The Federal Maritime Commission (FMC) recently announced eight compromise agreements resulting in civil penalties in an aggregate amount of $630,000. All amounts shown below are in US Dollars. These compromise agreements resulted from investigations conducted by FMC Representatives of the Bureau of Enforcement located in Los Angeles, Miami, New York, Seattle and Washington, DC. Staff attorneys with the Bureau of Enforcement negotiated the compromise agreements.
Asia-North America Eastbound Rate Agreement (ANERA) This ocean common carrier conference, with eight carrier members, suspended operations under conference authority as of May 1999. The FMC alleged that prior to the suspension of operations ANERA and its members were signatories to at least 105 service contracts containing “opt-out” provisions which were not disclosed in ANERA’s essential terms publication. FMC alleged this was a violation of section 8(c) of the Shipping Act of 1984, as well as the Commission’s regulations. In compromise of these allegations, ANERA and its members paid FMC $110,000, but did not admit any violations.
A.T.I. U.S.A., Inc. This New Jersey based company is licensed by the FMC as both an ocean freight forwarder and NVOCC. It was alleged that ATI violated the Shipping Act of 1984 by charging less than the rates and charges set forth in its tariff. In addition, it was alleged that ATI collected freight forwarder compensation on shipments in which it had a beneficial interest. ATI paid the sum of $ 25,000, but did not admit any violations.
E.H. Harms USA, Inc. This licensed ocean transportation intermediary located in Elizabeth, NJ operates as both an NVOCC and as ocean freight forwarder in the Transatlantic trade. The FMC alleged that Harms obtained ocean transportation at less that applicable rates and charges in violation of Section 10(a)(1) of the Shipping Act of 1984 by entering into service contracts as an ocean freight forwarder. It was also alleged that Harms violated section 19(d)(4) of the Act by collecting freight forwarder compensation for service contract shipments in which it had a beneficial interest. Harms paid FMC $40,000. There was no admission of violation by Harms.
Hamburg-Sudamerikanische Dampfschifffahrtsgesellschaft Eggert & Amsinck (dba Columbus Line). According to FMC’s statement, it was alleged that Columbus Line violated the Shipping Act of 1984 by allowing shipments, which did not qualify for transportation under an Inter-American Freight Conference service contract, to be transported at service contract rates rather than applicable tariff rates. Pursuant to a compromise agreement, Columbus Line made a payment of $70,000. There was no admission of violations.
King Ocean Services, S.A. This Panamanian vessel operating common carrier maintains its operating headquarters in Miami, FL, and provides transportation services in the South America and Caribbean trades. It was alleged by FMC that King Ocean violated the Shipping Act by allowing shippers to obtain ocean transportation from the USA to Trinidad, Central America and Venezuela by less than applicable rates and charges in five ways: by the payment of rebates, by receiving less than applicable rates and charges, by providing local drayage without charge, by misuse of rules and practices relating to equipment substitution, and by providing transportation pursuant to unfiled service contracts. King Ocean paid the sum of $200,000 to the FMC in compromise of these allegations, but made no admission of violations.
Inter-Shipping Chartering Co. This Miami based NVOCC was alleged by FMC to have violated the Shipping Act by obtaining transportation of property for less than applicable rates and charges by receiving rebates and other rate concessions. Inter-Shipping paid FMC $ 20,000 in compromise, but did not admit any violations.
Jardine Logistics Services (HKG) Ltd. This licensed ocean transportation intermediary located in Hong Kong operates as a NVOCC in the Transpacific trades. FMC alleged that Jardine violated the Shipping Act by using service contracts to which it was not a signatory. Also, it was alleged that Jardine provided ocean transportation services not in accordance with its published tariff. Jardine paid FMC $115,000, and did not admit any violations.
Venchi International Corp. and Patricia Nazar. This Miami based NVOCC and its President, Patricia Nazar, were alleged by FMC to have violated the Shipping Act in three ways: by obtaining transportation for less than applicable rates and charges by receiving rebates and other rate concession; by charging rates that were not published in its tariffs; by acting as an ocean freight forwarder without a license. Venchi International and Patricia Nazar admitted each and all violations as alleged, ceased to do business as an ocean transportation intermediary, withdrew all applications for licensing as an ocean transportation intermediary, and paid FMC $50,000.
The Federal Maritime Commissioners will meet in a closed-door session on December 6, 2000 to review Docket 98-14: Shipping Restrictions, Requirements, and Practices of the People’s Republic of China. The Commission has met in closed door sessions 4 times during the past year to consider information gathered in response to the “Information Demand Orders” it has served on Chinese and US flag carriers. This information is being used by the FMC to determine the extent to which Chinese laws, rules or regulations lead to conditions unfavorable to shipping in the USA-China trade. Previously, the FMC found serious restrictions on the ability of non-Chinese carriers to operate branches and subsidiaries in China. Moreover, Chinese rules for licensing of liner services have raised FMC concerns about the ability of non-Chinese carriers to compete in the China-USA trade.
It does not appear the FMC is ready to take action in this matter at this time, but the Commission does have the authority to impose countervailing sanctions against Chinese flag carriers of US$ 1.1 million per US port call. Similar sanctions were briefly imposed against Japanese flag carriers in September 1997 (Docket 96-20), but were later reduced under a negotiated settlement. Negotiations between representatives of the US and Chinese governments on Docket 98-14 and related maritime trade issues have been on-going for more than two years.
In a formal petition the Port of Houston requested the Federal Maritime Commission (FMC) initiate a rulemaking to address the lawfulness of marine terminal tariffs, schedules or contracts which provide for collection of legal fees and litigation costs required to secure payment of charges for services rendered to marine terminal users. The FMC was not persuaded by this petition (P1-00), and in a decision issued on November 27, 2000 declined to review its policy prohibiting such provisions in marine terminal tariffs.