CELEX: 51990PC0260
Language: en
Date: 1990-06-18
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ON THE APPLICATION OF ARTICLE 85 ( 3 ) OF THE TREATY TO CERTAIN CATEGORIES OF AGREEMENTS, DECISIONS AND CONCERTED PRACTICES BETWEEN SHIPPING COMPANIES

COMMISSION OF THE EUROPEAN COMMUNITIES
                                             C0MC90) 260 final
                                             Brussels, 18 June 1990
                  COMMUNICATION BY THE COMMISSION
               Report on the possibility of a group
      exemption for consortia agreements in liner shipping
                           Proposal for a
                      COUNCIL REGULATION (EEC)
        on the application of Article 85(3) of the Treaty
       to certain categories of agreements, decisions and
          concerted practices between shipping companies
                   (presented by the Commission)
 ---pagebreak---                                            - 1 -
                             Communication by the. Commission
                  Report o n t h e possibility o f a g r o u p exemption
                    for consortia agreements in liner shipping
1. Introduction
     1.1. In December 1986, at t h e time o f t h e adoption o f Regulation
            no. 4956/86, the Commission undertook to submit within o n e y e a r , a
            report to t h e Council o n whether t o provide f o r block exemptions
            for consortia, and t o m a k e proposals t o that tffect if
                       (1 >
            necessary
     1.2. As explained in the interim reports made to the Transport Working
                                   (2)                        (3)
            Group on 7 January         and 29 November 1988       , the Commission was
            unable despite its repeated efforts to complete its work within one
            year because the industry did not make available to it a sufficient
            number of consortia agreements to constitute a satisfactory basis
            for analysis. This was finally done in stages up to September 1989.
2.   paçkflrouno:
     2.1. T h e Commission is aware o f present and prospective developments and
     organisational changes in world shipping a n d t h e implications which
            these m a y have for t h e Community's shipping a n d competition
            policies.
(1)
     S e e Council D o c . N o . 11584/86 MAR 8 4 o f 19 December 1986 Annex III
 (2)
     See doc. N o . 4130/88 MAR 3 of 11.1.1988
   }
     S e e doc. No 10048/88 MAR 3 8 o f 13.12.1988
 ---pagebreak---                                 - 2 -
     Competition in the liner shipping industry has created the need for
     companies to be efficient in order to compete on the world market.
     The shipping industry is a capital intensive one, with a high
     proportion of fixed to variable costs. Ships therefore need to be
     as fully utilised as possible if the capital costs are to be
     covered. Individual enterprises acting alone without having strong
     financial resources are in a vulnerable position if heavy
     overcapacity shows itself on their particular trade routes.
2.2. The development of container services has increased pressures for
     co-operation and rationalisation, especially on the longer deep sea
     trade routes. Because of the large amounts of cargo which can be
     handled daily from a containership, operators have been able to use
     bigger ships without increasing, and indeed even reducing, port
     time. However, since the amount of cargo available remains much the
     same, fewer of the larger ships are needed to serve a particular
      trade. Community shipowners have difficulty to operate with
     container ships of the size needed to obtain the available
      economies scale and thus minimise costs, whilst maintaining a
      satisfactory frequency of service.
2.3. Other related pressures towards closer association between
      operators on containerised trade routes were that:
      - the establishment of a container service necessitated an initial
        capital investment greater than that required to replace tonnage
        on conventional services. Individual lines therefore hesitated to
        make this investment on their own account;
      - container ships were less free to transfer from one trade to
        another because many were designed for a particular trade route;
        in addition many ports did not have the equipment and
        infrastructure to handle container ships (a problem which still
        exists in some developing countries)
2.4. These pressures for cooperation led individual shipping lines to
      enter into joint fleet operations usually described as consortia.
 ---pagebreak---                                    - 3-
3. Analysis of consortia agreements
   3.1. The Comité des Associations d'Armateurs des Communautés Européennes
        (CAACE) has provided the Commission with a list of consortia
        serving Europe showing the conference, the consortium and its
        members and indicating the scope of clauses included. A copy of the
        list is attached as Annex I.
        The Commission has also received copies of the 23 consortia
        agreements listed in Annex II. The Commission has been asked to
        treat the details of these agreements as confidential.
   3.2. The examination of the agreements in the possession of the
        Commission and of such information as has been given by CAACE and
        by others has permitted the following findings:
         (i)  There are approximately 57 consortia operating worldwide, at
               least 48 of which operate in Community liner trades. The
              number of consortia in particular trade, their organisation
              and membership, and the scope and terms of the consortia
              agreements all vary.
         <ii) The variety and complexity of the different arrangements is
              considerable. Almost the only common factor is that they are
              coalitions of several independent shipping lines seeking some
               form of co-operation in order to maintain profitability
              through rationalisation in the widest sense and to spread the
              expense of investment in container operations. Each could, in
              principle, be considered sui generis. However, a number of
              specific arrangements seem to be common to most consortia.
 ---pagebreak---  /
/                              - 4-
   (iiî) Joint, fleet.operations
         a) Joint schedule: 37 consortia
         b) Space/slot exchange: 37
         c) Equipment pool: 28 (in some cases optional or only amongst
             some members of the consortium)
         d) Joint operational office: 38
   <iv) Terminals
         a) Joint terminal operation: 37 (in some cases only optional)
         b) Joint terminal contracts: 37 (in some cases optional or
             negotiated jointly but concluded separately)
   (v)   PQQlinff
         a) Cargo pool:          28
         b) Revenue pool:        28
         c) Net result pool:     27
   (vi) Conference riKhts
         5 consortia hold single voting rights in conferences in which
         they participate.
         4 consortia whilst not having formal voting rights in
         conferences do nevertheless act in that way.
