EC EXTENDS LINER CONSORTIA IMMUNITY UNTIL 2005

EC EXTENDS LINER CONSORTIA IMMUNITY UNTIL 2005    The European Commission has renewed for a further five years the antitrust immunity which allows liner shipping companies to operate consortium agreements in European trades.
   A revised law, known officially as EC Regulation No. 823/2000, became effective on Wednesday (April 26) and replaces the former five-year-old EC Regulation No. 870/95. The former law was valid until April 25.
   The regulation automatically exempts liner consortia, such as vessel-sharing agreements, which have a market share below 30 percent if they operate within a liner conference, or below 35 percent if the agreements operate outside a conference.
   “It is common for shipping companies to conclude consortia agreements with a view to provide a joint liner shipping service through the coordination of sailing timetables, the exchange and sale of space on vessels and the pooling of vessels and port facilities,” a spokesman for the EC said. The EC said that it continues to have a “favorable attitude towards liner shipping consortia.”
   For consortia with a market share above 30 percent or 35 percent, but below 50 percent, a consortium will benefit from exemption if it is notified to the EC and the Commission does not oppose exemption within six months. A consortium with a market share above 50 percent can benefit from an ad hoc “individual exemption,” subject to the approval of the EC.
   The new European regulation says that consortium agreements that make “temporary capacity adjustments” benefit from the immunity. However, the exemption does not apply to capacity management agreements “whereby shipping line members of the consortium refrain from using a certain percentage of the capacity of the vessels operated within the framework of the consortium.”