News Content
EU Commission clarifies EU rules on cabotage and reports on developments in this sector
The European Commission has given new guidance on the interpretation of the regulation to provide cabotage within a Member State1, thus providing an internal market for the provision of maritime transport services. With the new guidance competent authorities will have more legal certainty when awarding public service contracts and imposing public service obligations. Shipowners will also benefit from more legal clarity, allowing them to better organise their business in Europe.
European Commission Vice-President Siim Kallas, responsible for Mobility and Transport, said: "The internal market for maritime transport services is important to the performance of the European economy and for the quality of life and prosperity of maritime regions. Member States' authorities need clear rules on how to ensure adequate links to islands and peripheral regions that are particularly dependent on maritime transport. We have listened very carefully to where clarification was needed. These updated interpretative guidelines provide this clarity and will enhance legal certainty for all maritime cabotage actors in the EU."
The new guidance updates the previous Commission's guidance2 in order to align it to recent EU law and case-law of the Court of Justice. In future, there will be more flexibility in defining the duration of public service contracts. The new guidance is presented in the interest of transparency and legal certainty to help explain the EU rules to all actors that wish to make use of it.
Amongst other things the interpretative communication adopted today provides updated guidance on:
• the scope of the freedom to provide services in the maritime cabotage sector
• who enjoys that freedom and which services the Regulation covers,
• the award procedure for public service contracts,
• the duration of public service contracts,
• the manning rules on vessels providing maritime cabotage,
• the application of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) No. 1191/69 and 1107/703 to maritime cabotage services,
• transitional arrangements for Croatia.
Member States and stakeholders were fully involved and consulted in the process of preparation of the report and the new interpretative guidelines.
Today, the Commission has also presented its fifth report on the freedom to provide services to maritime transport within Member States (maritime cabotage)4.
Almost all cabotage services in the EU have been liberalised from 1 January 1999. The Greek market, which was among the last to be partly protected, has been opened up to competition since 1 November 2002. Croatia is the only Member State that still can apply the temporary derogation from certain provisions of the Regulation, until 31 December 2014.
Regarding market developments, the Commission has reported that until 2007, the maritime cabotage market in the EU recorded a continuous increase in volumes of goods and numbers of passengers transported in several countries. Since 2008 it has experienced a considerable decline, due to the impact of the economic crisis.
Facts and figures
As in previous years, the greatest market for cargo traffic is that of the United Kingdom and Spain (each around 80 million tonnes a year), followed by that of Italy (around 60 million tonnes). Liquid bulk continues to lead in terms of cargo transported.
Regarding passengers, Greece has the greatest traffic (60 million passengers a year), followed by Italy (40 million passengers).
Finally, according to the available data the penetration of the national markets by vessels flying non-national flags has slightly increased in the cabotage of cargo in three Member States, while it remains limited in the cabotage of passengers.
Frequently asked questions
Council Regulation (EEC) No 3577/92 (hereinafter the 'regulation') applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage)1is now over twenty years old. Since its entry into force on 1 January 1993, maritime cabotage has undergone gradual liberalisation.
Since 1993, the Commission has reported several times on the economic and legal progress of this liberalisation . It has also addressed the problems of interpretation raised by the regulation in its interpretative communications of 2003 and 2006.
The Commission is now enhancing legal certainty for all actors in maritime cabotage sector by providing updated guidelines on key provisions of the regulation.
1. Why are new interpretative guidelines needed for Regulation 3577/92?
On the occasion of preparing the fifth report on the implementation of the Regulation, and in particular after having consulted Member States and stakeholders, the Commission has become aware of the need to further clarify and update certain aspects of its guidance on the application of this Regulation.
The present interpretative communication updates the previous guidance in order to align it to recent EU law, mainly on public procurement and service concessions, and case-law of the Court of Justice. It also better reflects the changes in the Commission's understanding of certain provisions of the Regulation.
