EU Shipping Law

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Regulation 4057/86: dumping of shipping services and the unfair pricing of shipping services

A. Introduction

17.001 “Dumping” occurs when a product or service from one country is introduced on to another country’s market at less than the normal value of that product or service. This practice has serious consequences for the economy in which the goods or services are dumped because it undermines unfairly industry in that second economy.1 Dumping can be a temporary phenomenon but the consequences can be long lasting. The European Union (“EU”) has fallen victim to dumping in sectors such as photocopiers, textiles, footwear and, most importantly for present purposes, shipping services.2 There is no doubt that the dumping by some non-EU shipowners particularly, the former USSR, of their freight rates on the EU markets had a detrimental effect on EU shipowners.3 The former USSR was able to “dump” shipping services because it had a desire for hard currency,4 a large shipping fleet and a cost base lower than western shipowners because it did not fact the same expenses (e.g. insurance and lower wage costs). The EU responded to such dumping by adopting Council Regulation 4057/86,5 which was the first EU anti-dumping

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measure to deal with services.6 The purpose of Regulation 4057/86 is to provide a remedy against:

“unfair pricing practices by certain third country7 shipowners engaged in international cargo liner shipping, which causes serious disruption of the freight pattern on a particular route to, from or within the [EU] and cause or threaten to cause major injury to [EU] shipowners operating on that route and to [EU] interests.”8

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