Commission Regulation (EU) No 788/2014Show full title

[X1 CHAPTER II U.K. FINES AND PERIODIC PENALTY PAYMENTS

Article 3 U.K. Identification of infringements

1. The [F1 Secretary of State] shall identify an infringement under Article 6(1) of Regulation (EC) No 391/2009 where:

(a) the serious or repeated failure by a recognised organisation to fulfil one of the minimum criteria set out in Annex I of Regulation (EC) No 391/2009 or its obligations under Articles 8(4), 9, 10 and 11 of Regulation (EC) No 391/2009 reveals serious shortcomings in a recognised organisation's structure, systems, procedures or internal controls;

(b) a recognised organisation's worsening performance, taking into account Commission Decision No 2009/491/EC(1), reveals serious shortcomings in that organisation's structure, systems, procedures or internal controls;

(c) a recognised organisation has deliberately provided incorrect, incomplete or misleading information to the [F1 Secretary of State] in the course of its assessment or otherwise obstructed that assessment.

2. In any infringement procedure under this Regulation, the burden of proving an infringement shall rest on the [F1 Secretary of State].

Textual Amendments

F1 Words in Art. 3 substituted (31.12.2020) by The Merchant Shipping (Recognised Organisations) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/270), regs. 1(2), 4(4); 2020 c. 1, Sch. 5 para. 1(1)

Article 4 U.K. Calculation of fines

1. A basic fine of 0,6 % of the total average turnover of the recognised organisation, as determined in accordance with Article 9, shall be initially assigned to each infringement established on the basis of Article 6(1) of Regulation (EC) No 391/2009.

2. For the calculation of the individual fine for each infringement the basic fine referred to in paragraph 1 shall be increased or reduced, on the basis of the seriousness and of the effects of the infringement, in particular the extent to which safety or the protection of the environment have been compromised, in accordance with Articles 5 and 6 respectively.

3. The maximum amount of each individual fine shall not exceed 1,8 % of the total average turnover of the recognised organisation.

4. Where one action or omission of the recognised organisation forms the sole basis of two or more infringements under Article 6(1)(a) of Regulation (EC) No 391/2009 identified in accordance with Article 3(1)(a) of this Regulation, the concurrent individual fine shall be the highest of the individual fines calculated for the underlying infringements.

5. The total fine imposed on a recognised organisation in one decision shall be the sum of all individual fines resulting from the application of paragraphs 1 to 4 of this Article, without prejudice to the maximum ceiling established under Article 6(3) of Regulation (EC) No 391/2009, as detailed Article 8 of this Regulation.

Article 5 U.K. Assessment of the seriousness of an infringement

When assessing the seriousness of each infringement the [F2 Secretary of State] shall take into account all relevant aggravating and mitigating circumstances, in particular the following:

(a)

whether the organisation has acted with negligence or intent;

(b)

the number of actions or omissions of the recognised organisation which give rise to the infringement;

(c)

whether the infringement affects isolated offices, geographical areas or the entire organisation;

(d)

the recurrence of the actions or omissions of the recognised organisation giving rise to the infringement;

(e)

the duration of the infringement;

(f)

a misrepresentation of the actual condition of ships in the certificates and documents of compliance delivered by the recognised organisation, or the inclusion of incorrect or misleading information therein;

(g)

prior sanctions, including fines, imposed on the same recognised organisation;

(h)

whether the infringement results from an agreement between recognised organisations or a concerted practice, which have as their object or effect the breach of the criteria and obligations provided in Regulation (EC) No 391/2009;

(i)

the degree of diligence and cooperation of the recognised organisation in the discovery of the relevant actions or omissions, as well as in the determination of the infringements by the [F2 Secretary of State].

Textual Amendments

F2 Words in Art. 5 substituted (31.12.2020) by The Merchant Shipping (Recognised Organisations) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/270), regs. 1(2), 4(5) (with reg. 2(5)) (as amended by S.I. 2020/1000, regs. 1, 4); 2020 c. 1, Sch. 5 para. 1(1)

Article 6 U.K. Assessment of the effects of an infringement

When assessing the effects of each infringement, in particular the extent to which safety and the protection of the environment have been compromised, the [F3 Secretary of State] shall take into account all relevant aggravating and mitigating circumstances, in particular the following:

(a)

the nature and extent of the deficiencies actually or potentially affecting the fleet certified by the organisation, which the said organisation, as a result of the infringement, has failed to detect or may not be able to detect, or has failed to or may not be able to request the timely correction of, taking into account in particularthe criteria for the detention of a ship laid down in Annex X of Directive 2009/16/EC of the European Parliament and of the Council(2) on port State control;

(b)

the proportion of the fleet certified by the organisation actually or potentially affected;

(c)

any other circumstances posing specific identifiable risks, such as the type of the ships actually or potentially affected.

Textual Amendments

F3 Words in Art. 6 substituted (31.12.2020) by The Merchant Shipping (Recognised Organisations) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/270), regs. 1(2), 4(6); 2020 c. 1, Sch. 5 para. 1(1)

Article 7 U.K. Periodic penalty payments

1. Periodic penalty payments as referred to in Article 6(2) of Regulation (EC) No 391/2009 may be imposed by the [F4 Secretary of State] on the organisation concerned, without prejudice to the fines imposed pursuant to Article 3, in order to ensure that preventive and remedial action is taken as required by the [F4 Secretary of State] in the course of its assessment of the recognised organisation.

2. In the decision imposing fines pursuant to Article 3 the [F4 Secretary of State] may also establish periodic penalty payments to be imposed on the recognised organisation if, and for as long as, it fails to undertake remedial action or incurs unjustified delays in bringing the infringement to an end.

