The Administrative Council for Economic Defence (CADE) recently fined two port operator companies operating in the Santos Port. CADE found that the imposition of the terminal handling charge known as 'THC-2' for customs-bonded dockside terminals at the Santos Port was anti-competitive.

Both companies appealed CADE's fine. The court of first instance upheld CADE's fine. However, on appeal, the Fourth Panel of the Regional Federal Appellate Court(1) annulled CADE's decision and repealed the fine applied to the port operators.

The appellate court highlighted that the THC-2 cannot be mistaken with the THC. On the one hand, the THC refers to the movement of a container from the ship's hold to the existing pile of containers at the terminal. On the other, the THC-2 refers to the transfer of a container from its original pile to a segregated location at the request of customs. According to the appellate court, the THC-2 relates to an extra cost for port operators which is not included in the THC. As such, the court held that the collection of the THC-2 from the port operators was justified.

The appellate court's decision went on to affirm that CADE should not intervene in issues relating to the THC-2; as such, the court found CADE's conduct to be abusive. It also observed that the matter in question would more properly fall under the jurisdiction of CODESP (Companhia Docas do Estado de Sao Paulo) and the Brazilian National Waterway Transportation Agency (ANTAQ) in light of ANTAQ Resolution 2389/2012, which outlines:

  • the regulatory parameters for the performance of services relating to the movement, handling and storage of containers in public use facilities at organised ports; and
  • the distinction between the services included in the 'box rate' (ie, the fee paid for the service of cargo handling between the port terminal's gate and the vessel's hold) and other client and user services, such as the segregation and delivery of containers.

For further information on this topic please contact Godofredo Mendes Vianna at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email (godofredo@kincaid.com.br). The Kincaid | Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.

Endnotes

(1) Appeal 0014995.56.2005.4.03.6100 SP.

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