1044-00005 · Client 1044 · Administrative Proceedings

response-to-aade-information-request.docx DOCUMENT Finance & Banking

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VOURNAS & THEODORAKIS ΔΙΚΗΓΟΡΙΚΟ ΓΡΑΦΕΙΟ 22 Academias Street 106 71 Athens, Greece Tel: +30 210 362 8400

January 18, 2023

BY HAND DELIVERY AND ELECTRONIC TRANSMISSION

Ms. Aikaterini Vlachopoulou Chief Customs Auditor AADE Piraeus Regional Customs Office 2 Karaoli & Dimitriou Street 185 31 Piraeus, Greece

Cc: Mr. Panagiotis Drakos, Senior Partner, Meridian & Drakos Dikigiriko Grafeio, 15 Stadiou Street, 105 62 Athens, Greece

Re: Response to Information Request dated January 5, 2023 — Post-Clearance Audit File AADE/DTE/2022/PIR-04518 — Thalassa Shipping & Logistics Société Anonyme (EORI: GR094827361000; AFM: 094827361)

Dear Ms. Vlachopoulou,

We write on behalf of our client, Thalassa Shipping & Logistics Société Anonyme ("TSL"), a société anonyme organized and existing under the laws of the Hellenic Republic, with its registered office at 47 Akti Miaouli, 185 35 Piraeus, Greece, in response to your information request dated January 5, 2023 (the "Information Request"). The Information Request was issued in connection with the post-clearance audit proceedings conducted by the Independent Authority for Public Revenue (Ανεξάρτητη Αρχή Δημοσίων Εσόδων — AADE) under audit file reference AADE/DTE/2022/PIR-04518 (the "Audit"). The Audit relates, inter alia, to the Additional Duty Assessment Notice AADE/ADAN/2022/0073 concerning the tariff classification of certain imported marine cargo-handling equipment (the "Classification Notice") and the Additional Duty Assessment Notice AADE/ADAN/2022/0074 concerning the customs valuation of the same equipment (the "Valuation Notice"), both of which were issued on August 12, 2022.

TSL provides the documents and information set forth herein in good faith and in cooperation with the Audit, but subject to a full reservation of all rights, claims, and defenses raised in TSL's administrative objections (ενδικοφανείς προσφυγές) filed with the Directorate of Resolution of Disputes (Διεύθυνση Επίλυσης Διαφορών — DED) on November 30, 2022 in respect of both the Classification Notice and the Valuation Notice. Nothing in this response, including the production of the documents enclosed herewith, constitutes or shall be construed as an admission of liability, an acknowledgment of any duty assessment, or a waiver of any right, claim, or defense available to TSL under applicable Greek, European Union, or international law. TSL expressly reserves all such rights, claims, and defenses, including without limitation those set forth in its administrative objections and in its pending Binding Tariff Information application, as further described below.

We address each category of the Information Request in turn below and thereafter set forth certain observations that TSL considers pertinent to the Audit.

I. DOCUMENTS PROVIDED — RESPONSE TO EACH CATEGORY OF REQUEST

The following responds seriatim to each of the nine categories of documents and information identified in the Information Request. For each category, we identify the documents requested, describe the responsive materials enclosed, and provide such additional explanations or clarifications as we consider appropriate. All enclosed documents are organized in tabbed binders and are also provided in electronic format on an encrypted USB drive, as requested.

Request No. 1 — Purchase Contracts

Documents Requested: Complete copies of purchase contracts HHI-TSL-2019-001, HHI-TSL-2019-002, HHI-TSL-2020-003, and HHI-TSL-2021-004, including all annexes, schedules, and amendments thereto.

Response: Enclosed at Tab 1 are complete copies of the following four purchase contracts, together with all annexes and schedules appended thereto, executed between TSL and Hailong Heavy Industries Co., Ltd. (海龙重工有限公司), a limited liability company organized and existing under the laws of the People's Republic of China, with its registered address at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China (Unified Social Credit Code: 91330211MA2GR8KT5X) ("Hailong"):

(a) Contract HHI-TSL-2019-001, dated January 15, 2019, for the purchase of twelve (12) Ship-to-Shore (STS) Gantry Cranes. The declared CIF customs value for this contract is €38,400,000 (i.e., €3,200,000 per unit). The contract annexes include technical specifications (Annex A), delivery schedule (Annex B), payment terms and milestone schedule (Annex C), and warranty provisions (Annex D).

(b) Contract HHI-TSL-2019-002, dated March 22, 2019, for the purchase of eighteen (18) Rubber-Tyred Gantry (RTG) Cranes. The declared CIF customs value for this contract is €25,200,000 (i.e., €1,400,000 per unit). The contract annexes include technical specifications (Annex A), delivery schedule (Annex B), payment terms and milestone schedule (Annex C), and warranty provisions (Annex D).

(c) Contract HHI-TSL-2020-003, dated June 10, 2020, for the purchase of eight (8) Automated Stacking Crane (ASC) Systems. The declared CIF customs value for this contract is €28,800,000 (i.e., €3,600,000 per unit). The contract annexes include technical specifications (Annex A), delivery schedule (Annex B), payment terms and milestone schedule (Annex C), warranty provisions (Annex D), and automation integration requirements (Annex E).

(d) Contract HHI-TSL-2021-004, dated February 28, 2021, for the supply of spare parts, proprietary control software, and commissioning/installation services, on a bundled basis. The declared CIF customs value for this contract is €5,600,000, comprising: spare parts in the amount of €2,100,000; proprietary control software (HaiControl Suite v4.2 installation and configuration packages) in the amount of €1,400,000; and commissioning and installation services in the amount of €2,100,000. The contract annexes include a spare parts inventory list (Annex A), software specifications and licensing terms (Annex B), commissioning scope of work (Annex C), and payment schedule (Annex D).

TSL confirms that no amendments, modifications, supplements, side letters, or addenda have been executed with respect to any of the four contracts listed above. The terms of each contract remain as set forth in the original executed copies enclosed herewith.

The total declared CIF customs value across all four contracts is €98,000,000, as reflected in the customs declarations filed at the Piraeus Regional Customs Office in connection with the importation of the relevant equipment and goods.

Request No. 2 — Technology License Agreement

Documents Requested: Complete copy of the Technology License Agreement between TSL and Hailong Heavy Industries Co., Ltd.

Response: Enclosed at Tab 2 is a complete copy of the Technology License Agreement (the "TLA"), dated January 10, 2019, executed between TSL and Hailong. The TLA was executed five (5) days prior to the first purchase contract (HHI-TSL-2019-001, dated January 15, 2019).

Under the TLA, Hailong grants TSL a non-exclusive, non-transferable license to use Hailong's proprietary crane control software known as the "HaiControl Suite v4.2," together with the associated predictive maintenance algorithms (marketed as the "HaiPredict" module) and all related technical documentation, operating manuals, and training materials. The license encompasses the right to operate, configure, and update the HaiControl Suite v4.2 and HaiPredict module on the specific equipment purchased under the four purchase contracts identified above, for the purposes of TSL's terminal operations in Greece.

The license fee payable under the TLA is calculated at five percent (5%) of the aggregate equipment purchase price, which yields a total license fee of 5% × €98,000,000 = €4,900,000. The license fee is payable in three installments as set forth in Article 5 of the TLA, the details of which are addressed in our response to Request No. 4 below.

The term of the TLA is ten (10) years, commencing on the date of the first commercial operation of the last piece of equipment installed at any of TSL's terminal facilities, with an option for TSL to renew for successive five-year periods upon mutual agreement and renegotiation of the license fee.

TSL draws the Chief Customs Auditor's attention to Article 3.2 of the TLA, which expressly provides, in pertinent part, that the TLA is "independent of and supplemental to" any purchase agreement between the parties, and that "the rights and obligations of the Parties under this Agreement shall not be conditioned upon, affected by, or construed in reference to any agreement for the purchase or sale of equipment." This provision reflects the commercial understanding between TSL and Hailong that the technology license constitutes a separate and distinct transaction from the equipment procurement, a position that TSL maintains in its administrative objection to the Valuation Notice, as further discussed in Section II below.

Request No. 3 — Procurement Services Agreement (TSL–Nereus)

Documents Requested: Complete copy of the Procurement Services Agreement between TSL and Nereus Maritime Advisory Limited.

Response: Enclosed at Tab 3 is a complete copy of the Procurement Services Agreement (the "PSA"), dated December 1, 2018, executed between TSL and Nereus Maritime Advisory Limited ("Nereus"), a private limited company organized and existing under the laws of the Republic of Cyprus, with Cyprus Company Registration Number HE 387214 and its registered office at 12 Griva Digeni Avenue, Office 302, 3106 Limassol, Cyprus.

Under the PSA, TSL engages Nereus to "identify, evaluate, and recommend suitable manufacturers of marine cargo-handling equipment and to coordinate the procurement process on behalf of TSL," including, without limitation, conducting market assessments and supplier due diligence, facilitating price and contract negotiations, arranging and conducting quality inspections at manufacturing facilities, and providing procurement advisory services throughout the acquisition process.

The fee payable to Nereus under the PSA is calculated at three percent (3%) of the aggregate purchase price of equipment procured through Nereus's services, which yields a total procurement coordination fee of 3% × €98,000,000 = €2,940,000. The fee is payable in installments upon the execution of each purchase contract, with a final true-up payment upon completion of all deliveries.

