Sale of vessels: protection against injurious pricing

On 30 June 2016 the Regulation (EU) 2016/1035 of the European Parliament and of the Council of 8 June 2016 on protection against injurious pricing of vessels was published in the Official Journal of the European Union. It consists in a codification of the Council Regulation (EC) No 385/96, following its substantial amendments.

Pursuant to the Regulation, an injurious pricing charge may be imposed on the builder of any injuriously priced vessel whose sale to a buyer other than a buyer of the country in which the vessel originates causes injury. A vessel is considered as being injuriously priced if the export price of the vessel sold is less than a comparable price for a like vessel, in the ordinary course of trade, when sold to a buyer of the exporting country.

The term ‘injury’ refers both to material injury and threat to material injury. In the first case, its assessment is based on positive evidence and involves an objective examination of: (i) the effect of the sale at less than normal value on prices in the Union market for like vessels; (ii) the impact of that sale on the Union industry. In the second case, the determination should be based on facts and not merely on allegation, conjecture or remote possibility, taking into account factors such as: (i) whether there is sufficient freely disposable capacity on the part of the shipbuilder or an imminent and substantial increase in such capacity indicating the likelihood of substantially increased sales at less than normal value, account being taken of the availability of other export markets to absorb any additional exports; (ii) whether vessels are being exported at prices that would, to a significant degree, depress prices or prevent price increases which otherwise would have occurred, and would probably increase demand for further purchases from other countries. None of these factors itself can give a decisive guidance, but the totality of the factors considered must be as such as to lead to the conclusion that further sales at less than normal value are imminent and that, unless protective action is taken, material injury will occur.

In order to initiate an investigation to determine the existence, degree and effect of any alleged injurious pricing, any natural or legal person, or any association not having legal personality, acting on behalf of the Union industry, has to file a written complaint with the Commission or a Member State, which will then forward it to the Commission.

It should be noted that the sale of a vessel may be subject to an investigation by the Union only when the buyer of the vessel is established in the Union, and provided the ship is not a military vessel.