3. The decision imposing the periodic penalty payments shall determine the time limit within which the recognised organisation has to comply with the required action.

4. Periodic penalty payments shall apply as from the day following the expiry of the time limit established in accordance with paragraph 3 until the day on which appropriate remedial action has been undertaken by the organisation, provided that the remedial action is considered satisfactory by the [F4 Secretary of State].

5. The basic amount per day of the periodic penalty payments for each infringement shall be 0,0033 % of the total average turnover of the recognised organisation calculated in accordance with Article 9. For the calculation of the individual amount of periodic penalty payments for each infringement, the basic amount shall be adjusted based on the seriousness of the infringement and taking into account the extent to which safety or the protection of the environment has been compromised, in the light of Articles 5 and 6 of this Regulation.

6. The [F4 Secretary of State] may decide, in light of the circumstances of the case, and in particular in view of the urgency of the remedial action to be undertaken by the organisation concerned, to increase the daily amount for periodic penalty payments up to the following limits:

(a) when the recognised organisation exceeds the time limit established pursuant to paragraph 3 by more than 120 days, from the 121st to the 300th day from the expiry of the time limit, 0,005 % per day of the organisation's total average turnover, calculated in accordance with Article 9;

(b) when the recognised organisation exceeds the time limit established pursuant to paragraph 3 by more than 300 days, from the 301st day from the expiry of the time limit, 0,01 % per day of the organisation's total average turnover, calculated in accordance with Article 9.

7. The total amount of periodic penalty payments imposed under this Article, individually or in addition to fines, shall not exceed the maximum ceiling established under Article 6(3) of Regulation (EC) No 391/2009, as detailed in Article 8 of this Regulation.

Textual Amendments

F4 Words in Art. 7 substituted (31.12.2020) by The Merchant Shipping (Recognised Organisations) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/270), regs. 1(2), 4(7); 2020 c. 1, Sch. 5 para. 1(1)

Article 8 U.K. Determination of maximum aggregate amount of fines and periodic penalty payments

The maximum aggregate amount of fines and periodic penalty payments imposed to the recognised organisation, as established in Article 6(3) of Regulation (EC) No 391/2009, shall be determined as follows:

(a)

the aggregate amount of the fines imposed on a recognised organisation in accordance with Article 4 within one business year for that organisation, taking into account the date of the decision to impose the fines and, in case of more than one decision imposing fines to that organisation, the date of the first decision imposing a fine on that organisation, shall not exceed 5 % of the total average turnover of that organisation calculated in accordance with Article 9;

(b)

the aggregate amount of the fines imposed on a recognised organisation in accordance with Article 4 within one business year for that organisation, determined in accordance with paragraph 1, and the periodic penalty payments imposed in the same decisions in accordance with Article 7(2) and accrued for as long as appropriate remedial action is not undertaken by the organisation shall not exceed 5 % of the total average turnover of that organisation calculated in accordance with Article 9. Without prejudice to Article 21, recovery by the [F5 Secretary of State] of the periodic penalty payments shall not exceed the 5 % ceiling;

(c)

the aggregate amount of the periodic penalty payments imposed on a recognised organisation in accordance with Article 7(1) and accrued for as long as appropriate preventive or remedial action is not undertaken by the organisation shall not exceed 5 % of the total average turnover of that organisation calculated in accordance with Article 9. Without prejudice to Article 21, recovery by the [F5 Secretary of State] of the periodic penalty payments shall not exceed the 5 % ceiling.

Textual Amendments

F5 Words in Art. 8 substituted (31.12.2020) by The Merchant Shipping (Recognised Organisations) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/270), regs. 1(2), 4(8); 2020 c. 1, Sch. 5 para. 1(1)

Article 9 U.K. Calculation of turnover

1. For the purposes of this Regulation the total average turnover of the recognised organisation concerned shall be one third of the amount obtained by adding, over the three business years preceding the [F6 Secretary of State's] decision, the aggregate turnover of the parent entity holding the recognition and all legal entities which are encompassed in that recognition at the end of each year.

2. In the case of a group with certified consolidated accounts, the turnover referred to in paragraph 1 shall be, as regards the parent entity and all legal entities included in that group which are encompassed in the recognition at the end of each business year, the consolidated revenue of those entities.

3. In the application of paragraphs 1 and 2 only the activities falling under the scope of Regulation (EC) No 391/2009 shall be taken into account.]

Textual Amendments

F6 Words in Art. 9 substituted (31.12.2020) by The Merchant Shipping (Recognised Organisations) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/270), regs. 1(2), 4(9); 2020 c. 1, Sch. 5 para. 1(1)

Editorial Information

X1 Substituted by Corrigendum to Commission Regulation (EU) No 788/2014 of 18 July 2014 laying down detailed rules for the imposition of fines and periodic penalty payments and the withdrawal of recognition of ship inspection and survey organisations pursuant to Articles 6 and 7 of Regulation (EC) No 391/2009 of the European Parliament and of the Council (Official Journal of the European Union L 214 of 19 July 2014).

(1)

[X1 OJ L 162, 25.6.2009, p. 6 .]

(2)

[X1 OJ L 131, 28.5.2009, p. 57 .]

Editorial Information

X1 Substituted by Corrigendum to Commission Regulation (EU) No 788/2014 of 18 July 2014 laying down detailed rules for the imposition of fines and periodic penalty payments and the withdrawal of recognition of ship inspection and survey organisations pursuant to Articles 6 and 7 of Regulation (EC) No 391/2009 of the European Parliament and of the Council (Official Journal of the European Union L 214 of 19 July 2014).