The Antimonopoly Committee of Ukraine has fined the State Enterprise “Mykolayiv Commercial Sea Port” and the State Enterprise “Delta-pilot” UAH 600 thousand and UAH 30 thousand respectively, for abuse of monopoly provision of vessel escort and implementation of navigation safety. The Committee also acknowledged the commitment of anticompetitive practices of the State Enterprise “Mykolayiv Commercial Sea Port” Ryabchykov P.S., and violations of the Ministry of Transport and Communications, which was to legitimize actions of captain. This decision was made during the Committee meeting on the 21st of September. In October 2009, “NIBULON” became a hostage of the crisis that has already been existing for many years in the sphere of transport, including maritime transport. This situation arose mainly because of self-confidence and inaction of the government authorities in this field. ByOrder of the Ministry of Transport and Communications of Ukraine №211 dd 17.03.2003,functions ofgovernment supervision of international and national requirements for safety of navigation on navigable waterways and aquatic areas of Bug-Dnipro region and also maintenance of hydrotechnical constructionsand aquatic areas that are used for commercial shipping by performer of entrepreneurial activitiesregardless the ownership, except for sea trade ports were assigned to the State Enterprise “the Dnieper-Bug sea trade port”. On the basis of administrative order of the Cabinet of Ministers of Ukraine dd 23.07.2008 № 1013-r the State Enterprise “the Dnipro-Bug sea trade port” was reorganized by joining to the State Enterprise“Mykolayiv Commercial Sea Port”. During proceedings in a caseof concentration of these ports by the Antimonopoly Committee of Ukraine, it was found that the State Enterprise“Mykolayiv Commercial Sea Port” does not perform cargo operations and it is not a performer of the national market of loading and unloading operations on transshipment on freight vessels, but performs only the functions of government supervision of international and national requirements for safety of navigation on navigable waterways and aquatic areas of Bug-Dnipro region, and also maintenance of hydrotechnical constructionsand aquatic areas that are used for commercial shipping by performer of entrepreneurial activitiesregardless the ownership, except for sea trade ports. Thus, as a result of joining of the State Enterprise “The Dnipro-Bug sea trade port” to the State Enterprise“Mykolayiv Commercial Sea Port”, the last has acquired supervisory powers as to other entities of trade shipping, including those who are competitors of the port on the national market of the port loading and unloading (stevedore) works. Navigable waterway, which links the Mykolayiv port and the Black Sea, includes the Bug-Dnieper-Limansky channel(thirteen bends), the channel of aquatic area of Mykolayiv port (two bends) and Spas’kyy channel. These waterways under the legislation of Ukraine are the objects of transport infrastructure of public usage, i.e. the objects of public law. In a view of the reorganization of to the State Enterprise “The Dnipro-Bug sea trade port” transit navigable waterways are relegated to the aquatic area of “Mykolayiv Commercial Sea Port”: the thirteenth bend of Bug-Dnieper-Limansky channel and the first bend of the aquatic area of Mykolayiv Portby the Cabinet of Ministers of Ukraine dd 22.10.2008 № 934. As a result of this decision port received in sole use a transit navigablewaterway, the destruction of its integrity happened, the port received a monopoly position on the market of specialized port services in the aquatic area of the Bug-Dnieper-Limansky channeland was able to abuse this situation, undulyexecuting its duties refraining the navigable waterway and limiting other economic entities in the ability to carry on transshipment of cargo to the merchant vessels with displacementof over 50 thousand tons. In this regard, competitors of the port became dependent on it, among them – is one of the leaders of agricultural market of Ukraine “NIBULON”. We want to remind you that in October 2009 cargo ship «PREVENTER» arrived flying flag of Panama for the loading of barley of Ukrainian origin in the amount of about 65 thousand tons to the berth of transshipment terminal of “NIBULON” to the Ukraine’s territorial waters. But within 141 days ship journeyto the berth of “NIBULON” was blocked. Formally, this decision was made on behalf of Captain of “Mykolayiv Commercial Sea Port” P. Ryabchykov. The content of the decision was to refuse approval of applications for escort of vessel «PREVENTER» from the raid of the port “Yuzhnyy” to the berth of “NIBULON”. Captain P. Ryabchykov motivated his decision as if the size of the vessel does not meet the dimensions of adjacent aquaticto the berth of transshipment terminal of “NIBULON” areas. This decision of the captain was refuted by numerous proofs. One of them is the passport of the aquatic area, created in 2007 by a specialized organization that has the recognition of Shipping Register of Ukraine. According to the document adjacent to the berth of “NIBULON” aquatic area can take vessels of up to 70 thousand tons and a length of about 225 m. The only restriction under this passport is: loading of these vessels to incomplete capacity to immersion of no more than 9,2 m. Despite the convincing