transport market’.
Manning
Depending on the kind of transport service, matters relating to manning are the responsibility either of the EU country of registration (flag State) or of the country in which the cabotage service is performed (host State).
Public service
EU countries may make the right to provide transport services subject to public service obligations or may conclude public service contracts in the interests of maintaining adequate cabotage services between the mainland and its islands and between the islands themselves.
Safeguard measures
Where the market’s opening up to cabotage results in problems (such as the serious excess of supply over demand) that threaten the financial survival of shipping companies, the Commission may introduce safeguard measures. These may include the temporary exclusion of the area concerned from the scope of the regulation.
Non-discrimination
Persons providing maritime transport services in an EU country other than their own may do so temporarily on the same terms as those applied by that country to its own nationals.
Timetable
Maritime cabotage was liberalised on 1 January 1993. For France, Italy, Greece, Portugal and Spain, mainland cabotage was gradually liberalised according to a specific timetable for each type of transport service. Mainland-island and inter-island cabotage for these countries was liberalised in 1999. This exemption was extended for Greece until 2004 for scheduled passenger and lighter services and services involving vessels of less than 650 gross tonnes (gt). Exemptions were granted to Croatia till 31 December 2016 for existing public service contracts and for cruise services between Croatian ports by ships smaller than 650 gt, which are reserved for Croatian ships till 31 December 2014.
References
Act
Entry into force
Deadline for transposition in the Member States
Official Journal
Regulation (EEC) No 3577/92
1.1.1993
–
L 364 of 12.12.1992
Amending act
Entry into force
Deadline for transposition in the Member States
Official Journal
Act concerning the conditions of accession of Croatia
1.7.2013
–
OJ L 112 of 24.4.2012
RELATED ACTS
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the interpretation of Council Regulation (EEC) No 3577/92 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) ( COM(2003) 595 final – Not published in the Official Journal).
Decision 93/125/EEC on Spain’s request for adoption by the Commission of safeguard measures under Article 5 of Council Regulation (EEC) No 3577/92 against applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) – (Official Journal L 49 of 27.02.1993).
This Decision authorises Spain to exclude the Spanish mainland, for six months from the date of notification of this Decision, from the scope of Regulation (EEC) No 3577/92. The exclusion does not apply to feeder services. If no Spanish vessel is available to meet the demand for cabotage transport services, other EU countries’ vessels will be allowed to offer such services.
Report from the Commission to the Council: Fifth report on the implementation of Council Regulation (EEC) No 3577/92 applying the principle of freedom to provide services to maritime cabotage (2001-2010) (COM(2014) 231 final of 22.4.2014 – not published in the Official Journal).
This report is divided into 4 chapters:
1.
Recent case-law and legislative developments in EU and EFTA countries;
2.
Market trends in EU and EFTA countries;
3.
The available data on employment in maritime cabotage (due to the lack of reliable and conclusive data this part no longer contains the statistics on the crew costs).
4.
Conclusion: the Regulation is fit for purpose and does not require revision. Some issues raised in the consultation suggest there are problems of interpretation and implementation. These have been addressed in the communication on maritime cabotage (see next entry).
Communication from the Commission on the interpretation of Council Regulation (EEC) No 3577/92 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) [ COM(2014) 232 final of 22.4.2014 – not published in the Official Journal].
Drawing on over 20 years’ experience of the practical application of Regulation (EEC) No 3577/92, in the interests of transparency and legal certainty, the Commission has decided to update and amend its interpretation of the provisions of the Regulation.
This Communication amends and replaces previous Commission’s interpretative communications of 2003 and 2006. It is for information purposes only, to help explain the Regulation and indicates how the Commission intends to apply the Regulation. It does not set out either to revise the Regulation or to encroach on the Court of Justice’s jurisdiction in matters of interpretation.
It starts by specifying the scope of the freedom to provide services in the maritime cabotage sector. It indicates who enjoys that freedom and recalls which services the Regulation covers.
It goes on to describe the extent of the three derogations to the freedom to provide services, as provided for in the regulation:
—
EU countries can impose manning rules on board ships smaller than 650 gt and vessels performing island cabotage services between two ports on their territory.
—
EU countries may impose public service obligations and conclude public service contracts in order to ensure an adequate scheduled transport service to, from and between islands.
—
EU countries may ask the Commission to adopt safeguard measures to remedy a serious disturbance of the internal market.
Lastly, it provides guidance on the application of Regulation (EC) No 1370/2007 on public passenger transport services by rail and by road to maritime cabotage services.
Sea transport — supply of services, competition, unfair pricing and access to ocean trade
Regulation (EEC) No 4055/86 applying the principle of freedom to provide services to maritime transport between EU countries and with non-EU countries
Regulation (EEC) No 4057/86 on unfair pricing practices in maritime transport
Regulation (EEC) No 4058/86 on coordinated action to safeguard free access to cargoes in ocean trades
Regulation (EC) No 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty
Regulation (EC) No 246/2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia)
Regulation (EC) No 906/2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia)
They aim to organise maritime transport in accordance with the basic principles of EU law to provide services, competition, and free access to the market in sea transport.
Freedom to provide services
Regulation No 4055/86:
grants EU-country nationals (and non-EU shipping companies using ships registered in an EU country and controlled by EU nationals) the right to carry passengers or goods by sea between any port of an EU country and any port or offshore installation of another EU country or of a non-EU country;
requires any national restrictions which reserve the carriage of goods to vessels flying the national flag to be phased out or adjusted, and prevents the introduction of new restrictions;
sets out a procedure for cases where EU-country shipping companies have no effective opportunity to carry goods to and from a particular non-EU country;
extends the benefits of the regulation to non-EU nationals established in the EU.
