The Federal Maritime Commission (FMC) has announced that it has recently entered into nine (9) new compromise agreements, which resulted in the collection of a total of $1,080,000 in civil penalties. These agreements are the result of investigations by the FMC’s Bureau of Enforcement into violations of the Shipping Acts by ocean carriers, ocean freight forwarders, NVOCCs and unlicensed companies operating in the USA without FMC-OTI licenses. In concluding these compromises, these entities did not admit any violation of the Shipping Acts. Details of these compromise agreements are as follows:

Advance Ocean, Inc., an OTI-NVOCC located in Hacienda Heights, CA, was alleged to have violated section 10(a)(1) of the Shipping Act of 1984 by improperly accessing a service contract to which it was not a signatory or affiliate, and by misdescribing the commodity to the ocean carrier. Advance also was alleged to have violated section 10(b)(1) of the Act by failing to charge and collect rates and charges as shown in its tariff for these shipments. In compromise of these allegations, Advance made a payment to the FMC of $25,000.

Fortune Network Ltd. and Multi Express Inc.: Fortune Network Ltd. is an NVOCC located in Hong Kong. Multi Express Inc., is an FMC licensed ocean transportation intermediary (OTI) based in Hacienda Heights, CA. It was alleged that Fortune Network violated the Shipping Act by misdescribing commodities on shipments transported under its service contracts with COSCO. Fortune Network and Multi Express paid FMC $80,000.

The Maritime Credit Alliance (MCA) Agreement: The vessel operating common carrier members of this agreement are Alianca Navegacao E Logistic Ltda., CMA C.M. S.A., Companions Chilean de Navegacao Interoceanica S.A., Crowley Liner Services, Inc., Lykes Lines Limited, LLC, Mexican Line Limited, Tecmarine Lines, Inc. and Tropical Shipping & Construction Co., Ltd. It was alleged that the MCA and its members violation of sections 5(a) and 10(a)(2) of the Shipping Act by operating during 1999 and 2000 under a credit information agreement which was not filed with the FMC. The MCA and its members made a payment of $50,000 to the FMC in compromise of these allegations.

Mark VII Transportation Company, Inc.: This NVOCC based in Houston, TX was alleged to have violated the Shipping Acts by obtaining transportation in the Transatlantic trades for less than applicable tariff and service contract rates and charges by receiving rebates or other rate concessions. Mark VII paid $60,000 to compromise.

Mediterranean Shipping Company (MSC) is a vessel operating common carrier with headquarters in Geneva, Switzerland. It was alleged that in the Transatlantic trades MSC violated the Shipping Acts by undercharging, rebating or refunding to shippers a portion of its applicable tariff or service contract rates. In compromise of these allegations, MSC paid the FMC $500,000.

OEC Freight Worldwide Co. Ltd. and Orient Express Container Co. Ltd.: These two NVOCCs based in Taipei, Taiwan were alleged to have violated the Shipping Acts by misdescribing commodities on shipments transported under service contracts with ocean common carriers in order to obtain lower rates. The related companies jointly paid the FMC $145,000 to compromise these allegations.

Scorpion Express Line of Miami, FL, was alleged to have violated sections 10(a)(1) and 19(e) of the Shipping Act of 1984, by entering into a service contract with an ocean carrier and operating as an NVOCC without an ocean transportation intermediary license. Scorpion made a payment to the FMC of $20,000.

Transunion America Inc., Transunion S.A. and Cargo Dex S.A.: Transunion S.A. and Cargo Dex S.A. are located in Spain, where both operate as freight forwarders. Transunion America Inc., based in Maspeth, New York, served as the U.S. collection agent, and as consignee or notify party for shipments handled by Transunion S.A. These three companies have common owners and/or officers. It was alleged that the three Transunion Companies acted as an ocean transportation intermediary (OTI) in the U.S. foreign trades without an NVOCC bond, a tariff and an FMC-OTI license. It was also alleged that these companies unlawfully accessed the service contract of an ocean carrier in order to obtain transportation at less than the applicable rates and charges of the carrier. These three Transunion Companies paid FMC the sum of $90,000.

Wallenius Lines AB of Sweden ceased its vessel operations in the U.S. trades in 1999, but it was alleged to have violated the Shipping Act of 1984 and the Commission’s regulations prior to that time. Wallenius was alleged to have allowed ocean freight forwarders to enter into and utilize service contracts and time volume arrangements, by paying forwarder compensation to entities not entitled to receive such compensation, and by filing service contracts without proper shipper status certifications. Additionally, Wallenius was alleged to have provided transportation at less than applicable tariff rates for shipments that moved under service contracts or time-volume arrangements. In compromise of these allegations, Wallenius made a payment to the Commission of $110,000.

The FMC has begun a formal proceeding to revoke the OTI license of AAA Nordstar Line Inc., a New Jersey based OTI-NVOCC. The principals of AAA Nordstar, Anil V. Rane and Maria E. Fabros, were recently found guilty of mail fraud and conspiracy to commit mail fraud by a Federal Court in a case involving shipments of U.S. military household goods. In view of these convictions, the FMC has decided AAA Nordstar’s owners no longer posses the “good character” required to hold the OTI license. FMC regulations require that applicants for the OTI license must initially be qualified by “experience and character” to act as an ocean transportation intermediary, and must continuously maintain such qualifications of integrity, good character, technical OTI expertise and financial responsibility thereafter as a condition of license retention.

The recent federal case against Rane and Fabros involved Great Eastern Shipping, Inc., a separately incorporated company they owned and operated out of the same offices as AAA Nordstar in Rahway, NJ. From September 1998 through June 2000 Great Eastern was awarded more than 350 single-shipment contracts for ocean transportation of military household goods by the U.S. Military Traffic Management Command (MTMC). Documents presented in Federal Court showed Great Eastern over-billed and falsified documents to make it appear that it was using U.S. flag vessels when the transportation was, in fact, performed by foreign-registered vessels, contrary to U.S. shipping laws and the applicable MTMC shipping contracts. Rane and Fabros were sentenced to jail time, and agreed to repay the U.S. government $4,323,673.79.