 ---pagebreak---                             - 5-
(vii) Marketinn
      a) Joint marketing: 18
          (some limited by regions)
      b) Joint bill of lading: 22
(viii)joint price fiMina
      7 consortia have pricing fixing authority.
      CAACE has indicated that in some cases the consortium would
      have the authority to fix prices but that the "no" in the
      descriptive list means that it does not do so in practice. In
      some other trades the consortium operates either outside the
      conference or on routes where there is no conference.
<ix>   Inland operatipna
      a) Joint consolidation: 18 (some are optional or limited by
          regions)
       b) Joint haulage: 16 (some are optional or limited by
          regions)
<*>   Durât ion/terminatio,n
       Clauses concerning duration and termination of consortia
       agreements are not included in CAACE's list. Of the 23
       agreements examined by the Commission:
       a) Indefinite duration until cancellation/termination: 11
       b) Limited duration or without prolongation clause: 18 (2
          agreements do not contain clear provisions)
 ---pagebreak---                            - 6 -
     c) Cancellation/termination
         36 months notice: 1 Agreement
         24 months notice: 2
         12 months notice: 6
         6 months notice: 8
         Specific rules: 4
     d) Without cancellation/termination clause: 1
(xi) Purposes/objectives of consortia agreements
     This aspect has not been dealt with by CAACE's descriptive
     list. In the 23 agreements the following clauses ore typical:
     "The purpose of the Agreement is to establish a joint
     service/consortium capable of securing the economies and
     advantages of modern shipping technology through coordinated
     management of roll-on/roll-off., container or similar modern
     vessels, and all related activities".
      "To enable the parties to operate a service as defined in the
     agreement in the most economical and efficient way; to
     promote and maximize the trade and the movement of cargoes
     between the points and ports referred to".
      "The purpose of this Agreement is to authorize the parties to
      continue their joint service in the trades covered by this
      Agreement".
      "The purpose of this Agreement is to enable the parties
      collectively to establish and maintain a superior overfull
      common carrier shipping service, and thereby to promote to
      oceanborne commerce, in the trade between "... and ...".
 ---pagebreak---                                   7 -
           "The purpose of the Agreement is to allow the partners hereto
           to operate as an ocean common carrier by direct call or
           intermodal through service under the name ... as provided
           herein".
           "The purpose of the Agreement is to permit the parties to
           achieve efficiencies and economics in offering services in
           the trades covered by the Agreement".
           "To cooperate in the operation of a joint container service
           between ... and the ... - including the inland movement of
           containers - for the purpose of achieving optimal economic
           results through operation of container vessels and sharing
           the outcome through money pool upon the terms and conditions
           set forth in the agreement".
3.3. Multiple membership
     a) According to the information available there are 47 European
        shipping lines participating in 35 consortia serving European
        trades. (In the remaining 5 consortia serving European trades
        there seem to be no European shipping lines participating).
        Some of these shipping lines are members of more than one
        consortium :
        CGM                         participates in 13 consortia
        Nedlloyd                          "         12
        Hapag Lloyd                       "         11
        P&OCL                             "          7
        CMB                               "          6
        Swedish Transocean                "          5
        Incotrans                         "          4
 ---pagebreak---                            - 8 -
  Cunard
  EAC
   Charente Harrisson        5 lines each participate in 3 consortia
   E Herman
   Lloyd Triestino
   Uilh. Wilhelmsen
   Finncarriers
   Hoegh
   Johnson                   7 lines each participate in 2 consortia
   Wallenius
   DAL
   Delmas-Vieljeux
b) Shipping lines which are members of a consortium are in many
   cases also member of a conference.    Some conferences have,
   among their members, the participants in more than one
   consortium.    For instance, as shown in Annex III,
    - the members of the consortia CAROL, EURO-Caribe, S.A.C. and
      Streamline are all members of the Association of West India
      Transatlantic Steamship Lines, the WITASS Conference;
    - the members of the consortia OMEX, Scan Dutch, TRIO, ACE and
      Med Club are members of the Far Eastern Freight Conference;
    It should be noted that there are also other situations in
    European liner shipping trades. Two examples might be cited:
    The Europe/Australia & New Zealand Conference used to have
    participants in four consortia among its members (ANZECS,
    ACT(A)ANL, Scancarriers and Scanbarber). Scancarriers was taken
    over by one of its members and Scanbarber as well as ACT(A)ANL
    were disbanded, so that this Conference is now almost (except
    for Baltic Shipping Company) identical with the ANZECS
    consortium. As a second example, the UK West Africa Lines Joint
    Service (UKWAL) is a consortium which is also a conference.
 ---pagebreak---                                      - 9 -
4.  Views of shipowners and shippers
    4.1. CAACE and CENSA have argued, in various submissions to the
          Commission, that Community shipping lines need to participate in
          consortia in order "not to be put at a disadvantage compared with
          their competitors, the single entity, multi-trade giants". In their
          view consortia are either excepted, as technical agreements, under
          Article 2 of Regulation No 4856/86, or are covered by the block
          exemption in Article 3 of the same regulation. For cases not so
          covered there should be a group exemption. These views were not
          shared by the Union of Greek shipowners who argued that the
          Commission should only grant individual exemptions, where
          appropriate.
    4.2.  The British Shippers' Council his informed thé Commission that, in
          its view, consortia are covered neither by Article 2 nor by
          Article 3 of Regulation No 4056/86 and that a new block exemption
          would be inappropriate. Individual exemptions should be granted
          only with special conditions and obligations. The European
          Shippers' Councils hold similar views, arguing that consortia
          should apply for individual exemption and that conditions and
          obligations, including an obligation to meaningful consultations
          with shippers, should be attached.
