Formosa Oilseed Processing Co., Ltd. and 18 other enterprises applied to extend the period that they are permitted to engage in concerted action in jointly chartering cargo ships to import soybeans
Case:
Formosa Oilseed Processing Co., Ltd. and 18 other enterprises applied to extend the period that they are permitted to engage in concerted action in jointly chartering cargo ships to import soybeans
Key Words:
soybeans, jointly charter cargo ships for the purchase and import
Reference:
Fair Trade Commission Decision of August 21, 2003 (the 615th Commissioners' Meeting)
Industry:
Bean Product Manufacturing (0894)
Relevant Law:
Summary:
1. A 3 March 1993 resolution of the 74th Commissioners' Meeting of the Fair Trade Commission (FTC) conditionally approved an application by the Formosa Oilseed Processing Co., Ltd. (the Respondent) and 25 other companies to jointly charter cargo ships for the purchase and import of soybeans, for a period to expire on 31 March 1994. The Respondent subsequently represented all 26 companies in twice applying to extend the approval period, applying on behalf of four additional companies, or 30 in total, the second time. These two applications were reviewed on 30 March 1994 by the 129th Commissioners' Meeting and on 26 March 1997 by the 282nd Commissioners' Meeting, respectively, and extended the period to 31 March 2000. Following expiration of that period, the Respondent on 14 April 2000 again applied to the FTC on behalf of all 30 companies to further extend the approval period. However, the most recent application exceeded the period prescribed in Article 15(2) of the Fair Trade Law: "The approval shall specify a time limit not exceeding three years. The enterprises involved may, with justification, file a written application for an extension thereof with the Central Competent Authority within three months prior to the expiration of such period; provided, however, that the term of each extension shall not exceed three years." Furthermore, six among the 30 applying companies continued to jointly charter three cargo shipments of soybeans, on 18 April, 4 May and 18 May 2000, in violation of the prohibitions on concerted action set out in Article 14 of the Fair Trade Law. By an 18 August 2000 resolution of the 458th Commissioners' Meeting, the parties involved were ordered to immediately cease the concerted action and each imposed an administrative fine of NT$100,000. Meanwhile, the Respondent filed a new application with the FTC to jointly charter cargo ships for the purchase of soybeans on behalf of itself and 10 other companies, which was conditionally approved on 18 August 2000 by the 458th Commissioners' Meeting, with a period to expire on 31 August 2003. During the approval period, Chia Fha Chang Agricultural Chemistry Co., Ltd. withdrew from the original group of 11 companies, while Horng Sen International Co., Ltd., Ding Sen International Co., Ltd., China Rebar Co., Ltd., Chien Shun Steel Co., Ltd., Tong Shun Steel Co., Ltd., China Union Oil Corp., Panfood Trading Co., Ltd., Taimei Trading Co., Ltd. and Great Steady Co., Ltd. applied to the FTC for approval to join the joint chartering and purchasing consortium' s application. Following these changes, there were now 19 enterprises applying for approval to jointly charter cargo ships and purchase soybeans and as the previous approval period had elapsed on 31 August 2003, these enterprises applied in writing to the FTC for an extension.
2. Soybeans are freely importable commodity and there are no government restrictions regarding the qualifications of importers, enterprises may freely register an amount to be imported and are free to arrange an appropriate time for delivery to maximize business opportunity and complement the supply and demand circumstances of the market. Furthermore, the concerted action of jointly chartering cargo ships can lower import costs; reduce warehousing losses, excess capital and interest obligations; lower procurement risk and increase external bargaining power in the event of a trade dispute, all beneficial to the overall economic and public interest. This application to extend the approval period for joint chartering of cargo ships for soybeans procurement was in compliance with the provisions of Article 15(2) of the Fair Trade Law, the application documents were in compliance with the provisions of Article 25(1) of the Enforcement Rules to the Fair Trade Law, and the enterprises were capable of meeting a condition attached to the approval requiring them to periodically report relevant information to the FTC. The application for joint chartering of cargo ships for soybeans procurement would have no adverse impact on the market, and the conditional approval was thereby granted for a period of three years to 31 August 2006.
Appendix:
Formosa Oilseed Processing Co., Ltd.' s Uniform Invoice Number: 22102298
Summarized by Hwu, Ji-Shyan; Supervised by Wu, Bi-Ju