The PSA was executed on December 1, 2018, approximately six weeks prior to the execution of the first purchase contract and approximately seven weeks prior to the TLA, reflecting the fact that Nereus's engagement preceded and facilitated the procurement process, including the identification and evaluation of Hailong as a potential supplier and the coordination of initial commercial discussions.

TSL acknowledges the related-party dimension of the TSL–Nereus relationship, which is further addressed in our response to Request No. 7 below.

Request No. 4 — Technology License Fee Invoices and Proof of Payment

Documents Requested: All invoices and proof of payment for the technology license fees payable under the Technology License Agreement.

Response: Enclosed at Tab 4 are three (3) invoices issued by Hailong to TSL in respect of the technology license fee, together with corresponding bank transfer confirmations evidencing payment. The invoices and payments are as follows:

(a) Invoice No. HHI-INV-TLA-001, dated March 15, 2019, in the amount of €1,960,000 (representing Installment 1 of the license fee, being 40% of the total license fee of €4,900,000). Payment was made by wire transfer from TSL's account at Ashgrove Securities (IBAN: GR78 0260 1440 0000 8020 0413 576) to Hailong's account at Westmark Bancorp, Ningbo Branch (SWIFT: BKCHCNBJ940), on March 28, 2019. A copy of the SWIFT MT103 confirmation is enclosed.

(b) Invoice No. HHI-INV-TLA-002, dated July 10, 2020, in the amount of €1,470,000 (representing Installment 2 of the license fee, being 30% of the total license fee of €4,900,000). Payment was made by wire transfer from TSL's Ashgrove Securities account to Hailong's Westmark Bancorp account on July 24, 2020. A copy of the SWIFT MT103 confirmation is enclosed.

(c) Invoice No. HHI-INV-TLA-003, dated March 8, 2022, in the amount of €1,470,000 (representing Installment 3 of the license fee, being 30% of the total license fee of €4,900,000). Payment was made by wire transfer from TSL's Ashgrove Securities account to Hailong's Westmark Bancorp account on March 22, 2022. A copy of the SWIFT MT103 confirmation is enclosed.

The total amount invoiced and paid under the TLA is €1,960,000 + €1,470,000 + €1,470,000 = €4,900,000, which is consistent with the contractual license fee of 5% × €98,000,000 and represents full and final payment of all amounts due under the TLA. No further installments remain outstanding.

Request No. 5 — Nereus Procurement Fee Invoices and Proof of Payment

Documents Requested: All invoices and proof of payment for the Nereus procurement coordination fee payable under the Procurement Services Agreement.

Response: Enclosed at Tab 5 are four (4) invoices issued by Nereus Maritime Advisory Limited to TSL in respect of the procurement coordination fee, together with corresponding bank transfer confirmations evidencing payment. The four invoices were issued between June 2019 and April 2022, reflecting the phased nature of the fee payments, which were triggered by the execution of each purchase contract and by the completion of all equipment deliveries. Each invoice is accompanied by a SWIFT MT103 confirmation or equivalent bank transfer receipt.

The total amount invoiced and paid to Nereus under the PSA is €2,940,000, which is consistent with the contractual procurement coordination fee of 3% × €98,000,000 and represents full and final payment of all amounts due under the PSA. A detailed breakdown of each invoice, including the invoice date, the amount, and the corresponding payment date, is set forth in the summary schedule included at Tab 5. No further installments remain outstanding.

Request No. 6 — Documentation of Services Performed by Nereus Maritime Advisory Limited

Documents Requested: Documentation of services actually performed by Nereus Maritime Advisory Limited in connection with the equipment procurement, including any reports, correspondence, or records evidencing the nature and scope of such services.

Response: Enclosed at Tab 6 is the documentation available to TSL that evidences the nature and scope of the services performed by Nereus in connection with the equipment procurement. TSL notes at the outset that Nereus's services were primarily coordination-based in nature, involving market assessment, supplier identification and evaluation, negotiation coordination, and quality oversight. The available documentation includes the following:

(a) Nereus Market Assessment Report, dated November 2018. This report, prepared by Nereus prior to the execution of the PSA and the commencement of the formal procurement process, identifies and evaluates potential manufacturers of marine cargo-handling equipment in the People's Republic of China, the Republic of Korea, and Japan. The report assesses each potential supplier across a range of criteria, including manufacturing capacity, product quality, delivery lead times, pricing competitiveness, after-sales service capabilities, and references from other port operators. The report ultimately recommended Hailong Heavy Industries Co., Ltd. as the preferred supplier, based on a combination of competitive pricing, demonstrated manufacturing quality, and willingness to customize equipment to TSL's terminal specifications.

(b) Procurement Correspondence. Selected correspondence between Mr. Konstantinos Melas, Managing Director of Nereus, and Mr. Dimitrios Sarantopoulos, Vice President of Procurement & Supply Chain of TSL, regarding the Hailong procurement process. This correspondence includes communications relating to initial supplier outreach and engagement, the solicitation and evaluation of competitive proposals, the coordination and facilitation of price negotiations with Hailong, the review and negotiation of contractual terms, and the coordination of logistics and delivery arrangements. The correspondence spans the period from approximately October 2018 through March 2022.

(c) Quality Inspection Reports. Three quality inspection reports prepared by Nereus personnel following on-site visits to Hailong's manufacturing facility located at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China. The inspection visits and corresponding reports are as follows:

(i) Visit 1: February 2019 — Pre-production inspection conducted in connection with Contract HHI-TSL-2019-001 (STS Gantry Cranes). The inspection report covers Hailong's raw material sourcing, fabrication processes, quality management systems (ISO 9001:2015 certification verification), and production planning for the STS crane order.

(ii) Visit 2: November 2019 — In-production inspection conducted in connection with Contract HHI-TSL-2019-002 (RTG Cranes). The inspection report covers work-in-progress on the RTG crane order, including welding quality, structural integrity testing, electrical and hydraulic system assembly, and compliance with TSL's technical specifications.

(iii) Visit 3: September 2020 — Pre-shipment inspection conducted in connection with Contract HHI-TSL-2020-003 (ASC Systems). The inspection report covers final production quality, functional testing of the ASC units prior to disassembly and shipping, packing and crating procedures, and verification of shipping documentation.

TSL reserves the right to supplement this production with additional documentation evidencing the services performed by Nereus as such documentation becomes available or as may be identified through further internal review. TSL is continuing to collect and organize additional internal records, including electronic communications and meeting notes, that may be responsive to this request.

Request No. 7 — Nereus Corporate Registration and Ownership Information

Documents Requested: Corporate registration documents and ownership information for Nereus Maritime Advisory Limited, including details of shareholders, directors, and any relationship to TSL or its affiliates.

Response: Enclosed at Tab 7 is an extract from the Cyprus Registrar of Companies (Department of Registrar of Companies and intellectual Property, Ministry of Energy, Commerce and Industry), dated December 20, 2022, reflecting the current corporate registration and ownership information for Nereus Maritime Advisory Limited. The extract shows the following:

Full Legal Name: Nereus Maritime Advisory Limited

Cyprus Company Registration Number: HE 387214

Registered Address: 12 Griva Digeni Avenue, Office 302, 3106 Limassol, Cyprus

Entity Type: Private limited company incorporated under the Companies Law, Cap. 113, of the Republic of Cyprus

Date of Incorporation: September 14, 2017

Shareholders:

• Andreadis Family Holdings LLC, a limited liability company organized under the laws of the State of Delaware, United States of America (Delaware Division of Corporations File No. 5847291; registered agent: National Corporate Services Inc., 818 N. Market Street, Suite 100, Wilmington, Delaware 19801, USA) — holding 40% of the issued share capital of Nereus.

• Mr. Konstantinos Melas (individual; Greek national; Managing Director of Nereus) — holding 30% of the issued share capital of Nereus.

• Ms. Eleni Andreadis (individual; Greek national; Non-Executive Director of Nereus; daughter of Mr. Nikolaos Andreadis, Chairman and Chief Executive Officer of TSL) — holding 30% of the issued share capital of Nereus.

Directors:

• Mr. Konstantinos Melas — Managing Director

• Ms. Eleni Andreadis — Non-Executive Director

TSL acknowledges the related-party relationship between Nereus and TSL. Specifically, TSL recognizes that:

(a) Andreadis Family Holdings LLC, which holds 40% of the equity of Nereus, also holds approximately 62% of the issued share capital of TSL;

(b) Ms. Eleni Andreadis, who holds 30% of the equity of Nereus and serves as a Non-Executive Director of Nereus, is the daughter of Mr. Nikolaos Andreadis, Chairman and Chief Executive Officer of TSL; and

(c) the foregoing ownership and familial relationships constitute a related-party relationship within the meaning of Article 127(2) of UCC Implementing Regulation (EU) 2015/2447.

Notwithstanding the existence of this related-party relationship, TSL maintains that the procurement coordination fee paid to Nereus reflects fair market compensation for genuine services rendered and constitutes a deductible buying commission, as further discussed in Section II below.

Request No. 8 — Commissioning Service Records

Documents Requested: Commissioning service records, including scope of work documents, completion certificates, and engineer dispatch records, for the commissioning and installation services performed under Contract HHI-TSL-2021-004.