arguments of “NIBULON”, captain of the port insisted on previous made decision and on the 16th of October he even issued several regulations, which categorically prohibited vessel «PREVENTER» journeyto the berth of “NIBULON” without identifying specific actions and the validity of this decision. For a long time “NIBULON” offered the captain of the port to take all the appropriate measures at the expense of the company in order to ensure safe journey of the vessel. But in no way justifying its decision, the captain insisted on the impossibility of the vessel journey. Thus the captain openly ignored the fact that in the period of work of the Black Sea shipbuilding yard as a leading enterprise in the Soviet Union, dozens of vessels unberthed from the yard including those that were military-oriented, their length was much greater than the length of «PREVENTER», and the fact that in June-August 2008, when the transshipment terminal was already working, two large tonnage vessels of similar size as «PREVENTER» successfully called to its berth. In these circumstances rejecting the arguments of “NIBULON” P. Ryabchykov manipulated documents that contain strong signs of fraud. In particular, P. Ryabchykov issued his decision to ban the vessel «PREVENTER» call with a report of the captain of “The Dnipro-Bug sea trade port” A. Konovalchuk. After the investigation by the Antimonopoly Committee of a violation of legislation on protection of economic competition, it was found that the report of the O. Konovalchuk included corrupt information as to the allegedly receiving messages from the harbor pilots Davydov and Lysyy, who conducted large tonnage vessels at the dock of “NIBULON” in June and August of 2008. It became clear that P. Ryabchykov under any circumstances, had no intentions to reconsider his previous decision and tried to counteract the economic activity of “NIBULON” illegally. Wrongfulness of actions of port’s captain was also set judicially, including resolution of Mykolayiv county administrative court dd 04.12.2009, the action of P. Ryabchykov as to refusal to approve applications for escort of vessel «PREVENTER» to the berth “NIBULON” were declared illegal, also regulations dd10.16.2009 № 45/2009 concerningthe call of «PREVENTER» issued by Mr. Ryabchykov were declared illegal and cancelled. Despite the court decision captain of the port continued to refuse to approve applications for pilotage. Thus at the same time when the vessel «PREVENTER» was awaiting for a legal decision of port’s captain, P. Ryabchykov agreed escort of several vessels of similar size to the berth of “Mykolayiv Commercial Sea Port”, including ship «MILOS», which was escorted with numerous violations of the applicable rules of navigation, including: 1) vessel with no ice class was escorted in ice conditions, 2) the pilotage was carried out in the dark, which is strictly forbidden by existing rules. It was evident that actions of P. Ryabchykov are discriminatory against “NIBULON”, they are objectively unreasonable and contain evidence of anticompetitive practices. Since December 2009, P. Ryabchykov has been advancing additional demands for granting permission for pilotage. In particular, P. Ryabchykov demanded from «PREVENTER» owner letters of guaranty, notarized and legalized according to which the vessel would incur obligations to cover possible losses and damages to port that may arise during «PREVENTER» call of the first bend of “Mykolayiv” port. P. Ryabchykov imposed even such a requirement as approval of the letter of guaranty by several foreign insurance companies that insured «PREVENTER» and civil liability of its owner. These requirements of P. Ryabchykov are not based on law and they are absolutely false. During the investigation the AMCU found that demands were not imposed to other owners of vessels by the port captain that shows their obvious discriminatory nature to “NIBULON”. The AMCU gave a proper assessment to the actions and decisions of the port captain and it was found that they are anti-competitive actions of the administrative management and control, that is the port captain within the meaning of the law “On Protection of Economic Competition”. During the investigation of violations of the law of Ukraine “On Protection of Economic Competition” the AMCU found that water of the first bend of the channel of Mykolayiv port according to the Cabinet of Ministers of Ukraine decree dd 22.10. 08 № 934was given in use to the state enterprise “Mykolayiv Commercial Sea Port”. At the same time art. 75 of the Code “Commercial navigation” of Ukraine seaports were sealed to control and maintain the declared depth in aquatic areas and in approach channels of ports. The declared width of the first bend of Mykolayiv port is 80 meters, which is enough for a vessel of «Panamax» type, is set by sailing directions of the Black and the Azov seas in the waters of Ukraine. During the investigation of the case the AMCU found out that in October 2009 the official Web site of the Ministry of Transport and Communications contained information that allegedly declared depth of first bend of “Mykolayiv” port does not correspond to valid, in particular hydrographic survey, that were made by the Ministry of Transport and Communications on the 18th of October, it was found that there is a narrowing of the channel in places up to 48 