In the previous issue of the Shipping & Transport Bulletin, we mentioned the recent opening by the European Commission of an investigation on possible State Aid given by the Port of Antwerp to PSA Antwerp and Antwerp Gateway (the two major terminal container operators of the port of Antwerp).
Given the great interest generated by that news, we would like to point out that, in a nutshell, the «anomalous» conduct of the Port Authority consisted in (i) reviewing (downwards), with retro- spective effect, the traffic goals to be achieved by the terminal operators under the operational plan (resulting in a reduction of the fine applicable to such operators); and (ii) relinquishing the collection of the fine, even if reduced as a result of the review under (i) above.
As already noted, in the case under examination, the European Commission alleged breach of Ar- ticle 107 TFEU1, considering the waiver by a public entity of a payment due by a private entity as equivalent to granting the latter an economic benefit. The impossibility to justify the benefit and the distorting effect resulting in damage to the dynamics of competition leads to identifying a vio- lation (and, as a matter of fact, it is not by chance that the complaint came from a competitor).
As is known, any objective justification regarding a benefit selectively granted to an undertaking is subject to the European Commission’s verification of compliance with the so-called «Market Economy Investor Principle». Therefore, there will be no public support when the behaviour of a public entity is similar to that of a private operator acting under similar circumstances, under nor- mal market conditions.
Thus, the European Commission will have to determine whether, and under what terms, the eco- nomic assessments undertaken by the Port Authority of Antwerp that led to a retrospective re- view of the traffic goals of the terminal operators (and the consequent reduction of the applicable fine) would have been undertaken by a private investor too, under market rules, or, otherwise, whether such decision arose from other considerations, possibly in conflict with public interest.
As mentioned in our previous article, the decision to be made by the European Commission is ex- pected to have multiple effects, not only in the European port cluster, but also in the national one.
Indeed, Articles 18, paragraph 9, of Law No. 84/1994 and 47 of the Italian Navigation Code do not provide for a pecuniary sanction only in case of breach of a operational plan.
In particular, Article 18, Law No. 84/1994 can lead to a worse consequence, i.e. the revocation of a concession agreement and Article 47 of the Italian Navigation Code provides for withdrawal of concessions in case of misuse or non-performance of the relevant obligations. Consequently, in light of the requirements imposed (and, therefore, the failure to achieve the traffic goals), the non-revocation or non-withdrawal of the concession might amount to a sanctionable State Aid.
This is not of little importance. Indeed, although Port Authorities are supposed to carry out an au- dit on the traffic data of terminal operators every year, so far there is no evidence that the failure to achieve the goal set out in the operational plan has ever been sanctioned.
As emerges from the practice, certain objective reasons might actually justify the failure to comply with the objectives set out in the operational plan, like an unexpected and significant drop in traf- fic caused by a general crisis in the sector.
In particular, any limitation affecting the operational structures of an asset granted in concession due to a local Port Authority’s failure to carry out a specific action (for example, failure to carry out dredging operations) has been recognised by administrative practice as a valid justification for the failure by a terminal operator to achieve the traffic volumes envisaged in the operational plan.
It is clear, however, that any decision of the European Commission that may result in identifying the non-revocation or withdrawal of the concession as an actual State Aid would result in a crack- down on Port Authorities’ controls. Therefore, the position of a terminal operator who fails to comply with the obligations arising from the operational plan would be much more risky.
Are we facing a future where concessions will be revoked or declared withdrawn for non- compliance? In the absence of a system involving payment of pecuniary sanctions (like the one applied in American ports), the institution of revocation or withdrawal will be the only means to comply with EU decisions, of course with all complications for homogeneous application of the principle.
It is indeed a fact that, in Italy, you may drive for only one hundred miles to find a port applying rules diametrically opposite to those of the port you come from. Therefore, once again, the city «with no sea» of Brussels will give a chance to line up the Italian port industry to the Principles of European Law.