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November 26, 2015

Singapore’s MTI extends shipping block exemption for five more years

Singapore's Ministry of Trade and Industry (MTI) has extended the competition block exemption for liner shipping agreements order (BEO) for five years through 31 December 2020.

By Srivari Aishwarya

Singapore’s Ministry of Trade and Industry (MTI) has extended the competition block exemption for liner shipping agreements order (BEO) for five years through 31 December 2020.

The extension of BEO follows recommendations made by the Competition Commission of Singapore (CCS) to the ministry.

CCS has made the recommendation based on a three-week public consultation process from 25 May to 15 June this year.

"CCS has made the recommendation based on a three-week public consultation process from 25 May to 15 June this year."

The commission assessed five submissions from Singapore National Shippers’ Council, Singapore Shipping Association, Asian Shipowners’ Forum, Japanese Shipowners’ Association and the International Chamber of Shipping.

The commission also took into consideration, among other factors, the size of the Singapore economy, that the city-state is not a major port of origin or destination, and that a very large proportion of Singapore’s container cargo throughput involves transhipment.

Four of the five respondents have backed the proposed extension of the BEO.

The BEO, which was first issued in July 2006, exempts a category of liner shipping agreements from the prohibition against anti-competitive agreements, allowing two or more vessel-operating carriers to cooperate on technical, operational or commercial arrangements; price; or remuneration terms.

The liner shipping agreements continue to meet the net economic benefits criteria and those that do not substantially eliminate competition will be qualified for exemption from the prohibition against anti-competitive agreements.

These agreements will be exempted under section 34 of Singapore’s Competition Act, which prohibits agreements, decisions and concerted practises that have the object or effect of preventing, restricting or distorting competition in Singapore.

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