 5- The Legal Status of Consortia
    The examination of the texts of consortia agreements which have been
    made available and of other information available to the Commission
    services has led to the following main conclusions:
     s.i. Consortia are not mergers
          The information available suggests that consortia could not be
          regarded as mergers between the parties, for several reasons:
          a) All available agreements contain provisions to terminate the
              agreement with different periods of notice.
 ---pagebreak---                                 - 18 -
     b) There is no evidence which suggests that any of the parties to
         these agreements or to other agreements described by CAACE
         either transferred all its assets or activities to the
         consortium, so as to become mere holding companies, or
         completely and irreversibly abandoned business in the area
         covered by the consortium.
         On the contrary, the parties to consortia agreements remain free
         to act independently on other routes, to join consortia
         involving other parties for other routes or to join consortia
         for other routes involving the same or almost the same parties,
         but on different terms. The findings on multiple membership
         indicate that this is the case for many shipping lines.
5.2. Consortia are not purely technical arrangements
     The information available suggests that there are few if any
     consortia agreements whose sole object and effect are to achieve
     technical improvements or cooperation in the sense of Article 2 of
     Regulation No. 4056/86.
     All but two of the 23 agreements examined contain arrangements not
     only on joint fleet and terminal operations but also on pooling
     and/or conference rights, pricing, marketing or inland operations.
     One of the two exceptions concerns a Slot Charter Agreement
      containing arrangements on joint schedule and space/Pint exchange
      and arrangements on capacity restrictions for one of the parties
      regarding certain European ports. The other case concerns an
      agreement containing arrangements on joint fleet and terminal
      operations. However, it also provides for cost sharing arrangements
      for ships, administration and equipment. In addition it provides
      that conference trading rights may only be exercised by agreement
      of the consortium policy committee and that the parties, without
      having joint marketing, "may combine their interests".
      In all these cases the consortium's sole object and effect are not
      purely technical.
 ---pagebreak---                                - 11 -
    There are, according to CAACE's descriptive list, some other
    consortia agreements limited to arrangements on joint fleet and
     terminal operations. However, these agreements cannot be regarded
     as purely technical since for instance one agreement also contains,
     inter alia, the parties' agreement to avoid unreasonable or unfair
     sales and marketing competition amongst themselves through a common
     freight policy. Such agreements restrict competition and cannot be
     considered as having exclusively technical objects and effects.
     Finally, the parties to consortia agreements regulate the use of
     their vessel capacities in given trade routes and are actual or
     potential competitors.
     For all these reasons consortia cannot, other than perhaps in very
     exceptional cases, be considered as falling within the scope of
     Article 2 of Council Regulation 4056/86.
5.3. consortia are not covered by the conference black exemption
     a) Conferences are arrangements which exist essentially to ensure
         that their members charge the same rates of freight. Some
         conferences also agree members' participation in a particular
         trade (which is defined either as sailing rights, ie the right
         to berth x number of sailings per annum from one area to another
         or as percentage shares in the trade) or even 'pool' either
         earnings or liftings (freight tons) or both: the intention
         generally being to equate 'share' with earnings and liftings.
         Consortia are pursuing different objectives and are different in
         organisation. The size of container ships (say 3 to 6
         conventional ships = 1 container ship) means that most single
         shipping companies are no longer capable of providing, on their
         own a satisfactory liner service to shippers. To be viable, a
         shipping service must provide a frequent, say weekly, service to
         its customers. Rationalisation of schedules is, therefore, a
         sine qua non of liner shipping with each participating line
         being allocated slots for each sailing. This is not the role of
         conferences.
 ---pagebreak---                                 - 12 -
        Shipowners agree that consortia are different from conferences.
        b) (consortia agreements, restrict or eliminate competition
            between the parties in some or all of the following areas:
            - the provision and use of capacity and transport facilities
            - timings and sailings
            - marketing
            - inland operations
            - their policies as conference members and
            - price competition (which is eliminated either by conference
              membership, or by arrangements in the consortium agreements
              which are to that extent equivalent to a conference
              agreement, or by some combination of the two).
            A considerable number of consortia agreements thus contain
            restrictive arrangements which go beyond the scope of Article
            3 of Council Regulation No 4056/86 and would therefore not be
            covered by the block exemption.for conferences, even if they
            could be considered as conference agreements. This is the
            case for most of the 23 agreements available to the
            Commission and it would also be the case for the majority of
            the other agreements mentioned in CAACE's list.
         c) Consortia are increasingly concerned with combined sea/land
            door-to-door transport.  Multilateral agreements on combined
            sea/land transport are not covered by the conference block
            exemption, which applies only to the maritime sector.
5.4. It follows that consortia agreements which restrict competition and
     affect trade between Member States must, if they are not to be
     considered null and void in accordance with Article 85(2) of the
     Treaty, be covered either by an individual or by a block exemption.
     In view of the number of consortia agreements and the need for
     shipowners to retain the flexibility necessary to change their
     agreements in response to changing competitive circumstances, it is
 ---pagebreak---                                    - 13 -
        desirable for administrative reasons to give a group exemption as
        far as possible. Accordingly the Commission has examined the scope
        for granting such a group exemption.
6. Proposal for a block exemption
   6.1. Justification
        The Community shipping industry needs to attain the necessary
        economies of scale to compete on the world liner shipping market.
        Consortia can help to provide the necessary means for improving the
        productivity of liner shipping services and promoting technical and
        economic progress by facilitating and encouraging the use of
        containers.
        Users of the shipping services offered by consortia obtain several
         important advantages. First, they are ensured regular sailings at
         prices which do not depend on which ships are used for their
         containers. Second, economies of sca.le in the use of ships and
         on-shore facilities are achieved. Third, since consortia tend to
         bring about higher levels of capacity utilisation, costs are
         reduced for this reason also. Fourth, consortia increase the
         quality of shipping services by using more modern ships and
         equipment as well as port facilities. Last, but not least, through
         provision of joint inland services they are responding to many
         shippers' requirements for efficient door-to-door transport.