Response: Enclosed at Tab 8 are the commissioning service records relating to the commissioning and installation services performed under Contract HHI-TSL-2021-004. The enclosed documents include the following:

(a) Commissioning Protocols. Detailed commissioning protocols for each of TSL's three terminal facilities at which the imported equipment was installed and commissioned, namely: (i) the Piraeus Container Terminal (PCT), Piraeus; (ii) the Thessaloniki Container Terminal (ThCT), Thessaloniki; and (iii) the Volos Terminal Facility (VTF), Volos. Each protocol sets forth the scope of commissioning activities, the sequence of testing and acceptance procedures, safety and environmental requirements, and the criteria for final acceptance.

(b) Completion Certificates. Individual completion certificates for each piece of equipment commissioned at each terminal facility, signed jointly by the relevant TSL terminal manager and the responsible Hailong commissioning engineer. Each completion certificate confirms the satisfactory completion of all commissioning activities, including final assembly, mechanical and electrical testing, calibration, system integration, and performance acceptance testing, and records the date on which the equipment was accepted for commercial operation.

(c) Hailong Engineer Travel and Dispatch Records. Travel and dispatch records for all Hailong engineers and technical personnel deployed to Greece for the commissioning activities. These records include the names and qualifications of each engineer dispatched, travel dates and itineraries, the duration of each engineer's on-site presence at each terminal facility, and a description of the tasks performed by each engineer during the relevant period.

TSL draws the Chief Customs Auditor's attention to the following factual points, which are documented in the records enclosed at Tab 8 and are relevant to the customs valuation dispute:

All commissioning and installation services under Contract HHI-TSL-2021-004 were performed entirely within the territory of Greece, at TSL's terminal facilities, after the relevant equipment had been imported into the customs territory of the European Union and cleared through customs at the Piraeus Regional Customs Office. No commissioning or installation activities were performed outside Greece or prior to importation.

The commissioning activities encompassed the following categories of work: final assembly of equipment components that had been shipped in disassembled or semi-assembled form; mechanical testing of all crane systems, including load testing, structural stress testing, and movement range verification; electrical testing, including power supply integration, motor function testing, and safety interlock verification; calibration of crane control systems, sensors, and positioning equipment; integration with TSL's terminal operating systems, including the configuration and commissioning of the HaiControl Suite v4.2 software and associated HaiPredict predictive maintenance module; and performance acceptance testing against the contractual performance specifications.

The relevance of these facts to TSL's customs valuation position is addressed in Observation 3 in Section II below.

Request No. 9 — Commercial Correspondence Between TSL and Hailong

Documents Requested: Correspondence between TSL and Hailong Heavy Industries Co., Ltd. regarding the commercial terms of the Technology License Agreement and the purchase contracts, including pricing, scope of supply, and any discussions concerning the allocation of value between the various contracts and agreements.

Response: Enclosed at Tab 9 is selected correspondence between TSL personnel — including Mr. Dimitrios Sarantopoulos, Vice President of Procurement & Supply Chain, and Ms. Elena Papadimitriou, Chief Financial Officer — and Hailong personnel — including Mr. Wei Junhao (魏俊豪), Export Sales Director — relating to the negotiation of the commercial terms for the four purchase contracts and the Technology License Agreement. The enclosed correspondence covers the period from approximately September 2018 through March 2022 and includes emails, letters, and meeting minutes that address, inter alia, the development and negotiation of equipment pricing, the scope of supply under each contract, the structure and pricing of the Technology License Agreement, and various logistical and commercial matters arising during the performance of the contracts.

TSL notes that the production of correspondence at Tab 9 is subject to assertions of attorney-client privilege and commercial confidentiality where applicable. In particular, certain correspondence post-dating the initiation of the AADE audit on April 4, 2022 has been withheld from production on the grounds of attorney-client privilege, as such correspondence reflects legal advice sought and received by TSL from its legal advisors in connection with the Audit and the related administrative proceedings. TSL reserves the right to provide a privilege log identifying each withheld document by date, author, recipient, and general subject matter, upon request by the Chief Customs Auditor or as may otherwise be required under applicable procedural rules.

TSL further reserves the right to supplement this production with additional correspondence as may be identified through further internal review of its electronic records and document management systems.

II. OBSERVATIONS

TSL provides the foregoing documents without prejudice to, and subject to a full reservation of all rights, claims, and defenses set forth in, its administrative objections (ενδικοφανείς προσφυγές) filed with the Directorate of Resolution of Disputes (DED) on November 30, 2022, challenging both the Classification Notice (AADE/ADAN/2022/0073) and the Valuation Notice (AADE/ADAN/2022/0074). TSL's observations below are provided for the information of the Chief Customs Auditor and are likewise without prejudice to TSL's pending Binding Tariff Information application (reference: BTI-GR-2022-003847), filed on November 15, 2022, which has been referred to the European Commission's Directorate-General for Taxation and Customs Union (DG TAXUD) on February 7, 2023, pursuant to Article 34(10) of Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (the "UCC"). TSL understands that the BTI application is currently under consultation between AADE and DG TAXUD, and that the outcome of that consultation may have a material bearing on the classification aspects of the Audit.

In light of the documents produced herewith, TSL respectfully draws the Chief Customs Auditor's attention to the following observations:

Observation 1 — Independence of the Technology License Agreement from the Purchase Contracts

The documents produced at Tabs 1 and 2, and the correspondence produced at Tab 9, confirm that the Technology License Agreement dated January 10, 2019 and the four purchase contracts dated between January 15, 2019 and February 28, 2021 are separate and independent agreements with distinct subject matter, independent pricing mechanisms, and different contractual terms.

The four purchase contracts govern the sale for export and delivery of tangible goods — STS Gantry Cranes, RTG Cranes, ASC Systems, and associated spare parts, software installation packages, and commissioning services. The pricing under the purchase contracts reflects the agreed CIF value of the physical goods and services supplied, and the contracts are governed by their own set of terms and conditions, including specific provisions regarding delivery (Incoterms 2020, CIF Piraeus), warranty, inspection, and acceptance.

By contrast, the TLA governs the grant of an ongoing, non-exclusive license to use Hailong's proprietary software and intellectual property over a ten-year period. The services and rights provided under the TLA extend well beyond the sale and delivery of the imported equipment and encompass the following post-importation elements:

(a) Software updates and upgrades to the HaiControl Suite v4.2 and HaiPredict module over the ten-year license term, including major version upgrades, security patches, and functional enhancements;

(b) Remote technical support, including access to a 24-hour, 7-day-per-week helpdesk staffed by Hailong software engineers;

(c) On-site technical visits by Hailong engineers, at a frequency of two (2) visits per year to each of TSL's terminal facilities, for the purpose of software optimization, performance review, and troubleshooting;

(d) Access to Hailong's online technical documentation library, including engineering drawings, operating manuals, maintenance guides, and software documentation; and

(e) Annual training of TSL's engineers and technical personnel on the use, configuration, and maintenance of the HaiControl Suite v4.2 and HaiPredict module.

The TLA was separately negotiated between the parties, was subject to a separate internal TSL approval process (including review and approval by TSL's Board of Directors), and was executed on a date distinct from any of the purchase contracts. As noted above, Article 3.2 of the TLA expressly provides that the TLA is "independent of and supplemental to" any purchase agreement between the parties.

On the basis of the foregoing, TSL maintains that the technology license fees paid under the TLA do not constitute royalties or license fees that should be added to the customs value of the imported equipment under Article 71(1)(c) of the UCC, which provides for the addition of royalties and license fees to the customs value only where such payments relate to the imported goods and constitute a condition of their sale for export. TSL respectfully submits that the technology license fees relate primarily to post-importation services and rights and are not a condition of the sale for export of the equipment, as set forth in detail in TSL's administrative objection to the Valuation Notice (AADE/ADAN/2022/0074). TSL also draws attention to the guidance provided in Commentary No. 3 of the World Customs Organization's Technical Committee on Customs Valuation and the European Commission's Compendium of Customs Valuation Texts, which support the exclusion of license fees from the customs value where, as here, the license agreement covers post-importation services and is not a condition of sale.

Observation 2 — Genuine Character of Nereus Procurement Services and Buying Commission Treatment

The documentation produced at Tab 6 demonstrates that Nereus Maritime Advisory Limited performed genuine procurement coordination services on TSL's behalf in connection with the acquisition of the marine cargo-handling equipment from Hailong. These services were real, substantive, and directly attributable to TSL's equipment procurement process, and they encompassed the following activities:

(a) Market Assessment and Manufacturer Identification. Nereus prepared a comprehensive market assessment report dated November 2018 that identified and evaluated potential manufacturers of marine cargo-handling equipment across multiple countries, including the People's Republic of China, the Republic of Korea, and Japan. The report assessed each potential supplier on the basis of objective criteria, including manufacturing capacity, product quality, delivery capabilities, pricing, and after-sales support, and ultimately recommended Hailong as the preferred supplier.

(b) Coordination of Price and Contract Negotiations. Nereus played an active and ongoing role in coordinating the price and contract negotiations between TSL and Hailong, as evidenced by the procurement correspondence produced at Tab 6. Mr. Konstantinos Melas, Managing Director of Nereus, served as the primary intermediary between TSL and Hailong during the negotiation phase, facilitating the exchange of proposals, counter-proposals, and revised commercial terms.