2. What provisions do the Commission's interpretative guidelines cover?
The guidelines cover most of the provisions of the regulation that have been signalled to the Commission as being unclear. These points have been brought to the attention of the Commission for instance through questions from Members of the European Parliament and complaints, as well as through queries from shipowners and national authorities in Member States.
In particular, the updated guidelines provide further clarifications on
• the scope of the freedom to provide services in the maritime cabotage sector (who enjoys that freedom and which services the Regulation covers),
• the award procedure for public service contracts and the duration of these contracts,
• the manning rules on vessels providing maritime cabotage,
• transitional arrangements for Croatia,
• the application of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) No. 1191/69 and 1107/70 to maritime cabotage services.
3. What is the main change in the Commission's interpretation?
The main change in the Commission's interpretation relates to the duration of public service contracts.
Public service contracts should have a limited duration in order to allow regular and open prospecting of the market. With a view to complying with the principle of proportionality in any market intervention, Member States should choose the least distortional means, also in terms of duration, to meet the essential maritime transport needs.
In its interpretative Communication of 2003 the Commission allowed public service contracts of up to six years.
However, the Commission's experience since 2003 has shown that in some cases the six years limit puts shipowners off bidding as they consider this duration to be too short to recoup the investments in the operation of the service. Likewise, contracts of short duration might discourage shipowners from making more substantial investments, thus hampering innovation and possible improvements in the quality of the service.
For this reason the Commission decided to amend its earlier interpretation to allow for more flexibility in defining the duration of public service contracts. The new guidelines indicate that public service contracts with the duration of up to 12 years can meet the proportionality requirement provided that they are justified by objective criteria, such as the need to recoup the investments made in operating the maritime cabotage service under normal operating conditions (e.g. investments in vessels or infrastructure).
4. What is the impact of these guidelines?
The interpretative guidelines simply present the Commission's interpretation of the Regulation. They do not set out to revise the Regulation or to encroach on the Court of Justice's jurisdiction in matters of interpretation.
Therefore, they will not imply any costs to stakeholders as they will not - and cannot - create new obligations. In fact, they will only generate benefits in terms of increased legal certainty.
Source: European Commission
European Commission Vice-President Siim Kallas, responsible for Mobility and Transport, said: "The internal market for maritime transport services is important to the performance of the European economy and for the quality of life and prosperity of maritime regions. Member States' authorities need clear rules on how to ensure adequate links to islands and peripheral regions that are particularly dependent on maritime transport. We have listened very carefully to where clarification was needed. These updated interpretative guidelines provide this clarity and will enhance legal certainty for all maritime cabotage actors in the EU."
The new guidance updates the previous Commission's guidance2 in order to align it to recent EU law and case-law of the Court of Justice. In future, there will be more flexibility in defining the duration of public service contracts. The new guidance is presented in the interest of transparency and legal certainty to help explain the EU rules to all actors that wish to make use of it.
Amongst other things the interpretative communication adopted today provides updated guidance on:
• the scope of the freedom to provide services in the maritime cabotage sector
• who enjoys that freedom and which services the Regulation covers,
• the award procedure for public service contracts,
• the duration of public service contracts,
• the manning rules on vessels providing maritime cabotage,
• the application of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) No. 1191/69 and 1107/703 to maritime cabotage services,
• transitional arrangements for Croatia.
Member States and stakeholders were fully involved and consulted in the process of preparation of the report and the new interpretative guidelines.
Today, the Commission has also presented its fifth report on the freedom to provide services to maritime transport within Member States (maritime cabotage)4.
Almost all cabotage services in the EU have been liberalised from 1 January 1999. The Greek market, which was among the last to be partly protected, has been opened up to competition since 1 November 2002. Croatia is the only Member State that still can apply the temporary derogation from certain provisions of the Regulation, until 31 December 2014.