         Thus, users can obtain a share of the benefits resulting from the
         improvement in productivity and service. However, any group
         exemption must give a sufficient guarantee that consortia are able
         to realise their advantages to the fullest extent and that users
         get a fair share of the resulting rationalisation and reduction in
         costs.
         In order, therefore, to ensure that all the requirements of Article
         85(3) are met it would be necessary, inter alia, to attach to the
         block exemption certain conditions and/or obligations to ensure
 ---pagebreak---                                 - 14 -
     that a fair share of the benefits would be passed on to shippers
     and that competition in respect of a substantial part of the trades
     in question was not eliminated.
6.2. Form
     A group exemption for consortia would need to be an independent,
     self-contained regulation, rather than an amendment or addition to
     any existing regulation, because
     - there is a great variety of different consortia arrangements
        operating under different circumstances;
     - consortia are a specialized form of joint ventures. Despite of
        the efforts of the Commission's services and the interested
        industries, it has proved impossible to draft a block exemption
        for joint ventures in general;
      - many consortia deal with multi-modal transport operations which
        fall partly within the scope of Regulation No 4056/86 and partly
        under Regulation No 1017/68 and, insofar as containers are
        concerned, partly under Regulation No 17/62;
      Consortia in liner shipping are a specialised and complex type of
      joint venture. Unlike most commercial and industrial joint ventures
      the scope, parties, activities and terms of consortia agreements
      are frequently altered. It would therefore, as well as for other
      reasons discussed above, be extremely difficult to decide which
      specific clauses and arrangements of consortia agreements should be
      permitted, and in what circumstances. It would also be undesirable
      to proceed in this way because it would often make legal advice
      necessary, and perhaps individual exemption by the Commission each
      time the terms of a consortium agreement are altered. A block
      exemption for consortia should therefore concentrate on clarifying
      the requirements under which consortia can be exempted from the
      prohibition of cartels pursuant Article 85(3) of the Treaty, rather
      than differentiating between consortia.
 ---pagebreak---                                 - 15 -
6.3. gcope and content of the block exemption
     The block exemption would cover multi-modal as well as purely
     maritime consortia and would therefore be adopted on the basis of
     Regulation No 4856/86, No 1017/68 and No 17/62.
     The group exemption should cover as wide a variety as possible of
     the kinds of clauses which are found in consortia agreements.
     Since cooperation through consortia is a specific form of
     rationalisation cartels which goes further than conferences
     the Commission would need to attach some additional requirements to
     the block exemption. In fixing these requirements, e.g. certain
     conditions and/or obligations, the Commission must have regard not
     only to the interests of the shipping lines but also to those of
     shippers and of other transport modes who may compete with the land
     transport operations of members of consortia (for instance, road
     hauliers in respect of multi-modal consortia).
     The details of these requirements can only be fixed after further
     consultations with parties concerned and with Member States in the
     Advisory Committee on Restrictive Practices and Dominant Positions.
     Nevertheless, as a preliminary statement, the Commission considers
     that it would be necessary, in particular, in order to make sure
      that the conditions of Article 85(3) are fulfilled :
      (i)   to ensure that a fair share of the efficiency and other
            benefits from consortia could be passed on to shippers;
      (ii>  to ensure that competition in respect of a substantial
            portion of the whole trade is not eliminated or unduly
            restricted, for instance by agreements between consortia
            operating in the same trade;
      (iii) to provide a maximum period of notice for withdrawal without
            penalty by a participant line;
 ---pagebreak---                                • - 16 -
     (iv) to deal, in the case of multi-modal transport services
           offered by consortia,    with multilateral agreements with
            inland hauliers on through rates;
       (v) to ensure non-discrimination between shippers or ports.
     In addition, there would need to be obligations relating, inter
     alia, to meaningful consultations with shippers, and rights for
     shippers to arrange their own inland haulage, if they wish.
     The group exemption for consortia will take account, among other
     things, of the fact that almost all members of consortia are also
     members of conferences governed by Regulation 4056; the
     requirements of the group exemption will deal with the additional
     limitations of competition brought about by consortia.
6.4. The Commission considers that it would be desirable to grant a
     group exemption for consortia agreements. The Commission has
     thereby prepared the attached proposal (Annex IV) for a Council
     Regulation which would empower the Commission to grant a block
     exemption for consortia on the lines set out above. This enabling
     regulation follows the standard lines of such regulations and
     accordingly does not call for any specific comments.
     The Commission intends to clarify the position under competition
      law of multimodal transport containing a shipping leg
     simultaneously with the group exemption on consortia.
 ---pagebreak---                           CftACt
Comit* t"i«* A s s o c i a t i o n * d'Armatemre
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      Non Conference                   Johnson            Blue Star Line (UK). East
                                       Scanstar           A s i a t i c C" (DK)             yes       yes     yea       yes       yea     yes      yes             yea       no    yea  yea   yea    yea    yea
       OS-conference»                  Sagumex            Hapag Lloyd (D). CGM ( p ) .