(c) On-Site Quality Inspections. Nereus personnel conducted three (3) on-site quality inspections at Hailong's manufacturing facility in Ningbo, Zhejiang Province, PRC, between February 2019 and September 2020. These inspections covered pre-production, in-production, and pre-shipment stages, respectively, and produced detailed quality inspection reports documenting Nereus's findings and recommendations.

On the basis of the foregoing, TSL maintains that the procurement coordination fee of €2,940,000 paid to Nereus qualifies as a deductible buying commission under Article 72(a) of the UCC and Article 127(1) of UCC Implementing Regulation (EU) 2015/2447, which provide that buying commissions — defined as fees paid by an importer to its agent for the service of representing it in the purchase of goods — shall not be included in the customs value. TSL submits that Nereus acted exclusively on TSL's behalf, performed genuine procurement services, and was compensated for those services at a commercially reasonable rate, all of which are hallmarks of a buying commission relationship.

TSL acknowledges the related-party relationship between Nereus and TSL, as disclosed in our response to Request No. 7 above. However, TSL respectfully submits that the existence of a related-party relationship does not, in itself, preclude the treatment of a fee as a buying commission. The critical inquiry, as articulated in the case law of the Court of Justice of the European Union and in the European Commission's Compendium of Customs Valuation Texts, is whether the agent performed genuine services on behalf of the importer and whether the fee paid represents fair compensation for those services, rather than a disguised element of the purchase price.

TSL reserves the right to submit additional documentation and a detailed economic analysis in further support of the buying commission characterization. In particular, TSL intends to submit a Functions-Assets-Risks (FAR) analysis prepared by Kestrel & Palladian LLP, an independent advisory firm with offices at 8 Voukourestiou Street, 106 71 Athens, Greece. The FAR analysis will demonstrate, through a detailed assessment of the functions performed, assets employed, and risks assumed by Nereus, that Nereus acted as a genuine buying agent of TSL and that the procurement coordination fee constitutes fair consideration for the services rendered.

Observation 3 — Excludability of Post-Importation Commissioning Services from Customs Value

The commissioning service records produced at Tab 8 confirm that all commissioning and installation services performed under Contract HHI-TSL-2021-004 were conducted entirely within the territory of Greece, after the relevant equipment was imported into the customs territory of the European Union and cleared through customs at the Piraeus Regional Customs Office.

The commissioning services constituted post-importation activities that are distinct from and subsequent to the sale for export of the goods. These activities included:

(a) Final assembly of equipment components that had been shipped in disassembled or semi-assembled form, including structural assembly, attachment of booms and spreaders, and installation of electrical and hydraulic systems;

(b) Mechanical and electrical testing, including load testing, structural stress testing, motor function testing, power supply integration testing, and safety interlock verification;

(d) Integration with TSL's terminal operating systems, including the installation, configuration, and commissioning of the HaiControl Suite v4.2 software and the HaiPredict predictive maintenance module at each of TSL's three terminal facilities; and

(e) Performance acceptance testing, conducted in accordance with the contractual performance specifications and accepted by TSL upon satisfactory completion.

On the basis of the foregoing, TSL maintains that the commissioning services value of €2,100,000 allocated to commissioning and installation services under Contract HHI-TSL-2021-004 is excludable from the customs value of the imported goods under Article 72(e) of the UCC, which expressly provides that the following charges shall not be included in the customs value, provided that they are distinguished from the price actually paid or payable for the imported goods:

"charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation on imported goods such as industrial plant, machinery or equipment."

The commissioning activities described above fall squarely within the scope of Article 72(e), as they constitute assembly, erection, and technical assistance undertaken after the importation of the equipment. The commissioning services were separately priced within Contract HHI-TSL-2021-004, and the allocated value of €2,100,000 is distinguishable from the price paid for the physical goods and software. This position is set forth in detail in TSL's administrative objection to the Valuation Notice (AADE/ADAN/2022/0074).

III. RESERVATION OF RIGHTS

TSL provides the documents, information, and observations set forth in this response subject to a full reservation of all rights, claims, and defenses available to TSL under applicable Greek law, European Union law, and international law, including but not limited to those set forth in TSL's administrative objections to the Classification Notice and the Valuation Notice.

The production of documents in response to the Information Request does not constitute, and shall not be construed as constituting, a waiver of any privilege, including attorney-client privilege (δικηγορικό απόρρητο), the work product doctrine, or any other applicable privilege, protection, or immunity from disclosure. TSL expressly reserves all such privileges and protections with respect to any documents withheld from production, including the privileged correspondence identified in our response to Request No. 9 above.

TSL's administrative objections to the Classification Notice (AADE/ADAN/2022/0073) and the Valuation Notice (AADE/ADAN/2022/0074), filed with the Directorate of Resolution of Disputes (DED) on November 30, 2022, remain pending before the DED and are held in abeyance in accordance with the discussions between the parties regarding a proposed standstill arrangement. TSL understands that the DED has not yet rendered a decision on either objection and that the parties continue to discuss the terms of a standstill that would preserve TSL's right to seek judicial review before the competent Administrative Court of First Instance (Διοικητικό Πρωτοδικείο) in the event that the administrative objections are rejected.

TSL's Binding Tariff Information application (reference: BTI-GR-2022-003847), filed on November 15, 2022, is pending consultation between AADE and the European Commission's DG TAXUD following AADE's referral of the application on February 7, 2023, pursuant to Article 34(10) of the UCC. TSL respectfully requests that AADE take into account the outcome of the BTI consultation in its consideration of the classification issues raised in the Audit and in the pending administrative objection to the Classification Notice.

TSL reserves the right to supplement this production with additional documents, information, analysis, or expert reports as may be appropriate or as may be required in connection with the Audit, the pending administrative objections, the BTI consultation, or any subsequent proceedings.

Closing

We trust that the foregoing documents and information are responsive to the categories identified in the Information Request of January 5, 2023. Should you require any clarification or wish to discuss any aspect of this response, please do not hesitate to contact the undersigned at the address and telephone number indicated above.

We remain at the disposal of the Piraeus Regional Customs Office and look forward to the continued constructive resolution of the matters addressed in the Audit.

Respectfully submitted,

VOURNAS & THEODORAKIS ΔΙΚΗΓΟΡΙΚΟ ΓΡΑΦΕΙΟ

By: ________

Name: Alexandros Vournas

Title: Managing Partner

Athens Bar Registration No.: 18744 22 Academias Street, 106 71 Athens, Greece Tel: +30 210 362 8400

Email: a.vournas@vournaslaw.gr

Date: January 18, 2023

On behalf of Thalassa Shipping & Logistics Société Anonyme

Distribution

Copies to:

Ms. Christy Bauer Senior Associate Calderwood & Harkness LLP Avenue Louise 480 1050 Brussels, Belgium

Mr. Garrett Simmons Associate Calderwood & Harkness LLP 400 Lexington Avenue New York, NY 10170, USA

Ms. Elena Papadimitriou Chief Financial Officer Thalassa Shipping & Logistics SA 47 Akti Miaouli 185 35 Piraeus, Greece

ENCLOSURES — TAB INDEX

This letter and its enclosures contain confidential and commercially sensitive information belonging to Thalassa Shipping & Logistics Société Anonyme. Any unauthorized use, disclosure, or distribution of this letter or its enclosures is strictly prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.

Tab	Description
Tab 1	Purchase Contracts HHI-TSL-2019-001 (STS Gantry Cranes, 12 units), HHI-TSL-2019-002 (RTG Cranes, 18 units), HHI-TSL-2020-003 (ASC Systems, 8 units), and HHI-TSL-2021-004 (Spare parts, software, and commissioning services), with all annexes and schedules
Tab 2	Technology License Agreement dated January 10, 2019, between Hailong Heavy Industries Co., Ltd. and Thalassa Shipping & Logistics SA
Tab 3	Procurement Services Agreement dated December 1, 2018, between Thalassa Shipping & Logistics SA and Nereus Maritime Advisory Limited
Tab 4	Technology license fee invoices (3) issued by Hailong and corresponding bank transfer confirmations (SWIFT MT103)
Tab 5	Nereus procurement coordination fee invoices (4) issued by Nereus Maritime Advisory Limited and corresponding bank transfer confirmations
Tab 6	Documentation of Nereus services: (a) Market assessment report dated November 2018; (b) Procurement correspondence (Melas–Sarantopoulos); (c) Quality inspection reports — Visit 1 (February 2019), Visit 2 (November 2019), Visit 3 (September 2020)
Tab 7	Nereus Maritime Advisory Limited — Extract from the Cyprus Registrar of Companies (shareholders, directors, registered office, date of incorporation)
Tab 8	Commissioning service records: (a) Commissioning protocols for Piraeus, Thessaloniki, and Volos terminals; (b) Completion certificates; (c) Hailong engineer travel and dispatch records
Tab 9	Selected commercial correspondence between TSL and Hailong Heavy Industries Co., Ltd. (subject to assertions of attorney-client privilege; privilege log available upon request)

