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Signals™ Headlines - April 6, 2001

10 Compromise Agreements Announced by FMC:$520,000 in Civil Penalties Collected

The Federal Maritime Commission (FMC) has announced that it has entered into compromise agreements with ten (10) organizations, which resulted in the collection of a total of $520,00 in civil penalties. The agreements were entered into with vessel operating common carriers, and ocean transportation intermediaries (OTIs) operating as forwarders, carriers or shippers in the U.S. foreign trades. These include one NVOCC based in Taipei, Taiwan and nine US based organizations based in California, Florida, Maryland, New Jersey and Texas. Details of these ten compromise agreements are as follows:

Dedola International, Inc.: This ocean transportation intermediary located in Long Beach, CA was alleged to have violated the Shipping Acts and the Commission’s regulations by operating as an NVOCC without publishing a tariff between May 1, 1999 and March 30, 2000. During this period of time Dedola handled hundreds of shipments as a carrier, and participated as a shipper signatory to service contracts. In compromise of these allegations, Dedola paid the FMC the sum of $40,000.

Interocean Lines, Inc. and Trinity Shipping Line S.A.: These two vessel operating common carriers located in Miami, FL are active in the South America trades. FMC alleged that Interocean and Trinity violated the Shipping Acts by operating for about six months under an agreement that was not filed with the Commission, and by failing to charge the rates in their jointly-published tariff.

Additionally, Interocean and Trinity were alleged to have violated section 10(c)(5) of the Shipping Act of 1984 by placing a clause in service contracts which prohibited the payment of freight forwarder compensation. Conferences and groups of two or more carrier are prohibited by the Shipping Act from denying compensation to qualified ocean freight forwarders; this does not apply to independent ocean carriers and NVOCCs. In compromise of these allegations, Interocean and Trinity each paid the FMC $30,000.

Newport Cargo Consolidated, Inc.: This OTI-Freight Forwarder based in Hawthorne, CA was alleged to have violated the Shipping Act and FMC regulations by receiving freight forwarder compensation from ocean common carriers with respect to shipments in which it had a direct beneficial interest through an affiliated NVOCC. In compromise of these allegations, Newport Cargo paid $45,000 to the FMC.

Panalpina, Inc. and Panalpina FMS, Inc.: Panalpina, Inc. is a licensed ocean freight forwarder with U.S. headquarters in Morristown, NJ. Panalpina FMS, Inc. (FMS) is a subsidiary of Panalpina with headquarters in Hanover, MD. It was alleged by the FMC that with respect to certain shipments transported between February 1997 and June 2000, Panalpina permitted FMS, an unlicensed ocean freight forwarder, to use Panalpina’s freight forwarding license and to collect the resulting compensation from ocean common carriers; and FMS performed ocean freight forwarding services without a valid license issued by the Commission.

In compromise of these allegations, Panalpina and Panalpina FMS paid FMC $150,000, and FMS agreed not to engage in the performance of services as an ocean freight forwarder unless and until it holds a valid license. Additionally, FMS agreed to retain a neutral auditor for the purpose of ensuring its compliance with the Shipping Act and with FMC regulations.

Robert S. Rullo d/b/a ABA Forwarding: Mr. Rullo surrendered his ocean freight forwarder license and paid the sum of $15,000 to compromise allegations that his New Jersey based organization violated sections 10 and 19 of the Shipping Act in three ways: by conveying a portion of freight forwarder compensation to shippers, so as to reduce rates paid by these shippers, by permitting shippers to prepare and submit bills of lading naming ABA Forwarding as forwarder knowing that ABA Forwarding performed no services on such shipments, and by falsely certifying to the ocean carriers that forwarding services had been performed.

Signet Shipping Company: This vessel operating common carrier operated between Houston, TX and ports in Central America. FMC alleged that Signet violated the Shipping Act by failing to make the rules of its tariff available for public inspection, by failing to file its service contracts with FMC in a timely manner, and by failing to charge rates and charges set forth in its tariff for transportation services provided. Signet has discontinued its ocean common carrier service in the U.S. trades. In compromise of these allegations, Signet paid FMC $20,000.

Tecmarine Lines, Inc.: This South Florida based ocean common carrier was alleged by FMC to have violated the Shipping Act by allowing shippers to obtain transportation for less than applicable rates on certain shipments transported from the US to Trinidad during 1998 and 1998. According to the FMC, Tecmarine provided local drayage and equipment without charge, or not in accordance with its tariffs or service contracts. Tecmarine paid the FMC $80,000 to compromise these allegations.

Universal Freightways Corp.: This Miami, FL based OTI-NVOCC was alleged by FMC to have violated sections the Shipping Act of 1984 by charging different compensation for the transportation of property than the rates and charges set forth in its tariff. Additionally, it was alleged to have accepted cargo from or transporting cargo for the account of an NVOCC that does not have a tariff and bond on file at the FMC. Universal Freightways paid FMC $45,000 to compromise these allegations.

Yatari Express Co., Ltd.: This NVOCC based in Taipei, Taiwan paid $65,000 to compromise allegations that it violated sections the Shipping Act of 1984 in three ways: by improperly accessing a service contract, by misdescribing commodities, and by failing to charge the rates in its tariff. Also, it was alleged that Yatari began operations as an ocean transportation intermediary serving the USA before its tariff was published, and before its bond was in effect and on file at the Commission.

In concluding these compromises, none of the above listed organizations admitted any violation of the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 (OSRA). These compromise agreements resulted from investigations conducted by FMC Area Representatives of the Bureau of Enforcement located in Los Angeles, Miami, New Orleans, New York, Seattle and Washington, DC. Staff attorneys with the Bureau of Enforcement based in Washington, DC negotiated the compromise agreements. The announcement of these agreements was made by Vern W. Hill, Director of the FMC Bureau of Enforcement.


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