        (for North                                        GCL (Cunard, UK. Incotrana,       yes      yes                yes       yes     yes                                           no    .no    no      no
                                                                                                                no                                 no      no      no        no   no
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       Gulf)                                              Wallenius. S)
       Canadian                       St.Lawrence         Canada Mariti»e - comprising
                                                                                                                                                                                                                     i
       M. A l t a n t l c             Co-ordinated        CMB (B> fc CP Ships (Can)         yes      yes               yea        yes     yes                                                       no      no
       E4.W Bound                                                                                               no                               no        no     no         no   no     no   no
                                      Services            and HL Containerline (UK)                                                        (D)
       F r e i g h t Confe-
       rences
       A s s o c i a t i o n of      Caribbean            Charente Steamship c* Ltd
       w. India Trans- Overseas                            (TfcJ Harrison Nanaqers)         yea        yea      no     yea        yea       yes   yea     yea     yea                    yes               no
       a t l a n t i c Steam                                                                                                                                                 no                     no
                                      Lines               (UK), Napag-Lloyd (D).                                yes
       Ship Lines                     (CAROL)             Itedlloyd (HL). CGM (F)                               for
                                                                                                                Ree-
                                                                                                                fer
       A s s o c i a t i o n of       SAC                llapag-Lloyd (D).
       w. India Trans-                                   Nicaragua n a t i o n a l Line     yes        yes      yea               yes       yea                   yea             yea   yea   no    yea    yea
       a t l a n t i c tteasi                                                                                          no
       Ship Lines
        rwiTASS)
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       (B)      N e g o t i a t e d and agreed j o i n t l y , and indent ici»), but not ite f a c t " j o i n t c o n t r a c t a " .    (F.)   In s o s * t r a d e e . t h e consortium r>p*rstes e i t h e r
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    •wtaMe
    totals* t t o esafaramra
                        esafere*ca av
                                    a* an roataa *»hi»ra »Hin t» ne C0»f>ren?». J* awe* cseec, t t o eonaertlto 1* anoaeaf in )*••* salee-flals**.
 ---pagebreak---                       CAACE
                                                                                                                             leant                           lalaae
                                                                           Fleet ape rat lane   11 »„i..un       Pooling     >lgamiri|Mae*etleaJ     pern       rattat
                                                                                                                         am»                          (A)
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                                                                                                                                                                      e*
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taréet/BR              .lead      Bllemaa (BR), Faraeea Nitby (OK),                                                                                                   a
Conference         Centaiaer      Sim (la)                                   yee                       yea   yea   yee   no                           ao
                   Bervleee
                   Bear Beet           (D), RNffji (ML)                yea   yee                                   yea   yes                 yee           yss           I
reece - Tttrkey    Container
eeetorence -       Line
N. Barepe Egypt
Conferi
                                                                                                                                                                         o
lerael-Seanilaa-   Swedish        Swedleh Traaaoeeea (S) A
vlaa Aaaoclatli    Orient Linee   Flancarriara (rin)                   yea    yee             yea                                                      yea  yea      yea
                        IF)
Indian                            CON |F). Hapag Lloyd fD).
laUad Coofe-                      BtMP (F), Seal (D). MRU
                                        ) . SNC (F)
IC
            (AI In eana ceaea. the concert lam weald bava tb* authority t o price-fin bet tHe 'ao" reflect* that It doe* not
            IT) am BEC m*ab«ca bet eporete te/fran EEC porta.
 ---pagebreak---                                      CAACE                                                                                                                                                                                                                             -5
                                                                                                    1        Fleet   operations                1   1
                                                                                                                                                   1 Tormlaa1e|
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                                                                                                                                                                                    14      9      10                11         * »Uo     11             14    is
Far t e a t Frètent        ACS                      BOL (Sieg),00CL (MR). Korea
Conference                                          Shippine Corp. ( S . K . e . ) . Cbo
                                                    Tans Shippine ( S . K . o . )                   yee        yea      no         no               yee       yea        yea        no      no    no                 no         aa        no            ae     ao
E n t e n t e da F r e t   Bank a,                  Sank L l a e (OK), Coleabaa L l a a
dee L l g a a e da         Coloabaa                 (D)                                             yes        yee      yee        no               yea       yea        yee        yee     yee   ao                 yea        yee       no            yea    yea
Navigation
S e r v a n t Papaeta                                                                                                                                                                                                (C)                  (E)                  (CI
lamaaeelea                 I n d o n e s i a (F)   D j a k a r t a Lloyd  I
Confereace                 M a t . Lines           oaaorl L l e y i      ]      ,,,    ,            »          ?        7             7             t         T          »          7       t        T                      »        F    »              »      T
                                                                                 t m > )
                           Djaeeeetrl              T r l k o r s Lloyd   |
                                                   Saaedera ladoneele)
Far Caetera                NFECS
                                                   RCHP ( F ) , L l o y d T r i e s t i n o   (I),                                                                                                                                                             no
F r a i e n t Confe-       (Hedcleb)                                                                                                                              yea    yes        yon     yee       no             no          yes      no             no
                                                   MOL ( J ) , NYK ( J ) , OMEX                       yes       yes          yei      ye*               yea
rence ( I t a l y -
FE)                                                ( T a i w a n , Hong K o n g , S i n g a p o r e .
                                                   South Korea)
             1AI la sane eaaee. the L sneer I la* woal«J bsv* the aatborlty t o price-fix bat the "ao* reflect* «*•* It doee not da                                                                                   (C) Limited by regtene.
              ta) la      traeee, the ro*eortl«e operatee either ovicide the conference or on roetee where there ie no conferee                                                                                      In each eaaee. the coneortli
                  ia engaged in joint prlce-f ixlntj. (r) ne rcc aeabere bet operate to/bom EEC parte.
 ---pagebreak---                                                                                                                                                                                                                                      -b-
                        CAACE
                                                                                      1        Fleet eperatlane 1 [ «ermlaelefj
                                                                                               1
                                                                                                                                                   Fooling
                                                                                                                                                                   1tel                | Marketing J       pîl;J     1 lalane 1
                                                                                                                                                                                                                     |oaeret lone]
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                                               Reamers                                    -4                         V*40
                                                                                                                                                                                        S11
                                                                                          a1        2
                                                                                                              i
                                                                                                               3     4
                                                                                                                          •J 4 1 B
                                                                                                                         _}                          44       9       IO
                                                                                                                                                                                         0
                                                                                                                                                                                                ~ 0 12      13        14     1*
temeneelo                  W999C9/9ÊÊ       Madlleyd (ML), SAC (OR).                  yee          yea         yee   yea      !*•     yee    yea     yea     yee      no                  yee   yee         ne        yee   yea
Barepe F r e i g h t       Xaeoneele        Swedleh Traneacaaa ( 5 ) .