VOURNAS & THEODORAKIS ΔΙΚΗΓΟΡΙΚΟ ΓΡΑΦΕΙΟ 22 Academias Street 106 71 Athens, Greece Tel: +30 210 362 8400 | Fax: +30 210 362 8410 www.vournaslaw.gr
January 18, 2023
BY HAND DELIVERY AND ELECTRONIC TRANSMISSION
Ms. Aikaterini Vlachopoulou Chief Customs Auditor AADE Piraeus Regional Customs Office 2 Karaoli & Dimitriou Street 185 31 Piraeus, Greece
Cc: Mr. Panagiotis Drakos, Senior Partner, Meridian & Drakos Dikigiriko Grafeio, 15 Stadiou Street, 105 62 Athens, Greece
Re: Response to Information Request dated January 5, 2023 — Post-Clearance Audit File AADE/DTE/2022/PIR-04518 — Thalassa Shipping & Logistics Société Anonyme (EORI: GR094827361000; AFM: 094827361)
Dear Ms. Vlachopoulou,
We write on behalf of our client, Thalassa Shipping & Logistics Société Anonyme ("TSL"), a société anonyme organized and existing under the laws of the Hellenic Republic, with its registered office at 47 Akti Miaouli, 185 35 Piraeus, Greece, in response to your information request dated January 5, 2023 (the "Information Request"). The Information Request was issued in connection with the post-clearance audit proceedings conducted by the Independent Authority for Public Revenue (Ανεξάρτητη Αρχή Δημοσίων Εσόδων — AADE) under audit file reference AADE/DTE/2022/PIR-04518 (the "Audit"). The Audit relates, inter alia, to the Additional Duty Assessment Notice AADE/ADAN/2022/0073 concerning the tariff classification of certain imported marine cargo-handling equipment (the "Classification Notice") and the Additional Duty Assessment Notice AADE/ADAN/2022/0074 concerning the customs valuation of the same equipment (the "Valuation Notice"), both of which were issued on August 12, 2022.
TSL provides the documents and information set forth herein in good faith and in cooperation with the Audit, but subject to a full reservation of all rights, claims, and defenses raised in TSL's administrative objections (ενδικοφανείς προσφυγές) filed with the Directorate of Resolution of Disputes (Διεύθυνση Επίλυσης Διαφορών — DED) on November 30, 2022 in respect of both the Classification Notice and the Valuation Notice. Nothing in this response, including the production of the documents enclosed herewith, constitutes or shall be construed as an admission of liability, an acknowledgment of any duty assessment, or a waiver of any right, claim, or defense available to TSL under applicable Greek, European Union, or international law. TSL expressly reserves all such rights, claims, and defenses, including without limitation those set forth in its administrative objections and in its pending Binding Tariff Information application, as further described below.
We address each category of the Information Request in turn below and thereafter set forth certain observations that TSL considers pertinent to the Audit.
I. DOCUMENTS PROVIDED — RESPONSE TO EACH CATEGORY OF REQUEST
The following responds seriatim to each of the nine categories of documents and information identified in the Information Request. For each category, we identify the documents requested, describe the responsive materials enclosed, and provide such additional explanations or clarifications as we consider appropriate. All enclosed documents are organized in tabbed binders and are also provided in electronic format on an encrypted USB drive, as requested.
Request No. 1 — Purchase Contracts
Documents Requested: Complete copies of purchase contracts HHI-TSL-2019-001, HHI-TSL-2019-002, HHI-TSL-2020-003, and HHI-TSL-2021-004, including all annexes, schedules, and amendments thereto.
Response: Enclosed at Tab 1 are complete copies of the following four purchase contracts, together with all annexes and schedules appended thereto, executed between TSL and Hailong Heavy Industries Co., Ltd. (海龙重工有限公司), a limited liability company organized and existing under the laws of the People's Republic of China, with its registered address at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China (Unified Social Credit Code: 91330211MA2GR8KT5X) ("Hailong"):
(a) Contract HHI-TSL-2019-001, dated January 15, 2019, for the purchase of twelve (12) Ship-to-Shore (STS) Gantry Cranes. The declared CIF customs value for this contract is €38,400,000 (i.e., €3,200,000 per unit). The contract annexes include technical specifications (Annex A), delivery schedule (Annex B), payment terms and milestone schedule (Annex C), and warranty provisions (Annex D).
(b) Contract HHI-TSL-2019-002, dated March 22, 2019, for the purchase of eighteen (18) Rubber-Tyred Gantry (RTG) Cranes. The declared CIF customs value for this contract is €25,200,000 (i.e., €1,400,000 per unit). The contract annexes include technical specifications (Annex A), delivery schedule (Annex B), payment terms and milestone schedule (Annex C), and warranty provisions (Annex D).
(c) Contract HHI-TSL-2020-003, dated June 10, 2020, for the purchase of eight (8) Automated Stacking Crane (ASC) Systems. The declared CIF customs value for this contract is €28,800,000 (i.e., €3,600,000 per unit). The contract annexes include technical specifications (Annex A), delivery schedule (Annex B), payment terms and milestone schedule (Annex C), warranty provisions (Annex D), and automation integration requirements (Annex E).
(d) Contract HHI-TSL-2021-004, dated February 28, 2021, for the supply of spare parts, proprietary control software, and commissioning/installation services, on a bundled basis. The declared CIF customs value for this contract is €5,600,000, comprising: spare parts in the amount of €2,100,000; proprietary control software (HaiControl Suite v4.2 installation and configuration packages) in the amount of €1,400,000; and commissioning and installation services in the amount of €2,100,000. The contract annexes include a spare parts inventory list (Annex A), software specifications and licensing terms (Annex B), commissioning scope of work (Annex C), and payment schedule (Annex D).
TSL confirms that no amendments, modifications, supplements, side letters, or addenda have been executed with respect to any of the four contracts listed above. The terms of each contract remain as set forth in the original executed copies enclosed herewith.
The total declared CIF customs value across all four contracts is €98,000,000, as reflected in the customs declarations filed at the Piraeus Regional Customs Office in connection with the importation of the relevant equipment and goods.
Request No. 2 — Technology License Agreement
Documents Requested: Complete copy of the Technology License Agreement between TSL and Hailong Heavy Industries Co., Ltd.
Response: Enclosed at Tab 2 is a complete copy of the Technology License Agreement (the "TLA"), dated January 10, 2019, executed between TSL and Hailong. The TLA was executed five (5) days prior to the first purchase contract (HHI-TSL-2019-001, dated January 15, 2019).
Under the TLA, Hailong grants TSL a non-exclusive, non-transferable license to use Hailong's proprietary crane control software known as the "HaiControl Suite v4.2," together with the associated predictive maintenance algorithms (marketed as the "HaiPredict" module) and all related technical documentation, operating manuals, and training materials. The license encompasses the right to operate, configure, and update the HaiControl Suite v4.2 and HaiPredict module on the specific equipment purchased under the four purchase contracts identified above, for the purposes of TSL's terminal operations in Greece.
The license fee payable under the TLA is calculated at five percent (5%) of the aggregate equipment purchase price, which yields a total license fee of 5% × €98,000,000 = €4,900,000. The license fee is payable in three installments as set forth in Article 5 of the TLA, the details of which are addressed in our response to Request No. 4 below.
The term of the TLA is ten (10) years, commencing on the date of the first commercial operation of the last piece of equipment installed at any of TSL's terminal facilities, with an option for TSL to renew for successive five-year periods upon mutual agreement and renegotiation of the license fee.
TSL draws the Chief Customs Auditor's attention to Article 3.2 of the TLA, which expressly provides, in pertinent part, that the TLA is "independent of and supplemental to" any purchase agreement between the parties, and that "the rights and obligations of the Parties under this Agreement shall not be conditioned upon, affected by, or construed in reference to any agreement for the purchase or sale of equipment." This provision reflects the commercial understanding between TSL and Hailong that the technology license constitutes a separate and distinct transaction from the equipment procurement, a position that TSL maintains in its administrative objection to the Valuation Notice, as further discussed in Section II below.
Request No. 3 — Procurement Services Agreement (TSL–Nereus)
Documents Requested: Complete copy of the Procurement Services Agreement between TSL and Nereus Maritime Advisory Limited.
Response: Enclosed at Tab 3 is a complete copy of the Procurement Services Agreement (the "PSA"), dated December 1, 2018, executed between TSL and Nereus Maritime Advisory Limited ("Nereus"), a private limited company organized and existing under the laws of the Republic of Cyprus, with Cyprus Company Registration Number HE 387214 and its registered office at 12 Griva Digeni Avenue, Office 302, 3106 Limassol, Cyprus.
Under the PSA, TSL engages Nereus to "identify, evaluate, and recommend suitable manufacturers of marine cargo-handling equipment and to coordinate the procurement process on behalf of TSL," including, without limitation, conducting market assessments and supplier due diligence, facilitating price and contract negotiations, arranging and conducting quality inspections at manufacturing facilities, and providing procurement advisory services throughout the acquisition process.
The fee payable to Nereus under the PSA is calculated at three percent (3%) of the aggregate purchase price of equipment procured through Nereus's services, which yields a total procurement coordination fee of 3% × €98,000,000 = €2,940,000. The fee is payable in installments upon the execution of each purchase contract, with a final true-up payment upon completion of all deliveries.
The PSA was executed on December 1, 2018, approximately six weeks prior to the execution of the first purchase contract and approximately seven weeks prior to the TLA, reflecting the fact that Nereus's engagement preceded and facilitated the procurement process, including the identification and evaluation of Hailong as a potential supplier and the coordination of initial commercial discussions.
TSL acknowledges the related-party dimension of the TSL–Nereus relationship, which is further addressed in our response to Request No. 7 below.
Request No. 4 — Technology License Fee Invoices and Proof of Payment
