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  • 2015 March 12 12:39

    The EC closes the infringement procedure against Latvia in regards of providing tugboat services at the Freeport of Riga

    On February 26, 2015, the European Commission has decided to close the infringement procedure Nr.2012 / 2141 against Latvia on the violation of Article 49 of the Treaty on the Functioning of the European Union with regard to providing tugboat services at the Freeport of Riga, the company said in its press release.
     
    Thus, the JSC "PKL Flote" failed to obtain the dominant position and the opportunity to raise the tug service charge and increase its profit.

    In 2011, the European Commission received a complaint from the JSC "PKL Flote" in which it was claimed, that the company was prevented from providing tugboat services at Freeport of Riga. The complaint was lodged with the objective to make the Freeport of Riga Authority terminate providing of the tugboat services. This would have strengthened the dominant position of the JSC "PKL Flote” on the towage market at Freeport of Riga, and due to potential use of the company’s market power, a twofold increase of the towage fee at the Freeport of Riga might be possible. Such situation might result in an increase in the total costs related to calling the Freeport of Riga, and subsequently, might have a negative impact on the competitiveness of the Freeport of Riga as a transit cargo transshipment center, or the additional cost would have to be borne by the companies operating at the Freeport.

    On the basis of the JSC "PKL Flote" complaint, the European Commission began investigating this case, because according to the information provided by the JSC "PKL Flote", Latvian authorities failed to correctly apply the provisions of Article 49 of the Treaty on the Functioning of the European Union (TFEU) on freedom of establishment. The Commission was concerned that the Latvian legal and regulatory framework for the tugboat services at the Freeport of Riga does not comply with the provisions of the TFEU Article 49 on freedom of establishment.

    In this context, the European Commission Directorate-General for Mobility and Transport in May 2011 and March 2012 addressed the Latvian authorities requesting the information needed to clarify the facts, inter alia, stating the fact that the European Commission does not question the Freeport of Riga choice to provide tugboat services through its subsidiary.

    In response to requests for information, in July 2011 and in May 2012 the Latvian authorities provided mutually coordinated and detailed explanations to the European Commission on providing tugboat services at the Freeport, rejecting the allegations in regards of restrictions on freedom of establishment.
    In compliance with the European Commission General Secretariat’s letter of formal notice of 20.06.2013 - the infringement Nr.2012 / 2141, the Commission stated that in its view by combining legal, regulatory and administrative practices, the Latvian authorities have created obstacles to the freedom of establishment laid down in the Treaty on the Functioning of the European Union, Article 49, referring to the tugboat services at the Freeport of Riga. Since the Commission considered that Latvia has failed to fulfill its obligations arising from Article 49, in accordance with Article 258 it requested the Latvian government to submit its comments related to the facts and findings, provided in the Commission's letter. The Latvian government responded to the letter of formal notice with the letter of 20.08.13 and did not acknowledge the mentioned infringement.

    The Commission institutions carefully examined the information provided by the Latvian authorities, as well as all the evidence available and before making a decision on whether to continue to examine the infringement procedure in July 2014, requested to further clarify certain aspects of the case. The answer to the Commission was provided in September 2014.




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