MyCC proposes granting block exemption for liner shipping agreements
Published on: Friday, February 15, 2013
Kuala Lumpur: The Malaysia Competition Commission (MyCC) plans to issue a Proposed Block Exemption Order (BEO) for liner shipping agreements made within Malaysia or having an effect on the liner shipping services market in Malaysia. In a statement issued Thursday, MyCC said the Proposed BEO will be granted under Section 8 of the Competition Act 2010, provided all the conditions under Section 5 of the Act are satisfied.MyCC Chief Executive Officer Shila Dorai Raj said the proposal was drafted based on studies conducted on the industry, and after consultations with the relevant government agencies such as the Ministry of Finance, Ministry of Transport, Ministry of International Trade and Industry and Economic Planning Unit.
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The Proposed BEO follows the block exemption application made by the Malaysia Shipowners Association, Shipping Association of Malaysia and Federation of Malaysian Port Operators Council previously. MyCC said it may grant the Proposed BEO if it is satisfied that there are significant identifiable efficiency benefits arising from the liner shipping agreements and the benefits could not reasonably have been provided by the parties to the liner shipping agreement without the agreement having the effect of preventing, restricting or distorting competition.Others include the detrimental effect of the liner shipping agreements on competition is proportionate to the benefits provided; and the liner shipping agreement does not allow liner operators to eliminate competition completely in respect of a substantial part of the liner shipping services.MyCC said the proposed duration of the BEO is three years and after two years, should the need arise, the MyCC may review the exemption.
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"The final BEO will be made in June after the MyCC has evaluated submissions received during the Public Consultation on the proposal," it added.Spearheading the consultation is MyCC Member of Commission, Ragunath Kesavan.
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As Section 10 of the Act is not part of the Proposed BEO, parties to a liner shipping agreement can still be found liable for an infringement if they are found abusing their dominant positions in the liner shipping market. The Proposed BEO also does not cover inland carriage of goods and warehousing of goods. The Proposed BEO additionally allows liner shipping operators to offer, on the basis of individual confidential contracting, their own service arrangements, upon certain conditions. MyCC said a 30-day public consultation will be held starting Feb 19, 2013 and the Proposed BEO and consultation documents will be available for download from the MyCC website at www.mycc.gov.my on the same date.The closing date for submissions is March 18, 2013. All submissions may be sent by post or fax to the MyCC office, and/or by email to [email protected]. Stay up-to-date by following Daily Express’s Telegram channel.
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