Conference                 Service          Wllh. Wlhelaeen (M)
                                        i
Far Santera                Oman IF)         Cbe Tang Shippiag ( f . Kor) "                7             ?     »       7         7      7      »      T        7       T                   7     7           T          T      7
F r e i g h t Confe-                        BOL (Sing). OOCL (NK)
rence
For Santera
F r e i g h t Confe-
rence
                           tcanbvtck        OSN ( F ) . Beat A s i a t i c Ce. fBR)
                                            Nedlioyd (ML), Swedleh Traaeeceaa
                                            I S ) , « l i b . wilbalmaaa (B)
                                                                                      yee          yee         yee   yee      yee     yee    f*c     yea     yea      no                  yee        yee        ne    yee    yea
                                                                                                                                                                                                                                           g
Per Saetem                Trio              PfcOCL (OR) Ben L i n e (UK), *           yea               yee    ao    yea       yee    yee    !•»      yee
F r e i g h t Confe-                         Napae-Lloyd (B), BTR ( J ) ,        •!
rence                                        N i t a a l OSK (J)
emesjpe/                                    CON ( F ) . Bapag-Llovd (B),              yee               yee    yee   «•»       yea     yee    yee     yee     yea                        yen    ?••          •».      yee    yee
n e e t r o l l a s>                        Lloyd Trieatlna (X), Bedlloyd                                      (0)                                           wily                        (CI                          (C)    (Cl
N.B. confe-                                 (PLOCL (OK), SCNZ (H2)
rence                                                                                                                                                        for
                                                                                                                                                             •ee-
               (AI     in     eeeee. tba convection would have the authority t a prlce-f I* bet the                           »" r e f l e e t e that It deea not de a e .                (C) Limited by regieae.
               (FI     «a SEC   ~ ire bat operate te/fron SEC porte, (o) fteong eone manbara.
 ---pagebreak---       CAACE
                                                                                                                       -7-
(A) In soste eases, the consortia*) would have the authority to price-fix last the "no" reflects that It doss not so .
(ft) Negotiated and agreed jointly, and identical, but not in fact "Joint contracts".
 ---pagebreak---       CAACE                                                                                                                                                                 -7a-
 e
                                                                                                                                                                          •
                                                                    |     Fleet operetli
                                                                                            -1      [ Terminale] 1        Peeling
                                                                                                                                      IM   Market tag | |-ii
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                                                                                                                                       IO
                                                                                                                                             e^
                                                                                                                                             H      12     11 .11
                                                                                                                                                                      T-
                                                                                                                                                                      IS .
NEUSARA/        Sago                                                                                                          to
                                ACL, CGN, (F), Hapag-Lloyd
USAMERA                         (D)                                  yea    yea        no    yea     yea     yea     no     no    no    no    no   no      no  no    no
                North Ear.      CON (F), Rapng-Lloyd (D).
                North Am.       Incotrana (N), PfcOCL (UK).
                Space char-     Medlloyd (N), Sea land
                ter and          (US)                                yea    yea        no    yea     yea     yea     no     no    no    no   no    no      no  no    no
                aalling
                agreement
                Vesael          Nedlloyd (N), FtOCL (UK),
                aharing         Sea land (US)                        yes    yea        no    no      yea       yen   no     no    no    no   no    no      no  no    no
                agreement
SEUSA/          Teasel          Nedlloyd (B), PCOCL (UK),
MMRA            sharing         Sealand (US), CTE (E)                yea     yea       no    no      yea       yea   no     no    no    no   no    no      no  no    no
                agreement
                Mexico          ACL. Tecomar (M)                    yea      yea       no    no      yes       yee   no     no    no    no   BO    no      no  no    no
 (A)   In some cases, the consortium would neve the a u t h o r i t y t o p r i c e - f i x but the "no" re fleet a that i t doom not mo.
 ---pagebreak---                      .zs.
                                                          ANNEX II
List of consortia aereement* rocoivd bv tho CcMnmisgion
ANZECS
BEACON
CAROL Operating Agreement
(these three agreements submitted by CAACE in 1987)
ACL
Bean Carriers
Scan Dutch
 (these three agreements submitted by their representatives in 1988)
TRIO
Nedscans Letter of Intent
 Johnson ScanStar
 EUROSAL
 Swedish Orient Line Agreement
 West Coast UK Arab Service Operating Agreement
 Stresmlin* Joint Liner Service Agreement
 Canada Maritime Slot Charter Agreement
 COSEUA Common Services
 S.C.A.D.O.A. - Service Commun d'Armements Desservant l'Ouest Africa:
 Joint Container Service Europe - East Coast South America
 COBRA Operating Agreement (covering Phase I)
 Fed Sec Express Service (former CAMEL Merzario)
  <all these agreements submitted by CAACE in 1989)
 CAROL Lines Joint Service Agreement
 Trans Freight Lines Joint Venture Agreement
 Pacific Europe Express Joint Service Agreement
 Italia - d'Amico Joint Service Agreement
  (these four agreements received from the Federal Maritime Commissio
 Washington D.C.)
 ---pagebreak---                                   (MULTIPLE MEMBERSHIPS OF LINES/CONSORTIA/CONFERENCES)
                                             FAR EASTERN FREIGHT CONFERENCE
 OMEX                   SCANOUTCH               TRIO                  ACE                       MEO CLUB
Cho Yang Shipping (SKO) CGM (F)                 PftOCL (UK)           NOL (Sing)                ?     (F)
NOL (Sing)              Nedlloyd (ML)           Ben Line (UK)         OOCL (UK)                 Lloyd Triestino (I)
OOCL (H.K.)             East Asiatic (DK)       Hapag Lloyd (0)       Korea Shipp. Corp. (SKO)  NOL (Sing.)