Documents Requested: All invoices and proof of payment for the technology license fees payable under the Technology License Agreement.
Response: Enclosed at Tab 4 are three (3) invoices issued by Hailong to TSL in respect of the technology license fee, together with corresponding bank transfer confirmations evidencing payment. The invoices and payments are as follows:
(a) Invoice No. HHI-INV-TLA-001, dated March 15, 2019, in the amount of €1,960,000 (representing Installment 1 of the license fee, being 40% of the total license fee of €4,900,000). Payment was made by wire transfer from TSL's account at Ashgrove Securities (IBAN: GR78 0260 1440 0000 8020 0413 576) to Hailong's account at Westmark Bancorp, Ningbo Branch (SWIFT: BKCHCNBJ940), on March 28, 2019. A copy of the SWIFT MT103 confirmation is enclosed.
(b) Invoice No. HHI-INV-TLA-002, dated July 10, 2020, in the amount of €1,470,000 (representing Installment 2 of the license fee, being 30% of the total license fee of €4,900,000). Payment was made by wire transfer from TSL's Ashgrove Securities account to Hailong's Westmark Bancorp account on July 24, 2020. A copy of the SWIFT MT103 confirmation is enclosed.
(c) Invoice No. HHI-INV-TLA-003, dated March 8, 2022, in the amount of €1,470,000 (representing Installment 3 of the license fee, being 30% of the total license fee of €4,900,000). Payment was made by wire transfer from TSL's Ashgrove Securities account to Hailong's Westmark Bancorp account on March 22, 2022. A copy of the SWIFT MT103 confirmation is enclosed.
The total amount invoiced and paid under the TLA is €1,960,000 + €1,470,000 + €1,470,000 = €4,900,000, which is consistent with the contractual license fee of 5% × €98,000,000 and represents full and final payment of all amounts due under the TLA. No further installments remain outstanding.
Request No. 5 — Nereus Procurement Fee Invoices and Proof of Payment
Documents Requested: All invoices and proof of payment for the Nereus procurement coordination fee payable under the Procurement Services Agreement.
Response: Enclosed at Tab 5 are four (4) invoices issued by Nereus Maritime Advisory Limited to TSL in respect of the procurement coordination fee, together with corresponding bank transfer confirmations evidencing payment. The four invoices were issued between June 2019 and April 2022, reflecting the phased nature of the fee payments, which were triggered by the execution of each purchase contract and by the completion of all equipment deliveries. Each invoice is accompanied by a SWIFT MT103 confirmation or equivalent bank transfer receipt.
The total amount invoiced and paid to Nereus under the PSA is €2,940,000, which is consistent with the contractual procurement coordination fee of 3% × €98,000,000 and represents full and final payment of all amounts due under the PSA. A detailed breakdown of each invoice, including the invoice date, the amount, and the corresponding payment date, is set forth in the summary schedule included at Tab 5. No further installments remain outstanding.
Request No. 6 — Documentation of Services Performed by Nereus Maritime Advisory Limited
Documents Requested: Documentation of services actually performed by Nereus Maritime Advisory Limited in connection with the equipment procurement, including any reports, correspondence, or records evidencing the nature and scope of such services.
Response: Enclosed at Tab 6 is the documentation available to TSL that evidences the nature and scope of the services performed by Nereus in connection with the equipment procurement. TSL notes at the outset that Nereus's services were primarily coordination-based in nature, involving market assessment, supplier identification and evaluation, negotiation coordination, and quality oversight. The available documentation includes the following:
(a) Nereus Market Assessment Report, dated November 2018. This report, prepared by Nereus prior to the execution of the PSA and the commencement of the formal procurement process, identifies and evaluates potential manufacturers of marine cargo-handling equipment in the People's Republic of China, the Republic of Korea, and Japan. The report assesses each potential supplier across a range of criteria, including manufacturing capacity, product quality, delivery lead times, pricing competitiveness, after-sales service capabilities, and references from other port operators. The report ultimately recommended Hailong Heavy Industries Co., Ltd. as the preferred supplier, based on a combination of competitive pricing, demonstrated manufacturing quality, and willingness to customize equipment to TSL's terminal specifications.
(b) Procurement Correspondence. Selected correspondence between Mr. Konstantinos Melas, Managing Director of Nereus, and Mr. Dimitrios Sarantopoulos, Vice President of Procurement & Supply Chain of TSL, regarding the Hailong procurement process. This correspondence includes communications relating to initial supplier outreach and engagement, the solicitation and evaluation of competitive proposals, the coordination and facilitation of price negotiations with Hailong, the review and negotiation of contractual terms, and the coordination of logistics and delivery arrangements. The correspondence spans the period from approximately October 2018 through March 2022.
(c) Quality Inspection Reports. Three quality inspection reports prepared by Nereus personnel following on-site visits to Hailong's manufacturing facility located at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China. The inspection visits and corresponding reports are as follows:
(i) Visit 1: February 2019 — Pre-production inspection conducted in connection with Contract HHI-TSL-2019-001 (STS Gantry Cranes). The inspection report covers Hailong's raw material sourcing, fabrication processes, quality management systems (ISO 9001:2015 certification verification), and production planning for the STS crane order.
(ii) Visit 2: November 2019 — In-production inspection conducted in connection with Contract HHI-TSL-2019-002 (RTG Cranes). The inspection report covers work-in-progress on the RTG crane order, including welding quality, structural integrity testing, electrical and hydraulic system assembly, and compliance with TSL's technical specifications.
(iii) Visit 3: September 2020 — Pre-shipment inspection conducted in connection with Contract HHI-TSL-2020-003 (ASC Systems). The inspection report covers final production quality, functional testing of the ASC units prior to disassembly and shipping, packing and crating procedures, and verification of shipping documentation.
TSL reserves the right to supplement this production with additional documentation evidencing the services performed by Nereus as such documentation becomes available or as may be identified through further internal review. TSL is continuing to collect and organize additional internal records, including electronic communications and meeting notes, that may be responsive to this request.
Request No. 7 — Nereus Corporate Registration and Ownership Information
Documents Requested: Corporate registration documents and ownership information for Nereus Maritime Advisory Limited, including details of shareholders, directors, and any relationship to TSL or its affiliates.
Response: Enclosed at Tab 7 is an extract from the Cyprus Registrar of Companies (Department of Registrar of Companies and intellectual Property, Ministry of Energy, Commerce and Industry), dated December 20, 2022, reflecting the current corporate registration and ownership information for Nereus Maritime Advisory Limited. The extract shows the following:
Full Legal Name: Nereus Maritime Advisory Limited
Cyprus Company Registration Number: HE 387214
Registered Address: 12 Griva Digeni Avenue, Office 302, 3106 Limassol, Cyprus
Entity Type: Private limited company incorporated under the Companies Law, Cap. 113, of the Republic of Cyprus
Date of Incorporation: September 14, 2017
Shareholders:
•  Andreadis Family Holdings LLC, a limited liability company organized under the laws of the State of Delaware, United States of America (Delaware Division of Corporations File No. 5847291; registered agent: National Corporate Services Inc., 818 N. Market Street, Suite 100, Wilmington, Delaware 19801, USA) — holding 40% of the issued share capital of Nereus.
•  Mr. Konstantinos Melas (individual; Greek national; Managing Director of Nereus) — holding 30% of the issued share capital of Nereus.
•  Ms. Eleni Andreadis (individual; Greek national; Non-Executive Director of Nereus; daughter of Mr. Nikolaos Andreadis, Chairman and Chief Executive Officer of TSL) — holding 30% of the issued share capital of Nereus.
Directors:
•  Mr. Konstantinos Melas — Managing Director
•  Ms. Eleni Andreadis — Non-Executive Director
TSL acknowledges the related-party relationship between Nereus and TSL. Specifically, TSL recognizes that:
(a) Andreadis Family Holdings LLC, which holds 40% of the equity of Nereus, also holds approximately 62% of the issued share capital of TSL;
(b) Ms. Eleni Andreadis, who holds 30% of the equity of Nereus and serves as a Non-Executive Director of Nereus, is the daughter of Mr. Nikolaos Andreadis, Chairman and Chief Executive Officer of TSL; and
(c) the foregoing ownership and familial relationships constitute a related-party relationship within the meaning of Article 127(2) of UCC Implementing Regulation (EU) 2015/2447.
Notwithstanding the existence of this related-party relationship, TSL maintains that the procurement coordination fee paid to Nereus reflects fair market compensation for genuine services rendered and constitutes a deductible buying commission, as further discussed in Section II below.
Request No. 8 — Commissioning Service Records
Documents Requested: Commissioning service records, including scope of work documents, completion certificates, and engineer dispatch records, for the commissioning and installation services performed under Contract HHI-TSL-2021-004.
Response: Enclosed at Tab 8 are the commissioning service records relating to the commissioning and installation services performed under Contract HHI-TSL-2021-004. The enclosed documents include the following:
(a) Commissioning Protocols. Detailed commissioning protocols for each of TSL's three terminal facilities at which the imported equipment was installed and commissioned, namely: (i) the Piraeus Container Terminal (PCT), Piraeus; (ii) the Thessaloniki Container Terminal (ThCT), Thessaloniki; and (iii) the Volos Terminal Facility (VTF), Volos. Each protocol sets forth the scope of commissioning activities, the sequence of testing and acceptance procedures, safety and environmental requirements, and the criteria for final acceptance.
