Port of HaminaKotka Ltd to make a complaint to the EU and UN about the increase in fairway dues

Since 2015, merchant shipping has paid half of the fairway dues in Finland under temporary legislation. Contrary to its own Government Programme, the Finnish Government submitted a Government bill in the autumn to amend the Act on Fairway Dues and to repeal the temporary legislation on fairway dues, which means that the fairway dues will be restored to the full amounts from 2025.

Businesses, the biggest workers’ organisation SAK and a large number of other parties, including Port of HaminaKotka Ltd, have firmly opposed the full restoration of payments. Fairway dues are a Finnish speciality rarely used elsewhere. The change will significantly increase the logistics costs of exporting industries. These costs are already higher than in other countries and therefore impair the competitiveness of Finland.Exports are crucial for Finland, and the Port of HaminaKotka is by far the biggest export port in Finland.

Fairway dues not only have a negative impact on the competitiveness of Finnish businesses, but also have a very significant impact on limiting international food supply. In this sense, of all ports in the world, the increase in the fairway dues currently only applies to the Port of HaminaKotka and companies operating there, which have invested a total of approximately 150 million euros in fertiliser transport.

The massive increase in the fairway dues will prevent fertilisers from being carried in transit from Russia via the Port of HaminaKotka to third countries, even though fertilisers are part of global food supply and outside the scope of the European Union’s sanctions against Russia, in accordance with the decision of 21 July 2022 by the EU. The United Nations has also decided that the sanctions against Russia do not apply to food supply or to imports of food supply products from Russia.

In the view of Port of HaminaKotka Ltd, the fairway due increases of as much as 300 per cent, especially for the transit transport of fertilisers, are customs duties or at least comparable charges, which can only be decided by European Union regulations. Finland does not have a national right of its own for these fees. The increase in the fairway dues will directly concern the transit of fertilisers, which will also prevent products originating from Russia and related to the global food supply (such as fertilisers) from being transported to the world market, although this is approved by the EU.The increase in the fairway dues contradicts the principle of freedom to provide services without national charges, accepted in the EC Treaty.

Even though Finland will increase the fairway dues, Port of HaminaKotka Ltd considers that the increases could not be levied because the EU law is also binding on Finnish authorities, and EU law takes precedence over national law.Moreover, Finnish maritime transport, especially in terms of transit transport, is in a completely unequal position compared to other EU countries, in practice favouring these other countries. The Helsinki Administrative Court considered as early as 2008 that fairway dues are partly in conflict with EU law.

On 13 July 2022, the European Commission prohibited Lithuania from barring non-sanctioned transit transport of essential goods from Russia to the Port of Klaipeda.Transit transport from Russia was allowed, although Lithuania opposed it due to the war against Ukraine.

Port of HaminaKotka Ltd also condemns Russia’s war of aggression against Ukraine and has complied and will continue to comply with the sanctions scrupulously.

However, the UN, EU and many key national governments have decided that the transport of products included in the food chain, where grain and fertilisers are essential, must be secured even in conditions of war. The war in Ukraine has made it difficult to obtain fertilisers and grain, and increased their prices. Poor countries suffer the most from this.

The fertilisers carried via the Port of HaminaKotka are exported to South America and North Africa. Approximately 2.5 million tonnes of fertilisers are transported through the Port of HaminaKotka per year, which is enough to feed about 80 million people, in other words a country the size of Germany. Raising the fairway dues for goods passing through Finland by 300 per cent threatens to disrupt the food chain via Finland and thus amplify the shortage for food in the world.

In its complaint, Port of HaminaKotka Ltd requests the Commission to take all necessary measures to bring the increases in the fairway dues into line with EU law.

Kimmo Naski
CEO
Port of HaminaKotka Ltd
+358 (0)40 570 2036