EU Shipping Law

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Regulation 4058/86: co-ordinated action to safeguard free access to cargoes in ocean trade

A. Introduction

18.001 Council Regulation 4058/861 enables co-ordinated action to be taken by the European Union (“EU”) to safeguard free access to cargoes in ocean trade. 18.002 The regulation was another element in the December 1986 package of shipping measures adopted by the Council under its then UK Presidency.2 It provides a procedure to be used where certain trade practices by a third country3 or its agents threaten to restrict free market access by Member States’ shipping companies to ocean trade. In essence, it establishes a procedure for Member States to join together so as to resist cargo-reservation or other trade impediments by non-EU Member States. 18.003 The regulation was adopted because Member States believed that there was a need to ensure a free competitive environment, particularly in the dry and liquid bulk trades. As Heldring commented: “[t]he [Union] champions freedom of the seas, so it is very unusual for it to take countermeasures in shipping. However, it [was] clear that there were deficiencies in the EU’s arsenal which put freedom of the sea at risk.”4 It is therefore another expression5 of the EU’s commitment to free market economics and, moreover, ensuring such freedom where it would not otherwise occur.

B. Application of Regulation 4058/86

18.004 The regulation applies, in essence, to all types of shipping services and all types of cargo in international trades. The markets principally concerned are: (a) liner cargoes in codist trades (except in the case of restrictions from the United Nations Code of Conduct on Liner Conferences (“UNCTAD Code”)); (b) liner cargoes in non-codist trades; (c) bulk cargoes and any other cargo on tramp services; (d) passengers; as well as (e) persons and goods to or between offshore installations.

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C. Legal bases of Regulation 4058/86

18.005 The legal bases of the regulation were what are now the Treaty on the Functioning of the European Union (“TFEU”) and Article 100(2) of the TFEU.

D. Background to Regulation 4058/86

18.006 The recitals to the regulation are instructive and provide as follows:

“Whereas an increasing number of countries6 resort to protecting their merchant fleets either unilaterally, through legislation or administrative measures, or through bilateral agreement with other countries;

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