FAS issued an injunction to four stevedores to transfer nearly 17 billion RUB to the federal budget for abusing dominance

The Federal Antimonopoly Service (FAS Russia) issued injunctions to “Novorossiysk Commercial Seaport” PJSC (“NCSP” PJSC), “First Container Terminal” JSC (“FCT” JSC), “Petrolesport” JSC and “Vostochnaya Stevedoring Company” Ltd. (“VSC” Ltd.) to eliminate antimonopoly violations and transfer the income gained as a result of abusing dominance to the federal budget.

Under the injunctions, the companies must transfer the income gained through violating the antimonopoly law to the federal budget: “NCSP” PJSC – 9.74 billion RUB, “FCT” JSC – 4.17 billion RUB, “Petrolesport” JSC and “VSC” Ltd. – 1.27 and 1.6 billion RUB accordingly. The companies should transfer the funds within 180 calendar days upon receiving the injunctions.

Conduct requirements issued by the antimonopoly body include a list of measures that the companies should undertake to eliminate the violations.

In particular, the antimonopoly body requires “NCSP” PJSC to: abolish monopolistically high prices for the services set by “NCSP” PJSC; convert the prices for transshipment of ore, fertilizers, containers, ferrous and non-ferrous metals, oil and petrochemicals in Russian Rubles;  set prices for the services of transshipment of ore, fertilizers, containers, ferrous and non-ferrous metals, oil and petrochemicals at the level of actual prices in Ruble equivalent fixed by stevedores as of 30 June 2014, in view of possible indexing for consumer price index (for the past periods) and the forecast of social-and-economic development in the Russian Federation (for forthcoming periods). “FCT” JSC, “Petrolesport” JSC and “VSC” Ltd. are required to eliminate economically justified tariffs for container transshipment services, ranged depending on container types, in Russian Rubles.

The companies will also have to notify all counteragents to change prices for transshipment services. If they decide to increase tariffs for transshipment services they must notify FAS about such decisions 45 days prior to the planned increase. In addition to the above, the stevedores must publish information about the current tariffs on their official web-sites. The timeframe for implementing the described measures – 30 calendar days from receiving the injunction.

FAS points out that the companies are required to pay the funds gained through abusing dominance using port assets, to the budget. FAS emphasizes: “The question of economic expediency of maintaining such a low level of lease fee for port infrastructure use remains open. We work on it together with the Ministry of Finances and the Federal Property Management Agency [Rosimuschestvo]”.

In March 2017 FAS found that “NCSP” PJSC, “FCT” JSC, “Petrolesport” JSC and “VSC” Ltd. violated the antimonopoly law by abusing dominance: fixing and maintaining monopolistically high prices. In case of “NCSP” PJSC it concerned prices for transshipment of ore, fertilizers, containers, ferrous and non-ferrous metals, oil and petrochemicals in Novorossiysk port. Violations committed by “FCT” JSC and “Petrolesport” JSC related to the prices for container transshipment services in “Big Port St Petersburg” seaport. FAS found that “VSC” Ltd. fixed and maintained monopolistically high prices for container transshipment services in “Vostochny” seaport.

Taking into account the case circumstances and in view of the decision of FAS Presidium on the punishments for the violations when damages are significantly higher than the maximum turnover fine, the antimonopoly body issued injunctions to the companies to stop violating the antimonopoly law and transfer the income gained through monopolistic activity to the federal budget.