(b) Completion Certificates. Individual completion certificates for each piece of equipment commissioned at each terminal facility, signed jointly by the relevant TSL terminal manager and the responsible Hailong commissioning engineer. Each completion certificate confirms the satisfactory completion of all commissioning activities, including final assembly, mechanical and electrical testing, calibration, system integration, and performance acceptance testing, and records the date on which the equipment was accepted for commercial operation.
(c) Hailong Engineer Travel and Dispatch Records. Travel and dispatch records for all Hailong engineers and technical personnel deployed to Greece for the commissioning activities. These records include the names and qualifications of each engineer dispatched, travel dates and itineraries, the duration of each engineer's on-site presence at each terminal facility, and a description of the tasks performed by each engineer during the relevant period.
TSL draws the Chief Customs Auditor's attention to the following factual points, which are documented in the records enclosed at Tab 8 and are relevant to the customs valuation dispute:
All commissioning and installation services under Contract HHI-TSL-2021-004 were performed entirely within the territory of Greece, at TSL's terminal facilities, after the relevant equipment had been imported into the customs territory of the European Union and cleared through customs at the Piraeus Regional Customs Office. No commissioning or installation activities were performed outside Greece or prior to importation.
The commissioning activities encompassed the following categories of work: final assembly of equipment components that had been shipped in disassembled or semi-assembled form; mechanical testing of all crane systems, including load testing, structural stress testing, and movement range verification; electrical testing, including power supply integration, motor function testing, and safety interlock verification; calibration of crane control systems, sensors, and positioning equipment; integration with TSL's terminal operating systems, including the configuration and commissioning of the HaiControl Suite v4.2 software and associated HaiPredict predictive maintenance module; and performance acceptance testing against the contractual performance specifications.
The relevance of these facts to TSL's customs valuation position is addressed in Observation 3 in Section II below.
Request No. 9 — Commercial Correspondence Between TSL and Hailong
Documents Requested: Correspondence between TSL and Hailong Heavy Industries Co., Ltd. regarding the commercial terms of the Technology License Agreement and the purchase contracts, including pricing, scope of supply, and any discussions concerning the allocation of value between the various contracts and agreements.
Response: Enclosed at Tab 9 is selected correspondence between TSL personnel — including Mr. Dimitrios Sarantopoulos, Vice President of Procurement & Supply Chain, and Ms. Elena Papadimitriou, Chief Financial Officer — and Hailong personnel — including Mr. Wei Junhao (魏俊豪), Export Sales Director — relating to the negotiation of the commercial terms for the four purchase contracts and the Technology License Agreement. The enclosed correspondence covers the period from approximately September 2018 through March 2022 and includes emails, letters, and meeting minutes that address, inter alia, the development and negotiation of equipment pricing, the scope of supply under each contract, the structure and pricing of the Technology License Agreement, and various logistical and commercial matters arising during the performance of the contracts.
TSL notes that the production of correspondence at Tab 9 is subject to assertions of attorney-client privilege and commercial confidentiality where applicable. In particular, certain correspondence post-dating the initiation of the AADE audit on April 4, 2022 has been withheld from production on the grounds of attorney-client privilege, as such correspondence reflects legal advice sought and received by TSL from its legal advisors in connection with the Audit and the related administrative proceedings. TSL reserves the right to provide a privilege log identifying each withheld document by date, author, recipient, and general subject matter, upon request by the Chief Customs Auditor or as may otherwise be required under applicable procedural rules.
TSL further reserves the right to supplement this production with additional correspondence as may be identified through further internal review of its electronic records and document management systems.
II. OBSERVATIONS
TSL provides the foregoing documents without prejudice to, and subject to a full reservation of all rights, claims, and defenses set forth in, its administrative objections (ενδικοφανείς προσφυγές) filed with the Directorate of Resolution of Disputes (DED) on November 30, 2022, challenging both the Classification Notice (AADE/ADAN/2022/0073) and the Valuation Notice (AADE/ADAN/2022/0074). TSL's observations below are provided for the information of the Chief Customs Auditor and are likewise without prejudice to TSL's pending Binding Tariff Information application (reference: BTI-GR-2022-003847), filed on November 15, 2022, which has been referred to the European Commission's Directorate-General for Taxation and Customs Union (DG TAXUD) on February 7, 2023, pursuant to Article 34(10) of Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (the "UCC"). TSL understands that the BTI application is currently under consultation between AADE and DG TAXUD, and that the outcome of that consultation may have a material bearing on the classification aspects of the Audit.
In light of the documents produced herewith, TSL respectfully draws the Chief Customs Auditor's attention to the following observations:
Observation 1 — Independence of the Technology License Agreement from the Purchase Contracts
The documents produced at Tabs 1 and 2, and the correspondence produced at Tab 9, confirm that the Technology License Agreement dated January 10, 2019 and the four purchase contracts dated between January 15, 2019 and February 28, 2021 are separate and independent agreements with distinct subject matter, independent pricing mechanisms, and different contractual terms.
The four purchase contracts govern the sale for export and delivery of tangible goods — STS Gantry Cranes, RTG Cranes, ASC Systems, and associated spare parts, software installation packages, and commissioning services. The pricing under the purchase contracts reflects the agreed CIF value of the physical goods and services supplied, and the contracts are governed by their own set of terms and conditions, including specific provisions regarding delivery (Incoterms 2020, CIF Piraeus), warranty, inspection, and acceptance.
By contrast, the TLA governs the grant of an ongoing, non-exclusive license to use Hailong's proprietary software and intellectual property over a ten-year period. The services and rights provided under the TLA extend well beyond the sale and delivery of the imported equipment and encompass the following post-importation elements:
(a) Software updates and upgrades to the HaiControl Suite v4.2 and HaiPredict module over the ten-year license term, including major version upgrades, security patches, and functional enhancements;
(b) Remote technical support, including access to a 24-hour, 7-day-per-week helpdesk staffed by Hailong software engineers;
(c) On-site technical visits by Hailong engineers, at a frequency of two (2) visits per year to each of TSL's terminal facilities, for the purpose of software optimization, performance review, and troubleshooting;
(d) Access to Hailong's online technical documentation library, including engineering drawings, operating manuals, maintenance guides, and software documentation; and
(e) Annual training of TSL's engineers and technical personnel on the use, configuration, and maintenance of the HaiControl Suite v4.2 and HaiPredict module.
The TLA was separately negotiated between the parties, was subject to a separate internal TSL approval process (including review and approval by TSL's Board of Directors), and was executed on a date distinct from any of the purchase contracts. As noted above, Article 3.2 of the TLA expressly provides that the TLA is "independent of and supplemental to" any purchase agreement between the parties.
On the basis of the foregoing, TSL maintains that the technology license fees paid under the TLA do not constitute royalties or license fees that should be added to the customs value of the imported equipment under Article 71(1)(c) of the UCC, which provides for the addition of royalties and license fees to the customs value only where such payments relate to the imported goods and constitute a condition of their sale for export. TSL respectfully submits that the technology license fees relate primarily to post-importation services and rights and are not a condition of the sale for export of the equipment, as set forth in detail in TSL's administrative objection to the Valuation Notice (AADE/ADAN/2022/0074). TSL also draws attention to the guidance provided in Commentary No. 3 of the World Customs Organization's Technical Committee on Customs Valuation and the European Commission's Compendium of Customs Valuation Texts, which support the exclusion of license fees from the customs value where, as here, the license agreement covers post-importation services and is not a condition of sale.
Observation 2 — Genuine Character of Nereus Procurement Services and Buying Commission Treatment
The documentation produced at Tab 6 demonstrates that Nereus Maritime Advisory Limited performed genuine procurement coordination services on TSL's behalf in connection with the acquisition of the marine cargo-handling equipment from Hailong. These services were real, substantive, and directly attributable to TSL's equipment procurement process, and they encompassed the following activities:
(a) Market Assessment and Manufacturer Identification. Nereus prepared a comprehensive market assessment report dated November 2018 that identified and evaluated potential manufacturers of marine cargo-handling equipment across multiple countries, including the People's Republic of China, the Republic of Korea, and Japan. The report assessed each potential supplier on the basis of objective criteria, including manufacturing capacity, product quality, delivery capabilities, pricing, and after-sales support, and ultimately recommended Hailong as the preferred supplier.
(b) Coordination of Price and Contract Negotiations. Nereus played an active and ongoing role in coordinating the price and contract negotiations between TSL and Hailong, as evidenced by the procurement correspondence produced at Tab 6. Mr. Konstantinos Melas, Managing Director of Nereus, served as the primary intermediary between TSL and Hailong during the negotiation phase, facilitating the exchange of proposals, counter-proposals, and revised commercial terms.
(c) On-Site Quality Inspections. Nereus personnel conducted three (3) on-site quality inspections at Hailong's manufacturing facility in Ningbo, Zhejiang Province, PRC, between February 2019 and September 2020. These inspections covered pre-production, in-production, and pre-shipment stages, respectively, and produced detailed quality inspection reports documenting Nereus's findings and recommendations.
On the basis of the foregoing, TSL maintains that the procurement coordination fee of €2,940,000 paid to Nereus qualifies as a deductible buying commission under Article 72(a) of the UCC and Article 127(1) of UCC Implementing Regulation (EU) 2015/2447, which provide that buying commissions — defined as fees paid by an importer to its agent for the service of representing it in the purchase of goods — shall not be included in the customs value. TSL submits that Nereus acted exclusively on TSL's behalf, performed genuine procurement services, and was compensated for those services at a commercially reasonable rate, all of which are hallmarks of a buying commission relationship.
TSL acknowledges the related-party relationship between Nereus and TSL, as disclosed in our response to Request No. 7 above. However, TSL respectfully submits that the existence of a related-party relationship does not, in itself, preclude the treatment of a fee as a buying commission. The critical inquiry, as articulated in the case law of the Court of Justice of the European Union and in the European Commission's Compendium of Customs Valuation Texts, is whether the agent performed genuine services on behalf of the importer and whether the fee paid represents fair compensation for those services, rather than a disguised element of the purchase price.
TSL reserves the right to submit additional documentation and a detailed economic analysis in further support of the buying commission characterization. In particular, TSL intends to submit a Functions-Assets-Risks (FAR) analysis prepared by Kestrel & Palladian LLP, an independent advisory firm with offices at 8 Voukourestiou Street, 106 71 Athens, Greece. The FAR analysis will demonstrate, through a detailed assessment of the functions performed, assets employed, and risks assumed by Nereus, that Nereus acted as a genuine buying agent of TSL and that the procurement coordination fee constitutes fair consideration for the services rendered.
Observation 3 — Excludability of Post-Importation Commissioning Services from Customs Value
The commissioning service records produced at Tab 8 confirm that all commissioning and installation services performed under Contract HHI-TSL-2021-004 were conducted entirely within the territory of Greece, after the relevant equipment was imported into the customs territory of the European Union and cleared through customs at the Piraeus Regional Customs Office.
The commissioning services constituted post-importation activities that are distinct from and subsequent to the sale for export of the goods. These activities included:
(a) Final assembly of equipment components that had been shipped in disassembled or semi-assembled form, including structural assembly, attachment of booms and spreaders, and installation of electrical and hydraulic systems;
(b) Mechanical and electrical testing, including load testing, structural stress testing, motor function testing, power supply integration testing, and safety interlock verification;
(c) Calibration of crane control systems, sensors, anti-sway systems, and positioning equipment;
(d) Integration with TSL's terminal operating systems, including the installation, configuration, and commissioning of the HaiControl Suite v4.2 software and the HaiPredict predictive maintenance module at each of TSL's three terminal facilities; and
(e) Performance acceptance testing, conducted in accordance with the contractual performance specifications and accepted by TSL upon satisfactory completion.
On the basis of the foregoing, TSL maintains that the commissioning services value of €2,100,000 allocated to commissioning and installation services under Contract HHI-TSL-2021-004 is excludable from the customs value of the imported goods under Article 72(e) of the UCC, which expressly provides that the following charges shall not be included in the customs value, provided that they are distinguished from the price actually paid or payable for the imported goods:
"charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation on imported goods such as industrial plant, machinery or equipment."
The commissioning activities described above fall squarely within the scope of Article 72(e), as they constitute assembly, erection, and technical assistance undertaken after the importation of the equipment. The commissioning services were separately priced within Contract HHI-TSL-2021-004, and the allocated value of €2,100,000 is distinguishable from the price paid for the physical goods and software. This position is set forth in detail in TSL's administrative objection to the Valuation Notice (AADE/ADAN/2022/0074).
III. RESERVATION OF RIGHTS
TSL provides the documents, information, and observations set forth in this response subject to a full reservation of all rights, claims, and defenses available to TSL under applicable Greek law, European Union law, and international law, including but not limited to those set forth in TSL's administrative objections to the Classification Notice and the Valuation Notice.
The production of documents in response to the Information Request does not constitute, and shall not be construed as constituting, a waiver of any privilege, including attorney-client privilege (δικηγορικό απόρρητο), the work product doctrine, or any other applicable privilege, protection, or immunity from disclosure. TSL expressly reserves all such privileges and protections with respect to any documents withheld from production, including the privileged correspondence identified in our response to Request No. 9 above.
TSL's administrative objections to the Classification Notice (AADE/ADAN/2022/0073) and the Valuation Notice (AADE/ADAN/2022/0074), filed with the Directorate of Resolution of Disputes (DED) on November 30, 2022, remain pending before the DED and are held in abeyance in accordance with the discussions between the parties regarding a proposed standstill arrangement. TSL understands that the DED has not yet rendered a decision on either objection and that the parties continue to discuss the terms of a standstill that would preserve TSL's right to seek judicial review before the competent Administrative Court of First Instance (Διοικητικό Πρωτοδικείο) in the event that the administrative objections are rejected.
TSL's Binding Tariff Information application (reference: BTI-GR-2022-003847), filed on November 15, 2022, is pending consultation between AADE and the European Commission's DG TAXUD following AADE's referral of the application on February 7, 2023, pursuant to Article 34(10) of the UCC. TSL respectfully requests that AADE take into account the outcome of the BTI consultation in its consideration of the classification issues raised in the Audit and in the pending administrative objection to the Classification Notice.
TSL reserves the right to supplement this production with additional documents, information, analysis, or expert reports as may be appropriate or as may be required in connection with the Audit, the pending administrative objections, the BTI consultation, or any subsequent proceedings.
Closing
We trust that the foregoing documents and information are responsive to the categories identified in the Information Request of January 5, 2023. Should you require any clarification or wish to discuss any aspect of this response, please do not hesitate to contact the undersigned at the address and telephone number indicated above.
We remain at the disposal of the Piraeus Regional Customs Office and look forward to the continued constructive resolution of the matters addressed in the Audit.
Respectfully submitted,
VOURNAS & THEODORAKIS ΔΙΚΗΓΟΡΙΚΟ ΓΡΑΦΕΙΟ
By: ________
Name: Alexandros Vournas
Title: Managing Partner
Athens Bar Registration No.: 18744 22 Academias Street, 106 71 Athens, Greece Tel: +30 210 362 8400
Email: a.vournas@vournaslaw.gr
Date: January 18, 2023
On behalf of Thalassa Shipping & Logistics Société Anonyme
Distribution
Copies to:
Ms. Christy Bauer Senior Associate Calderwood & Harkness LLP Avenue Louise 480 1050 Brussels, Belgium
Mr. Garrett Simmons Associate Calderwood & Harkness LLP 400 Lexington Avenue New York, NY 10170, USA
Ms. Elena Papadimitriou Chief Financial Officer Thalassa Shipping & Logistics SA 47 Akti Miaouli 185 35 Piraeus, Greece
ENCLOSURES — TAB INDEX
This letter and its enclosures contain confidential and commercially sensitive information belonging to Thalassa Shipping & Logistics Société Anonyme. Any unauthorized use, disclosure, or distribution of this letter or its enclosures is strictly prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.
Tab | Description
Tab 1 | Purchase Contracts HHI-TSL-2019-001 (STS Gantry Cranes, 12 units), HHI-TSL-2019-002 (RTG Cranes, 18 units), HHI-TSL-2020-003 (ASC Systems, 8 units), and HHI-TSL-2021-004 (Spare parts, software, and commissioning services), with all annexes and schedules
Tab 2 | Technology License Agreement dated January 10, 2019, between Hailong Heavy Industries Co., Ltd. and Thalassa Shipping & Logistics SA
Tab 3 | Procurement Services Agreement dated December 1, 2018, between Thalassa Shipping & Logistics SA and Nereus Maritime Advisory Limited
Tab 4 | Technology license fee invoices (3) issued by Hailong and corresponding bank transfer confirmations (SWIFT MT103)
Tab 5 | Nereus procurement coordination fee invoices (4) issued by Nereus Maritime Advisory Limited and corresponding bank transfer confirmations
Tab 6 | Documentation of Nereus services: (a) Market assessment report dated November 2018; (b) Procurement correspondence (Melas–Sarantopoulos); (c) Quality inspection reports — Visit 1 (February 2019), Visit 2 (November 2019), Visit 3 (September 2020)
Tab 7 | Nereus Maritime Advisory Limited — Extract from the Cyprus Registrar of Companies (shareholders, directors, registered office, date of incorporation)
Tab 8 | Commissioning service records: (a) Commissioning protocols for Piraeus, Thessaloniki, and Volos terminals; (b) Completion certificates; (c) Hailong engineer travel and dispatch records
Tab 9 | Selected commercial correspondence between TSL and Hailong Heavy Industries Co., Ltd. (subject to assertions of attorney-client privilege; privilege log available upon request)

January 18, 2023

BY HAND DELIVERY AND ELECTRONIC TRANSMISSION

II. OBSERVATIONS

III. RESERVATION OF RIGHTS

Record

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