Regarding market developments, the Commission has reported that until 2007, the maritime cabotage market in the EU recorded a continuous increase in volumes of goods and numbers of passengers transported in several countries. Since 2008 it has experienced a considerable decline, due to the impact of the economic crisis.
Facts and figures
As in previous years, the greatest market for cargo traffic is that of the United Kingdom and Spain (each around 80 million tonnes a year), followed by that of Italy (around 60 million tonnes). Liquid bulk continues to lead in terms of cargo transported.
Regarding passengers, Greece has the greatest traffic (60 million passengers a year), followed by Italy (40 million passengers).
Finally, according to the available data the penetration of the national markets by vessels flying non-national flags has slightly increased in the cabotage of cargo in three Member States, while it remains limited in the cabotage of passengers.
Frequently asked questions
Council Regulation (EEC) No 3577/92 (hereinafter the 'regulation') applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage)1is now over twenty years old. Since its entry into force on 1 January 1993, maritime cabotage has undergone gradual liberalisation.
Since 1993, the Commission has reported several times on the economic and legal progress of this liberalisation . It has also addressed the problems of interpretation raised by the regulation in its interpretative communications of 2003 and 2006.
The Commission is now enhancing legal certainty for all actors in maritime cabotage sector by providing updated guidelines on key provisions of the regulation.
1. Why are new interpretative guidelines needed for Regulation 3577/92?
On the occasion of preparing the fifth report on the implementation of the Regulation, and in particular after having consulted Member States and stakeholders, the Commission has become aware of the need to further clarify and update certain aspects of its guidance on the application of this Regulation.
The present interpretative communication updates the previous guidance in order to align it to recent EU law, mainly on public procurement and service concessions, and case-law of the Court of Justice. It also better reflects the changes in the Commission's understanding of certain provisions of the Regulation.
2. What provisions do the Commission's interpretative guidelines cover?
The guidelines cover most of the provisions of the regulation that have been signalled to the Commission as being unclear. These points have been brought to the attention of the Commission for instance through questions from Members of the European Parliament and complaints, as well as through queries from shipowners and national authorities in Member States.
In particular, the updated guidelines provide further clarifications on
• the scope of the freedom to provide services in the maritime cabotage sector (who enjoys that freedom and which services the Regulation covers),
• the award procedure for public service contracts and the duration of these contracts,
• the manning rules on vessels providing maritime cabotage,
• transitional arrangements for Croatia,
• the application of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) No. 1191/69 and 1107/70 to maritime cabotage services.
3. What is the main change in the Commission's interpretation?
The main change in the Commission's interpretation relates to the duration of public service contracts.
Public service contracts should have a limited duration in order to allow regular and open prospecting of the market. With a view to complying with the principle of proportionality in any market intervention, Member States should choose the least distortional means, also in terms of duration, to meet the essential maritime transport needs.
In its interpretative Communication of 2003 the Commission allowed public service contracts of up to six years.
However, the Commission's experience since 2003 has shown that in some cases the six years limit puts shipowners off bidding as they consider this duration to be too short to recoup the investments in the operation of the service. Likewise, contracts of short duration might discourage shipowners from making more substantial investments, thus hampering innovation and possible improvements in the quality of the service.
For this reason the Commission decided to amend its earlier interpretation to allow for more flexibility in defining the duration of public service contracts. The new guidelines indicate that public service contracts with the duration of up to 12 years can meet the proportionality requirement provided that they are justified by objective criteria, such as the need to recoup the investments made in operating the maritime cabotage service under normal operating conditions (e.g. investments in vessels or infrastructure).
4. What is the impact of these guidelines?
The interpretative guidelines simply present the Commission's interpretation of the Regulation. They do not set out to revise the Regulation or to encroach on the Court of Justice's jurisdiction in matters of interpretation.
Therefore, they will not imply any costs to stakeholders as they will not - and cannot - create new obligations. In fact, they will only generate benefits in terms of increased legal certainty.
Source: European Commission
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