m. In turn, the port’s captain subsequently used this information and motivated the following conditions for approval of applications for vessel «PREVENTER» pilotage allegedly by narrowing of the first bend of the channel aquatic area of Mykolayiv port. Given that “The Dnipro-Bug sea trade port”, that wasreorganized by joining to “Mykolayiv Commercial Sea Port” on the basis of order of the Cabinetof Ministers of Ukraine) was entrusted with responsibility for proper maintenance of the first bend of the channel aquatic area of Mykolayiv port in 2008, the AMCU made a reasonable conclusion that it is “Mykolayiv Commercial Sea Port” which is responsible for maintaining the width of the site of navigable waterway at the declared size, i.e. at 80 m. Such width of large tonnage vessels,including «PREVENTER», allows pilotage possible and safely. The AMCU found that maintaining of navigable passages, including the aquatic area and the approach channel of ports in proper and suitable states for safe operation is the service of marine on navigation security enforcement. These services are a commodity. Their cost is paid by vessel owners by paying relevant port charges. The AMCU found that during the period from January 2009 to July 2010 inclusive,  “Mykolayiv Commercial Sea Port” within the water area assigned to it, held a monopoly dominant position in the port service market on navigation security enforcement with a share of 100%. Retention of the first bend of the channel aquatic area of Mykolayiv port in suitable condition for navigation and maintaining declared navigational sizes are a part of such services. In fact, the Committee determined that port had abused its monopoly position in the market by illegal retention of channel, which led to infringement of interests of other entities, including infringement of the interests of “NIBULON” and inflicting considerable material damage. In this regard, the ports’ actions were qualified by the AMCU according to art. 13 of the Law “On Protection of Economic Competition” and a fine of USD 300 thousand was also imposed for violations. Under the existing laws, state pilot must appear on any vessel immediately, which sent a request for the pilot. Current legislation does not set any conditions for sending a pilot on this vessel. In practice, in view of relevant legislation “Delta-pilot” is the only entity that provides pilot services, vessel escort on inland waterways of Ukraine and in the territorial waters of Ukraine. The AMCU basing on analysis of the material revealed that during the time from January 2009 to July 2010 inclusive “Delta-pilot” had a monopoly position on the national market for pilot services and vessel escort with a share of 100%. In other words, “Delta-pilot” is the only entity that can provide such services. «PREVENTER» had forced outage and was caused by the fact that “Delta-pilot” despite their own conclusion, that was made in October 2009 about the possibility of «PREVENTER» escort to the berth of “NIBULON”, denied admission to the implementation of applications submitted by sea agent of «PREVENTER» and did not assign the pilot on board of the vessel for its escort from the raid of the port “Yuzhnyy” to the berth of “NIBULON” for almost 5 months. The current legislation does not provide the possibility of refusal of state pilot service to provide pilot services only considering the fact that the port’s captain does not agree upon an appropriate application for pilot escort. The AMCU made an analysis of current legislation on this issue and found out that sending a pilot on board of the vessel that requests for him is an absolute duty of “Delta-pilot”. Denial of provision of such services was assessed as abuse of  monopoly on the national market of pilot services in the form of denial of disposal of goods in the absence of alternative sources of its purchase by the AMCU. In this context actions of “Delta-pilot” were assessed as an abuse of monopoly position according to the art. 13 of the Law “On Protection of Economic Competition”, for the violation of the law company was fined USD 30 thousand. The Committee also examined compliance with antitrust laws by the Ministry of Transport and Communications of Ukraine during the consideration of numerous complaints and appeals of “NIBULON” over anticompetitive practices of port’s captain. The fact is that according to the art. 89 of the Merchant Shipping Code of Ukraine that is the Ministry of Transport and Communications of Ukraine which empowered to cancel orders of port’s captain. Thus, under this law the Ministry of Transport and Communications had sufficient authority to cancel the illegal and unfoundedlyregulation of “Mykolayiv Commercial Sea Port’s” captain about the prohibition of «PREVENTER» escort to the berth of “NIBULON”. But despite the complaints of “NIBULON” and ignoring the decision of Mykolayiv Regional Administrative Court dd 12.04.2009, the Ministry of Transport and Communications did not invoke a given right and did not abolish the illegal regulation of port’s captain, which caused violation of the legislation On Protection of Economic Competition. The omission of the Ministry of Transport and Communications of Ukraine constitutes the violation of antimonopoly legislation that is described in art. 17 of the Law of Ukraine“On Protection of Economic Competition”, namely: