FAS Russia oblidges NCSP transfer revenue from its monopolistic activities into the federal budget
On 22 March 2017, Federal Antimonopoly Service of Russia (FAS Russia) acknowledged Novorossiysk Commercial Sea Port (NCSP PJSC) as violating Clause 1 Part 1 Article 10 of the Federal Law “On Protection of Competition” through fixing and maintaining monopolistically high prices for services on transshipment of ore, fertilizers, containers, ferrous and non-ferrous metal, crude oil and oil products at the port of Novorossiysk.
Following the monitoring of prices for services on loading/unloading of cargo at seaports of the Russian Federation, FAS opened a case against the stevedoring companies on 17 June 2016.
Having considered the case, the Commission of FAS Russia found out that the prices for the mentioned services had been set in US dollars and that prices for loading/unloading of cargo in export/import segment were raised from 1 January 2015.
The analyses of the natural monopoly’s business activities showed that the final cost of the services increased without good reason.
Expenses of NCSP PJSC for rendering services on loading/unloading of ore, fertilizers, containers, ferrous and non-ferrous metal, crude oil and oil products had changed but those changes did not correspond to the growth of tariffs set by the stevedore. The list of buyers of NCSP services on loading/unloading of ore, fertilizers, containers, ferrous and non-ferrous metal, crude oil and oil products saw no significant changes. General conditions of the commodities (services) circulation remained unchanged but that change was disproportionate to the change of prices.
The profit of NCSP in 2015 doubled (207%) versus 2014, profitability grew from 56 to 300%.
According to the conclusions of the Commission, NCSP which holds the dominating position as a natural monopoly did not have good reasons for the increase of rates in 2015, so the company took advantage of its dominance and set the monopolistically high prices.
FAS Russia says the violation could be escaped if the prices were not set in US dollars and if the prices earlier set in foreign currency were converted into Russian roubles.
The decision of FAS Presidium was to oblige NCSP transfer the revenue from monopolistic activities into the federal budget. The instructions will be issued by the Commission and given to the company with the full text of the decision.