                        WilheUsen (N)           NYK (J)               Cho Yang Shipp. (SKO)     NYK (J)
                        Swedish Transocean (S) Mitsui OSK (J)         Kawasaki Kisen Kaisha (J) OMEX
                                                                                                (Taiwan, Hong Kong,
                                                                                                Singapore, South Korea)
                                                                                                                        z
                                                                                                                        'n
 ---pagebreak---                         (MULTIPLE MEMBERSHIP LINES/COMSORTIA/CONFEIcEMCES)
                               MEUSARA / USANERA
                               US/EUROPE RATE AGREEMENTS
ACL           Pacif. Eurax.           SAGUNEX                NEW ?            Johnson Scanstar
              Express JS/HL/PEX
Swedish Trans                                                                 Blue Star  (UK)
Vatlènius                                                                     East Asiatic (DIC)
Cunard*(tjK)                                                                  Johnson Line (S)
                                                                      CTE (Ê)
 ---pagebreak---                                              CONFERENCE
                         ASSOCIATION OF WEST INDIA TRANSATLANTIC STEAMSHIP LINES
                                            W.l.T.A.S.S.
CAROL!                        EURO-CARIBE                  SAC                   STREAMLINE
       Coapagnie              Hapag Lloyd                   edlloyd              Johnson Line
       Générale Naritiae          (0)                        (NL)                Firm carriers (Fine)
             (F)                                                                 Royal Mail Lines (UK)
                                                                                 Flomerca (Guatemala)  is
Charente Steanship Co.                                     Nicaragua
         (UK)                                              Nat. Line (Nicar.)
 ---pagebreak---                                 4L*-                              ANNEX IV
                 COUNCIL REGULATION (EEC) No       QL.
On the application of Article 85(3) of the Treaty to certain catégories
of agreements, decisions and concerted practices between shipping
companies.
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 87 thereof,
Having regard to the proposal from the Commission ,
                                                       2
Having regard to the Opinion of the European Parliament ,
Having regard to the Opinion of the Economic and Social Committee",
Whereas Article 85(1) of the Treaty may in accordance with Article
85(3) be declared inapplicable to categorj.es of agreements, decisions
and concerted practices which fulfil the conditions contained in
Article 85(3);
Whereas the provisions for the application of Article 85(3) should be
adopted by way of Regulation pursuant to Article 87; whereas, according
to Article 87(2)(b), such a Regulation must lay down detailed rules for
the application of Article 85(3), taking into account the need to
ensure effective supervision, on the one hand, and to simplify
administration to the greatest possible extent on the other; whereas,
according to Article 87(2)(d), such a Regulation is required to define
the respective functions of the Commission and of the Court of Justice;
 1
   O.J.
 2
   O.J.
 3
   O.J.
 ---pagebreak--- Whereas   liner   shipping   is  a capital    intensive   industry;     whereas
containerization     has   increasest   pressures    for   co-operation      and
rationalisation;     whereas the Community     shipping industry      neods to
attain    the   necessary   economies    of  scale   in   order    to   compete
successfully on the world liner shipping market;
Whereas joint service agreements between liner shipping companies with
the aim    of rationalising     their operations by means of technical,
operational    and/or   commercial   arrangements   (described    in   shipping
circles as consortia) can help to provide the necessary means for
 improving the productivity of liner shipping services and promoting
technical and economic progress;
Whereas users of the shipping services offered by consortia can obtain
a share of the benefits resulting from the improvements in productivity
 and service,    by means of,    inter alia,   regularity,    cost reductions
derived from higher levels of capacity utilization,            better service
quality stemming from improved vessels and equipment,            and efficient
door-to-door transport;
 Whereas most consortia deal with multi-modal transport operations which
                                                                                L
 fall partly within the scope of Council Regulation (EEC) No 4056/86
                                                           5
 and partly under Council Regulation (EEC) No 1017/68 and, insofar as
 containers are concerned,       partly under Regulation No 17/62 of the
 Council ;
 Whereas   the   Commission   should  be   enabled  to   declare    by   way   of
 regulation that the provisions of Article 85(1) do not apply to certain
 categories of consortia agreements,      decisions and concerted practices,
 A
  0.J. No L378, 31.12.1986, p. A.
 5
  O.J. No L175, 23.7.1968, p. 1; (Special edition 1968 I, p. 302).