Regulation No 3577/92/EEC deals specifically with freedom to provide services in sea transport within EU countries (‘maritime cabotage’*).
Unfair pricing in maritime transport
Regulation No 4057/86:
authorises the EU to apply redressive duties in order to protect shipowners in EU countries from unfair pricing practices on the part of non-EU shipowners. These redressive duties can be imposed after an investigation which demonstrates that injury has been caused by unfair pricing and that the interests of the EU make intervention necessary;
concerning the examination of injury, lays down the appropriate factors or indicators to be taken into consideration, e.g. a reduction in the shipowner’s market share or profits, or the effect on employment;
lays down a procedure for complaints, consultations and subsequent investigations.
Free access to ocean trades
Regulation No 4058/86:
applies when action by a non-EU country or by its agents restricts free access to the transport of liner cargoes, bulk cargoes or other cargoes by shipping companies of EU countries or by ships registered in an EU country (except where such action is taken in conformity with the United Nations liner code);
allows for coordinated action by the EU following a request made by an EU country to the European Commission. Such action might include diplomatic representation to non-EU countries and countermeasures directed at the shipping companies concerned;
permits similar coordinated action to be taken at the request of another country belonging to the Organisation for Economic Cooperation and Development with which a reciprocal arrangement has been concluded.
Competition rules
General EU competition laws laid down in Regulation (EC) No 1/2003 also apply to the EU maritime transport sector. However, in accordance with Council Regulation (EC) No 246/2009, the Commission may make exceptions for certain types of cooperation between liner shipping* companies (consortia*). The Commission accordingly adopted Regulation (EC) No 906/2009, which allows these exceptions, and extended it until 25 April 2020 by Regulation (EU) No 697/2014.
Context
Council Regulation (EEC) No 4055/86 has applied since 1 January 1987.
Council Regulations (EEC) No 4057/86 and 4058/86 have applied since 1 July 1987.
Council Regulation (EC) No 1/2003 has applied since 1 May 2004.
Council Regulation (EC) No 246/2009 has applied since 14 April 2009.
Commission Regulation (EC) No 906/2009 has applied since 26 April 2010.
BACKGROUND
For more information, see:
‘Internal market — Free access to ocean trade’ on the European Commission’s website
KEY TERMS
Cabotage: where a company which transports goods, registered in one EU country, carries out national transport in another EU country.
Liner shipping: regular transport of goods on a particular route or routes between ports, at previously advertised dates and times, and available to any paying transport user, even if on an occasional basis.
Consortia: agreements (or sets of agreements) between 2 or more shipping carriers which provide international liner shipping services solely for carrying cargo relating to one or more trades. Their purpose is to provide a joint maritime transport service which is better than the service that each of its members could have offered individually (i.e. without the consortium).
MAIN DOCUMENTS
Council Regulation (EEC) No 4055/86 of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries (OJ L 378, 31.12.1986, pp. 1–3)
Successive amendments to Regulation (EEC) No 4055/86 have been incorporated in to the original document. This consolidated version is of documentary value only.
Council Regulation (EEC) No 4057/86 of 22 December 1986 on unfair pricing practices in maritime transport (OJ L 378, 31.12.1986, pp. 14–20)
Council Regulation (EEC) No 4058/86 of 22 December 1986 concerning coordinated action to safeguard free access to cargoes in ocean trades (OJ L 378, 31.12.1986, pp. 21–23)
Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, pp. 1–25)
See consolidated version.
Council Regulation (EC) No 246/2009 of 26 February 2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia) (Codified version) (OJ L 79, 25.3.2009, pp. 1-4)
Commission Regulation (EC) No 906/2009 of 28 September 2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia) (OJ L 256, 29.9.2009, pp. 31–34)
The supply of shipping services
The freedom to provide services is one of the European Union’s basic principles. However, the maritime transport sector sometimes finds that non-EU countries impose restrictions and conditions, such as cargo-sharing. These substantially increase transport costs and can damage overall EU trade.
It confirms that the freedom to provide services applies to maritime transport within the European Union and between EU and non-EU countries. It sets out the conditions under which this principle applies. It gradually abolishes earlier restrictions and prevents new ones being introduced.
Key Points
—EU maritime transport companies may carry passengers or freight to any port or off-shore installation (such as oil or gas platforms) within or outside the EU.
— The same right applies to companies based outside the EU provided they are owned by an EU national and registered in the EU.
— Unilateral national restrictions in force before 1 July 1986 were to be phased out between 31 December 1989 and 1 January 1993.
— Cargo-sharing arrangements in bilateral agreements between EU and non-EU countries must be phased out or readjusted.
EU governments had to report to the European Commission initially every 6 months and later on an annual basis on the changes being introduced to earlier agreements.
—
An EU country having problems in adjusting an existing agreement must inform the Council of Ministers and the Commission.
—
Cargo-sharing arrangements in any future agreements with non-EU countries are not allowed unless, in exceptional circumstances, not having these arrangements would prevent an EU company from plying for the trade.
Context
1 January 1987.
Internal market – free access to ocean trade
ACT
Council Regulation (EEC) No 4055/86 of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries
REFERENCES
Act
Entry into force
Deadline for transposition in the Member States
Official Journal
Regulation (EEC) No 4055/86
1.1.1987
–
OJ L 378, 31.12.1986, pp. 1-3
Amending act(s)
Entry into force
Deadline for transposition in the Member States
Official Journal
Regulation (EEC) No 3573/90
17.12.1990
–
OJ L 353, 17.12.1990, p. 16
RELATED ACTS
Council Regulation (EEC) No 4058/86 of 22 December 1986 concerning coordinated action to safeguard free access to cargoes in ocean trades (OJ L 378, 31.12.1986, pp. 21-23)