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CADE signs Cease and Desist Agreement in the market of warehousing facilities

Cease and Desist Agreement

CADE signed, on 19 August 2015, a Cease and Desist Agreement in the market of warehousing facilities in the area of influence of the Port de Santos, in the state of São Paulo
published: Aug 31, 2015 10:00 AM last modified: May 03, 2016 06:39 PM

The Administrative Council for Economic Defense  - CADE signed, on 19 August 2015, a Cease and Desist Agreement (TCC in its acronym in Portuguese) with Rodrimar S/A Transportes, Equipamentos Industriais e Armazéns Gerais, in the context of the Administrative Proceeding no. 08012.009690/2006-39, which assesses alleged abuse of dominant position in the market of warehousing facilities in the area of influence of the Port de Santos, in the state of São Paulo.

Rodrimar acts as port operator, responsible for handling and storage of goods destined to or coming from waterway transportation in port facilities.

According to the investigations, between 2004 and 2005, Rodrimar charged warehousing facilities and importers an additional fee for cargo clearance, claiming costs related to the implementation of the International Ship and Port Facility Security Code (ISPS Code). Such code comprises security rules aiming at protecting agents involved in port activities.

According to the Reporting Commissioner Márcio de Oliveira Júnior, the Resolution 426/2005 of the National Waterway Transportation Agency (ANTAQ in its acronym in Portuguese) establishes that the charge of additional costs for remuneration of ISPS Code could not burden warehousing facilities, once the existing contractual relationship is between the ship-owner (the company that has the property of the ship transporting the goods) and the port operator. In this sense, the fee would be illegal and would generate anticompetitive effects.

By the TCC, Rodrimar agreed to collect BRL 150,000 as pecuniary contribution. The company is also prohibited to charge the abovementioned fee from warehousing facilities and importers, and to create other fees related to the adaptation and the fulfillment of ISPS Code requirements. This obligation does not prevent the charging of such fee from other economic agents.

It was also established that the company will adopt a compliance program for the fulfillment of antitrust rules, and an open-door policy with CADE. These commitments shall be implemented following deadlines and conditions foreseen in the TCC. Furthermore, the port operator will inform its clients about the terms of the agreement signed with CADE, among other obligations.

For Commissioner Oliveira Júnior, the TCC reasonably addresses the Council concerns, which justifies its signature. “The measures represent the company’s effort not only in ceasing the conduct, but also to internalize the rules of competition defense, which conveys a stronger commitment of transparency with CADE and with the market”, noted the Commissioner.

With the signature of the agreement, the Administrative Proceeding will be suspended until the agreed obligations are fulfilled.