 6
   O.J. No 13, 21.2.1962, p. 204/62; (Special edition 1959-1962, p. 87)
 ---pagebreak---                                      - 31-
in order to make it easier for undertakings to cooperate in ways which
are economically desirable and without adverse effect from the point of
view of competition policy;
Whereas the    Commission,     in   close and    constant   liaison  with the
competent authorities of the Member States,         should be able to define
precisely the scope of these exemptions and the conditions attached to
them;
Whereas consortia in liner shipping are a specialized and complex type
of joint venture;      whereas there is a great         variety of different
consortia agreements operating in different circumstances;         whereas the
scope,   parties,    activities or terms of consortia          are  frequently
altered;     whereas   the  Commission     should   therefore   be  given  the
responsibility of defining from time to time the consortia to which the
group exemption should apply;
Whereas,    in order to ensure that all the conditions of Article 85(3)
are met    it would    be necessary     to attach    to the block    exemption
 conditions to ensure in particular that a fair share of the benefits
 would be passed on to shippers and that competition is not eliminated;
 Whereas under Article 11(4) of Council Regulation (EEC) No 4856/86,
Article 11(4) of Council Regulation (EEC) No 1017/68,         and Article 6 of
 Regulation No 17 of the Council,        the Commission may provide that a
decision taken in accordance with Article 85(3) of the Treaty shall
 apply with retroactive     effect;     whereas   it  is desirable   that the
 Commission be empowered to adopt, by regulation, provisions to the like
 effect;
 Whereas notification of agreements,       decisions and concerted practices
 falling  within   the   scope   of   this   regulation   shall  not  be  made
 compulsory,   being primarily the responsability of undertakings to see
 to it that they conform to the rules on competition,        and in particular
 to the conditions laid down by regulation concerning liner shipping
 consortia;
 ---pagebreak---                                      -iV
Whereas there can be no exemption if the conditions set out in Article
85(3) are not satisfied;      whereas the Commission should therefore have
power to take the appropriate measures where an agreement proves to
have effects incompatible with Article 85(3);        whereas the Commission
should consequently be able first to address recommendations to the
parties and then to take decisions;
HA8 ADOPTED THIS REGULATION:
                                   ARTICLE 1
1. Without   prejudice    to   the  applications  of   Regulation  (EEC) No
    4056/86,   Regulation    (EEC) No 1017/68 and Regulation No 17,      the
    Commission may,    by regulation and in accordance with Article 85(3)
    of the Treaty,      declare   that Article 85(1) shall not apply to
    categories   of   agreements    between   undertakings,    decisions  of
    associations of undertakings and concerted practices that have as
    their object    to promote or establish      cooperation   in the joint
    operation of maritime transport services or of combined maritime and
    land transport services.
 2. Such regulation shall define the categories of agreements, decisions
    and concerted practices to which it applies and shall specify the
    conditions and obligations under which, pursuant to Article 85(3) of
    the Treaty,   they shall be considered exempted from the application
    of Article 85(1) of the Treaty.
                                   ARTICLE 2
 1. The Regulation pursuant to Article 1 shall be made for a specified
    period.
 2. It may be repealed or amended where circumstances have changed with
    respect to any of the facts which were basic to its being made.
 ---pagebreak---                                           •  &
                                       ARTICLE 3
The regulation adopted pursuant to Article 1 may include a provision
t!-;.-ii- i! r»pp1if>'-. with retroactive effect to agreement?,    <W- j'-,ior/. ."wl
c-ricerted practices which were in existence at the date of •••ntry into
force of such regulation,            provided they comply with the conditions
established therein.
                                        ARTICLE 4
Before adopting the regulation,             the Commission shall publish a draft
thereof to enable all persons and organizations concerned               to submit
their comments within such reasonable time limit,            being not less than
one month, as the Commission shall fix.
                                        ARTICLE 5
 1. Before publishing          the draft    regulation  and before  adopting the
        regulation the Commission shall consult:
        a) The Advisory Committee on Agreements and Dominant Position in
           Maritime Transport established by Article 15(3) of Regulation
           (EEC) No 4056/86;
        b) the Advisory Committee on Restrictive Practices and Monopolies in
           the Transport Industry established by Article 16(3) of Regulation
           (EEC) No 1017/68;
        c) the Advisory Committee on Restrictive Practices and Monopolies
           established by Article 10(3) of Regulation 17.
 2. Paragraphs 5 and 6 of said provisions, relating to consultation with
        the Advisory Committees, shall apply, it being understood that joint
        meetings with the Commission shall take place not earlier than one
        month after dispatch of the notice convening them.
 ---pagebreak---                                      ZH
                                   ARTICLE 6
1. Where the     persons concerned     are   in  breach of     a condition    or
    obligation which attaches to an exemption granted by the Regulation
    adopted pursuant to Article 1.      the Commission    may, in order to put
    an end to such a breach:
    - address recommendations to the persons concerned, and
    - in    the  event  of   failure   by   such  persons    to  observe   those
       recommendations,    and depending on the gravity         of the breach
       concerned,    adopt a decision that       either prohibits     them from
       carrying out, or requires them to perform, specific acts or, while
       withdrawing the benefit of the block exemption which they enjoyed,
       grants them an individual exemption in accordance with Article
       11(4) of Regulation (EEC) No 4056/86,      Article 11(4) of Regulation
        (EEC) No   1017/68   and   Article    6  of   Regulation   No   17,   as
       appropriate, or withdraws the benefit.of the block exemption which
       they enjoyed.
 2. Where the Commission, either on its own initiative or at the request
    of a Member State or of natural or              legal persons    claiming a
     legitimate interest, finds that in any particular case an agreement,
    decision or concerted practice to which the block exemption granted
     by   the   regulation    adopted   pursuant     to   Article   1   applies,
     nevertheless has effects which are incompatible with Article 85(3)
     or are prohibited by Article 86,      it may withdraw the benefit of the
     block   exemption  from those    agreements,      decisions  or concerted
     practices and    take all appropriate measures        for the purpose of
     bringing these infringements to an end,         pursuant to Article 13 of
     Regulation (EEC) No 4056/86,        Article 13 of Regulation       (EEC) No
     1017/68 and Article 8 of Regulation No 17, as appropriate.
 3. Before taking a decision under paragraph 2,             the Commission may
     address recommendations for termination of the infringement to the
     persons concerned.
 ---pagebreak---                                   3s:
                               ARTICLE 7
This Regulation shall enter     into force on the day     following  its
publication in the Official Journal of the European Communities.
This  Regulation  shall   be  binding   in  its  entirety  and  directly
applicable in all Member States.
Done at Brussels,
                                    For the Council
                                    The President
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                                                                                ISSN 0254-1475
                                                                 COM(90) 260 final
                                                      DOCUMENTS
EN                                                                                           07
                                 Catalogue number : CB-CO-90-287-EN-C
                                                               ISBN 92-77-61376-9
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