IACS Press Release - 10 June 2009

IACS welcomes progress on European Commission's competition investigation

(London, 10 June 2009): The International Association of Classification Societies ("IACS") has welcomed the publication by the European Commission of a Market Test Notice providing a summary of the current status of its investigation into the Association: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:131:0020:0022:EN:PDF. The publication is a prelude to the closure of the investigation, which is expected to occur later this year.

By publishing the summary, and the Commitments that IACS has proposed to the Commission, the Commission allows interested third parties a one month period in which to submit their observations. If the comments submitted do not alter the Commission's intention to close the case on the basis of the Commitments offered by IACS, the Commission will issue a Decision to declare the Commitments binding and close the case. This will be on the clear basis that no competition infringement has either been found by the Commission, or admitted by IACS.

"All IACS members are pleased that this investigation appears to be nearing a satisfactory conclusion and that the activities of the Association, and the reputations of its member societies, have been maintained without being damaged by this investigation," said Oh Kong-gyun, the current Chairman of IACS.

"To the extent that the Commission has shared its views with us, we would emphasise that our activities have always been consistent with all applicable laws and that there has not been any finding by the Commission, provisional or otherwise, regarding any possible infringement of EC competition law by IACS", the Chairman of IACS added.

IACS has explained to the Commission why it does not agree with the Commission's preliminary views set out in the Market Test Notice, stressing its belief that its activities have been compliant with all applicable laws and disputing the specific concerns that the Commission has expressed. The Commission's views focused primarily on the manner in which IACS establishes and applies its membership criteria and the transparency associated with developing and publishing IACS Unified Requirements and other technical requirements.

IACS has also offered a series of Commitments to the Commission that it believes will enable the Commission to close its investigation on mutually acceptable terms. "Although we do not agree with the Commission's views, we have offered these commitments in the interests of putting an end to the investigation to avoid any further diversion of IACS' and its members' resources away from their principal mission," said Mr Oh.

These Commitments lay out a new approach to assessing applications for membership based more on qualitative rather than the existing quantitative criteria. They also propose opening access to IACS' technical working groups to non-member classification societies and further developing the sharing of background information used in the development of IACS technical requirements.

"The primary concern of all IACS member societies is to promote the safety of life, property and the natural environment," Mr Oh said. "We believe that the Commitments we have offered to the Commission are in line with these core principles and are also closely aligned with the Commission's own approach to evaluating Recognised Organisations (RO) under the recently adopted new EU RO Directive and Regulation."

IACS members are confident that representatives of the other members of the maritime safety regime, particularly underwriters, flag States, ship owners, major charterers and others who place their trust in the classification sector, will use the comment period to communicate their support for IACS' position to the Commission.

IACS