The Warehousing Service Center of the Export Processing Zone Administration, Ministry of Economic Affairs (MOEA) violated the Fair Trade Law
Case:
The Warehousing Service Center of the Export Processing Zone Administration, Ministry of Economic Affairs (MOEA) violated the Fair Trade Law
Key words:
discriminatory treatment, patently unfair
Reference:
Fair Trade Commission Decision of 26 November 1997 (the 317 Commission Meeting); Disposition (86) Kung Chu Tzu No. 216
Industry:
Warehousing Industry (6201)
Relevant Laws:
Summary:
1. Since 1 September 1996, the Warehousing Service Center (the Center) of the Export Processing Zone Administration (the Administration) started to collect an additional 20% storage fee from incoming vehicles that carried goods to be warehoused there, and usage fees from vehicles that had come into the Export Processing Zone (the Zone) to unload the goods they had carried, on the grounds that a system needed to be established and users pay for the services they received. The complainant said that the collection of such fees was not justifiable, and no similar rules could be found in other domestic or foreign, private or public warehousing centers.
(1) Following the opening up of the transportation business inside export processing zones, transporters located outside the Zone (the External Transporters) are allowed to enter and use the Zone. The Center, in accordance with the principle that users pay for the services they received, charged the External Transporters site usage fees, which seems a rational requirement. In addition, the usage fees standards have been reported and approved by the Administration pursuant to relevant laws, whose legality is thus without question. So, the collection of site usage fees appears to be reasonable. However, according to the confession made by the Center, the collection of such fees is applicable only to the External Transporters who are in competition with the Center, whereas the External Transporters that enter the Zone to carry and ship cargo that the Center itself cannot handle are exempt from such charge, which gives rise to the question of discriminatory treatment. Pursuant to Article 19(ii) of the Fair Trade Law, no enterprise shall give discriminatory treatment to another enterprise without proper or justifiable cause. In the present case, the Center on one hand is in competition with the External Transporters, but on the other hand, because the former also charges the latter the site usage fees, they are in a general trade relationship. If the site usage fees are collected based on considerations such as the cost factors and the principle that users pay for the services they received, the collector in theory should objectively evaluate how the vehicles that come from outside the Zone are using the site. Also the rate should have been reviewed and determined by the Administration in view of the relevant costs. Nevertheless, the Center simply unilaterally decided the rate and subjected the transporters to the site usage fees based on the cargo they can carry. So, the way the Center collects the usage fees is not exactly as it claims as being based on the cost considerations and the principle that users pay for the services they received. Discriminatory treatment, in the form of imposition of usage fees, befalls the External Transporters that are competing with the Center. On the other hand, if the usage fees are collected because of cost considerations, then in accordance with the principle that users pay for the services they received, all of the transporters using the site shall jointly bear the cost. Nonetheless, in the present case, the Center relies on its position and subjectively selects the transporters to collect the usage fees. Such an act undoubtedly blurs the calculation of costs and usage fees and the contribution basis, thus influencing the competition between the Center and other members of the industry. Based on the foregoing facts, the Center's discriminatory treatment to another enterprise lacks justifiable cause and raises concerns that fair trade might be hindered, which constitutes a violation of Article 19(ii) of the Fair Trade Law.
(2) In reference to the Center's collection of an additional 20% of storage fees for bonded goods carried into the Zone by the External Transporters, Article 24 of the Fair Trade Law states that "aside from the other provisions in this Law, an enterprise also shall not engage in any deceptive or obviously unfair acts that adversely affect trading order." The Center's storage fees standards have been approved by the Administration. As same as the usage fees, the storage fees are collected after being approved by the Administration in accordance with the Regulations Governing State-run Enterprises. Moreover, pursuant to Article 46(1) of the Fair Trade Law, the provisions of the Fair Trade Law shall not apply to acts performed by enterprises in accordance with other laws. In other words, acts enterprises perform in their operation, permitted by specific laws and accompanied by active and strict supervision and management by the competent authorities, may be exempted from the application of the Fair Trade Law. However, the "permission" given by the Administration seems no more than general review and examination; the Administration does not impose concrete and active requirements on the Center, which therefore does not meet the conditions for exemption from the application of the Fair Trade Law. On the other hand, the fact that the External Transporters carry goods into the Zone and store them in the Center directly creates trade opportunities for the Center, which can reap the economic benefits therefrom. So, according to the general practice in market competition and transactions, the warehousers usually try their best to accommodate the needs of the transporters and strive for such trade opportunities. But in the present case, the Administration allows the Center to assess additional storage fees on vehicles that come from outside and carry goods into the Zone, which seems less than reasonable and adequate. Furthermore, the Center claimed that the additional storage fees are charged because the External Transporters come in to take up the limited operation site, and directly influence the Center's moving lines and efficiency of loading and unloading, resulting in prolonged warehousing and transport time, and increased expenses on personnel and facilities. In fact, whether the bonded goods are carried into the Zone by the External Transporters or by the Center, the warehousing operations following the arrival are identical. So why should the goods carried by the External Transporters be charged with additional 20% storage fee? Different storage computation formulas are applied for the delivery of the same goods simply because of the difference in the transporters. Manufacturers based inside the Zone, due to the cost considerations, may well opt to trade with the Center instead of with the External Transporters. As a result, the chance of the External Transporters participating in the competition inside the Zone is directly impaired; the rules that aim to facilitate the opening up of the bonded goods transport business wind up as mere formalities. Therefore, the Center's collection of additional storage is patently unfair to the External Transporters, and causes obstacles for their participation in the competition, thus adversely affecting trading order and constituting a violation of the aforesaid provisions of the Fair Trade Law.
Summarized by Cheng, Peng-chi
Supervised by Hsin, Chih-chung