During March 2000 the FMC Bureau of Enforcement collected a total of $1,060,000 in penalties from four vessel
operating common carriers and fourteen ocean transportation intermediaries (OTIs). These payments settled
allegations of violations of the US Shipping Acts. Individual settlements ranged from $15,000 to $290,000 (in US
Dollars). These entities did not admit any violations of the Shipping Acts, but each paid a significant penalty. Two
of the OTI-Freight Forwarders involved surrendered their licenses.
The malpractices cited by the FMC in these settlement agreements include illegal rebating, misdescription of
commodities in order to obtain lower rates, failure to enforce tariffs, unlawful freight forwarder compensation, and
service contract misuse. Illegal rebating was the most frequent allegation. Three of the four vessel operating
common carriers named by the FMC were alleged to have paid illegal rebates. Seven of the OTIs named were alleged to
have received illegal rebates in violation of section 10(a)(1) of the Shipping Act.
Misdescription of commodities to obtain more favorable rates was involved in three of the compromises. In one case,
the misdescriptions were made by an origin agent in China, but because the shipment moved on the bill of lading of
the US based NVOCC, and under its service contract, the NVOCC had to settle with FMC for $25,000. In several cases,
the ocean carrier or NVOCC was alleged to have failed to enforce the rates of its tariff or service contract, and
thereby violated section 10(b) of the Shipping Act by allowing shippers to obtain transportation at less than the
applicable tariff or contract rates.
Agreements between the FMC and vessel operating common carriers (VOCCs) settled allegations of rebating, service
contract misuse, and failure to enforce tariffs. The four carriers named were:
Empresa de Navegacao Alianca S.A. This Brazilian VOCC was alleged to have knowingly and willfully allowing
shippers to obtain transportation for less than applicable rates shown in its tariffs and service contracts by the
payment of illegal rebates. It was also alleged to have allowed shipments which did not qualify for carriage under
service contract to be transported at service contract rates. Alianca paid FMC $290,000 in compromise.
Caribbean General Maritime, Ltd. (CAGEMA): This St. Lucia based VOCC was alleged paid illegal rebates in the
South America trades. Also, it was alleged that CAGEMA violated section 10(b)(14) of the Shipping Act by knowingly
and willfully providing service to an untariffed and unbonded NVOCC in the Caribbean trades. In compromise of these
allegations, CAGEMA paid FMC $80,000.
Compania Chilena de Navegacion Interoceanica S.A. The FMC alleged that CCNI, a Chilean VOCC, paid illegal
rebates. Under the compromise, CCNI paid the sum of $150,000 to the FMC.
DSR – Senator Lines GmbH. – The compromise resolves allegations that DSR-Senator Lines violated the Shipping
Act by charging less compensation for transportation than the rates filed in its tariffs and service contracts.
DSR-Senator is also alleged to have allowed third parties to obtain transportation at less than the applicable rates
by allowing access to a service contract without the consent of the shipper signatory. DSR-Senator Lines GmbH is a
VOCC based in Bremen, Germany. It paid FMC the sum of $120,000.