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Supreme Administrative Court on reduced fairway dues when carrying empty containers

Supreme Administrative Court on reduced fairway dues when carrying empty containers

12.04.2017

According to Section 1 of the Fairway Dues Act, “Fairway dues are payable to the government for ships engaged in merchant shipping in Finnish territorial waters”. The amount of fairway dues will be reduced if a ship is not fully loaded comparing to the particular loading capacity utilisation rate. According to the legislature, reducing fairway dues as a result of reduced loading capacity are based on established practice. However, the established practice has been subject to considerable interpretation.

It has been unclear whether a ship is carrying cargo in the meaning of merchant shipping and entitled to reduced fairway dues when carrying empty containers for free. On March 23 2017 the Supreme Administrative Court rendered a decision stating that a ship carrying a shipping company’s empty containers is entitled to the loading capacity reduction, while, on the other hand, a ship carrying empty containers that are not owned by the shipping company is regarded as carrying cargo.

In this case Customs charged fairway dues without granting any reduction. The decision was against the application instructions issued by the Board of Customs in 2006. According to the instructions carrying empty containers and similar platforms free of charge is not regarded as merchant shipping and hence not to be subject to fairway dues.

The Supreme Administrative Court accepted the Helsinki Administrative Court decision, where the customs decision was overruled by referring to Section 6 of the Administrative Procedure Act (434/2003), which states that the acts of the authority will protect legitimate expectations according to law. It means justified expectations towards the acts of the authority.

Partner Matti Komonen from HPP Attorneys Ltd has written an update on the amount of fairway dues and the Supreme Administrative decision. The update titled “Supreme Administrative Court on reduced fairway dues when carrying empty containers” has been published in the International Law Office`s Newsletter.